The United Kingdom is the first economy to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) through the lengthy accession process that it has established for new members. The CPTPP is a free trade agreement, originally signed by 11 Asia-Pacific countries, which with UK participation now represents 14.5 percent of 2022 global GDP. Members have pledged to eliminate almost all tariffs and import charges on each other's products over time. They have accepted common obligations on food regulations, environmental protections, the digital economy, and regulations governing investment, labor, financial services, and other sectors.
Since taking effect in December 2018, several additional countries have applied or shown interest in joining the CPTPP. The CPTPP accession is a long and complicated application process, however. Entry to the agreement requires a consensus among existing signatories, and applicants must work with every member to satisfy concerns.
Seven CPTPP signatories are also members of the Regional Comprehensive Economic Partnership (RCEP) that took effect in January 2022. RCEP is the world's largest free trade agreement (FTA), encompassing 15 countries that account for 29 percent of 2022 global GDP. RCEP members are also required to phase out tariffs on signatories' goods, but the requirements are not as comprehensive as under the CPTPP. Trade liberalization under its provisions is incremental, and tariffs on sensitive imports are left intact. Unlike the CPTPP, the RCEP does not include disciplines on support for state-owned enterprises (SOEs) or provisions on labor issues and environmental protections, but its flexible origin rules encourage deeper supply chain integration across the 15 members.
These agreements confront US policymakers with some difficult choices: stay out of the Asia-Pacific megadeals and face increasing trade discrimination in important and growing markets while China deepens its trade and investment ties in the region, or reengage with CPTPP countries and/or develop new and more narrowly focused trade accords with key allies in the region in areas such as digital trade and trade-related climate issues. By beginning negotiations on an Indo-Pacific Economic Framework for Prosperity (IPEF), the Biden administration has chosen the second option. Meanwhile, US trading partners, including IPEF participants, are seeking CPTPP membership despite the US absence.
In addition to the 11 original signatories—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam—the following countries have applied. The UK is thus far the only country to have acceded to the CPTPP.
Applied: February 2021
Acceded: July 2023
On February 1, 2021, the United Kingdom became the first nonfounding country to apply to join the CPTPP. In September 2021, the CPTPP members established an Accession Working Group (AWG) to conduct negotiations with the United Kingdom; the first meeting of the AWG with UK officials took place on September 28, 2021.
CPTPP-UK negotiations concluded at the end of March 2023; the United Kingdom accepted existing CPTPP obligations and agreed to provide increased access for imports of goods and services from CPTPP countries beyond those covered in current bilateral UK trade deals. The most sensitive reforms reportedly involve farm products, where CPTPP negotiators accepted partial UK trade liberalization and allowed UK officials to maintain strict sanitary and phytosanitary measures protecting beef and other products.
The agreement was approved by CPTPP ministers in July 2023, completing the United Kingdom’s accession to the pact. The CPTPP will enter into force in the United Kingdom after it completes domestic ratification procedures, expected later in 2023.
Applied: May 2023
Ukraine sent a formal accession request to New Zealand, the CPTPP’s secretariat, in May 2023, which was discussed by current CPTPP members at their meeting in mid-July in New Zealand. Ukrainian officials now have to engage in preparatory consultations with each CPTPP member to explain how they would align their laws and regulations with CPTPP obligations. Those talks are a prerequisite for a subsequent decision by CPTPP members to establish an AWG to start accession negotiations.
Ukraine would be the first continental European country to join the agreement. It hopes to strengthen its economy devastated by Russia’s war.
Applied: December 2022
At the end of 2022, Uruguay announced its application for CPTPP membership to boost trade with Asia, despite threats that doing so could lead to retribution from other members of the Mercosur—the South American customs union that includes regional economic giants Argentina and Brazil. The Mercosur requires members to maintain common external tariffs on trade with nonmember countries and negotiate trade agreements as a bloc (as Mercosur has been doing with the European Union). Uruguay's attempt to join the CPTPP, and its entry into formal negotiations with China over a possible trade deal in July 2022, have created friction with its regional partners.
Applied: August 2022
The Costa Rican government announced its intention to join the CPTPP on August 10, 2022. The United States is Costa Rica's main trading partner; officials hope that CPTPP membership will complement its existing FTAs, deepen trade links with fast-growing Asian economies, and attract new investment in Costa Rican industry and agriculture.
Applied: December 2021
As part of a strategy to reduce its reliance on oil and diversify its economy, Ecuador is seeking to expand its trade with larger economies and formally applied to join the CPTPP at the end of 2021. The agreement represents an opportunity for Ecuador to grow its banana and shrimp exports, but it will face challenges meeting the agreement's stringent trade obligations.
Applied: September 2021
Less than a week after China submitted its bid for CPTPP membership, Taiwan filed its application under the name "the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu." Taiwan's accession will be a challenge with China insisting on joining first (as it did in WTO accession two decades ago) and without the United States—Taiwan's most influential international supporter—among the agreement's signatories.
Applied: September 2021
China submitted its CPTPP application on September 16, 2021, after two years of signaling its interest in joining the pact. But the gap between Chinese policies and CPTPP standards is large and may be unbridgeable in areas such as labor, SOEs, and digital trade. Without substantial changes in Chinese policies, long transition periods for implementing CPTPP reforms, or exemptions from specific provisions, it is hard to see how China's application would be approved.
CPTPP INTERESTED APPLICANTS
South Korea signaled on December 13, 2021, that it will step up its efforts to join the CPTPP once domestic political consultations had been completed. However, the new government of President Yoon Suk Yeol, elected by an ultra-slim margin of victory in March 2022, has been wary of pushing politically contentious issues like the CPTPP and instead has given priority to deepening ties with the Association of Southeast Asian Nations. Korean officials remain concerned that longstanding bilateral trade and political frictions would lead Japan to demand sensitive trade reforms as the price of CPTPP entry. Korea’s Indo-Pacific Strategy, launched in December 2022, calls for renewed consideration of CPTPP membership. With the UK accession to the pact—which sets a benchmark for new entrants—and the recent improvement in Korea-Japan relations, Korean participation in the CPTPP is now a more distinct possibility.
In December 2021, South Korea also ratified the RCEP, which entered into force for Korea in February 2022.
Motivated by fears of losing trade and investment opportunities to Southeast Asian competitors participating in the agreement, Thailand has long expressed interest in joining the CPTPP but hesitated because of public resistance to the trade reforms required by the high-standard agreement. However, Thailand has signed the RCEP and now seems amenable to broader trade liberalization.
Australia*, Brunei*, Cambodia, China, Indonesia, Japan*, Laos, Malaysia*, Myanmar, New Zealand*, Philippines, Singapore*, South Korea, Thailand, Vietnam*
* member of both CPTPP and RCEP
This PIIE Chart is based on research from Jeffrey J. Schott’s blog, China's CPTPP bid puts Biden on the spot, Schott's Policy Brief, RCEP is not enough: South Korea also needs to join the CPTPP, and Schott and Megan Hogan’s Policy Brief, Korea faces opportunities as well as risks under the Indo-Pacific Economic Framework.
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