UK officially joins major Asia-Pacific trade bloc CPTPP

The secretary of state is in Auckland to put pen to paper on this mega deal, alongside New Zealand trade minister Damien O’Connor, Canadian trade minister Mary Ng, Japanese minister for economic revitalisation Goto Shigeyuki, and Australian deputy trade minister Tim Ayres, the UK’s department for business and trade said in a press release.

The signature is the formal confirmation of agreement for the UK to join the group, following substantial conclusion of negotiations earlier this year. The UK government will now seek to ratify the agreement, which will include parliamentary scrutiny, whilst other CPTPP countries complete their own legislative processes.

The signing comes as a new government report reveals one in every 100 UK workers was employed by a business headquartered in a CPTPP member nation in 2019, equating to over 400,000 jobs across the country.

Membership of the trade group is expected to spark further investment in the UK by CPTPP countries, already worth £182 billion in 2021, by guaranteeing protections for investors.

Speaking ahead of the signing, Badenoch said: “I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.

“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”

The report found that the CPTPP investment accounted for over £240 billion in turnover in London, £35 billion in the Southeast, and £18 billion in the East of England and the creation of 26,000 jobs in 2021 and 2022.

Around 75 per cent of all employment in CPTPP-owned businesses was outside of London with one in 50 jobs in the Northeast and one in every 25 jobs in the manufacturing sector.

The report also found that CPTPP companies punch above their weight economically. While they account for 0.3 per cent of all businesses in the UK, they generate 6.1 per cent of the UK’s total turnover—20 times higher than the proportion of businesses they represent.

The UK will be the first European member and first new member since CPTPP was created. With the UK as a member, CPTPP will have a combined gross domestic product (GDP) of £12 trillion and account for 15 per cent of global GDP. The government will now take the steps needed to bring the agreement into force, expected to be next year.

Being part of the CPTPP will mean that more than 99 per cent of current UK goods exports to CPTPP countries will be eligible for zero tariffs. The agreement is a gateway to the wider Indo-Pacific which is set to account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come, bringing new opportunities for British businesses and supporting jobs.

UK’s accession to the CPTPP will boost services by reducing red tape, increase trade flexibility, diversify supply chains, stimulate investment, and provide modern rules for digital trade. It will also create new markets, with a free trade agreement with Malaysia for the first time. Moreover, UK consumers could enjoy lower prices on imported goods from Chile, Peru, and Mexico.

Fibre2Fashion News Desk (NB)