Business and Trade Secretary Kemi Badenoch signed documents in New Zealand Sunday for the UK to become the 12th signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The signing kickstarts the UK’s membership of what has been called a modern and ambitious trade deal. It is also the first European country to be part of the pact that has 11 other members in the Asia-Pacific region, including Vietnam.
The signing took place in Auckland in the presence of New Zealand Trade Minister Damien O’Connor, Vietnamese Minister of Industry and Trade Nguyen Hong Dien, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalization Goto Shigeyuki and Australian Deputy Trade Minister Tim Ayres.
The signature is the formal confirmation of agreement for the UK to join the group, following the substantial conclusion of negotiations earlier this year.
The British government will now seek to ratify the agreement, after parliamentary scrutiny. Other CPTPP members have completed their own legislative processes.
“Total trade between the UK and Vietnam has recently reached £6.9 billion (over $9 billion), an increase of 29% on last year and I'm confident that the UK's accession to CPTPP will strengthen this even further,” Iain Frew, British Ambassador to Vietnam, says in an embassy press release.
“This shows the UK’s strategic commitment to the Indo-Pacific region... I look forward to working closely with the Government of Vietnam, other partners and businesses to make the most of this new partnership.”
A new British government report says that one in every 100 UK workers was employed by a business headquartered in a CPTPP member in 2019, equal to more than 400,000 jobs in the country.
Membership of the trade group is expected to spark further investment in the UK by CPTPP countries, already worth £182 billion ($238.26 billion) in 2021, by guaranteeing protections for investors, according to the British Embassy release.
Badenoch said in Auckland that joining “the exciting, growing, forward-looking trade bloc will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”
The British government report says CPTPP investment accounted for over £240 billion (around $314.2 billion) in turnover in London, £35 billion ($45.82 billion) in the South East and £18 billion ($23.56 billion) in the East of England.
It also says that CPTPP companies punch above their weight economically. While they account for 0.3% of all businesses in the UK, they generate 6.1% of the UK’s total turnover, 20 times higher than the proportion of businesses they represent.
The UK will be the first European member and first new member since CPTPP was established in 2018. Its 11 existing members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
“Being part of CPTPP will mean that more than 99% of current UK goods exports to CPTPP countries will be eligible for zero tariffs. Dairy farmers, for example, will benefit from reduced tariffs on cheese and butter exports to Canada, Chile, Japan and Mexico. This builds on the £23.9 million (nearly $31.3 million) worth of dairy products we exported to these countries in 2022,” the embassy press release says.
It quotes Warrick Cleine, chairman of the British Corporate Advisory Council in Vietnam, also chairman and CEO of KPMG Viet Nam, as saying: “CPTPP is a trade agreement like no other. While the participants are diverse and span many of the world’s fastest-growing geographies, CPTPP members share a common commitment to a rules-based trading system that goes beyond trade in goods, and facilitates the digital economy and trade in services.
“Vitally, the CPTPP should be viewed in the C-suite as another essential part of trade infrastructure - the negotiators and politicians did their part – business leaders now need to lean into the opportunity.”
The release also quotes chairman of the British Chamber of Commerce in Vietnam, Chris Jeffery, as saying: “Our belief is that trade between Vietnam and the UK will continue its rapid growth, marking the start of our next 50 years of partnership and growing links between the two countries. The opportunity is now there for UK companies to fully benefit from the UK’s focus on developing ties and links with Asia.”