Prime Minister Rishi Sunak announced on Friday 31st March 2023 that the UK has agreed to join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Joining the CPTPP after Brexit secures access for British exporters to a vast free trade area of more than 500 million people across the Indo-Pacific 11, countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
This historic agreement follows two years of intense negotiations by the Department for Business and Trade and puts the UK at the heart of a dynamic group of economies, as the first European member and first new member since CPTPP was created.
Being part of CPTPP will support jobs and economic growth across the country, with every nation and region expected to benefit. More than 99 percent of UK goods exports to CPTPP countries will now be eligible for zero tariffs, including key UK exports such as cheese, cars, chocolate, machinery, gin and whisky.
Total UK exports to CPTPP countries were already worth £60.5 billion in the 12 months to the end of September 2022 and are set to grow under CPTPP. Our leading services industry will also benefit from reduced ‘red tape’ and greater access to growing Pacific markets with an appetite for high-quality UK products and services.
Prime Minister Rishi Sunak said “We are, at our heart, an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms. As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.”
However, it remains to be seen how much the deal actually benefits Britain’s growth prospects. Based on the government’s own estimates, the deal will raise long-term domestic GDP by just 0.08%, which will have little impact to offset European trade losses as a result of Brexit.
China and Taiwan’s are the next two applicants in line to join the trade bloc, having each applied to join in fall 2021. On its economic merits, Taiwan’s status as an advanced liberal market economy makes the island a qualified candidate to meet the high standards of CPTPP membership. However, its political relationship vis-à-vis China complicates its potential membership. China, as the world’s largest nonmarket economy, faces a highly complex accession process—with its membership remaining uncertain based on the country’s debatable economic merits for joining. As a result, many CPTPP members are reluctant to accept both economies into the agreement; nor is any member comfortable admitting one before the other. Ecuador, Costa Rica, and Uruguay, which all applied between 2021 and 2022, all face lengthy accession processes, but their acceptance into the trade area is less politically controversial.
Westmond Logistics will ensure that our customers understand the Customs requirements of the CPTPP and to outline if their goods have a better tariff treatment under another FTA that is already in place.
Under CPTPP, an Importer may make a claim for preferential tariff treatment based on a Certification of Origin completed by an Exporter, Producer, or Importer. However, for imports into Brunei Darussalam, Malaysia, Mexico, Peru and Vietnam, a Certification of Origin completed by the Importer shall be implemented no later than five years after their respective dates of entry into force of the CPTPP. As there is no prescribed format, the Certification of Origin can be presented in a variety of ways, including on the consignment invoice, a company letterhead or a Certification of Origin template.