On 15 December 2023, the UK officially became a full member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is a free trade bloc that covers the Indo-Pacific region
The CPTPP includes countries like Australia, Japan, Canada, Vietnam, and Malaysia, with a combined GDP of £12 trillion.
By joining the CPTPP, Wales is expected to have significant economic benefits. This membership is set to boost the Welsh economy by £110 million in the long term.
Reducing tariffs and better export opportunities
The CPTPP offers significant advantages for Welsh businesses. The membership means lower tariffs and reduced trade barriers, particularly for key sectors like machinery, pharmaceuticals, and food and drink.
Welsh businesses shipping to the 11 member countries will have fewer regulations and lower costs, improving their ability to compete in these rapidly growing markets.
This could lead to new opportunities for companies already trading in the Indo-Pacific region and opening doors for others looking to expand internationally.
A boost for Welsh service providers
Welsh service industries are set to benefit from the CPTPP.
Welsh companies already export over £6.8 billion worth of services, and with the new agreement, it will be easier to operate across member countries.
The CPTPP makes sure that UK service providers can compete on equal terms with local businesses in these markets, further offering access to a range of sectors including finance, insurance, and digital services.
Concrete Canvas: A Welsh Success Story
One example of how Welsh businesses will benefit from the CPTPP is Concrete Canvas, based in Pontyclun, GOV.UK reported.
The company, which produces flexible concrete fabric for various construction applications, already exports to all CPTPP markets, accounting for more than 40% of its annual turnover.
With the UK’s membership in the bloc, Concrete Canvas will be able to save up to 20% on exports to Malaysia, where it has now secured its first Free Trade Agreement. These tariff reductions will allow the company to reinvest in product development and improve its regional competitiveness.
Consumer benefits and lower prices
Besides business growth, the UK’s membership in the CPTPP is expected to bring direct consumer benefits. Removing tariffs on consumer goods like fruit juices from Peru and vacuum cleaners from Malaysia could lead to lower prices for UK shoppers.
As the government continues to reduce trade barriers, the cost of everyday items may decrease, putting more money in people’s pockets and stimulating further economic activity. While also addressing the cost of living crisis.
Expanding future global trade
The UK’s CPTPP membership is part of a wider plan to secure new trade agreements with countries such as India, South Korea, and the Gulf Cooperation Council.
As the CPTPP expands, Costa Rica is set to join next, and Indonesia has expressed interest, the potential for even better economic opportunities grows.
For Wales, the entry into the CPTPP shows a significant step forward in building stronger international trade links, driving economic growth, and supporting job creation across the region.
A strategic Step for Welsh growth
The UK’s membership in the CPTPP looks to unlock new opportunities for Welsh businesses, from manufacturing to services. The deal is expected to enhance Welsh economic growth, create jobs, and increase prosperity by reducing tariffs, simplifying export procedures, and opening up new markets.
