The UK last week announced an agreement in principle to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a move largely supported by industry leaders.

The UK government predicts that “in the long run, [the deal] could boost the UK economy by £1.8bn” and increase UK exports to CPTPP members by £1.7bn.

The bloc currently includes 11 nations – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – and the UK is the first non-founding member to join.

According to a UK government statement, joining the CPTPP “will deliver new opportunities for growth in a way that is tailored to the UK’s economy and reflects the future of the global economy”, providing a “gateway to the wider Indo-Pacific region”, which is expected to account for the majority of worldwide growth in the coming decades.

Trade between the CPTPP bloc and the UK, which already had a deal in place with every member except Brunei and Malaysia, amounted to around 6.8% of UK trade in the four quarters to the end of Q3 2022, representing £110.9bn.

Industry leaders have responded positively to the news, which marks a further step in the UK’s bid to line up trade agreements with countries beyond Europe after leaving the EU.

“The UK joining CPTPP will provide meaningful new trade and investment opportunities between east and west, and across some of the world’s fastest growing markets,” says Barry O’Byrne, chief executive of global commercial banking at HSBC. “This is good news for businesses, suppliers and consumers both in the UK and across a group of countries representing 15% of the global economy.”

Marco Forgione, director general of the Institute of Export & International Trade (IoE&IT) says the professional membership body welcomes the news.

“This agreement not only reduces trade tariffs for goods, but also sets new rules in areas such as services, investment, intellectual property, digital trade and advanced manufacturing,” he says.

Zero tariffs will be available for over 99% of goods – including cars, machinery, whisky and chocolate – that are exported to CPTPP member countries, many of which will come into force in stages, according to the UK government.

Forgione adds that the deal puts “pioneering provisions” in place to support the growth of trade in services, offering service providers like banks “smoother access to markets such as Singapore, Malaysia, and Vietnam” as well as ironing out digital trade barriers, like preventing the imposition of customs duties on electronic transmissions and providing guarantees on paperless trading.

“The UK has been crying out for major trade deals for two years now,” says Atul Bhakta, chief executive of logistics company One World Express. “This is what was promised in the aftermath of Brexit, but it has taken a long time for meaningful trade agreements to be formed, either with major global powers or sizeable trading blocs.”

Bhakta cautions however that the deal’s significance should not be overstated, given it is predicted to increase the size of the UK’s economy by less than 0.1%. “It is clearly not a game-changer, and no doubt critics will be quick to jump on that,” he says.

“But, that said, opening up access to a market of 500 million people, with many goods free from tariffs, this trade deal should not be derided. It will undoubtedly open up new opportunities for British businesses to export globally, and anything that reduces red tape and helps the export market should be celebrated,” Bhakta adds.

The deal is also being touted as a way for UK businesses to diversify their supply chains and increase their economic resilience.

According to Minako Morita-Jaeger, policy research fellow at the UK Trade Policy Observatory, the CPTPP’s significance should be viewed “in the context of a wider foreign geopolitical strategy beyond trade”, presenting an opportunity for the UK to “enhance strategic ties” with countries in the region.

The UK’s membership of the CPTPP, the IoE&IT’s Forgione says, shows that “the core values of liberalised rules-based trade as a vehicle for good will continue to underpin international trade in the future”.

But concerns remain regarding the potential environmental impacts of the deal, particularly in the case of Malaysian palm oil. Campaigners have suggested that reduced tariffs could encourage further deforestation, with the Guardian reporting that Greenpeace UK campaigner Daniela Montalto views cuts to palm oil tariffs as a means of incentivising more destruction.