The UK has reached an agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with Australia, Canada, Japan, Mexico, New Zealand, Singapore, Vietnam, Peru, Malaysia and Chile, supporting tariff-free trade with a number of nations with which the UK does not currently have full FTAs.
The UK’s accession to the CPTPP may yield small benefits in the short term, but its rewards will grow over time and businesses that want to take advantage sooner can exploit the opportunities of the new agreement with our interconnected supply chain operations.
With current CPTPP economies accounting for 15% of global trade and 13% of global GDP, tariff-free access to these significant markets provides important new trading opportunities for the UK, with the government highlighting their Top 10 benefits.
1. A gateway to growth
CPTPP is a vast free trade bloc consisting of 11 sovereign countries spanning the Asia Pacific and the Americas. It is a gateway to the wider Indo-Pacific region, which will account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come.
2. Opening new markets for UK services providers
Red tape will be slashed and UK businesses will be operating on a par with local firms.
3. Data flows
Vital for modern trade, data flows enable everything from more efficient manufacturing and supply chains to more reliable infrastructure. Joining CPTPP will help remove the barriers our companies face like data localisation requirements, ensuring data can flow between the UK and CPTPP members.
4. Benefitting UK exporters: cutting tariffs on goods exports
Over 99% of exports to CPTPP member countries will be eligible for zero tariffs, improving goods market access for British firms.
5. Benefitting UK exporters: new opportunities from diversifying supply chains
Modern ‘rules of origin’ should make British businesses more competitive by allowing them to trade more freely across the bloc. For example, UK automotive manufacturers could sell car engines tariff-free to a car maker in the bloc, who could then sell their cars tariff-free to any member country.
6. Benefitting the whole of the UK
Joining the bloc will help companies reach new markets through CPTPP’s ambitious services and digital provisions.
7. A trade deal with Malaysia for the first time
CPTPP goes above and beyond the existing FTAs that we have with most CPTPP members. And joining CPTPP means the UK will have a trade deal with Malaysia, a CPTPP member, for the first time.
8. More access to high-quality consumer goods
Consumers and businesses could benefit from better choice, quality and affordability. It could also lead to cheaper import prices for inputs to manufacturing with tariffs eliminated on a wide range of inputs, including machinery and chemicals. Greater access to global supply chains is an important source of competitive advantage for businesses.
9. Strengthening economic security
British businesses will benefit from enhanced access to more markets while trading under fair rules that allow them to compete and thrive on the global stage.
10. Encouraging investment
Being a member of CPTPP encourages further investment by guaranteeing protections for investors, supporting jobs across the UK.
As opportunities to trade with CPTPP members emerge, we have fixed price and long-term capacity agreements in place with our partner carriers across the pacific, to provide resilient, consistent and reliable supply chain solutions.
Metro’s cloud-based supply chain management platform, MVT, simplifies global trading, by making every milestone and participant in the supply chain transparent and controllable, down to individual SKU level.
To discuss how our technology could support your supply chain, EMAIL Elliot Carlile to discover all options relating to current freight profile movements to and from CPTTP countries.