UK reaches agreement on £8.4 trillion Asia-Pacific free trade pact

Out-Law News | 03 Mar 2022 | 3:07 am | 1 min. read

The UK has reached an agreement with the Asian free trade partnership, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to progress with negotiations.

According to a statement by the UK government, the UK has entered the second ‘market access’ phase of negotiations with the CPTPP, a free trade area worth £8.4 trillion (US$11.2tn). Once completed, 99.9% of UK exports to CPTPP member states could be tariff-free trade.

Once the UK joins, it will gain new guarantees of access to services markets, exporting UK services to CPTPP countries. UK businesses could expand their digital reach in international markets because of the CPTPP's modern rules for digital trade across all sectors of the economy.

Kotsonis Totis

Dr. Totis Kotsonis

Partner, Head of Subsidies, Procurement, Trade Agreements and Trade Remedies

This is yet another important milestone in the UK’s accession to the CPTPP.

Some UK exports will have easier access to preferential tariff treatment, which will increase demand for imports of UK goods from CPTPP member countries. CPTPP’s rules of origin means traders can more easily import goods from other member countries.

Trade law expert Dr. Totis Kotsonis of Pinsent Masons said: “This is yet another important milestone in the UK’s accession to the CPTPP. The UK has much to gain through its participation in this dynamic trading bloc.”

“Over and above CPTTP’s significance as a super cross-regional trade bloc that brings together some of the world’s more dynamic and fast-growing economies, with the accession of the UK, but also in light of new membership applications by the likes of China, Taiwan and South Korea, CPTTP can yet emerge as an influential forum for the setting of international regulatory standards and rules in areas such as digital trade and cross-border data flows that are relevant to an increasing amount of global trade,” he said.

The UK’s secretary of state for international trade, Anne-Marie Trevelyan, said the second round of negotiation was “a major milestone for us joining this dynamic group of economies and means the finish line is in sight’.

In June 2021, member countries of the CPTPP approved UK’s request to join the bloc. In October 2020, the UK made a formal request to join the deal and signed its first post-Brexit trade deal with Japan.