UK Seeks to Join Asia-Pacific Trade Pact
Feb. 22, 2021
By: Navpreet K. Moonga
On February 1, 2021, the United Kingdom (UK) applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) by submitting a formal notification of intent to the depositary of the agreement, the New Zealand Government. This move from the UK comes exactly one year after the nation formally left the European Union (EU).
The CPTPP is a trade agreement among countries that border the Pacific Ocean, namely, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It was initiated in January 2018 following the withdrawal of the United States from the Trans-Pacific Partnership. The agreement aims to provide for greater market access to each nation and seeks to eliminate or reduce 95% of tariffs and/or import charges. Further, goods qualify for rules of origin requirements where 70% of product source components come from any of the participating countries. The CPTPP however, has not been designed to have the same customs structure as the EU, which is a single market and customs union. Instead, each country in the partnership is able to establish and maintain its own regulations.
Having left the EU, the UK foresees membership in the CPTPP as “a key part of the Government’s plan to position the UK at the [center] of a network of modern free trade deals that support jobs and drive economic growth at home.” Prime Minister Boris Johnson has stated that it is the UK’s “ambition to do business on the best terms with [its] friends and partners all over the world and be an enthusiastic champion of global free trade.”
The UK Government stated that by joining the CPTPP, business will benefit from the following:
- Modern digital trade rules that allow data to flow freely between members, remove unnecessary barriers for businesses, and protect commercial source code and encryption.
- Eliminating tariffs quicker on UK exports including whisky (from 165% to 0% in Malaysia) and cars (reducing to 0% in Canada by 2022, two years earlier than through the UK-Canada trade deal).
- Easier travel for businesspeople between CPTPP countries, such as the potential for faster and cheaper visas.
If you have any questions or would like more information about UK trade developments or the CPTPP, contact an attorney at Barnes, Richardson & Colburn LLP.