Key facts
- The UK has officially become a full member of the CPTPP, a large free trade area, as of September 1.
- The CPTPP includes countries like Canada, Australia, Japan, and Singapore, but excludes the US, China, and the EU.
- The UK government estimates CPTPP membership will increase the UK's economy by approximately £2 billion annually.
- The UK is the second-largest member of the CPTPP by GDP, behind only Japan, and is the only member not located on the Pacific Rim.
- The agreement is expected to provide opportunities for 'regulatory diplomacy' in emerging technologies and intellectual property.
The United Kingdom has officially gained full access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a significant free trade area, as of September 1. This development marks a positive step in the UK's economic and geopolitical landscape, particularly amidst global market volatility and trade tensions.
The CPTPP is described as the world's largest free trade area excluding the United States, China, and the European Union. Its members comprise a diverse group of 'middle power' economies, including Canada, Australia, Japan, New Zealand, Singapore, Chile, Mexico, Peru, Malaysia, Brunei, and Vietnam.
Alexander Downer, Australia's former Minister for Foreign Affairs and High Commissioner to the UK, expressed confidence that the UK's membership offers extensive opportunities and counters the narrative of post-EU isolation. The bloc's combined GDP stands at approximately £13 trillion, representing 14% of global GDP, making it comparable in size to the EU and second only to the US and China individually.
The UK signed the CPTPP in 2023 and has been awaiting finalization of its membership, particularly an agreement with Canada. This week's development means UK businesses operating in Canada will experience easier travel arrangements, and both nations will see enhanced access to each other's public procurement markets.
Economically, the UK government projects that CPTPP membership will contribute around £2 billion annually to the UK's economy. In an era of escalating global trade wars, such agreements are crucial for fostering stable trading relationships and enabling supply chain diversification.
The UK is now the second-largest CPTPP member by GDP, trailing only Japan, and notably, it is the only member not situated on the Pacific Rim. Policy Exchange, a think tank chaired by Downer, believes the UK's participation may encourage other nations, such as South Korea and the United Arab Emirates, to join. The CPTPP's combined economy is reportedly growing faster than other free trade zones and could potentially surpass the EU's size in the future.
Manufacturing hubs within the CPTPP, like Vietnam and Malaysia, offer alternatives to China for countries seeking to diversify supply chains, particularly in sectors like semiconductors. Geopolitically, the UK's membership could enhance its leverage with the US and China, especially if either seeks to join the bloc.
The CPTPP also strengthens the UK's presence in the Indo-Pacific region, offering opportunities for its services sector and for 'regulatory diplomacy' in areas such as emerging technologies and intellectual property. The UK's full entry into the CPTPP is seen as a vital economic anchor, contributing to its long-term economic and geopolitical security.