On 15 December, the United Kingdom officially became a complete Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member.
It unlocks access to new markets and promises substantial economic benefits for businesses and consumers.
The CPTPP is a significant trade agreement involving 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the UK.
Together, these countries represent a combined GDP of £12 trillion. The UK’s membership aligns it with one of the world’s most dynamic economic regions.
The UK’s accession to the CPTPP is expected to deliver an annual economic boost of £2 billion in the long term. All UK nations and regions will benefit. Scotland could see a gain of £240 million annually, Wales £110 million, and Northern Ireland £70 million.
The South East of England may gain £450 million, while the North West could add £310 million. These regional boosts support the government’s goal to level up the economy.
Household wages are also expected to increase by £1 billion annually. It will contribute to improved living standards and support local investment.
Businesses nationwide will see reduced tariffs and fewer trade barriers with economies spanning three continents.
The agreement provides significant advantages for financial services, manufacturing, and food and drink sectors. Modern “rules of origin” provisions allow goods to qualify for lower tariffs if they include components sourced from CPTPP countries.
For instance, a UK car engine manufacturer using parts from other CPTPP nations could enjoy reduced tariffs when exporting within the bloc.
UK services firms, which employ over 80% of the workforce, will also benefit. Companies can manage global funds from the UK and compete equally with domestic firms in member countries.
Consumers will enjoy lower prices on Peruvian fruit juices and Malaysian vacuum cleaners. If importers pass on the savings, households could see reduced costs on everyday items.
Small and medium-sized enterprises (SMEs) are set to gain as well. The agreement reduces administrative burdens and trading costs, simplifying the process for smaller companies to enter CPTPP markets.
Matthew Borthwick, CEO of Scalerr, highlighted the benefits for SMEs.
“International trade is no longer just for large corporations,” he said.
CPTPP support enables SMEs to expand their reach and explore opportunities in markets like Vietnam, Singapore, and New Zealand.
Business and Trade Secretary Jonathan Reynolds called the agreement a testament to the UK’s open and outward-looking economy.
He said, “Britain is uniquely placed to take advantage of exciting new markets while strengthening existing relationships.”
The deal boosts trade, supports jobs, raises wages, and drives investment. It represents a key part of the government’s mission to deliver economic growth.
The CPTPP’s potential for expansion adds to its strategic importance. Costa Rica is already in the process of joining, and Southeast Asia’s largest economy, Indonesia, is also interested in joining. As the bloc grows, so will opportunities for UK businesses.
Industry leaders have praised the deal. Ian Stuart, CEO of HSBC UK, noted its significance.
“Being part of the CPTPP signals that the UK is open for business with some of the world’s most exciting growth markets,” he said.
Since the UK’s accession was announced in July 2023, payments between CPTPP markets and the UK have increased. Stuart expects this growth to continue.
Jean-Etienne Gourgues, Chairman and CEO of Chivas Brothers, welcomed the deal for the Scotch whisky industry.
“Improved access to markets in dynamic regions like Southeast Asia and Latin America should help boost our £1BN annual exports,” he said.
The CPTPP provides the UK with its first-ever free trade agreements with Malaysia and Brunei. These markets have a combined GDP of over £330 billion. It complements ongoing trade talks with partners like the Gulf Cooperation Council, India, Switzerland, and South Korea.
The government’s “twin-track” trade strategy focuses on strengthening ties with global markets while resetting its relationship with the EU.
As a member of the CPTPP, the UK joins a trade bloc that prioritizes economic cooperation and growth. Businesses are encouraged to explore the opportunities created by this agreement.
These include reduced tariffs, simplified regulations, and partnerships in emerging markets. The government’s forthcoming Trade Strategy, to be published next year, will guide businesses in leveraging these benefits.
This new chapter reinforces the UK’s position as a global trading hub. Long-term gains for businesses, households, and the broader economy now seem more attainable than ever.