On December 15, 2024, the United Kingdom officially became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This marks a significant step for the UK as it seeks to enhance its trade connections in the Asia-Pacific region following its exit from the European Union.
The CPTPP includes key economies such as Japan, Australia, and Canada, and is expected to provide a long-term boost to the UK economy, estimated at £2 billion ($2.5 billion) annually. The agreement allows the UK to apply CPTPP trade rules and benefit from lower tariffs with eight of the eleven existing members, which include Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam.
The pact will officially take effect with Australia on December 24, 2024, and will extend to Canada and Mexico 60 days after their ratification. This agreement represents the UK's first free trade deals with Malaysia and Brunei, while enhancing existing agreements with other member countries.
Unlike the European Union, the CPTPP does not necessitate regulatory harmonisation, allowing for more flexible trade rules. Additionally, the UK's membership grants it a role in discussions regarding the potential inclusion of China and Taiwan in the pact, reflecting the strategic implications of this trade agreement.
The CPTPP evolved from the U.S.-backed Trans-Pacific Partnership, which aimed to counter China's economic influence before the U.S. withdrawal in 2017 led to its restructuring.