Published on: December 16, 2024

BRITAIN JOINS THE CPTPP

BRITAIN JOINS THE CPTPP

NEWS  – Britain became the first European nation to join a major Indo-Pacific trading bloc.

HIGHLIGHT

  • This marks the biggest trade deal since Brexit for the UK.
  • The UK officially became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • The accession treaty was formally signed last year.
  • Officials anticipate the membership will boost Britain’s economy by up to £2.0 billion ($2.5 billion)
  • In the 12 months leading to September, the UK’s total trade value amounted to £1.7 trillion.

COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP (CPTPP)

  • A landmark pact established in 2018 that reduces trade barriers between its members.
  • It functions as a Free Trade Agreement (FTA) among the member countries.
  • Initially called the Trans-Pacific Partnership (TPP) but was renamed after the US withdrew in January 2017.

Member Countries

  • Original Members (11 countries):
    • Australia
    • Brunei
    • Canada
    • Chile
    • Japan
    • Malaysia
    • Mexico
    • New Zealand
    • Peru
    • Singapore
    • Vietnam

Features of CPTPP

  • Tariff Reductions: Countries are required to eliminate or reduce tariffs
  • Services and Investments: Strong commitments to open services and investment markets.
  • Competition and IP Rules: Clear rules on competition and intellectual property rights.
  • Foreign Company Protections: Safeguards and fair treatment for foreign companies.

Strategic Significance

  • Countering China’s Dominance:
    • CPTPP acts as a bulwark against China’s economic influence in the Indo-Pacific region.
    • China, along with Taiwan, Ukraine, Costa Rica, Uruguay, and Ecuador, has applied to join.
  • Economic Benefits:
    • Once implemented, CPTPP will form a trading bloc representing:
      • 500 million consumers
      • 5% of global GDP
    • Provides preferential access to key markets in Asia and Latin America.
  • High-Standard Free Trade Agreement:
    • Covers all aspects of trade and investment, including:
      • Trade in goods and services
      • Labour mobility
      • Government procurement

Key Features for Businesses

  • Transparency in Trade:
    • Establishes clear rules for consistent and transparent trade practices.
    • Dedicated chapters address technical barriers, customs procedures, and sanitary standards.
  • Environmental and Labour Protection:
    • The agreement includes enforceable chapters on:
      • Environmental protections
      • Labour rights
    • Dispute settlement mechanisms ensure compliance.