UK Joins Indo-Pacific Bloc: A Post-Brexit Trade Milestone

On December 15, 2024, the United Kingdom officially became the first European nation to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This significant move, a result of the UK’s post-Brexit strategy, aims to boost the country’s economy by providing new business opportunities and trade benefits across the Indo-Pacific region. The UK’s entry into the bloc was formalized after the ratification of the accession treaty by most CPTPP members, with several more expected to follow.

What is the CPTPP?

The CPTPP is an economic partnership that originally started with 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. After the US withdrawal from the Trans-Pacific Partnership (TPP) in 2016, the remaining countries established the CPTPP, reducing trade barriers on a wide range of goods and services. The bloc accounts for around 15% of global GDP and includes some of the fastest-growing markets globally.

Economic Opportunities and Projections

UK officials anticipate that joining the CPTPP could add up to £2 billion to the UK economy annually, benefiting sectors like financial services, manufacturing, and food and drink. With reduced tariffs and barriers, UK businesses are expected to see enhanced market access across three continents, particularly in emerging markets of the Indo-Pacific.

Trade Benefits and Future Expansion

The CPTPP’s updated “rules of origin” provisions are expected to benefit industries like the UK’s car manufacturing and food production. In addition to large firms, small and medium-sized enterprises (SMEs) are set to benefit from the easier export processes. The deal will also help UK firms tap into the burgeoning growth corridors in Asia and the Pacific.

A Step Towards Global Trade Leadership

The UK’s membership in the CPTPP is seen as a pivotal step in strengthening its post-Brexit global trade strategy. Conservative leaders, including former Trade Secretary Kemi Badenoch, emphasize that this trade agreement unlocks substantial benefits for various sectors. As more countries, including Costa Rica, express interest in joining the CPTPP, the UK’s role within this growing trade bloc is expected to become increasingly central to its long-term economic success.

Summary of the news

Why in News	Key Points
UK Joins CPTPP	UK became the first European country to join the CPTPP on Dec 15, 2024. This move is part of the UK’s post-Brexit trade strategy.
CPTPP Members	The CPTPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and now the UK.
Projected Economic Benefit	UK’s membership expected to add up to £2 billion annually to its economy.
CPTPP Overview	The CPTPP accounts for 15% of global GDP and includes fast-growing Indo-Pacific economies.
Trade Sectors Impacted	Financial services, manufacturing, food and drink, and SMEs will benefit from reduced tariffs and easier market access.
Entry Process	UK’s entry ratified by 8 CPTPP members: Japan, Singapore, Chile, New Zealand, Vietnam, Peru, Malaysia, and Brunei. Entry with Australia on Christmas Eve.
Post-Brexit Strategy	CPTPP membership helps the UK diversify trade, lessening reliance on EU countries for exports and imports.
UK’s Post-Brexit Trade Deals	The UK is seeking new trade agreements globally after leaving the EU following the 2016 Brexit referendum.
Static Points	CPTPP Formation: Originated from the Trans-Pacific Partnership (TPP), following the US withdrawal in 2016.
Global GDP Share	CPTPP members now represent around 15% of global GDP, with a population of 500 million.