UK strengthens Asia-Pacific trade ties with CPTPP accession

The UK!! has formally joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an Asia-Pacific trade bloc spanning five continents and over half a billion people.

Set up in 2018, the CPTPP has 11 original members – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – which jointly account for around 12% of global GDP.

In July 2023, the UK formally agreed to become the bloc’s 12^th member, with entry into force dependent upon the ratification of the pact by six existing CPTPP countries – a milestone achieved on 23 August this year when Peru became the latest to give its legal confirmation to the deal.

From 15 December – the date of its official accession to the bloc – the UK can now trade with eight CPTPP members under the terms of the agreement. These eight members are: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam. The agreement will enter into force for UK trade with Australia on 24 December, and for trade with Canada and Mexico 60 days after they ratify.

While the UK already has bilateral free trade agreements (FTAs) with nine of the 11 current members, in many instances CPTPP provisions go further than existing agreements. Under the terms of the CPTPP, more than 99% of current UK goods exports to bloc members will be tariff-free, which the UK government says could bolster the country's economy by as much as £2bn each year by 2040.

"Agreements like this boost trade and create opportunities for UK companies abroad," says Jonathan Reynolds, the UK's business and trade secretary. "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."

According to a government announcement, the manufacturing and food and drink sectors in particular are set to benefit from the deal. It cites Jean-Etienne Gourgues, chairman and CEO of Scottish whisky company Chivas Brothers, as saying: "At a time of increasing barriers to trade globally, the UK's accession to the CPTPP is welcome news. Improved access to markets in dynamic regions like Southeast Asia and Latin America in a trading bloc which covers almost a fifth of the total value of Scotch whisky exports should help boost our £1bn annual exports."

Being part of the CPTPP also means that the UK and Malaysia will benefit from a trade deal for the first time. "This agreement is a crucial step in fostering deeper trade ties and creating mutual benefits for both nations," says Vikkrama Kumaravale, Asean country specialist at Navigator Global. "Malaysia's dynamic economy, with its strong demand for high-quality goods, presents a wealth of opportunities for UK businesses. From advanced manufacturing to healthcare and green technologies, UK exporters can leverage this deal to tap into a growing market and build partnerships in key sectors."

The CPTPP is designed to expand over time, further growing the economic and strategic benefits of the agreement. The UK is the first new member since the bloc was established in 2018 and the first European country to join. Costa Rica was recently announced as the next country to go through the process of joining, and other economies have applied to join the CPTPP, or expressed an interest in doing so – including Indonesia and China.

While an FTA like the CPTPP lays the groundwork for stronger trade relationships, it isn't enough to boost trade on its own, says Alex Phillips, China country specialist for Navigator Global. "For SMEs, the real challenge lies in identifying the right opportunities and navigating the complexities of entering new markets. This is where targeted support is essential," he explains.

"We're focused on bridging this gap by offering businesses the tools and connections they need to succeed. For example, we’re expanding relationships with providers across the Apac region to help companies meet product compliance requirements. Additional partnerships are also under development to provide operational support," he adds. "We're here to help businesses unpack the practical benefits of the CPTPP, turning the promise of a trade deal into tangible growth." 

Navigator Global has been working with the UK Department for Business and Trade's Free Trade Agreement Utilisation team (FTAU) to increase awareness of the commercial opportunities afforded to businesses in FTA markets. Part of that work has included providing constructive feedback on 70+ practical guidance documents that the FTAU has produced to help exporters navigate the CPTPP. To access the guides, visit the great.gov.uk site.