The CPTPP is one of the largest free trade areas in the world – and when the UK joins, it will account for 15% of global GDP (the equivalent to £12 trillion).
The agreement comprises 12 economies – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and now the UK.
Benefits of the CPTPP agreement to the UK
This is the first time the UK will have secured free trade deals with Malaysia and Brunei – economies worth more than £330bn in 2023.
Seven more countries have also applied to join the bloc, including Southeast Asia’s largest economy, Indonesia – home to nearly 280m consumers in 2023.
Currently, trade with CPTPP represents 7% (£122bn) of the UK’s total trade, with the nation exporting more than £2.3bn of food and drink to CPTPP countries last year.
The agreement is set to go ahead on 15 December 2024 and the Department for Business & Trade believes the move represents a significant opportunity for future growth within UK food and drink.
Whisky, confectionary, meat and dairy are key sectors expected to benefit. For example, the 6% tariff on UK exports of cheese to Chile will be removed within two years. Furthermore, in Malaysia, the present 15% tariffs on chocolate will be reduced to zero, and tariffs of around 80% on whisky will be gradually eliminated over 10 years.
“Our accession puts our food and drink exporters in a prime position in markets across Asia-Pacific and the Americas where there is significant demand for premium British products like whisky, chocolate and dairy,” commented trade minister Douglas Alexander.
Alexandar added that the agreement may also help British businesses to secure lower tariffs on goods that are made using materials sourced from other CPTPP countries, as well as playing to Britain’s strengths in creating and selling premium products due to CPTPP’s ‘significant middle-class’ market. For example, the Indo-Pacific region is expected to account for around half of the world’s middle-class consumers in the decades to come.
“CPTPP’s modern rules of origin provisions and lower tariffs will create real opportunities for British businesses to capture the significant consumer demand across this bloc of over 500 million people,” the trade minister explained.
How competitive will CPTPP countries be in the UK marketplace?
Whilst this agreement will open up new opportunities for the UK to sell into new markets more freely, it will also extend the same courtesy to those in the bloc.
In its statement following the conclusion of negotiations with CPTPP Parties, the National Farmers Union (NFU) noted that ‘UK agricultural producers will benefit from increased access to the CPTPP market and there is opportunity to expand our exports of high-quality UK produce’.
Minette Batters, then president of the NFU, also said the Government has negotiated a “considered and balanced outcome, particularly with respect to managing market access in our most vulnerable sectors.”
Speaking with the Department for Business & Trade, it added that protections for the agriculture industry have been secured and these will need ‘not undercut UK farms or compromise UK standards.
These protections mean increased access to the UK market for some agricultural products will be staged over a significant period of time, giving producers time to adjust to any new trade flows.
The UK has also secured protections permanently limiting annual additional import from major CPTPP producers of beef, pork, chicken, and milled rice through tariff rate quotas.
For eligible goods, safeguard mechanisms will also apply to provide a temporary safety net for industry if they face serious injury, or threat of serious injury, from increased imports as a result of the agreement.
The department also told Food Manufacture that ‘without exception’, imports into the UK must continue to meet all the relevant UK food safety and biosecurity standards. This includes products imported into the UK under CPTPP.
‘Seize the opportunity’
Commenting on the news, Liam Hughes, the founder of The Glasgow Distillery agreed that joining the bloc will be a positive move that will enable his business to continuing growing.
“The opportunity this agreement provides will be particularly beneficial for our Single Malt Scotch Whisky brand, Glasgow 1770, which will benefit directly from reduced tariffs in Malaysia, allowing us to explore this as a potential new market,” he shared.
Alexander concluded: “British food and drink exports have long been a global success story, and CPTPP membership will help take that to the next level. I would encourage all UK food and drink producers to seize this opportunity, see what CPTPP can do for them, and expand their footprint in these dynamic markets.”