My Rt Hon Friend the Secretary of State for International Trade (Liz Truss MP) has today made the following statement.
The UK will today launch negotiations with 11 countries belonging to a free trade area, in a landmark moment for the UK as an independent trading nation. Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) hitches the UK to some of the world’s biggest current and future economies populated by half a billion people and with a joint GDP of £9 trillion.
It would secure our businesses and British exports superior access to these dynamic markets, with 65% of the world’s 5.4 billion middle class consumers expected to be in Asia by 2030. UK exports to CPTPP nations would increase by 65% (£37bn) until 2030 and, in addition to this growth, comparative static analysis shows an additional increase in trade by £3.3bn as a result of UK accession.
Membership of CPTPP would build on the FTAs we have now signed with 67 countries plus the EU, and opens new markets for our services sectors, lowers tariffs on goods like cars and whisky, and creates new opportunities for UK farmers. The historic trade deal agreed in principle with Australia on 15 June will mean iconic British products will be cheaper to sell into Australia, boosting UK industries that employ 3.5 million across the country. This agreement, and others with CPTPP members including Japan, Singapore and Mexico, is a gateway into the fast-growing Indo-Pacific region and will boost our bid to join CPTPP.
CPTPP members represent 13% of global GDP, growing to 16% if the UK joins. Joining CPTPP would put the UK at the heart of this dynamic group of countries, deepening our ties with some of the world’s biggest and fastest-growing countries, as the world economy increasingly centres on the Pacific region.
Joining CPTPP is expected to boost this growth even further, and that means supporting even more UK jobs. It is an advanced and ambitious agreement which goes deep in areas of UK interest such as services and digital trade.
The Indo-Pacific is the world’s growth engine: home to half the world’s people; 40% of global GDP; and some of the fastest-growing economies that are at the forefront of new global trade arrangements. By entering into a free trade agreement with these countries, the UK can benefit from this growth. Acceding to the CPTPP would help the UK engage more deeply with the region, and help us secure increased trade and investment opportunities, diversify our trading links and supply chains, and embed open trade.
As part of CPTPP, our analysis shows that every nation and region of the UK is expected to benefit. Each region of the UK already exported over £1 billion worth of goods to CPTPP members in 2019, including £3.1 billion from the East Midlands, £2.4 billion from Scotland, and £2 billion from the North West. Membership could deliver a £1.8bn boost to UK GDP in the long run and to increase take-home pay for British workers by £800 million.
Accession could see 99.9% of UK exports being eligible for tariff-free trade with CPTPP members. Joining would secure lower tariffs for exports such as whisky and cars, which are in high demand in the Pacific region; 65% of the world’s 5.4 billion middle class consumers are expected to be in Asia by 2030.
CPTPP also greatly benefits the UK as the world’s second-largest services exporter. It makes travel easier for business-people moving between CPTPP countries, and goes further in areas of key UK interest, with advanced provisions that facilitate digital trade, modern rules on data that would help the UK’s cutting-edge tech sector go global and enable more financial and professional services markets to be opened up.
CPTPP also sets modern rules for digital trade across all sectors of the economy, supporting UK businesses seeking new opportunities in member markets. Digitally delivered services from the UK to CPTPP, such as making online international bank transfers, selling an e-book from an online marketplace or giving legal advice over Zoom, were worth £18.7 billion in 2019.
The more CPTPP expands, the greater the benefits to the UK. Economies including the Philippines, Thailand, Taiwan, and Republic of Korea have all expressed interest in joining. By having a seat at the table as the first new member, the UK can help shape CPTPP’s future development as it grows.
Today, the Department for International Trade has published four documents, copies of which have been placed in the House library:
- Our outline approach to negotiations, setting out our objectives for the negotiations
- A response to the public consultation on membership of CPTPP, setting out how it has informed our policy
- Our geostrategic vision for trade with the region
- A scoping assessment, providing a preliminary economic assessment of the impact of membership
On Wednesday 2nd June, CPTPP nations agreed to the UK’s bid to begin the accession process to join CPTPP. The UK will continue to work closely with Japan, as this year’s chair of the CPTPP commission, alongside the other CPTPP nations to progress negotiations as quickly as possible. As in all negotiations, we are committed to upholding our high environmental, labour, product and food safety, and animal welfare standards in our negotiations with CPTPP member states, as well as protecting the National Health Service (NHS).
CPTPP has high standards in areas including the environment and labour. Its rules commit members, for example, to protecting the minimum wage, freedom of association, the elimination of forced and child labour and, crucially, enforcing their own laws in these areas. CPTPP also affirms the UK’s right to regulate in our national self-interest, rather than forcing harmonisation on its members, complementing the UK’s system of strong rule of law coupled with the freedom to set our own regulations.
This government is committed to transparency and will ensure that parliamentarians, UK citizens and businesses have access to information on our trade negotiations. The Written Ministerial Statement of 7 December 2020 set out our transparency and scrutiny commitments, including regular updates to parliament and engagement with Select Committees, which will apply to the UK’s process of accession to CPTPP.
This statement has also been made in the House of Commons