Business and Trade Secretary Kemi Badenoch has formally signed the treaty to accede to CPTPP trade group in New Zealand on Sunday 16th July, kickstarting the UK’s membership of a modern and ambitious trade deal spanning 12 economies across Asia, the Pacific, and now Europe.
The Secretary of State is in Auckland to put pen to paper on this mega deal, alongside New Zealand Trade Minister Damien O’Connor, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalisation Goto Shigeyuki and Australian Deputy Trade Minister Tim Ayres.
The signature is the formal confirmation of agreement for the UK to join the group, following substantial conclusion of negotiations earlier this year. The Government will now seek to ratify the agreement, which will include parliamentary scrutiny, whilst other CPTPP countries complete their own legislative processes.
The signing comes as a new government report reveals one in every 100 UK workers was employed by a business headquartered in a CPTPP member nation in 2019, equating to over 400,000 jobs across the country.
Membership of the trade group is expected to spark further investment in the UK by CPTPP countries, already worth £182 billion in 2021, by guaranteeing protections for investors.
Speaking ahead of the signing, Kemi Badenoch said:
I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.
We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.
The report found CPTPP investment accounted for:
The report also found that CPTPP companies punch above their weight economically. While they account for 0.3% of all businesses in the UK, they generate 6.1% of the UK’s total turnover – 20 times higher than the proportion of businesses they represent.
The UK will be the first European member and first new member since CPTPP was created, which would have been impossible had we remained in the EU. With the UK as a member, CPTPP will have a combined GDP of £12 trillion and account for 15% of global GDP.
The Government will now take the steps needed to bring the agreement into force, expected to be next year.
Being part of CPTPP will mean that more than 99 per cent of current UK goods exports to CPTPP countries will be eligible for zero tariffs. Dairy farmers, for example, will benefit from reduced tariffs on cheese and butter exports to Canada, Chile, Japan and Mexico. This builds on the £23.9 million worth of dairy products we exported to these countries in 2022.
The agreement is a gateway to the wider Indo-Pacific which is set to account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come, bringing new opportunities for British businesses and supporting jobs.
Reacting to the signing of the Accession Protocol, paving the way for the UK’s accession to the CPTPP in 2024, William Bain, Head of Trade Policy at the BCC, said:
“The forthcoming addition of the UK to this trading bloc takes it to 12 countries which accounts for 15% of global economic output.
“It will open up new opportunities for our businesses in both inward and external investment with the other 11 countries from the second half of next year.
“The UK has bilateral trading terms negotiated with nine of the eleven current members, but no agreements had been reached with Malaysia and Brunei, so the new terms will be of particular interest for traders in these markets.
“There are not many multi-national trade agreements like this one, and it offers new prospects in a fast-growing region of the global economy.
“We see particular relevance for small and medium sized businesses in reduced costs to import components from member countries to use in manufactured goods for export.
“There are also generous terms for data flows which underpin an increasing part of international trade.
“We will be scrutinising the Accession Protocol in detail on its publication in the next few days. But accession will be good news for UK businesses to enter or upscale their trade in these markets, with increased confidence and more generous trading terms.
“We look forward to working with the UK Government, and others, to ensure firms get the best possible access to this thriving market within the global trade system.”