The UK has officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major trade bloc spanning three continents – and a bit of a tongue twister.
With a combined GDP of £12 trillion, the CPTPP includes economies such as Japan, Canada, and Australia, making it one of the most significant trade developments in recent years.
If you’re looking to expand internationally, this opens up a wealth of opportunities.
You can now take advantage of several key benefits, including:
- Lower tariffs – Goods exported to CPTPP countries will face fewer trade barriers, making UK products more competitive on a global scale.
- Improved market access – Key industries such as manufacturing, food and drink, automotive, and financial services will benefit from enhanced access to fast-growing markets.
- Simplified trade rules – Updated “rules of origin” provisions mean businesses can source components from other CPTPP countries while still qualifying for lower tariffs. For example, a UK car engine manufacturer using CPTPP-sourced parts could reduce export costs.
- New trade relationships – The UK now enjoys free trade agreements with Malaysia and Brunei for the first time, creating fresh opportunities in previously untapped markets.
You might want to discuss the potential advantages with a tax adviser before moving forward.
Opportunities for UK businesses
CPTPP membership gives you access to high-growth economies in Southeast Asia and Latin America.
With reduced tariffs, exporting goods and services becomes more cost-effective, allowing UK businesses to compete more effectively with local companies in these regions.
For service providers, the agreement reduces restrictions on market entry.
Firms in sectors like fintech, consultancy, and logistics can now operate more freely in CPTPP countries, managing funds internationally and expanding their client base.
Lower tariffs on imports and exports also enable consumer goods businesses to adopt more competitive pricing strategies.
UK brands can reach new international markets, while British consumers may see lower prices on products such as fruit juices from Peru or appliances from Malaysia.
However, CPTPP benefits are not limited to large corporations.
Small and medium-sized enterprises (SMEs) can also take advantage of reduced costs, simplified trade administration, and improved market access, making it easier for you to expand internationally.
How to make the most of CPTPP membership
We suggest you assess how CPTPP economies align with your business goals.
Countries like Japan, Malaysia, and Vietnam present significant growth opportunities in manufacturing, food production, and technology.
In addition, if your business sources raw materials or components from CPTPP countries, take advantage of the updated rules of origin to lower production costs and improve efficiency.
You should also review your international expansion plans and explore how lower tariffs and streamlined trade conditions can benefit your products or services in new markets.
If you need help with this, why not discuss it with an international tax adviser?
