UK Joins CPTPP to Boost Its Economy

The UK has joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Sunday as a fully-fledged member, potentially boosting the UK economy by around $2.53 billion a year in the long run.

CPTPP is a major trade bloc whose members – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and now the UK – have a combined GDP of $15.16 trillion.

The UK’s accession is estimated to benefit all UK nations and regions in the long run, relative to 2019 values, with boosts of $303.26 million for Scotland, $138.99 million for Wales, and $88.45 million for Northern Ireland. All English regions are also estimated to gain, including $568.60 million for the South East and $391.71 million for the North West, according to the Department for Business and Trade..

By joining CPTPP, businesses across the UK will face lower tariffs and fewer barriers when selling to economies across three continents, with the financial services, manufacturing and food and drink sectors in particular set to benefit, helping to support the Government’s Plan for Change by boosting household wages by $1.26 billion every year and delivering on one of the five missions of kick-starting economic growth.

The UK’s Business and Trade Secretary Jonathan Reynolds said that Britain is uniquely placed to take advantage of exciting new markets, while strengthening existing relationships. Joining CPTPP is further proof that the UK is a wonderful place to do business, with an open, outward looking economy driving the growth people can feel in their communities.

“Agreements like this boost trade and create opportunities for the UK companies abroad. This is a proven way to support jobs, raise wages, and drive investment across the country which is key to this Government’s mission to deliver economic growth,” he added.

CPTPP to Expand Further

CPTPP is designed to expand over time, further growing the economic and strategic benefits of the agreement. Costa Rica was recently announced as the next country to go through the process of joining, and other economies such as Indonesia, the largest economy in Southeast Asia, with a GDP of over $1.26 trillion and home to around 280 million people in 2023 – have already expressed an eagerness to join the bloc.

The UK services firms, which employ over 80% of our workforce, could also find it easier to export their services to CPTPP countries, with firms allowed to manage funds across the world from the UK and provide services to CPTPP markets on a level playing field with domestic firms in key sectors.

Prices on consumer goods could also fall if savings are passed on by importers, with tariffs removed on items like fruit juices from Peru and vacuum cleaners from Malaysia.

Through CPTPP, the UK now has free trade deals with Malaysia and Brunei for the first time, economies with a combined GDP of over £330 billion last year.

CPTPP’s entry into force comes as the UK edges closer to securing trade deals with partners such as the GCC, India, Switzerland and South Korea. These form one half of this government’s twin-track approach to trade which seeks to reset our relationship with the EU at the same time as striking new trade deals.