UK has officially joined CPTPP
16 December 2024
The UK became the first new member of the CPTPP trade bloc on 15 December 2024. CPTPP is an Asia-Pacific trade agreement with 11 original members, including Australia and Japan. Other countries, such as China, have also expressed interest in joining. The UK can now trade with eight CPTPP members under the agreement: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam. The agreement with Australia will be effective on December 24th, and with Canada and Mexico 60 days after their ratification
CPTPP reception at the Foreign, Commonwealth and Development Office (December 2024)
What are the benefits of joining?
CPTPP membership is expected to yield benefits for the UK, including reduced trade barriers and increased economic growth. While the estimated long-term GDP increase is modest at £2 billion, this could be higher if other countries join the bloc. The UK already has trade agreements with most CPTPP members, and the overall trade volume with the region is relatively small. Despite this, the UK government believes that joining CPTPP will boost household wages and benefit specific sectors like financial services and manufacturing.
The CPTPP prioritises digital trade, enabling data flow and removing barriers like data localization requirements. This should benefit UK businesses by enabling more efficient operations, facilitating remote services, and allowing them to expand into new markets. The agreement offers ambitious services provisions that benefit the UK as a major services exporter. UK businesses will gain greater market access, benefit from reduced red tape, and increased certainty in CPTPP markets.
Our View
Ocean Bridge Management views the UK's joining of the CPTPP as a positive development for UK trade in the Asia-Pacific region. Given the current geopolitical concerns in the region, strengthening relationships with CPTPP member countries is crucial for the UK. However, it's important to acknowledge that the economic benefits of joining the CPTPP are limited and cannot replace the UK's trade relationship with the EU.
Regarding how to utilise the trade agreement, the UK government (Department for Business and Trade) has created a guideline. For instance, between Japan and the UK, there is another trade agreement: - the UK-Japan CEPA (Comprehensive Economic Partnership Agreement) and the advice from the government is available on which trade agreement to use from here:-
Contains public sector information licensed under the Open Government Licence v3.0.