The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has a combined market value of £11 trillion and offers a near-frictionless gateway to countries in the Asia-Pacific region – some of which the UK has no existing trade agreements with.

And as the second largest economy in the CPTPP after Japan, the UK is in a strong position to benefit from the agreement and increase commercial transactions in key territories.

The CPTPP is a landmark, free-trade agreement between 11 countries across the Asia-Pacific region and now including the UK as its twelfth member.

The main aims of the CPTPP are to reduce trade barriers, encourage cooperation on regulations, and facilitate economic integration. Unlike the European Union (EU), the CPTPP does not require countries to join a single market or customs union and doesn’t impose identical standards and regulations on members.

The agreement covers multiple sectors, including agriculture, technology, financial services, and manufacturing, and largely eliminates tariffs on goods. It also sets common standards in areas like intellectual property, e-commerce, and labour practices.

Although the UK had existing trade agreements with several members, the CPTPP creates new relationships for Britain with Malaysia and Brunei. Several other countries, like Indonesia, Costa Rica and Taiwan, are currently seeking membership, signalling potential for expansion of the group.

Besides the UK, the current members of the CPTPP are:

Australia – population 26M. Main imports from the UK are cars, pharmaceuticals, consumer goods, and business and financial services.

Brunei – population 456,000. Current main imports from the UK are electrical and electronic equipment, vehicles and pharmaceuticals. 

Canada – population 37M. Imports from the UK include industrial machinery, cars, aircraft, mineral fuels and consumer goods.

Chile – population 19.6M. Current main imports from the UK include alcoholic drinks, pharmaceuticals, cars, and business and financial services.

Japan – population 125M. Main imports from the UK are cars, automotive parts, machinery, chemicals, pharmaceuticals, food and drink, and business and financial services.

Malaysia – population 31.5M. Cars, precious metal compounds, gas turbines, electrical goods, machinery, and food and drink are the current main imports from the UK.

Mexico – population 132M. Main imports from the UK are cars and commercial vehicles.

New Zealand – population 5.3M. Current main imports from the UK include cars, machinery and pharmaceuticals.

Peru – population 34M. Imports from the UK include food and alcoholic drinks, machinery, pharmaceuticals, and electrical and electronic equipment.

Singapore – population 5.6M. The main imports from the UK are power generators and industrial machinery, mechanical appliances, and alcoholic drinks.

Vietnam – population 97.5M. Imports from the UK are pharmaceuticals, machinery and industrial equipment.

Together, the CPTPP countries represent approximately 15% of global Gross Domestic Product (GDP), according to the World Economic Forum, and a combined market of roughly 500 million people. 

For UK businesses, the CPTPP offers opportunities to expand trading partnerships beyond Europe and create deeper connections with some of the world’s fastest-growing economies. This will be crucial for the UK if future global economic growth shifts towards Asia, as many economists predict.

The agreement will allow over 99% of UK goods exports to be eligible for zero tariffs and reduces barriers to trade in services. In the long run, the UK's participation is expected to increase bilateral trade by an estimated £4.9 billion, opening up new opportunities for British businesses.

Key benefits for UK businesses include:

Access to new markets: Entry into the CPTPP provides UK businesses access to a wide range of economies, from developed nations like Japan and Canada to rapidly growing markets such as Vietnam and Peru.

Enhanced supply chains: The rules of origin established by the CPTPP  allows UK businesses to create more resilient supply chains by allowing them to source materials from multiple member countries without facing excessive tariffs.

Regulatory coordination: The CPTPP streamlines customs procedures and reduces regulatory differences, making it easier for UK businesses to navigate cross-border trade with other members.

Improved services sector access: The agreement strengthens provisions for service-based industries, particularly in finance, legal, and creative services, where the UK is considered a world leader.

Digital trade provisions: Robust rules on e-commerce and intellectual property create a secure environment for UK tech companies and digital exporters.

Agricultural opportunities: Reduced tariffs and clearer rules of origin benefit UK food exporters, allowing better access to markets where British goods are highly valued.

The CPTPP is an opportunity for UK businesses to unlock growth potential, expand their global reach, diversify their markets, and strengthen their supply chains. Some of the most promising trade and investment opportunities include:

Technology and innovation: Markets like Japan, Singapore, and Canada have strong technology sectors. The CPTPP’s provisions on intellectual property protection provide a framework for collaboration and market entry into these regions. The CPTPP also allows management of data across borders with less regulatory friction.

Food and drink: The demand for premium British food and drink products, like whisky, chocolate, dairy, and processed foods, is high in countries like Vietnam, Malaysia, and Chile. Lower tariffs make these markets more accessible.

Professional services: The UK’s strength in financial and legal services aligns with the CPTPP’s emphasis on services trade, and member countries with growing demand for expertise in these areas are expected to gravitate towards British businesses.

The green economy: Environmental provisions in the CPTPP encourage investment in renewable energy and sustainable technologies. This could present new opportunities for UK businesses operating in this sector.

Infrastructure and construction: Rapid urbanisation in countries such as Vietnam and Peru could create new business for UK companies specialising in engineering, architecture, and infrastructure development. The construction sector is expected to benefit from tariff-free exports of materials and machinery.

Manufacturing: Demand for high-quality manufactured products, like commercial machinery, industrial turbines and power generators could give UK manufacturing companies an advantage in the CPTPP.

To capitalise on CPTPP opportunities, UK businesses could consider several key factors when refining their export strategies.

Mitigating risk in supply chains

UK businesses should assess the risks related to political stability, currency fluctuations, and regulatory compliance in CPTPP countries. Building resilient and diversified supply chains is a crucial way that UK businesses can use the CPTPP agreement to their advantage.

Market entry strategies

Entering a new market can be daunting, but here are some tips to help get you started.

Detailed market research to identify demand trends, consumer preferences, and local competition will be vital. UK businesses could explore partnerships, joint ventures, or local distributors to help establish themselves within CPTPP countries.

Each CPTPP country offers distinct opportunities, and businesses should investigate individual markets to evaluate their potential. For example:

• Japan has high demand for premium goods and technology products.
• Vietnam has a rapidly expanding middle class and offers potential as a manufacturing hub.
• Canada offers broad opportunities for financial services and green technologies.

Be sensitive to cultural and regulatory issues. Understanding cultural subtleties and observing local regulations will be vital for UK businesses when building trust to establish a presence in CPTPP countries.

There are a broad range of resources to help UK businesses navigate trade with other CPTPP countries:

Government resources

• The Department for Business and Trade (DBT) offers market insights, trade missions, and export support tailored to CPTPP countries.
• The DBT’s Export Support Service (ESS) provides guidance on exporting to CPTPP markets, including advice on tariffs and regulatory requirements.

British Chambers of Commerce

Local chambers and the British Chambers of Commerce (BCC) network in CPTPP countries can help facilitate connections and provide on-the-ground support for UK businesses.

Digital tools

Organisations like the World Trade Organisation (WTO) provide market access maps and trade and tariff data to help businesses identify opportunities and streamline their export processes.

Trade associations

Sector-specific trade bodies offer insights into market trends, regulatory changes, and best practices for businesses entering new markets.

Financial ecosystem

Banks can provide tailored financing solutions, risk management tools, and expert advice to support international trade and investment. NatWest has a wealth of experience in trade finance and was named the UK’s Best Trade Finance Provider at the 2024 Global Finance Awards. 

Visit our Trade Finance hub to find out how we could help your business establish new trading partnerships in the Asia-Pacific region.

Interested in selling to South Asia and Asia Pacific regions?  We have partnered with the Department for Business and Trade on a series of expert-led events across the UK.

Find out how your business could expand into this region