UK plans to join trans-Pacific trade pact CPTPP

• The UK government has announced that it is applying to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), one of the world’s largest free-trade areas made up of 11 developed and emerging economies in the Pacific, under its post-Brexit plans.

• UK International Trade Secretary Liz Truss will speak to Japanese Minister for CPTPP Yasutoshi Nishimura, who is the Chair of the 2021 CPTPP commission, and Damien O’Connor, Minister for Trade and Economic Growth in New Zealand, which stores official documentation for all CPTPP members to make the official request to join, with formal negotiations for its first major post-Brexit multilateral trading move set to start this year.

What is CPTPP?

• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement involving 11 countries in the Asia-Pacific region.

The countries are:

New Zealand

Australia

Brunei Darussalam

Canada

Chile

Japan

Malaysia

Mexico

Peru

Singapore

Vietnam.

• The CPTPP was signed by the 11 countries on March 8, 2018 in Santiago, Chile.

• The economies included in the CPTPP account for 13.3 percent of world GDP – worth a total of $10.6 trillion.

• The CPTPP includes many of the elements that were negotiated as part of the Trans-Pacific Partnership (TPP) agreement (signed, but not yet in force), but with some significant differences. On January 23, 2018, negotiations concluded and the participants agreed to suspend 22 items from the original TPP agreement.

• The 11 countries have a shared vision of the CPTPP as a platform that is open to others to join if they are able to meet its high standards.

• CPTPP goes beyond reducing costs for businesses. It includes commitments to safeguard high labour and environmental standards across the Asia-Pacific region.

• The CPTPP recognises the challenges facing Small and Medium-sized Enterprises (SMEs) in establishing export markets, and includes outcomes to help make this task easier in the CPTPP region. 

Outcomes include:

• Elimination of tariffs and reduction in non-tariff barriers in CPTPP export markets.

• Common and transparent trade and investment rules between 11 Asia-Pacific countries, assisting in the reduction of administration costs.

• Rules that encourage SME participation in government procurement opportunities in all CPTPP countries, including the requirement for suppliers to have access to an independent review body when procurement processes do not comply with the rules.

• Commitments addressing a number of ‘21st century’ trade and investment issues, including rules against corruption, reducing unfair competition by state-owned enterprises, and ensuring a liberalised environment for electronic commerce.

• Longer term integration benefits facilitating better access to regional supply chains for goods and services (also known as Global Value Chains).

How will it benefit the UK?

• Joining the CPTPP reflects the UK’s post-Brexit Pacific tilt and is dubbed as a critical part of the Prime Minister Boris Johnson-led government’s wider trade strategy, which aims to deepen links with faster-growing parts of the world and partnering with countries who believe in free and fair trade, including India.

• UK International Trade Secretary Liz Truss said that joining the CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU. 

• According to official statistics, UK trade with the group was worth 111 billion pounds last year, growing by 8 per cent a year since 2016.

• The UK government says the CPTPP would deepen the UK’s access to fast-growing markets and major economies, including Mexico, Malaysia and Vietnam, for the benefit of British business.

• The Department for International Trade (DIT) hopes joining the partnership will cut tariffs for UK industries, including food and drink and cars, while also creating new opportunities for modern industries like tech and services, ultimately supporting and creating high-value jobs across the UK.

• Unlike EU membership, joining does not require the UK to cede control over our laws, borders, or money, it highlights.

• The UK says its membership will complement the bilateral free trade agreements (FTAs) it has already concluded or is negotiating with nine of the CPTPP members, including Japan and Canada.

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