The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has today welcomed the UK as a member of the bloc, expanding the group to now include a European nation. As one of the largest free trade agreements in the world, the CPTPP encompasses 11 countries across the Asia-Pacific region, accounting for 13.5% of global GDP.
The countries that comprise the bloc are Japan, Australia, Canada, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The UK is now added to this list and is the first non-founding member of the CPTPP showcasings its growing global appeal. Economies such as those of Singapore, Malaysia and Vietnam are some of the fastest growing in the world right now.
However, the UK’s entry is not expected to have any significant economic impact with the deal expected to generate just 0.08% of extra income for the UK over the next 10 years. The real gain could be geostrategic though, rather than economic and with China next in line fto be considered for accession it will make for interesting developments that the UK will now have to tackle as part of this bloc. This will include issues such as Taiwans formal application to join the CPTPP, which was also made at the same time as China in September 2021. Given Beijings claims that Taiwan is part of its territory this could make for some awkward conversations. Other applicants include Ecuador, Costa Rica and Uruguay.
For the UK, now that it has received the green light it will have to implement any reforms deemed necessary to meet the CPTPP standards within a set period. The UK already has rolled over many EU FTAs and negotiated new ones with CPTPP members. The enclosed 66 page document ‘UK Accession to CPTPP: The UK’s Strategic Approach’ published by The Department for International Trade and published here gives good detail of the thought process behind our entrance to this bloc. Click the below link to read.
There may also be problems with the EU though, where it had been recently expected that greater alignment was on the cards to ease the trade complications since Brexit. A lot of noise has been made that this is the end of heading back to the EU, but as we know, in an ever-changing world anything is possible if there is mutual will. The U.S. who formally withdrew from the Trans-Pacific partnership trade deal, the predecessor to the CPTPP, in 2017, have been asked by Japan to return. So as we can see, it’s simply just another club, akin to the EU, where you and the club decide together if being in it is mutually beneficial. Or if you’re in it and things change, you can leave.
In economic terms leaving the EU to join the CPTPP was always a non-sensical argument, but it makes sense that since we have, it’s pragmatic to explore what’s on offer. And over the next few months exploring the opportunities is what we will be doing.
Look out for guides and our article soon ‘CPTPP: Fanfair or Fluff’, regarding trade prospects, opportunities and challenges working with some of the fastest growing economies in the world now we are members of the CPTPP. If you have any burning questions about international trade please do drop us a line at firstname.lastname@example.org or call our trade expert Steve Townley here on 01394 286644. We’re always happy to chat.