The benefits of Britain joining CPTPP

 

As I posted on Friday, the UK has signed an agreement last week under which we will be the first European nation to join the CPTPP. (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)

Here are some of the facts about this very important trade deal.

• This agreement, signed after 21 months of negotiations, is the biggest trade deal since Brexit – giving British businesses access to the markets of the CPTPP bloc, now worth £11 trillion and with 500 million people. Trade with CPTPP countries will boost our economy by billions and support thousands of new jobs. 
• This deal will benefit businesses of all sizes, in all corners of our United Kingdom and help deliver on our promise to grow the economy. 

This will help grow the UK economy by:

• Boosting UK exports to CPTPP by reducing trade barriers, cutting tariffs, and increasing our market access to some of the world’s largest and fastest growing markets. More than 99 per cent of goods exports will be eligible for zero tariffs under CPTPP which makes it easier for UK firms to sell to CPTPP countries. 
• Building a gateway to the wider Indo-Pacific region which will drive global economic growth and technological innovation. Spanning the Asia Pacific and Americas, CPTPP is a gateway to the wider Indo-Pacific region, which will account for more than half of global economic growth, compared to a quarter from the EU and North America combined.
• Opening up new markets and slashing red tape for UK service providers. CPTPP is one of the most modern trade agreements in the world, with ambitious services provisions that are ideally suited to our economy as the world’s second largest service provider. Red tape will be slashed and UK businesses will be operating on a par with local firms, bringing new benefits to UK businesses like greater certainty around licensing procedures and ensuring independent and impartial regulators

Examples of new opportunities for UK exporters from joining CPTPP:

• Exporters of dairy products, including cheese and butter, will get greater access to lower tariffs in Canada, Japan and Mexico, building on the £23.7 million of dairy products we exported to these countries last year. 

• Exporters of chocolate will benefit from zero tariffs on exports to Mexico and Malaysia. 

• Whisky exporters will see Malaysian tariffs reduced from around 80 per cent to 0 per cent in 10 years. 

The UK will maintain our high product quality, safety and welfare standards as a member of CPTPP and play a larger role shaping global standards: 

• This agreement protects Britain's high standards across the board – healthcare, the environment, animal welfare and food standards are all protected by our deal. We have been clear that our trade deals will never lead to lower quality standards. All food and drink products imported into the UK will still have to meet the respective food safety and biosecurity standards for the UK. The CPTPP includes comprehensive chapters for environmental protections, anti-corruption and improving workers’ rights.

• The CPTPP is a growing partnership in which the UK will have a strong voice, allowing us to shape the bloc in line with our geostrategic and trade interests. As the second largest economy in the CPTPP, we will maximise our influence in shaping the future of the bloc in line with our interests, including free and fair trade. Costa Rica, Ecuador and Uruguay are among countries that have formally applied, and Thailand, the Philippines and South Korea have expressed an interest in joining, and the bloc is set to rival the EU’s single market as a global standards setter.  

• Making sure British businesses and interests are always protected. Decisions on new joiners require full consensus, which gives the UK a firm say on the terms under which any future countries join. 

Joining CPTPP will open new markets for our world-leading digital firms and attract further investment into the UK:

• Joining CPTPP will remove unjustified barriers for our cutting-edge digital firms, helping the UK to become a world leader in digital trade. Remotely delivered services from the UK to CPTPP were worth £20.5 billion in 2020. Joining CPTPP will help remove the unjustified barriers for digital firms and, according to the City of London Corporation, help the UK become a leader in digital trade, with freer access to other members’ service sectors. 

• Providing new protections for CPTPP investors in the UK, encouraging investment and creating new British jobs. As of 2021, CPTPP countries had direct investments worth around £182 billion in the UK, accounting for at least nine per cent of total UK inward investment. Investment from CPTPP also supported the creation of over 5,000 new jobs in 2021/2022. Joining the CPTPP means investors are guaranteed protections and have access to a modern, transparent dispute settlement mechanism, which will encourage further investment in the UK, while protecting UK investors abroad. 

Supporting jobs, driving economic growth

• CPTPP membership is expected to support jobs and create opportunities for UK businesses in every UK nation and English region. From beverage producers in Scotland, to manufacturers of machinery in Wales, and car manufacturers in Northern Ireland and the West Midlands, business across the UK will benefit from CPTPP membership.

• Joining CPTPP secures a trade deal with Malaysia for the first time: 

• Joining CPTPP goes above and beyond our existing free trade agreements and means the UK has a trade deal with Malaysia for the first time, giving UK businesses open access to Malaysia’s dynamic economy worth £271 billion. Our deal with CPTPP goes beyond the existing FTAs we have already secured with most members. It also means the UK will have a trade deal with Malaysia for the first time, supporting jobs across key sectors in the UK and boosting our near 5 per cent share of the Malaysian services market. 

Strengthening Britain's economic security and protecting free and fair trade

• As CPTPP grows, the UK will shape its development and fight coercive trading practices as we deliver on our promise to defend free and fair trade. The Business and Trade Secretary made it one of her priorities to defend free and fair trade around the world – as the second largest economy in CPTPP, we will shape the future of the bloc in line with our geostrategic interests, and in the interests of free and fair trade. 

Questions and Answers

Q1) Does this agreement protect Food standards?

Yes. The UK has not lowered our food, animal welfare or environmental standards in order to accede to CPTPP. CPTPP is consistent with the UK’s existing approach to quality controls and does not compromise food standards.

Q2: Has this agreement sold out UK farmers?

No – we have struck a balanced deal which is good for UK food and agriculture. Joining CPTPP will create new opportunities for our exporters to sell their products to some of the world’s biggest markets in the Americas and Asia-Pacific. At the same time, the UK has agreed to reduce import tariffs in a manner proportionate to the market access that we have received in return. We have also maintained appropriate protections for UK producers where needed and agreed permanent annual limits on the volume of the most sensitive agricultural goods that can be exported to the UK.

Q3: Does this deal open the way to privatisation of public services, such as the NHS?

No, Absolutely not.

We are clear in all trade negotiations that the NHS and the services it provides are off the table. We will continue to ensure that decisions about public services are made by the UK Government and the Devolved Administrations, not by our trade partners. This has always been the case in our trade agreements and no future trade agreement will alter that.