UK Gains Membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
The United Kingdom is set to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) by 15 December 2024, following the final ratification of the treaty by Peru. The agreement spans over five continents and will allow the UK greater access to global markets. Furthermore, it will reduce tariffs on over 99% of UK goods exported to member countries.
The CPTPP’s reach is expected to boost the UK economy by around £2 billion annually by 2040. This milestone comes at a time when most companies are eyeing opportunities in the international markets.
CPTPP: A Global Trading Bloc
The CPTPP, which started as the Trans-Pacific Partnership, has evolved into one of the largest trading blocs in the world. It will account for 15% of global GDP once the UK becomes a member. With 11 current members, including Japan, Singapore, and Australia, the agreement reduces trade barriers, especially allowing the UK to tap into growing economies across the Indo-Pacific region. Most unicorn startups, particularly in sectors like technology, services, and manufacturing will benefit significantly from easier trade regulations and reduced tariffs.
Economic Growth Potential
Prime Minister Rishi Sunak has hailed the UK’s accession to CPTPP as a major step forward, stating that it places the country in “prime position” to strengthen its global trade ties. Notably, UK exports to CPTPP countries already amount to around £60.5 billion and this figure is expected to grow further once the deal is fully operational. For instance, tariffs on key UK exports such as whiskey to Malaysia and cars to Vietnam will be eliminated, and this will allow importers from those countries to import more of the products.
While the UK government estimates that this deal will contribute an additional £1.8 billion to GDP over the next decade, critics argue that this may not fully offset the economic impact of Brexit. Regardless, for many businesses the CPTPP offers new avenues for expansion and reduced trade costs.
The Role of Unicorn Startups in CPTPP
Most unicorn startups are already leaders in global innovation, and the CPTPP presents them with unique opportunities to break into rapidly growing markets. The bloc itself has 600 million consumers. Also, the UK’s position as the first European country to join this pact enhances its influence on the trade bloc’s future direction, allowing it to advocate for rules that promote innovation and high standards.
Another thing to note is that countries such as Costa Rica and Ecuador are also seeking to join the CPTPP. This translates to the trading bloc getting more global traction in the future. This again, offers further promise for the UK’s businesses to diversify into new markets.
If you’re looking to leverage the benefits of the CPTPP for your business, reach out to 3E Accounting. As a trusted corporate service provider, we help companies navigate international trade agreements and unlock global growth opportunities.
