CPTPP and Britain’s Membership

April 5, 2023

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade pact that originated from the Trans-Pacific Partnership (TPP) after the United States withdrew in 2017. The agreement includes 11 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The CPTPP aims to enhance trade between member countries by reducing tariffs, improving market access, and promoting economic growth. On December 31, 2022, Britain formally applied to join the CPTPP, which will make it the first European country to join the partnership.

Expected Membership and Impact

With Britain’s membership, the CPTPP will cover a market of 500 million people, accounting for approximately 15% of global GDP. According to the UK government’s estimates, joining the CPTPP will provide a £1.8 billion boost to exports in the long run, with an estimated 0.08% increase in GDP. This increase is expected to be driven by reduced tariffs and increased market access for British businesses.

Market Access and Regulatory Harmonization

Unlike the EU, the CPTPP does not have a single market for goods or services, and regulatory harmonization is not needed. This means that businesses in the UK can access markets in CPTPP countries without having to comply with a unified set of regulations. Furthermore, the CPTPP does not impose a uniform tariff reduction, allowing member countries to negotiate their own tariffs.

Preferential Tariffs and Eligible Products

Exporters who want to take advantage from preferential tariffs under the CPTPP are required to prove that their products have an adequate proportion of “locally” sourced parts. This means that the product must be made with a certain percentage of components that originate from within the CPTPP member countries. Eligible products for zero tariffs under the agreement include cheese, cars, chocolate, machinery, gin, and whisky.

Membership Benefits for UK Exporters

One practical benefit that UK exporters have from the CPTPP is optionality. By joining the partnership, UK businesses can choose to export to CPTPP member countries that offer the most favorable market conditions. Additionally, UK exporters will be able to compete on a level playing field with other CPTPP countries, allowing them to expand their customer base and increase their exports.

Beef Import Quotas and Food Standards

In the CPTPP agreement, Britain agreed to a quota on beef imports. This quota is intended to protect British farmers by limiting the amount of beef that can be imported from CPTPP member countries. However, Britain did not agree to lower its food standards for imported beef, including the ban on hormone-treated beef.

« Previous Post Next Post »