- UK wraps up key step to joining CPTPP - worth £12 trillion in global GDP upon our entry - by ratifying the terms of our agreement to join the trade group
- British businesses will benefit from UK's accession to CPTPP through lower tariffs and fewer barriers to trade
- UK-Peru Double Taxation Agreement reached which will prevent businesses from being taxed twice and will significantly reduce the costs of doing business with Peru, supporting bilateral trade and investment
The UK has, earlier than expected, completed its key step required for joining CPTPP, Minister for Trade Policy Greg Hands will tell fellow members of the group during a meeting in Arequipa, Peru.
Joining CPTPP - which will account for 15% of global GDP with the UK included - means over 99% of current UK goods exports to CPTPP members will be eligible for tariff-free trade. Encompassing 500 million consumers in some of the world's largest current and future economies, the potential for increased trade is huge.
Business and Trade Secretary Kemi Badenoch signed the deal last July to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a modern, ambitious trade pact spanning 12 economies across Asia, the Pacific, and now Europe. Being part of CPTPP will support jobs and economic growth across the country, with every nation and region expected to benefit.
Only six economies, in addition to the UK, need to ratify by October for the deal to enter into force by the end of the year. Singapore, Japan, and Chile have already ratified, with other countries in the works.
During a two-day visit which kicks off today [17 May], Minister Hands will also welcome the conclusion of negotiations on a Double Taxation Agreement (DTA) which will protect businesses from being taxed twice - once in Peru and again in the UK, or vice versa. Reducing costs and providing certainty, it is a major win for businesses in both countries and will provide opportunities for substantial increases in bilateral trade and investment.
Minister for Trade Policy Greg Hands said:
The UK has been racing to get our ratification done because we know how much CPTPP will benefit British businesses, whether through access to new markets or cutting red tape on existing exports.
I'm delighted we were able to bring this forward, ahead of our original July forecast, so we can get the countdown to Entry into Force going as soon as possible."
The UK intends to be an influential member of CPTPP, making its voice heard on all key matters, and is already involved in meetings and discussions with CPTPP Parties on the future of the agreement. Peru, a member of the bloc, is a longstanding trading partner for the UK, with bilateral trade worth £1.8 billion last year.
William Bain, Head of Trade Policy at the British Chambers of Commerce, said:
There are few multi-national trade agreements like this one. The UK's addition to this bloc will open up new opportunities for both inward and outward investment.
Trade rules will be more favourable for manufacturers looking to sell products to other member countries and data transfers for firms in the services sector will also be more straightforward.
Crucially, it will also give the UK a say in the bloc's future development, making it a deal that will work for our traders both now and in the future."
Marco Forgione, Director General of the Institute of Export & International Trade said:
The ratification of CPTPP marks an important stage in the UK's trading future. British businesses now have tariff free access to some of fastest growing markets in the world to sell our goods and our world leading services. This is an opportunity which can help reshape the UK economy.
At a time when global trade has been weaponised, this partnership can help the UK establish resilient and robust supply chains across Southeast Asia, Central and South America. In a world of growing geo-political uncertainty, the expanding trading community of CPTPP nations offers an important counterpoint.
Now CPTPP is ratified the real work begins to make sure businesses understand how to take advantage of the immense opportunities for UK services and goods in CPTPP nations. There is a great opportunity for UK businesses to grow."
Miles Celic, Chief Executive Officer, TheCityUK said:
The UK's ratification of the CPTPP is another major milestone in the journey to finalising this strategically important deal. Britain will not only benefit from better access to some of the world's fastest growing economies, it will also be able to help shape the future direction of a group which is increasingly important for the future of the global economy."
Other benefits of UK accession to CPTPP include:
- Less red tape for the UK's world-class services
- Increased flexibility via modern 'rules of origin' for British goods
- Investment provisions which limit barriers
- Cheaper import prices thanks to reduced tariffs
Background
- The UK is announcing ratification of the terms of our agreement to join the CPTPP.
- This follows depositing our instrument of accession with New Zealand as depositary earlier this week to accept our Accession Protocol signed last year; the treaty that sets out the terms and conditions of accession of the UK to the CPTPP.
- This step follows the Trade (CPTPP) Act receiving Royal Assent in March. Entry into force is expected later this year.
Sources used in this press release:
