The UK is formally applying to join one of the world’s largest free-trade areas, deepening trade ties with some of the fastest-growing markets in the world.
International Trade Secretary Liz Truss spoke to ministers in Japan and New Zealand on 1 February 2021 to request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), with formal negotiations set to start this year.
UK trade with the group was worth £111 billion in 2019, growing by 8% a year since 2016. Benefits that CPTPP membership will bring for businesses include:
- Modern digital trade rules that allow data to flow freely between members, remove unnecessary barriers for businesses, and protect commercial source code and encryption.
- Eliminating tariffs quicker on UK exports including whisky (down from 165% to 0% in Malaysia) and cars (reducing to 0% in Canada by 2022, two years earlier than through the UK-Canada trade deal).
- Rules of Origin that allow content from any country within CPTPP to count as ‘originating’. For example, this would mean that cars made in the UK could use more Japanese-originating car parts, such as batteries.
- Easier travel for businesspeople between CPTPP countries, such as the potential for faster and cheaper visas.
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Commenting on the UK plan to join the Comprehensive and Progressive Trans-Pacific Partnership, Adam Marshall, Director General at the BCC said:
“A new partnership with one of the world’s largest free trade areas would only be a good thing for our business communities. Firms will be keen to see the UK and members of the Comprehensive and Progressive Trans-Pacific Partnership forge a deeper trading relationship, and we will work with the government to maximise this opportunity for UK businesses.
“However, we must not forget the single most critical trade agreement for our business communities remains the one we have with the European Union.”