The United Kingdom has announced its imminent entry into a major trans-Pacific trade alliance, marking a significant milestone in its post-Brexit trade strategy. According to a statement released on August 29, 2024, the British government confirmed that its agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will take effect by December 15, 2024, following the receipt of final ratification.
The CPTPP, a free trade agreement established in 2018, currently comprises 11 member nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This alliance represents a substantial economic bloc, covering a market of approximately 500 million people and accounting for about 13.5% of global GDP.
Britain's accession to the CPTPP is noteworthy for several reasons. It is the first country to join the partnership since its inception and will be the only European member. This move aligns with the UK's efforts to diversify its trade relationships following its departure from the European Union.
The journey to CPTPP membership for the UK began in February 2021 when it formally applied to join the agreement. Negotiations commenced in June of the same year, culminating in the completion of talks on March 31, 2023. The process demonstrates the CPTPP's openness to new members, subject to terms agreed upon by existing participants.
The CPTPP offers significant benefits to its members, including the elimination of tariffs on 95% of goods traded between participating countries. Additionally, the agreement encompasses provisions on intellectual property, labor rights, and environmental standards, promoting regulatory coherence and addressing emerging challenges in the digital economy.
"Joining the CPTPP marks a new chapter in Britain's trade policy, opening up opportunities for businesses across various sectors and strengthening our ties with fast-growing economies in the Pacific region."
As the UK prepares to formally enter the CPTPP, it joins an agreement with a rich history. The pact evolved from the Trans-Pacific Partnership (TPP) after the United States withdrew in 2017. It was subsequently signed on March 8, 2018, in Santiago, Chile, and entered into force on December 30, 2018, for the first six countries to ratify it.
The inclusion of the UK in this trans-Pacific alliance underscores the changing dynamics of global trade and the increasing interconnectedness of economies across different regions. As Britain navigates its post-Brexit trade landscape, its participation in the CPTPP could potentially offer new avenues for economic growth and cooperation with Pacific Rim nations.