CPTPP and UK trade could it happen
The CPTPP or the Comprehensive and Progressive agreement for Trans-Pacific Partnership is high on the UK agenda at the minute. As “BREXIT” gets closer the UK government are focussing even heavier on this partnership as a gateway to trade. On the 03rd July 2020 Liz Truss delivered a speech on advancing trade between the UK and Asia-Pacific. The full speech is here exactly as it was delivered. It is can also be found by following our UK trade links.
What is the CPTPP
The CPTPP is a trade agreement which covers 11 countries. Originally the TPP it evolved into the CPTPP when the USA pulled out of the arrangement. At the time of signing the combined economy between the 11 countries equalled over 13% of global GDP. If the CPTPP had moved forward it would have been the third largest free-trade area in the world by GDP. The countries involved were :
- Australia
- Brunei
- Canada
- Japan
- Malaysia
- Mexico
- New Zealand
- Peru
- Singapore
- Vietnam
- United States of America ( Who withdrew at the TPP stage so before completion of the CPTPP ).
The CPTPP came into effect originally at the start of 2019 and over the course of a few months tariffs were reduced to allow free trade. Countries which have shown an interest in joining but have yet to take this forward are :
- United States of America
- Taiwan
- United Kingdom
- Colombia
- Indonesia
- South Korea
- Thailand
So why the interest now
As the UK emerge as a trading nation trade barriers with countries outside of the EU can be shaped. It is interesting that Australia have been given airbridge status by the UK. Originally airbridges were for countries without restriction on travel. Australia and New Zealand were added even though they do have restrictions on arriving UK Passengers. With both Australia and New Zealand in the CPTPP partnership strengthening our trade relationship will do no harm at all.
The UK government have made no secret of the fact that they see free trade as the way forward. Quoting our growth patterns in 2001 as strong indicators that trade outside of the EU is vital for growth. What the CPTPP allows is a free trade agreement without forced domestic harmonisation. In effect what Liz Truss refers to as a modern, rules based free trade area.
Where all partners focus on trade to drive growth rather than country harmonisation into a block.
With global trade by Air and Sea and the development of potential free-trade zones at ports in the UK it is a strong indicator. Without the USA if the UK joins the global GDP of this free trade area clears 16%. You would anticipate that other countries who are looking for trade not harmonisation would come forward and look to join. The EU is our biggest partner by trade but from a freight forwarders perspective global free trade across the CPTPP could be an extremely strong focus.
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