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UK-CPTPP deal to axe 80% whisky tariff

The UK has agreed to join a trade bloc of 11 countries, which will remove the 80% tariff on whisky exports to Malaysia.

Scotch Whisky
Malaysia’s 80% tariff on UK whisky exports will be removed within 10 years

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 11 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The move to join the bloc will enable businesses in the UK to trade more easily with the 11 countries.

Tariffs of around 80% will be eliminated on UK exports of whisky to Malaysia within 10 years, helping the UK to gain a larger share of the market, the government said.

Scotch to benefit

Scotch Whisky Association (SWA) chief executive, Mark Kent, said 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 said: “Exports of Scotch whisky to the CPTPP countries have grown significantly in the past decade, collectively reaching more than £1.1 billion [US$1.3bn] in 2022.

“With the potential for more countries to join CPTPP in the coming years, Scotch whisky will benefit from further liberalisation in the region.”

The UK will become the first European country to enter the trading bloc, resulting in a combined gross domestic profit (GDP) of £11 trillion (US$13.6trn) once it joins.

Economies including Costa Rica, Ecuador and Uruguay have formally applied to join CPTPP, the UK government said. Furthermore, Thailand, the Philippines, and South Korea have also expressed an interest in joining, which could lead to a combined GDP of just over £13trn (US$16trn).

In October, the UK government lifted trade barriers in four markets worth more than £100 million (US$113m) to alcohol producers, including Argentina and Morocco.

The government previously secured the removal of tariffs on all UK exports to Australia and New Zealand, making it cheaper to sell gin and Scotch whisky in the two markets.

The UK has agreed more than 50 continuity free trade agreements, which replicate all of the previous deals the UK had as part of the EU.

India-UK deal

Kent also called on the UK government to achieve a “good deal” with India for its forthcoming free trade agreement, which could remove the 150% tariff on Scotch exports.

He also said the SWA remains “disappointed” that the government has failed to deliver on its promise to ensure the tax system supports Scotch. The government recently announced a 10.1% take hike on spirits from 1 August in the spring budget, a move that has been slammed by the spirits industry.

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