Credit: Original article can be found here
The government has announced that the UK will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), becoming the first European member of the group. This will offer UK exporters tariff-free access to new markets.
The CPTPP is an agreement between 11 nations (now 12, including the UK), formed after collapse of the Trans Pacific Partnership which was abandoned when the USA withdrew from talks.
The CPTPP includes Australia, Canada, Japan, Mexico and New Zealand. China is not a current member but is in discussions, as are other major nations in the Pacific region.
The CPTPP will give the UK tariff-free access to large overseas markets and also better access to raw materials and manufacturing facilities. Given resilience challenges, easier access to diversified supply is clearly a strategic advantage.
It therefore provides a supplement to the Trade and Co-operation Agreement (TCA) struck with the EU. However, it should be noted that the UK already had trade deals or was in discussions with most members of the CPTPP, so the net benefit of joining may be quite small. The UK government estimates the net economic benefit as equivalent to 0.08% of GDP.
Also, the CPTPP is not operated as a single market, with unified regulations in the same way as the EU, although it is making moves in that direction. Doing business across the CPTPP may therefore be difficult.
The CPTPP includes some very large food exporting nations – especially Australia, Canada and NZ. The NFU has previously raised concern that UK membership would allow these exporters unfettered access to UK markets for goods which do not match UK production standards. More recently, however, the NFU has been more welcoming, citing reassurances given by the UK government.
More economic news and analysis
Sign up to our bulletin
Our round-up of the latest economic and political news, focused on FMCGs