Friday, June 14, 2024

Benefits for food and drink businesses highlighted as UK concludes tax agreement with Peru and ratifies deal to join major Indo-Pacific trade bloc

The UK has completed its key step required for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Joining CPTPP – which will account for 15% of global GDP with the UK included – means over 99% of current UK goods exports to CPTPP members will be eligible for tariff-free trade.

Business and Trade Secretary Kemi Badenoch signed the deal last July to join the CPTPP, a modern trade pact spanning 12 economies across Asia, the Pacific, and now Europe.

Only six economies, in addition to the UK, need to ratify by October for the deal to enter into force by the end of the year. Singapore, Japan, and Chile have already ratified, with other countries in the works.  

During a two-day visit to Peru which kicks off today (17 May), Minister for Trade Policy Greg Hands will also welcome the conclusion of negotiations on a Double Taxation Agreement (DTA) which will protect businesses from being taxed twice – once in Peru and again in the UK, or vice versa.  

Minister for Trade Policy Greg Hands said: “The UK has been racing to get our ratification done because we know how much CPTPP will benefit British businesses, whether through access to new markets or cutting red tape on existing exports. 

“I’m delighted we were able to bring this forward, ahead of our original July forecast, so we can get the countdown to Entry into Force going as soon as possible.” 

British food and drink producers will have new opportunities to sell their first-class products like whisky, chocolate, and dairy to some of the world’s biggest markets in the Americas and Asia-Pacific. In 2023, the UK exported £2.3 billion of food and drink to CPTPP countries in current prices.

The Glasgow Distillery was founded with the mission of bringing back quality spirits production to the city of Glasgow. Founded by two friends in 2012, Liam Hughes and Mike Hayward, they became the first new independent single malt scotch whisky distillery in Glasgow for over 100 years.

Founder of The Glasgow Distillery Liam Hughes said: “Opening markets for trade within the CPTPP bloc is a positive move forward for The Glasgow Distillery and will allow us to continue growing our exports in this region.

“The opportunity this agreement provides will be particularly beneficial for our Single Malt Scotch Whisky brand, Glasgow 1770, which will benefit directly from reduced tariffs in Malaysia, allowing us to explore this as a potential new market.” 

Based in Wellington, Somerset, Somerdale International is a UK exporter of British cheese and dairy products, exporting to over 50 countries worldwide.

Stephen Jones of Somerdale International said: “The news that the UK will now be part of the CPTPP will mean that British cheese will be eligible for zero tariff status in a number of emerging Pacific-Rim markets. Somerdale International already has an established presence in Australia and New Zealand and sees good opportunities to grow further in other CPTPP markets including Vietnam, Singapore, Mexico and Canada.”

Further benefits for the food and drink sector:

  • Tariff-free trade on more than 99% of eligible goods exports, including elimination of tariffs on UK exports of chocolate and sugar confectionary to Mexico.
  • Lower tariffs to Mexico’s beef, pork, and poultry markets and Canada’s poultry markets.
  • Tariffs of around 80% eliminated on UK whisky exports to Malaysia within 10 years.
  • Permanent limits on amount of pork, beef, chicken, milled rice and sugar that can be imported tariff-free from major producers of these goods in CPTPP.
  • Existing Geographical Indications will continue to be afforded high standards of protection.
  • Sector-specific annexes in the Technical Barriers to Trade chapter including on wine and spirits, proprietary formulas for pre-packaged food, and organic products to address common market access issues.
  • Greater transparency and information sharing on Parties’ SPS conditions and measures so food standards will not be compromised.

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