On 31 March 2023, just slightly over two years since applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP"), the United Kingdom ("UK") announced that it had concluded negotiations on its accession to the CPTPP.
This free trade agreement ("FTA") between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam ("CPTPP Parties"), which was signed by these parties in March 2018, was ratified in Malaysia on 29 November 2022.
Before the UK can become CPTPP's 12th member, each existing Party must complete its own domestic ratification procedures to approve the UK's accession. The UK will also need to complete its own processes, such as conducting pre-ratification scrutiny and passing legislation to implement the FTA.
The result will be extensive tariff liberalisation between the UK and Malaysia – the first time the two nations will form a trade deal. As a consequence, it is anticipated, for example, that export tariffs for whiskey to Malaysia will be reduced from 80% to 0% within 10 years, while UK exporters of chocolate and sugar confectioneries will benefit from 0% tariffs on exports to Malaysia (current tariffs are between 10% and 50%). There will also be a side letter between the UK and Malaysia allowing more liberal rules of origin on automotive exports, giving UK car manufacturers better opportunities to export finished vehicles to Malaysia.
As part of negotiations leading up to its accession, the UK has agreed to eliminate import tariffs on Malaysian palm oil (currently ranging up to 12%). Both countries will issue a joint statement setting out their commitments on sustainable production and to protect forests in Malaysia.
The UK's accession to the CPTPP is expected to boost its trade and investment relationship with Malaysia, offering further opportunities for deepening the economic relationship.
