UK becomes first European country to join Trans-Pacific trade bloc

Prime Minister Chris Hipkins welcomed the United Kingdom joining one of the country’s largest trading blocs, saying it would further bolster economic opportunities.

UK Business and Trade Secretary Kemi Badenoch signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trading bloc at a meeting in Auckland on Sunday.

The world’s sixth-largest economy will become the first new member to join since the bloc was formed, and its first European signatory. It joins Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, Vietnam and Malaysia. The inclusion of the UK means the bloc will cover more than 500 million people and more than 15% of global GDP.

“Worth $60 billion in two-way trade with partner economies, this agreement is providing significant benefits and opportunities for our exporters,” Hipkins said. “By welcoming the UK into the CPTPP family we will only see those economic opportunities for growth and recovery further increase.”

Hipkins said trade was essential to the country’s economic recovery, and improving the lives and livelihoods of all New Zealanders.

Trade Minister Damien O’Connor said having the UK inside the tent would strengthen the rules-based trading system in the region, benefiting New Zealand exporters, providing greater certainty, and enhancing regional supply chains for trade.

He said the agreement had delivered tariff savings of more than $330 million on New Zealand exports in its first two years, with many more millions of benefits flowing since then.

Adding new partners like the UK increased the value of the agreement, he said.

The UK’s accession to CPTPP follows the recent NZ-UK free trade agreement which has seen 99.5% of New Zealand’s goods exports entering the UK market duty free, he said.

The signature is the formal confirmation of agreement for the UK to join the group, following two years of negotiations. It is the UK’s biggest trade deal since Brexit, which saw its exit from the European Union in 2020.

The UK sees the agreement as a gateway to the wider Indo-Pacific which is set to account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come, bringing new opportunities for British businesses and supporting jobs.

The UK Government will now seek to ratify the agreement, which will include parliamentary scrutiny, whilst other CPTPP countries complete their own legislative processes.

The agreement is expected to come into force next year.