The Business and Trade Secretary, Kemi Badenoch, has made a historic move by formally signing the treaty to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade group in New Zealand. This significant event took place on a Sunday morning, marking the beginning of the UK’s membership in a modern and ambitious trade deal that spans 12 economies across Asia, the Pacific, and now Europe.
A New Chapter in UK Trade
In Auckland, the Secretary of State embarked on her journey to solidify the mega-deal. Accompanied by influential figures like New Zealand Trade Minister Damien O’Connor, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalisation Goto Shigeyuki, and Australian Deputy Trade Minister Tim Ayres, she affixed her signature on the agreement. This act serves as the official confirmation of the UK’s commitment to join the CPTPP group, reflecting the successful culmination of extensive negotiations conducted earlier this year. As the UK takes this significant step, the government will now seek to ratify the agreement, subjecting it to parliamentary scrutiny, while other CPTPP member nations complete their own legislative processes.
Boosting UK Jobs and Investment
The recent endorsement of the CPTPP treaty coincides with the release of a fresh government study, uncovering a fascinating statistic: around 1 out of every 100 workers in the UK found employment within an organization headquartered in a CPTPP member nation during the year 2019. This equates to an impressive total of over 400,000 job opportunities spread across the entire country. As the UK officially joins the trade group, it is anticipated that this move will ignite additional investment from CPTPP countries. This is especially significant given that the investment value had already reached an impressive £182 billion in 2021. Moreover, the agreement solidifies protections for investors, fostering an environment that nurtures the growth and expansion of businesses.
Ian Stuart, CEO of HSBC UK, expressed enthusiasm about the opportunities this agreement presents for ambitious British businesses. He emphasized that the UK’s formal accession to CPTPP is a significant milestone for UK trade, enabling businesses to connect with the world’s most exciting growth markets for start-ups, innovation, and technology. HSBC UK, as a leading global trade bank, stands ready to support UK businesses in realizing their full potential and tapping into a world of opportunity.
Opening Doors for British Producers
Cath White, Head of International at Belvoir Farm, highlighted the positive impact of the UK’s accession to CPTPP on trade barriers. Over 99% of the goods exported from the UK to member countries of the CPTPP will now qualify for zero tariffs, presenting a significant advantage for UK businesses engaged in international trade. This development will ease administrative and commercial trade barriers, allowing talented and passionate UK producers to showcase their products on a worldwide scale. Belvoir Farm, as an illustration, ships out 20% of its total revenue to markets worldwide, with approximately one-third of its exports targeted towards Indo-Pacific regions such as Australia, New Zealand, Japan, and Singapore.
Enabling Competitive Advantage in Engineering and Architecture
Ian Galbraith, the Group Strategy Director at Mott MacDonald, enthusiastically expressed his unwavering support for the UK’s decision to join the CPTPP, emphasizing the numerous benefits it will bring. Mott MacDonald was part of the technical board that advised the British negotiating team. Galbraith highlighted the ambitious services and procurement chapters of the partnership, which pave the way for greater recognition of professional competence in engineering and architecture. The agreement sets forth transparent and equitable competition regulations in government procurement, enabling top-tier companies such as Mott MacDonald to secure and deliver new contracts across the diverse array of countries encompassed by the CPTPP.
Kemi Badenoch’s Optimism and the Benefits Ahead
Speaking ahead of the signing, Kemi Badenoch expressed her delight in signing a deal that will significantly boost British businesses and generate billions of pounds in additional trade. She emphasized that joining this exciting, growing, and forward-looking trade bloc is a testament to the UK’s status as an independent trading nation. The trade agreement known as CPTPP will play a crucial role in driving economic growth in the UK, while also contributing to the expansion of job opportunities supported by businesses associated with CPTPP throughout the nation.
Impacts on the UK Economy
According to the government report, CPTPP investment had a substantial impact on various regions and sectors of the UK economy. Key findings include:
- In London alone, the turnover exceeded £240 billion, while the South East and the East of England saw turnovers of £35 billion and £18 billion, respectively.
- The creation of 26,000 jobs in 2021 & 2022.
- Approximately 75% of jobs within CPTPP-owned businesses were located outside of London, showcasing the widespread economic impact of the trade group.
- One in 50 jobs in the North East.
- One in every twenty-five (25) jobs in the manufacturing sector.
The report further highlights that CPTPP companies have a significant economic influence, accounting for only 0.3% of all businesses in the UK but generating 6.1% of the country’s total turnover—a proportion 20 times higher than their representation in the business landscape.
A Game-Changing Partnership
As the UK becomes the first European member and the first new member since CPTPP was established, it demonstrates the immense opportunities that lie outside of the European Union. With the United Kingdom’s inclusion, the CPTPP trade group will possess a combined GDP of £12 trillion, constituting approximately 15% of the global GDP. This membership is a gateway to the wider Indo-Pacific region, which is projected to be the driver of global growth and home to approximately half of the world’s middle-class consumers in the coming decades. British businesses can now explore new horizons and tap into a market with immense potential, ensuring the creation of jobs and contributing to economic prosperity.
Source: Gov[Dot]UK
