UK Ratifies Trans-Pacific Trade Deal Ahead of Schedule

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The UK’s ratification of CPTPP sets the stage for 99% of trade with the growing “Pacific Rim” bloc becoming tariff free later this year. Trade Policy Minister Greg Hands announced the conclusion of the UK’s ratification step last week, while meeting with representatives of the other CPTPP nations in Arequipa, Peru. The news came hot on the heels of a double taxation agreement being reached between the UK and Peru.

CPTPP (which stands for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) currently includes the nations of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. With the addition of the UK, it will account for 15% of global GDP, and a total population of around 500 million, including some of the world’s fastest growing and most advanced economies.

Singapore, Japan, and Chile have now ratified the UK’s accession to the group; a further three countries from the bloc need to ratify in order for the process to be complete, a process which is expected to be completed within the next few months.

Opportunities for service industries

The UK already sells more services than goods to CPTPP members – £32.2 billion worth. This includes £1.9 billion business services to Australia, £1.5 billion insurance and pension services to Canada, and £1.4 billion transportation services to Singapore. CPTPP will cut red tape for UK service providers, and allow easier access to Singapore, Malaysia, Vietnam and other markets.

The UK government estimates that we delivered £23 billion of services remotely to CPTPP customers in 2021. CPTPP is committed to the highest data protection standards; becoming part of CPTPP will help remove barriers and enable data to flow more easily.

Highlight opportunities for UK exporters include:

Malaysia: First ever trade deal with the UK. 80% tariffs on whisky and 30% tariffs on cars are set to be phased out over time.

Singapore: Mechanical power generators account for 46.9% of all goods exports from UK to Singapore – £3 billion in 2023). There is also strong demand for British beverages, industrial machinery and medical/pharmaceutical products.

Australia: Great opportunities to export British cheese, other dairy products, and pork.

Vietnam: A young, vibrant and growing consumer economy – amazing opportunities for consumer brands, as well as in clean growth, tech, and digitalisation.

Chile: Opportunities in mining, infrastructure, clean energy and agribusiness.

Peru: Opportunities in mining, energy, infrastructure, life sciences and healthcare, security, and food and drinks.

Japan: British agriculture, food and drink, manufacturing, digital, and financial services sectors all look set to gain from CPTPP.

Mexico: A target for automotive and advanced engineering (think proximity to the USA), food and drink, education, life sciences, healthcare, energy, finance and professional services.

New Zealand: Exporters can seek out opportunities in relation to infrastructure, technology, fintech, agritech, e-commerce, and food and drink.