Research and analysis

The role of businesses from CPTPP countries in the United Kingdom (executive summary)

Published 15 July 2023

The government has closed negotiations on our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). CPTPP is a trade bloc with over 500 million people and a collective gross domestic product (GDP) worth £9 trillion.

CPTPP-owned businesses make a positive contribution to the UK economy. In 2019, CPTPP-owned businesses accounted for 0.3% of all businesses in the UK but generated 6.1% of business turnover. One in every 100 UK workers, or 1.3%, worked for a CPTPP-owned business^{[footnote 1]}, equating to over 400,000 jobs across a variety of sectors.

Furthermore, CPTPP investment is contributing to the UK’s levelling up agenda by supporting investment across the UK. In 2019, around 75% of all employment in CPTPP-owned businesses were outside of London.

Being a member of CPTPP also encourages investment by guaranteeing protections for investors. In 2021, the level of investment from CPTPP countries in the UK was around £182 billion, accounting for at least 9% of the total UK inward investment. Investment from CPTPP countries supported the creation of over 5,000 new jobs in 2021 and 2022. CPTPP’s rules will help protect UK investors from unfair, arbitrary or discriminatory treatment and enable them to access a modern, transparent dispute settlement mechanism in case these rules are broken.

Supporting local economies in the UK region

In 2019, CPTPP-owned businesses employed workers across all regions of the UK. London had the highest employment in CPTPP-owned local businesses (103,000), followed by the Southeast (60,000), the Northwest (40,000) and the East of England (30,000).

Employment in CPTPP-owned businesses grew in most regions between 1998 to 2019. The region with the largest increase was the Southwest (120.6%), followed by the Northwest (113.1%) and London (99.3%).

CPTPP-owned businesses impact on UK industries

CPTPP members are investing significantly in the manufacturing and scientific, technical and IT activities industries. 25.9% of CPTPP source UK FDI jobs were in the manufacturing industry in 2019. This was the largest of any industry in the UK. Furthermore, CPTPP-owned businesses accounted for 6.2% of total turnover in the industry.

The next largest employment percentages were the Scientific, Technical and IT activities industry (22.6%) and the wholesale and retail industry (14.3%).

In 2019, CPTPP-owned businesses accounted for 13.3% of all UK business turnover in the financial services industry. It was also the largest industry in terms of total absolute turnover of CPTPP-owned businesses, with a total turnover of £208 billion.

CPTPP-owned businesses impact on the UK economy

The total estimated spill over effect from UK employment in CPTPP-owned businesses is estimated to amount to a contribution of £33.6 billion to UK Gross Value Added (GVA) over the period 2010 to 2019. The spill-over effect refers to the impact that the employment and economic activities of foreign-owned businesses have on the wider economy of the host country.

Foreign-owned businesses, including CPTPP-owned businesses, export a greater value of goods and services from the UK than domestically owned businesses. It is expected that CPTPP-owned businesses contribute to wider economic impacts through exports from the UK.

Japan’s dominant influence in the UK among CPTPP Countries

In 2019, Japan had the largest number of businesses in the UK at 4,000, followed by Australia and Canada (2,162 and 2,054 respectively).

In terms of employees, Japan also employed the largest number of employees in the UK at 179,000 generating a turnover of £187 billion. This was followed by Canada which employed 108,000 people generating a turnover of £92 billion.

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1. 2019 data has been used although more recent data is available to avoid temporary pandemic effects on FDI statistics. ↩