UK’s entry into the CPTPP
The UK is set to become one of the few countries in the world with a Free Trade Agreement (FTA) with both the EU and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
While on paper the CPTPP doesn’t match the loss of not being in the Customs Union of the EU where we had the deepest level of integration, it represents an area of 500 million people.
Together these agreements account for 30% of world GDP, making the CPTPP an opportunity for the taking in terms of manufacturing, raw materials, services and software.
The CPTPP was set up in 2018 as a free trade block partly as a counter balance to China – Japan assumed the leadership following the USA’s exit under Trump – securing the UK’s accession at the end of March this year.
According to the World Bank, by 2050 the EU’s share of world GDP will have fallen to 10% whilst the CPTPP’s share of the world economy will have increased to 20%.
Some estimates point to 25%. Interestingly, by that time, 65% of the world’s middle class will be in the CPTPP countries.
New countries are being added to the CPTPP all the time including Ecuador, Cambodia, Taiwan, South Korea, even the USA might re-join making it the largest bloc on the planet.
The CPTPP opens up trade for the first time with Malaysia and Brunei removing tariffs on everything from cars to whisky.
Previously, if the UK was to export a car to Australia we would need to prove that the car had been substantially made in the UK.
Within the CPTPP, the car can be made from parts sourced from anywhere within the CPTPP.
All members have a veto on future members and there is no membership fee other than the cost of maintaining the relationship
The UK’s entry into the CPTPP is in the final stages of negotiations. A full legal review will take place before the matter goes before UK Parliament at the end 2024. There is cross-party support so it is very likely to happen.
This is a great time for research and making plans to create presence in this expanding bloc.
Watch this space.
