UK joins Asia-Pacific trade bloc bringing £310 million boost to North West economy

The UK has officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement, which is set to boost the UK economy by up to £2 billion a year, with £310 million of gains in the North West.

The trade bloc, comprising Canada, Australia, Japan, Mexico, New Zealand and a number of other countries across Latin America and South East Asia, boasts a combined GDP of £12 trillion. The UK’s accession to the CPTPP will mean lower tariffs and fewer barriers for British businesses exporting to and importing from these countries, with the financial services, manufacturing and food and drink sectors set to benefit most.

Business and Trade Secretary Jonathan Reynolds said:

“Britain is uniquely placed to take advantage of exciting new markets, while strengthening existing relationships. Today’s news is further proof that the UK is a wonderful place to do business, with an open, outward looking economy driving the growth people can feel in their communities.

“Agreements like this boost trade and create opportunities for UK companies abroad. This is a proven way to support jobs, raise wages, and drive investment across the country which is key to this Government’s mission to deliver economic growth.

“Our Trade Strategy, published next year, will finally put in place a long-term, strategic plan for international trade that helps businesses and consumers and, ultimately, grows the economy.“

Under CPTPP rules UK manufacturers can benefit modern “rules of origin” provisions which allow goods to qualify for lower tariffs when built from parts from CPTPP countries then exported to a CPTPP country. Service industries will also face fewer barriers to doing business in other CPTPP countries, while the financial services sector will be able manage funds across the world from the UK and provide services to other banking hubs such as Singapore.

Consumer goods, such as fruit and vegetables grown in South America or electrical goods manufactured in South East Asia, could also fall in price if savings from lower tariffs are passed on to UK shoppers.

With other countries also moving to join the agreement, including Costa Rica which begun negotiations in November, and Indonesia, South East Asia’s largest economy, also having expressed eagerness to join the bloc this year, economic and strategic benefits of the agreement are expected to continue to grow with time.