Written by Rachel Martin
The UK has announced intentions to formally apply to join one of the world’s largest free trade areas, deepening trade ties with some of the fastest-growing markets in the world.
International Trade Secretary Liz Truss will speak to ministers in Japan and New Zealand on Monday morning (February 1, 2021) to request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), with formal negotiations set to start this year.
The CPTPP’s 11 members, include Australia, Brunei, Canada, Japan, Mexico, Malaysia, Peru, Singapore, and Vietnam.
A government spokesperson explained joining the £9 trillion partnership will cut tariffs for UK industries including food and drink, and cars, while also creating new opportunities for modern industries like tech and services, ultimately supporting and creating high-value jobs across the UK.
Unlike EU membership, joining does not require the UK to cede control over our laws, borders, or money.
UK trade with the group was worth £111 billion in 2019, growing by 8% a year since 2016. Benefits that CPTPP membership will bring for businesses include:
- Modern digital trade rules that allow data to flow freely between members, remove unnecessary barriers for businesses, and protect commercial source code and encryption.
- Eliminating tariffs quicker on UK exports including whisky (down from 165% to 0% in Malaysia) and cars (reducing to 0% in Canada by 2022, two years earlier than through the UK-Canada trade deal).
- Rules of Origin that allow content from any country within CPTPP to count as ‘originating’. For example, this would mean that cars made in the UK could use more Japanese-originating car parts, such as batteries.
- Easier travel for businesspeople between CPTPP countries, such as the potential for faster and cheaper visas.
Prime Minister Boris Johnson said: “One year after our departure from the EU we are forging new partnerships that will bring enormous economic benefits for the people of Britain.
International Trade Secretary Liz Truss said: “Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU and deepen our ties with some of the fastest-growing markets in the world.
“It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home.
“We’re at the front of the queue and look forward to starting formal negotiations in the coming months.”
‘Worth £100 million to UK businesses’
The UK will publish its negotiation objectives, scoping analysis, and consultation response in advance of negotiations expected to start this spring.
CBI president, Lord Karan Bilimoria, said: “This ambition marks a new chapter for our independent trade policy. As one of the largest free trade agreements in the world, these 11 countries contribute over £100 billion to our economy.
“Membership of the bloc has the potential to deliver new opportunities for UK business across different sectors.”
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