THE BUSINESS OF INTERNATIONAL TRADE
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The UK formally applies to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) on February 1, 2021. The CPTPP is one of the world’s largest free trade areas, which includes some of the fastest growing markets in the world, as spokesperson for the Department for International Trade (DIT).
Secretary of State for International Trade Liz Truss will speak to ministers in Japan and New Zealand on Monday morning (1 February 2021) requesting admission. Formal negotiations are set to start in the Spring. The announcement came as the UK celebrated exactly one year since leaving the EU and becoming an independent trading nation.
The DIT spokesperson added, “Joining the CPTPP would deepen the UK’s access to fast-growing markets and major economies, including Mexico, Malaysia and Vietnam, for the benefit of UK business. 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.
The 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. Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade.”
Liz Truss explained, ““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.”
The heads of business groups including techUK, the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and the Confederation of British Industry (CBI) all expressed their approval of the move.
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