CPTPP enters into force: what it means for UK businesses looking to LATAM

CPTPP enters into force: what it means for UK businesses looking to LATAM

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On the 15th of December, the UK officially joined Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

For those less familiar, CPTPP is a modern and ambitious trade deal spanning 12 economies across Asia, the Americas, and Europe now that the UK is part of it. The bloc represents 15% of global GDP in 2023, or £12 trillion, providing real opportunities for UK businesses looking to trade with CPTPP markets, and ultimately grow their business.

Latin America is represented in the agreement by Chile, Peru, and Mexico. CPTPP is currently in force between the UK and Chile, and Peru, but as Mexico is yet to ratify UK accession, CPTPP terms cannot be used when exporting to Mexico.

So, what does CPTPP mean for UK-Latin America trade?

Reductions in tariffs and increases in tariff rate quotas (TRQs) in the agrifood sector take centre stage with this agreement. Joining the Agreement will create new opportunities for UK producers to sell products such as meat, chocolate, and dairy to some of the world’s biggest markets in Latin America.

Beyond tariff reductions, CPTPP also offers the UK an opportunity to diversify supply chains across a broad and varied range of markets. Strengthening relationships with economies such as Chile and Peru, which have access to rare earth metals including gold, copper and lithium, is essential for the UK’s resilience, security and energy ambitions.

As a modern agreement, it is an upgrade to the existing bilateral free trade agreements the UK has with these countries – excitingly, it is the first time the UK has had commitments on trading digitally with them. From yesterday, businesses can be assured that they will not face unjustified data localisation requirements, meaning they can store their data wherever they want, reducing administrative costs around setting up additional data storage facilities. Further, CPTPP countries have committed to making trade administration documents available in electronic form and to accept electronic versions of those documents. This reduces administrative costs and improves efficiency of processes, benefiting UK businesses across all sectors.

CPTPP also creates a more attractive investment environment, thanks to provisions that limit market access barriers and promote inward investment. UK exports in services to Chile in 2023 were valued at £622 million, an increase of £39 million year-on-year . We expect CPTPP to boost this by further aligning our regulatory frameworks and making it easier for businesses to expand in the region.

For example, Biopanda, a life sciences firm, has been present in Peru since 2022, selling in vitro diagnostic tests to healthcare professionals. The Belfast-based company is looking forward to growing its business in Peru and expanding to the rest of the Latin American region, while helping support an increasing demand for private healthcare through diagnosis of many health conditions, including heart problems and respiratory infections.

CPTPP facilitates easier business mobility between CPTPP markets, ensuring clarity on what activities can be undertaken and allowing for increased lengths of stay and accompaniment of dependants, in certain instances. Consider the UK’s strengths in mining, infrastructure, and advanced manufacturing – related to analysis, project management, and specialist machinery – where being able to deliver in-market services, such as installation and maintenance, is key, especially at the outset of a partnership.

This can support businesses such as the John King Group, a UK family-owned conveyor chain manufacturer, founded in 1926. The company blends traditional manufacturing with cutting edge technologies whilst ensuring high standards. Based in Leeds and servicing industries worldwide, including nine of the 11 CPTPP countries, they have local facilities in Chile and Malaysia.

Costa Rica was recently confirmed as the next potential member to join CPTPP. The UK Government wants to hear from you about what issues you would like them to consider when engaging in discussions, on whether Costa Rica should join CPTPP and the terms on which they should join.

You can read an Information Note and submit your views and evidence here. It should take no longer than 10 mins to complete the survey and the deadline to submit is 24th January 2025.

If this has piqued your interest, you can find a breakdown of the key provisions, such as tariffs and customs, and sector opportunities for Chile and Peru by visiting their market pages:

Upon entry into force with Mexico, the same resources will be available.

The Department for Business and Trade (DBT) can help support you to do business abroad. You may also be eligible for 1-2-1 support from your local International Trade Advisor and DBT’s overseas in-market support service. Follow this link to find out: Export Support Service team.