UK Signs CPTPP Treaty

On 16 July 2023, Secretary of State for Business and Trade Kemi Badenoch signed the much anticipated treaty confirming the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). She was in Auckland, New Zealand, and signed the treaty alongside representatives of other CPTPP members, including Chilean Vice-Minister for International Economic Relations Claudia Sanhueza, Malaysian Trade Minister Tangku Zafrul Aziz, Peruvian Trade Minister Juan Carlos Mathews Salazar, Singaporean Trade Minister Gan Kim Yong, Vietnamese Trade Minister Nguyen Hong Dien and Mexican Ambassador Alfredo Perez Bravo.

The agreement will have to be scrutinised by Parliament and ratified by the UK government and those of the current members countries. If passed, legislation will make the UK the twelfth member of the CPTPP; the others are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The Department for Business and Trade says that the Indo-Pacific trade bloc is worth £12 trillion in GDP (over 13 percent of global gross domestic product), that CPTPP-owned businesses employ 1 in 100 UK workers, that membership of the bloc is expected to increase turbocharge investment in the UK further, that whisky, construction machinery, and cars are among 99% of current UK goods exports to CPTPP that will be eligible for zero tariffs in CPTPP countries and that the agreement gives UK businesses unparalleled access to market of over 500 million people. Digital trade should also benefit, with the introduction of customs duty-free trade in digital content, acceptance of digital forms and protection of source code among other measures.

DBT points out that "food and drink products imported into the UK will continue to have to comply with our import requirements [and] nothing in CPTPP restricts the UK's sovereign right to set our own animal welfare and antimicrobial resistance policies." However, to be clear, food and drink imports will not have to comply with UK animal welfare standards.

The CPTPP's Technical Barriers to Trade chapter may free up trade in the medical and life sciences sector. Juliette White of AstraZeneca, the UK's largest biopharmaceutical company, said "The economic engines of growth in the 21st century are overwhelmingly concentrated in emerging markets, many of which are located in Asia. The potential for CPTPP accession to enhance the UK's trade links with these growth markets could pave the way for new enduring economic and regulatory partnerships, in turn making it easier to bring our life-changing medicines to patients."

However the benefits of CPTPP membership may be limited. The UK already has free-trade deals with all the member nations except Brunei and Malaysia. In 2022 the UK's total trade with CPTPP was worth £49 billion. Government sources say that accession may boost exports from the UK by £1.7bn, imports into the UK by £1.6bn and GDP by £1.8bn in the long term.

UK manufactured goods exported to CPTPP were worth £24.6bn in 2022 - DBT suggests that in the long run this could increase by over £1bn (4 percent).

Services accounted for £21bn of exports to CPTPP members. Auditing, accounting and legal services between them totalled £9.7bn, financial services £6.7bn). DBT predicts that, as the world's second largest services exporter, joining CPTPP will secure enhanced market access, predictability and transparency for UK service suppliers, and that services exports are expected to increase by £55m (a small fraction).

A government report found that: CPTPP investment accounted for: over £240 billion in turnover in London, £35bn in the South East and £18bn in the East of England; the creation of 26,000 jobs in 2021 and 2022; 75% of all employment in CPTPP-owned businesses was outside of London; 1 in 50 jobs in the North East; I in every 25 jobs in the manufacturing sector. It should be pointed out that this was achieved before UK accession.

Labour's Shadow Trade Secretary, Nick Thomas-Symonds, said that "The government's own assessment says CPTPP is worth just 0.08% to UK GDP".

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