Oliver Chapman, CEO of the No.1 fastest growing company in the UK 2022 – FT1000, and supply chain experts OCI, comments on the latest news regarding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
- Chile and Malaysia join CPTPP
- South Korea also plans to be a member
- The block has a combined GDP of around $13.5 trillion, around 13.4 per cent of the global economy.
- It has a population of 500 million.
- The UK submitted a formal application to join CPTPP in 2020
- UK Minister of State for Trade Policy Greg Hands said recently: “Our accession to CPTPP will take the bloc from 12 per cent to 15 per cent 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.”
- CPTPP members are Australia, New Zealand, Brunei, Canada, Chile, Japan, Mexico, Malaysia, Peru, Singapore and Vietnam.
“CPTPP represents an outstanding opportunity for countries that span the Pacific region. The block contains advanced and extremely wealthy countries such as Japan and developing countries with significant potential.
“Both Chile and Malaysia, which recently joined the block, are strong economies. Chile has the highest GDP per capita in South America, and Malaysia has the fifth highest GDP in South East Asia, behind CPTTP members Singapore, Brunei and Japan, as well as South Korea.
“Chile is also a major region for the mining of lithium, a vital metal in the gloat economy as we transition to electric vehicles and national grids look at means of energy storage to support renewables.
“The significance of the UK’s plans to join CPTTP is less clear cut.
“One of the lessons of the recent supply chain crisis has been the need to look towards more local sources of supply.
“Sourcing local manufacturing is important for several reasons, including savings in fuel costs, reducing C02 emissions and aiding cash flow.
“Because of the sheer distance between the UK and Pacific regions, practical challenges are associated with the supply chain. For example, cash tied up whilst products are at sea travelling across the world can significantly impede a company’s growth.
“However, there is more to trade than shipping goods. For the UK, the biggest opportunity for closer ties with the Pacific region probably relates to services. The UK has a comparative advantage in many services-related sectors, and distance is less of a barrier to trade.”