The UK has moved into the second and final phase of accession to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), it has been announced.
Membership will give British businesses unlimited access to a global market worth £8.4 trillion each year.
Here’s what you need to know.
What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership?
Launched in March 2018, the CPTPP is a free trade agreement between 11 major Pacific Rim Nations, including Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
According to the latest statistics, the free trade area – described as “one of the largest and most exciting free-trading clubs in the world” – contains more than 500 million people and generates an estimated £8.4 trillion in revenue each year.
If successful, the UK will be the first non-founding member to join the partnership.
What are the benefits of joining?
Assession will cut red tape and costs for British businesses trading with Trans-Pacific members.
Under the agreement, up to 95 per cent of import charges and tariffs will be reduced or cut completely, while the rules of origin will be simplified providing 70 per cent of the materials or components used come from participating countries.
For example, 99.9 per cent of UK exports to the CPTPP will be eligible for tariff-free trade.
Membership will also give professional and digital services businesses unrivalled access to international markets.
What’s the catch?
Like membership to the EU, members must comply with strict product and financial regulations, such as food and health and safety standards. Most British suppliers, however, will already meet the minimum level of compliance under existing UK laws.
Commenting on the announcement, Secretary of State for International Trade Anne-Marie Trevelyan said: “CPTPP is one of the largest and most exciting free-trading clubs in the world. Today’s announcement is a major milestone for us joining this dynamic group of economies and means the finish line is in sight.
“I look forward to visiting Asia next week and flying the flag for Global Britain by holding valuable trade talks with key partners across the Indo-Pacific region and pushing to secure CPTPP accession by the end of the year. This is just one aspect of our Indo-Pacific strategy, which will benefit businesses and consumers across every part of the UK and help us to level up at home.”
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