UK signs treaty to join vast Indo-Pacific trade group as new data shows major economic benefits
Business and Trade Secretary Kemi Badenoch has formally signed the treaty to accede to CPTPP trade group in New Zealand this morning
- Business and Trade Secretary Kemi Badenoch formally signed the treaty confirming the UK’s accession to CPTPP – the Indo-Pacific trade bloc now worth £12 trillion in GDP – in New Zealand today [Sunday 16th]
- To celebrate this huge moment, the Government released new figures showing CPTPP-owned businesses employed one in 100 UK workers, with membership expected to turbocharge investment in the UK even further
- British whisky and cars amongst 99% of current UK goods exports to CPTPP set to be eligible for zero tariffs as UK businesses given unparalleled access to market of over 500 million people
Business and Trade Secretary Kemi Badenoch has formally signed the treaty to accede to CPTPP trade group in New Zealand this morning [Sunday], 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.
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 found CPTPP investment accounted for:
- Over £240 billion in turnover 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 employment in CPTPP-owned businesses was outside of London
- One in 50 jobs in the North East
- One in every 25 jobs in the manufacturing sector
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.