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WHISKY JOURNAL
UK to enter Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
UK to enter Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
- April 17, 2023
Whilst the UK, and in particular the Scotch whisky industry continue to cross its fingers in relation to the UK-India FTA, progress has been made in other areas of the globe and the whisky industry finally has something to celebrate.
Following two years of earnest negotiations by the Department for Business and Trade, the UK has been accepted into the ‘The Comprehensive and Progressive Agreement for Trans-Pacific Partnership’ (CPTPP), a group (bloc) comprising eleven countries; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. As the first major trade agreement which has been struck since Brexit and with the UK being the first European country to join the bloc, it’s a massive step forward for UK industry as a whole.
For the whisky industry in particular, the agreement will see the current tariffs of around 80% in Malaysia gradually dwindle over the coming decade, which, given that exports of Scotch whisky to the countries within the bloc have continued to grow to and exceed an impressive £1.1 billion (US$1.3 billion) as at 2022, is a huge boost. This will actually be the first time the UK will be able to enjoy free trade with Malaysia.
Commenting on the Agreement, Mark Kent of the Scotch Whisky Association (SWA) thought the deal would:
“Open up new opportunities for Scotch whisky and other UK products in key markets in the region, including the phased elimination of Malaysia’s import tariff.”
He went on to say that:
“With the potential for more countries to join CPTPP in the coming years, Scotch whisky will benefit from further liberalisation in the region.”
In fact, a number of other countries have already expressed interest in joining the bloc, including Thailand, the Philippines and South Korea, whilst Costa Rica, Ecuador and Uruguay have already submitted formal applications. Given that the Indo-Pacific region currently accounts for 60% of the world’s population and contributes two thirds of global growth, and is forecast to comprise more than half of the world’s billion middle-class consumers, this can only be good news for Scotch whisky exports, in the form of both product growth and the creation of jobs within all areas of the industry.
In a statement announcing the deal to join the CPTPP, Business and Trade Secretary Kemi Badenoch said:
“This is an important moment for the UK. Our accession to CPTPP sends a powerful signal that the UK is open for business and using our post-Brexit freedoms to reach out to new markets around the world and grow our economy.”
“Joining CPTPP will support jobs and create opportunities for companies of all sizes and in all parts of the UK. It is about giving British businesses improved access to the countries that will be gateway to the wider Indo-Pacific region which is projected to make up the majority of global growth in the future.”
The benefits to made from this membership are clear to see, but for whisky in particular, it’s a very promising move, one which Anishka Jelicich, Director of Public Affairs for Pernod Ricard UK, was happy to comment on:
“CPTPP is a big opportunity for our Scotch whisky business. Five of our top 20 export markets are CPTPP members. We expect tariff cuts and smoother access to some of the world’s fastest growing economies to increase exports and secure jobs and investment in the UK, with sales doubling in some markets.”
It is hoped that formal ratification of the Agreement will be completed later this year, and we’re sure the Scotch whisky industry won’t hesitate in saying cheers to that!
