On March 31, 2023, British Prime Minister Rishi Sunak publicly announced that the UK had completed the negotiation agreement to join the CPTPP and thereby, will officially join the CPTPP in the foreseeable future.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
CPTPP stands for Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is a free trade agreement in the Asia-Pacific region. This Agreement was negotiated and signed in 2018 by 11 countries including: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
CPTPP is considered one of the largest free trade agreements in the world, with an impact on more than 500 million people and accounting for about 13.5% of gross domestic product. The agreement aims to facilitate member states to make a series of commitments on reducing tariffs, increasing investment, raising standards for intellectual property rights, protecting the environment, and providing strict regulations on labor and culture.
With a total population of 500 million people in the CPTPP’s member countries, the International Monetary Fund (IMF) estimates that with the participation of the UK, this group will contribute 15% of global GDP.
The UK’s prospect of joining the CPTPP
When announcing that Britain would join the CPTPP, British Prime Minister Rishi Sunak said that the UK as a whole considers this to be its largest trade agreement since Brexit. With the accession to the CPTPP, the UK will have the ability to tighten ties with countries in the Asia-Pacific region and thereby, be able to self-deploy other trade cooperation without depending on the European Union.
Notably, the CPTPP will serve as an additional agreement in addition to the free trade agreements (FTAs) that the UK currently has with most member countries.
Typically, the UK has a UKVFTA Free Trade Agreement with Vietnam signed on December 29, 2020 and officially took effect from May 1, 2021.
UKVFTA helps strengthen the commercial relationship between the UK and Vietnam, especially in the context of the UK leaving the European Union (Brexit). This agreement helps to establish regulations and commitments on trade and investment between the two countries, including commitments on reducing tariffs, promoting services, protecting intellectual property rights and promoting scientific cooperation and technology transfer between Vietnam and the UK.
Prime Minister Sunak said that Britain’s accession to the CPTPP would significantly improve the UK’s economic interests and for the CPTPP bloc as a whole. As expected by the British Government, this accession will help the UK add $2.2 billion in GDP per year, a long-term growth through tariff incentives of cars, alcohol and dairy products, etc. that the CPTPP Agreements provide with member countries.
The UK government said that profits will continue to increase sharply if more countries join the CPTPP. This statement is especially possible when a world power like the UK has joined the CPTPP and thereby, can influence other countries to join in. In the future, it is possible that the United States under President Joe Biden’s regime will consider rejoining the CPTPP as the United States announces its withdrawal from the original TPP Agreement (Trans-Pacific Partnership Agreement – The predecessor of the CPTPP) in 2017.
The UK has been studying the possibility of joining the CPTPP since the beginning of 2018, in order to stimulate exports after Brexit. The British government applied to join the CPTPP from 2021 and since the establishment of the CPTPP, the UK will be the first new member of this organization.
In addition to the UK, some other countries that have applied and are in the process of approving requests to join the CPTPP are: Taiwan, Thailand, Colombia, South Korea, Philippines, Indonesia.
These countries are carrying out negotiations with CPTPP member countries to set out commitments and conditions for accession. Joining the CPTPP helps these countries strengthen their economic ties with countries in the region and the world, while benefiting from free trade regulations and investment protection.