Business and Trade Secretary Kemi Badenoch officially signed the accession treaty to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand, marking the beginning of the UK’s participation in a trade agreement encompassing 12 economies throughout Asia, the Pacific, and now, Europe.
Stationed in Auckland, the Secretary of State officiated the mega-deal alongside trade ministers Damien O’Connor of New Zealand, Mary Ng of Canada, Goto Shigeyuki, Japan’s Minister for Economic Revitalisation, and Tim Ayres, the Australian Deputy Trade Minister.
The signing symbolises the UK’s formal consent to join the trade bloc, a decision that follows the successful completion of negotiations earlier in the year. The next stage for the UK government is to ratify the agreement – a process which involves parliamentary review, while the remaining CPTPP nations undergo their legislative procedures.
The agreement was signed amid the release of a government report indicating that in 2019, one in every 100 UK employees worked for a company whose headquarters were located in a CPTPP member state. This represents more than 400,000 jobs nationwide.
As a result of the UK’s membership in the CPTPP, increased investments from the bloc’s nations, amounting to £182 billion in 2021, are anticipated due to the investment protections guaranteed.
Ian Stuart, CEO at HSBC UK, said, “The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology. At HSBC UK, we are incredibly excited about the opportunities this agreement presents; as the world’s leading global trade bank we will support UK businesses to achieve their full potential and open up a world of opportunity.”
Cath White, Head of International at Belvoir Farm said, “The UK’s accession to CPTPP will mean more than 99% of UK goods exported to CPTPP member countries will be eligible for zero tariffs. It will also ease administrative and commercial trade barriers to allow talented and passionate UK producers to tell their story on a worldwide scale. At Belvoir Farm, we export 20% of our turnover to markets across the globe, with one-third of exports bound for Indo-Pacific markets, including Australia, New Zealand, Japan and Singapore. This is a fantastic opportunity to grow British brands, especially this year when the spotlight is on the UK.”
Ian Galbraith, Group Strategy Director at Mott MacDonald, said, “Mott MacDonald is strongly supportive of UK accession to CPTPP and proud to have been part of the technical board advising the British negotiating team. The Partnership’s ambitious services and procurement chapters pave the way for greater recognition of professional competence in engineering and architecture, and establish open, fair and transparent competition rules in government procurement, allowing world-leading firms like Mott MacDonald to win and service new contracts across the many countries covered by CPTPP.”
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 revealed that the CPTPP’s investments were responsible for:
- A turnover of over £240 billion in London, £35 billion in the South East, and £18 billion in the East of England
- The creation of 26,000 jobs in 2021 and 2022
- 75% of all jobs in CPTPP-owned businesses are located outside of London
- One in 50 jobs in the North East
- One in every 25 jobs in the manufacturing sector
- Interestingly, the report demonstrated that CPTPP companies significantly contribute to the UK’s economy. Despite only comprising 0.3% of all UK businesses, they generate 6.1% of the UK’s total turnover, a figure that is 20 times their business representation.
The UK will become the first new member and the inaugural European member of the CPTPP since its inception. This feat would not have been achievable had the UK remained part of the EU. The UK’s membership means the CPTPP will now have a collective GDP of £12 trillion, representing 15% of global GDP.
The government will now commence the process of enforcing the agreement, which is expected to be achieved next year.
The UK’s CPTPP membership implies that over 99% of current UK goods exports to the bloc’s nations will be qualified for zero tariffs. Dairy farmers stand to benefit from this, with reduced tariffs on exports of cheese and butter to Canada, Chile, Japan, and Mexico, building upon the £23.9 million worth of dairy products exported to these countries in 2022.
This agreement also paves the way for increased access to the wider Indo-Pacific region, projected to account for the majority of global growth and approximately half of the world’s middle-class consumers in the coming decades, creating fresh opportunities for British businesses and job support.