The United Kingdom formally signed a treaty to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade group in New Zealand on July 16, kickstarting its membership of a modern and ambitious trade deal spanning 12 economies across Asia, the Pacific, and now Europe.
The signature marks the formal confirmation of the agreement for the UK to join the group, following substantial negotiations earlier this year. The UK government will now seek to ratify the agreement, which will include parliamentary scrutiny and the completion of other CPTPP countries' legislative processes.
The signing comes as a new government report reveals that 1 per cent of UK personnel were 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 ($238.2 billion) in 2021 – by guaranteeing protections for investors.
The UK's Business and Trade Secretary Kemi Badenoch said, "The deal will be a big boost for British businesses and deliver billions of pounds in additional trade. It will also 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, and forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already provide up and down the country," she said.
Ian Stuart, CEO at HSBC UK stated, "The UK’s formal accession to the CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for startups, innovation, and technology. At HSBC UK, we are incredibly excited about the opportunities this agreement presents. As a global bank, we will support UK businesses to achieve their full potential and open up a world of opportunity."
The UK will be the first European member and first new member since the CPTPP was created, which would have been impossible had the UK remained in the EU. With the UK as a member, the CPTPP will have a combined GDP of £12 trillion ($15.7 trillion) and account for 15 per cent of global GDP.
The UK government will now take the steps needed to bring the agreement into force, which is expected to happen next year.
Being part of the CPTPP will mean that more than 99 per cent of the UK's current goods exports to CPTPP countries will be eligible for tax-free tariffs. Dairy farmers, for example, will benefit from reduced rates on cheese and butter exports to Canada, Chile, Japan, and Mexico. This will build on the £23.9 million ($31.2 million) worth of dairy products that were exported to these countries in 2022.
The agreement is a gateway for the UK into 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. The move is set to provide new opportunities for British businesses and create jobs.
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