Malaysia and Chile have officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade bloc worth a combined £9 trillion of GDP, that already includes Australia, Brunei, Canada, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The United Kingdom is also in negotiations to become the first European member of the bloc, which could potentially mean more than 99% of UK exports to member countries become eligible for tariff-free trade.
Lower export tariffs
The inclusion of Malaysia and Chile is expected to provide significant opportunities for global trade, benefiting all countries involved.
British businesses, in particular, can add Malaysia and Chile to the list of countries they could benefit from lower tariffs on exports to, now that they have joined CPTPP. With the UK accession, the bloc will take up from 12% to 15% of global GDP, thus expanding the opportunities for global free trade.
Joining CPTPP will provide new opportunities for collaboration in the areas of fintech, green finance, and cybersecurity, supporting innovation in the financial services sector and helping develop countries as leaders of financial services. The potential for deeper and broader trading relationships among the member countries will be a major boost to global economic growth.
As the world economy increasingly centers on the Pacific region, stronger trade links with these countries are crucial to benefiting from this growth. CPTPP membership not only offers significant direct opportunities for UK exports, but it could also act as a gateway to the wider Indo-Pacific region, which is expected to account for the majority (56%) of global economic growth between 2019 and 2050.
The inclusion of Malaysia and Chile in the bloc is expected to have a significant impact on the global economy, as CPTPP had a combined GDP of £9 trillion and was home to over 500 million people in 2021. With the expansion of the bloc, the opportunities for global free trade are set to increase even further, benefiting businesses and economies worldwide.