- Access to new markets:
Joining the CPTPP would give the UK automotive industry greater access to markets in the Asia-Pacific region, including developed markets such as Japan, Australia, Canada, and Mexico. Joining this international partnership will open doors to new markets on which the UK automotive industry can sell its products, therefore, contributing to increasing export volumes.
- Knock Down Trade Barriers:
The CPTPP aims to reduce or eliminate trade barriers between member countries. If the UK were to join this trade organisation, it would benefit from reduced trade barriers on many export products, including zero tariffs on automotive exports to fellow CPTPP member countries. The absence of stringent trade barriers will make the UK automotive industry more competitive than other European countries in those markets and lead to increased vehicle and part sales. Reducing barriers to trading could lead to increased cooperation between CPTPP members and could, for example, include exchanging technology or mutually beneficial exclusivity deals.
- Competitive challenges:
While joining the CPTPP could open new export markets for the UK automotive industry by knocking down trade barriers, it may also increase competition between member countries. The CPTPP includes countries with established automotive industries, such as Japan and Mexico, which could compete more directly with UK automakers in the global market. It means UK automotive exporters would compete with those countries on quality, price, and innovation to maintain or increase their market share. However, the absence of trade barriers will make it easier for the UK automotive industry to form partnerships with its counterparts in Japan or Mexico and could lead to exclusive market access in some regions.
- Supply chain integration:
By joining the CPTPP, the UK will not just break down trade barriers with fellow member states. The UK automotive industry would also benefit from an expanded supply chain, particularly as the agreement encourages cooperation and regulatory harmonisation between member countries. Such cooperation could increase cross-border trade and improve supply chain operations, benefiting UK automotive exporters and importers.
- Regulatory alignment:
Joining the CPTPP trade organisation would involve regulations and standards alignment with those of other member countries. It would mean the UK automotive industry adapting to new regulatory frameworks, particularly regarding vehicle safety, emissions standards, and technical requirements. However, in the long run, the work to align with these regulations will pay off as it will facilitate the export of UK vehicles and automotive parts to CPTPP markets by reducing regulatory and trade barriers.
The scenarios presented in this blog are hypothetical. The United Kingdom officially applied for CPTPP membership on 21 February 2023 and accession negotiations were agreed and concluded on 31 March 2023. The agreement was formally signed on 16 July 2023 and the UK will become the organisation’s 12th member once the agreement has been ratified by Parliament.
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