A new free trade agreement in the Pacific has come into force
today (Sunday 30 December) and will play a crucial role in
promoting free trade.
International Trade Secretary welcomed the introduction of
Comprehensive and Progressive Agreement for Trans-Pacific Pacific
Partnership (CPTPP), saying that the alliance will be ‘force for
good’ in providing economic opportunities for hundreds of
millions of people.
The Pacific has been the focus of increased trade tensions and
the introduction of protectionist measures, by both China and the
US who have a major influence in the region.
87% of Chinese exports are subject to distorted trade measures in
the US market and 92% of US exports are subject to distorted
trade measures in the Chinese market.
CPTPP will eliminate 95% of tariffs on goods trade between 11
countries around the Pacific rim, including Australia, Canada,
Japan, Malaysia and Vietnam.
Its members currently account for 13% of global GDP and £95bn
worth of the UK’s trade. Many more countries are expected to join
the agreement in the future and the UK will potentially join
after we leave the European Union.
The UK is considering seeking accession to the agreement and the
Department for International Trade is currently analysing
responses to its 14-week public consultation on potential
accession to CPTPP.
International Trade Secretary said:
“Joining CPTPP would cement our strong economic ties with old
friends, like Canada and Japan, as well as establishing new links
with some of the world’s fastest-growing economies.
“We know from our recent public consultation that UK businesses
want to join CPTPP as it would help them to expand into new
markets and capitalise on the growing demand for quality British
goods and services.
“This agreement will also help to promote free trade against a
backdrop of heightened tensions in the global trade system. It is
in all of our interests to ensure an open and rules-based trading
system wins out and that a trade war in the Pacific does not hit
British households in the pocket.”
DIT’s consultation on CPTPP included 12 events throughout the UK,
which confirmed that there is demand from businesses to join
CPTPP. It also revealed that there are many businesses that are
unaware of the opportunities on offer but would benefit with
support from DIT trade advisers.
In addition, a recent survey by CBI found that over 40% of their
export orientated members are already trading with one or more
CPTPP member countries, with a further 26% looking to do so in
the near future.
DIT has already engaged with all 11 members of CPTPP and there is
support for UK membership. In October the Japanese Prime Minister
Shinzo Abe said that the UK would be welcomed into the agreement
‘with open arms’ and the Australian PM has said ‘the British
would be pushing at an open door’.
The agreement is widely recognised as one of the most progressive
free trade agreements, with provisions for digital trade,
e-commerce, trade in services and protection of intellectual
property. It also sets new standards in agreements for
sustainability, anti-corruption and improving workers’ rights.
If the UK joined, we would been able to benefit from the
opportunities of membership and we would be able to shape the
future rules of the agreement.
Many British businesses could benefit from the UK’s potential
accession to the CPTPP including Dudley-based technology company
Simworx who are a world-leading supplier of 4D effects cinemas
and motion simulation attractions for entertainment, education
and corporate markets worldwide.
The Asia-Pacific is an important market for the company and they
have recently secured a contract worth £46 million to provide
rides for four major theme parks across China.
Joining CPTPP could make it is easier for Simworx to secure more
contracts in rapidly growing Asia-Pacific countries and it could
make their services more competitively priced.
CEO of Simworx Limited Terry Monkton said:
“As a small and growing business, emerging markets in Asia and
Latin America represent excellent opportunities to grow Simworx.
“Our products are already sought after in Vietnam and Mexico and
that’s helped Simworx treble its turnover and employ over 50
people in the UK.
“But businesses like mine face particular barriers when we look
to export, particularly import duties, and agreements like the
Trans-Pacific Partnership would make it simpler for me to reach
new customers.”
Notes to Editors
· The 11 members of CPTPP are Australia, Brunei, Canada, Chile,
Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and
Vietnam.
· CPTPP comes into effect today for the seven countries that have
ratified it: Australia, Canada, Japan, Mexico, New Zealand,
Singapore and Vietnam.
