The UK and Malaysia now have a free trade agreement for the first time.

On 15th December, the UK joined Malaysia and 10 other countries to become the newest member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The UK has always been a proponent of free trade. Our CPTPP journey started in 2018 when we first stated our interest in joining this “gold standard” agreement.

Since then, the UK has been through political change, overcome supply chain issues caused by Covid, as well as navigated a changing global political landscape.

But our commitment to free trade remains steadfast. We are grateful to Malaysia and other free trading nations in CPTPP for their support in making UK membership a reality.

In an era which sees rising protectionism and the fragmentation of global supply chains, we need to join together and push for free and fair trade, and membership of CPTPP is a big step in that direction.

There are obviously strong economic benefits from the UK’s CPTPP membership.

With the UK joining, the combined GDP of the CPTPP members has increased from over £9 trillion to around £12 trillion – or from around 12 per cent to around 15 per cent of global GDP.

With a market of 68 million consumers and the sixth largest economy in the world, the UK is the second largest economy in the grouping, making it an attractive market for Malaysia and all CPTPP countries.

Joining this existing trading group means that over 99 per cent of current UK goods exports to CPTPP members will be eligible for tariff-free trade.

For example, Malaysia will enjoy cheaper chocolate and cars from the UK; while the UK will enjoy cheaper cocoa and electricals from Malaysia.

Tariff liberalisation and new Rules of Origin mean that supply chains can grow between our two countries – for example we could see growth in Malaysian aerospace components being exported top tier aerospace manufacturers in the UK, or new investments by automotive companies in each other’s markets.

The UK wants to play an active role in promoting free trade through CPTPP, and promote growth through dialogue partnership with ASEAN.

This trade deal also helps position British companies to expand into new markets and follow the likes of HSBC, AstraZeneca and Arup who have been committed to their investments in Malaysia for decades. 

British and Malaysian businesses will also stand to operate more on a par with local firms.

Red tape can be cut and data localisation requirements removed, leading to greater ease of doing business. 

Not only is joining CPTPP crucial to the UK’s economic growth mission, it is also important to our security, and our interest in an open and stable international order.

We are embedding ourselves deeper into an existing and emerging network of economic, diplomatic and security partnerships in the region.

We want to play an active role in promoting free trade through CPTPP, and promote growth through our dialogue partnership with ASEAN – and we are looking forward to working with Malaysia as Chair next year.

The UK’s membership also sends a very strong signal that CPTPP is an outward-looking group that wishes to welcome into its ranks all countries that wish to trade freely and adhere to high standards and the rule of law.

We will champion free and fair trade, fight protectionism and remove barriers to trade at every opportunity.

This is a time for businesses to prepare to take advantage of the agreement and boost our bilateral trade that currently stands at £5.7 billion.

I urge companies to discover the opportunities created by the UK’s membership of the agreement and take advantage – before your competitors do it first.

(David Wallace is Acting British High Commissioner to Malaysia.)