British business sizes up global trade wins as Malaysia and Chile join Indo-Pacific bloc
Malaysia and Chile have officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), meaning British businesses will get better access and lower tariffs in the Malaysian and Chilean markets when the UK joins the dynamic trade bloc.
Malaysia is one of the CPTPP members with which the UK does not currently have a bilateral free trade agreement. The UK and Malaysia both joining CPTPP will greatly increase the UK’s access to the Malaysian market and could boost the £2.9bn worth of exports we currently sell annually in the country.
Chile was the first country to sign a trade deal with the UK after we left the EU which secured preferential access to each other’s markets. Chile remains one of the foremost champions of free and open trade in the Pacific region and is keen to deepen our trading relationship, which was already worth £1.5bn in 2021.
Joining CPTPP will also provide opportunities for collaboration with Chile in areas such as fintech, green finance and cybersecurity, supporting innovation in our financial services sector and helping develop our countries as leaders of financial services.
The UK is making good progress in negotiating our own accession to CPTPP. UK accession could mean more than 99% of UK exports to member countries become eligible for tariff-free trade.
Minister of State for Trade Policy Greg Hands said: This is great news for UK businesses and global free trade. The Indo-Pacific has some of the most innovative and fast-growing economies in the world and closer ties with markets like Malaysia and Chile will demonstrate how our trade agenda is delivering for the whole of the UK.
I’ve spent the last few days in the Asia-Pacific region to discuss our accession to CPTPP which will take the bloc from 12% to 15% of global GDP and will mean we are using our independent trading powers to bring a new, strong, persuasive voice to a network committed to free trade.”
Sheffield-based chilli paste manufacturer Mak Tok has been exploring Malaysia as a new potential market and is looking to license the brand and partner with a manufacturer in the country.
Mak Tok rose to fame after showcasing its Malaysian chilli paste and sauces on Dragon’s Den. The business has been created around traditional Malaysian cuisine and already exports to other CPTPP member countries including New Zealand.
The Department for International Trade (DIT) has supported Mak Tok on its exporting journey and the benefit of improved market access could mean they see increased opportunities to trade with Malaysia as joint members of CPTPP.
Mak Tok Founder Will Chew said: ”Malaysia and its neighboring countries have always been markets Mak Tok has been trying to penetrate. For the past few months, we have been working closely with our dedicated International Trade Advisor and the wider Department for International Trade (DIT) team on a strategy to establish those critical initial contacts in the region.
Being a part of CPTPP will accelerate our conversations with potential manufacturing and distribution partners, which will generate a new revenue stream for the business, expand our market reach and increase the movement of our products.
These key metrics will fuel the growth of Mak Tok by attracting new key investors in the Indo-Pacific region to help drive the brand even further.
Founded in Bath in 1990, the Fine Cheese Co. export a range of traditionally made artisan cheeses from independent producers from across the UK. The product can currently be found in over 600 delicatessens, farm shops and independent retailers across the UK and thirty other nations across the globe, from Chile to Australia.
Fine Cheese Co. Owner and Director, John Siddall, said: Having exported to the country since 2008, The Fine Cheese Co. is excited about the future opportunity of the Chilean market at the nation’s gourmet market expands.
The most recent round of CPTPP negotiations, held in London in December, made good progress and the UK continues to engage in talks on both a bilateral and collective basis with CPTPP members.
Joining CPTPP puts Britain at the heart of a dynamic group of countries, as the world economy increasingly centres on the Pacific region. As these economies grow, stronger trade links with these countries are crucial to benefiting from this growth.”
CPTPP is made up of 11 countries in the Asia Pacific and Americas, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
CPTPP had a combined GDP of £9 trillion and was home to over 500 million people in 2021. 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.