Key UK/CPTPP trade facts
- In 2020, the UK exported around £51 billion of goods and services to CPTPP countries and imported around £41 billion, resulting in a trade surplus of around £10 billion.
- 6% of UK trade was with CPTPP countries in 2020 (latest available data).
- Real GDP growth in the CPTPP bloc is forecast to average 2.3% a year from 2022-26, according to TheCityUK calculations based on IMF forecasts.
Core trade asks
The UK should seek to join CPTPP regulatory dialogues that will help shape future Pacific Rim financial markets. The CPTPP provides a platform for regulators to work together to avoid unnecessary regulatory barriers to entry and seek more regulatory alignment. The UK should:
- encourage CPTPP regulators to develop consistent regulatory approaches on an outcomes basis and defer to each other’s regulatory frameworks
- foster CPTPP co-operation on regulating new financial services like sustainable finance, FinTech, cybersecurity, cryptocurrencies, and AI.
Expanding cross-border trade with CPTPP markets
There is significant demand for UK financial and professional services expertise in CPTPP markets. The UK should use CPTPP talks to liberalise cross-border services trade, especially in:
- maritime, aviation, and transport insurance (MAT)
- the supply of financial information and financial data
- financial intermediary and advisory services
- portfolio management services and investment advice
- electronic payment services for payment card transactions.
Achieving freedom for UK businesses to operate in CPTPP markets
CPTPP countries offer different amounts of freedom to UK services business to operate. The UK should seek agreement from all CPTPP countries to remove:
- foreign investor equity caps
- joint venture requirements
- economic needs tests
- restrictions relating to corporate form of a service-supplier
- nationality and/or residency requirements for business personnel.
Facilitating digital trade
The CPTPP has become a centre for digital innovation. CPTPP members have signed up to ground rules that enable cross-border data flows and constrain data localisation. But financial data is excluded from these liberalising provisions. UK negotiators should ensure that financial data is treated in the same way as other kinds of data in CPTPP provisions on data flows and data localisation. The UK should sign up to CPTPP commitments that prevent customs duties from being imposed on digital trade, recognise the international validity of e-signatures and electronic contracts, and protect digital intellectual property including software, source codes, and encryption technologies.
Enabling business mobility
In order to grow services exports to CPTPP markets, UK professionals need to be able to travel to work in the region. UK negotiators should achieve longer lengths of stay for UK professionals, faster turnaround times and reduced administrative costs for business visas, and clearer definitions of who can get a business visa. Spouses and children should be able to accompany professional workers. The UK should further agree more flexible requirements for the short-term business travel of inter-corporate transferees.
UK businesses should be treated fairly in CPTPP markets when applying for government contracts. The CPTPP excludes financial institutions from benefiting from its public procurement commitments, making it harder, for example, for UK financial businesses to support public pensions schemes in the region. UK financial and professional services businesses should have comprehensive access to public procurement markets.
UK investors in the CPTPP should be protected against expropriation or government action restricting the value of their investment. The UK should negotiate measures that protect UK investments, provide dispute resolution mechanisms in the event of investment-related disputes, and guarantee adequate, effective, and prompt compensation to investors whose assets have been expropriated.
Mutual recognition of professional qualifications (MRPQ)
To support trade in professional services, the UK should use CPTPP negotiations to ensure that CPTPP members shape MRPQ frameworks that set out a clear path for the admission of UK professionals (lawyers, accountants etc) into CPTPP country regulated professions.