Businesses applaud UK bid to join CPTPP

Business leaders in the UK - particularly in financial services - have welcomed this week's opening of formal negotiations for the nation to join a free trade alliance of Asia-Pacific countries.

David Sapsted

23 June 2021

International Trade Secretary Liz Truss launched the UK's bid to join the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in discussions with her Japanese counterpart, who chairs the trade group.In addition to Japan, existing members of the trade alliance are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam - a market of some 500 million people.“This part of the world is where Britain’s greatest opportunities lie. We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe,” said Ms Truss. “It is a glittering post-Brexit prize that I want us to seize.”The UK is hopeful the US under President Joe Biden will also join the alliance. Donald Trump withdrew America from the original Trans-Pacific Partnership shortly after becoming president.Under the CPTPP, virtually all tariff and quota barriers to trade are removed, with the exception of those applying to 'sensitive' areas, such as those aimed at protecting Japanese rice production and Canada’s dairy industry.Lord Mayor of the City of London William Russell described the start of negotiations as "encouraging news" that would be welcomed by many firms in the capital's financial services sector.“The City of London has always been a champion for free and open markets, and we hope membership of the CPTPP will lead to closer links between the UK and some of the world’s most exciting markets,” he said.Catherine McGuinness, the policy chair at the corporation, added: “The Square Mile is at the heart of global trade, so we welcome the start of these negotiations.“Membership of the CPTPP brings potentially greater access for UK firms to fast-growing markets. We welcome the opportunity to focus on the services, data and digital, and investment elements specifically."Removing barriers to trade in these areas would be not only good news for firms and consumers, but could help support wider global goals including a swift recovery from COVID and the race to net zero.“As always, however, the devil will be in the detail of the final agreement, and we look forward to feeding into these negotiations as they progress.”William Bain, head of trade policy at the British Chambers of Commerce, agreed that businesses' views needed to be taken into account by the government as the negotiations progressed.“Exporting businesses will welcome the commencement of the accession process to CPTPP. Trading opportunities with the Indo-Pacific are likely to grow in the coming decades although the EU will stay our closest and most important trading partner by far," he said.“If accession is successfully completed, the strong digital trade chapter should provide for greater e-commerce opportunities for UK exporters. We will also want to make the most of the dedicated chapter for SMEs, while the generous cumulation provisions within the rules of origin will create additional flexibilities for manufacturing exporters in how they can organise their supply chains.“But it is important that government works in partnership with business around this accession process right from the start. If the UK plans carve-outs from particular chapters, we need to know what these are early on and have the opportunity to press the views of business on compliance costs and terms.”Gerard Grech, CEO of Tech Nation, also welcomed the bid to join the CPTPP, saying there "has never been a better time for UK tech on the global stage". He said his organisation looked forward to working with the government to support more UK tech companies to scale and succeed overseas.Miles Celic, chief executive of the financial services trade group, TheCityUK, commented: "The world’s economic centre of gravity is shifting towards the Indo-Pacific."Being part of the CPTPP would give UK firms greater access to one of the fastest growing populations of middle-class consumers in the world. This economic shift will increase demand for the financial and related professional services and products in which the UK excels."