UK Joins CPTPP: What Membership of the Indo-Pacific Trade Bloc Means for Business

CPTPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, and now the UK, with a combined GDP of £12 trillion according to the government.

When the agreement applies

The agreement enters into force on 15 December between the UK and the members that ratified its accession by 16 October: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam. It enters into force with Australia on 24 December, and with Canada and Mexico 60 days after each of them ratifies. Through CPTPP, the UK now has free trade arrangements with Malaysia and Brunei for the first time.

What changes for business

• Tariffs: exporters face lower tariffs and fewer barriers in markets across three continents, and importers benefit from removed tariffs on some goods.
• Rules of origin: goods can qualify for preferential tariffs when built using parts from other CPTPP countries, which the government highlights for automotive and food and drink supply chains.
• Services: UK services firms gain easier access to CPTPP markets, including the ability to manage funds across the region from the UK and to compete on a level playing field with domestic firms in key sectors.

The government's impact assessment sets out its modelling of the long-run economic effects of accession, from which the headline estimates are drawn. New guidance for businesses on using the agreement was published alongside the announcement.

What it means

As the UK joins CPTPP in stages, exporters and importers should review the rules of origin of their products, check which partner markets the agreement is already in force with, and update customs processes. Costa Rica has been announced as the next candidate to join, and other economies, including Indonesia, have expressed interest, so the bloc may continue to grow.

Sources

• GOV.UK: £2 billion boost to growth as UK joins major trade group
• GOV.UK: UK accession to CPTPP impact assessment (PDF)