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Trade with the CPTPP

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CPTPP agreement unlocks new trade opportunities for UK businesses

In 2023 the UK joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a deep free trade agreement between 12 economically diverse countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam…and now the UK. With a combined GDP of £12 trillion and forecasts of further growth, the CPTPP presents immense growth potential for UK businesses. In this article, explore some of what this trade deal means for UK businesses and the opportunities it brings.

What does the deal mean for UK businesses?

  • EXPANDING TRADE OPPORTUNITIES

One of the key advantages of the UK joining the CPTPP is the access to previously untapped markets. The deal opens new trading opportunities with Malaysia and Brunei, both of which are economies worth over £240 billion combined in 2022. This expansion offers UK businesses the chance to explore and establish trade relationships with these countries, creating avenues for growth and diversification.

  • TARIFF-FREE TRADE

Under the CPTPP, UK businesses can benefit from enhanced trading arrangements. Currently, the UK exports around £30billion worth of goods to CPTPP countries. With this deal, over 99% of UK exports will be eligible for tariff-free trade to CPTPP countries.

  • DIGITAL TRADE OPPORTUNITIES

The CPTPP also introduces modern rules for digital trade, enabling businesses to seek new opportunities in CPTPP markets. With the agreement committed to the highest data protection standards, businesses can expand into CPTPP markets with confidence, ensuring individuals and businesses know their data is safe.

  • MORE FLEXIBLE SUPPLY CHAINS

The CPTPP brings flexibility to the rules on supply chains across member countries. This means that UK exporters can benefit from a single set of rules, making it easier to qualify for preferential tariff treatments. This will not only reduce administrative burdens for businesses but also enhance efficiency and competitiveness in accessing CPTPP markets.

 

When can businesses start using it?

Businesses can use the provisions when CPTPP enters into force. Currently, the UK is moving quickly to ratify the deal. Once the other parties have also ratified, the entry will come into effect, expected to occur in the second half of 2024.

 

Rules of Origin

Rules of Origin (RoO) are an essential part of the CPTPP as tariff reductions only apply to goods deemed to have the ‘origin’ of a CPTPP member country. These rules determine in which country a product was made – its ‘economic nationality’ – and help ensure that customs authorities apply lower duties correctly so that businesses benefit from them.

The RoO for the CPTPP allow importers in all CPTPP member countries to take advantage of preferential duty rates for goods obtained or manufactured in a CPTPP member country or combination of countries. This means that if your goods meet the criteria to be treated as ‘UK origin’ under the CPTPP then they can benefit from preferential tariff treatment when sent to other CPTPP countries. For countries where the UK already has a bilateral FTA, traders can use CPTPP RoO or the bilateral FTA RoO, depending on the tariff preference you want to claim.

In our CPTPP guide you can find further information on the RoO for CPTPP and how to determine if your product will qualify for reduced tariffs.

 

Global Connectedness Report 2024

DHL recently released their Global Connectedness Report for 2024. The report measures the globalisation of 181 countries and provides a unique and comprehensive picture of how goods & services, capital, information, and people are moving around the world. Singapore – one of the countries in the CPTPP – stood out in the report with research showing it to be the world’s most globalised country with one of the most advanced economies. Its major port operations make it uniquely positioned to excel in globalisation. The other 11 countries in the trade deal sit among the top 100 globalised countries. These statistics highlight the potential for growth and trade that each of the countries in CPTPP hold, again showing the immense opportunities this deal will open for the UK.

By leveraging the CPTPP, UK businesses of all sizes can expand their global reach, unlock new growth opportunities, and strengthen their position in international trade. We recently hosted our CPTPP webinar where government and industry experts dove into the intricacies of this transformative agreement. Fill out the form at the bottom of this page to gain valuable insights and prepare your business for success in the CPTPP!

Register for access to the webinar and guide:

More information on CPTPP can be found at Gov.uk, including the full agreement text, tariff schedules and business explainers. We have also produced a guide with all of the relevant information shippers should know about the CPTPP, which you can find here.

This year the UK Department for Business and Trade will be preparing a range of products and guidance to help businesses prepare for when CPTPP comes into force, guided by the UK FTA Utilisation team. This guidance is being tested with Business Representative Organisations and businesses to ensure it is fit for purpose.

Before the trade deal comes into force, DHL and the Government will be providing further information on the CPTPP. To receive our latest updates on the subject, sign up to our weekly newsletter or keep an eye on our social channels.