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The latest news in global trade is the United Kingdom’s admission to the burgeoning Indo-Pacific trade bloc. This is a massive trade deal with far-reaching impacts for this country since its separation from the European Union. While considerably less controversial, this move puts the UK into a brilliant trade position offering up market opportunities to various countries in the Indo-Pacific region.

What Exactly is the Trade Deal?

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was ratified to advance economies at scale, create jobs, and improve trade relations among its members. Twelve countries make up this free trade agreement, namely, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, Vietnam, and now, the UK. Looking at this list of prominent players in global trade, as well as some smaller economies, it is interesting to note that this trade bloc comprises over 15% of the world’s GDP.

That’s a total GDP of over £11 trillion!

The intent behind any free trade agreement is to remove the barriers to entry for global trade and consequently increase the trade between the various nations involved. Within this particular bloc, a handful of the countries involved are relatively untouched gems for trade. Not only are the markets within the Indo-pacific region growing at a rapid pace, but this region is home to 60% of the world’s population, and global predictions indicate that this area will be home to the majority of the global economic growth.


How is This a Benefit for Enterprise and the Data Center Industry?

With access to a broader consumer base and more consumer spending (£11 trillion worth of spend), coupled with less red tape and barriers to entry, inevitably, companies from the United Kingdom will take their businesses and expand to companies within the trade bloc. Expanding businesses bring with it a greater need for supporting infrastructure in the countries that form part of the trade bloc. This will result in greater demand for data center space in these countries.

Another significant benefit to those within the data center sector is the reduced tariffs which make exports less expensive. When moving equipment across borders, reduced tariffs lower costs but increases the competitiveness of the market. First-movers will have the opportunity to take full advantage of the Indo-Pacific market.

The Surprising Pitfall of Skirting a Brick-and-Mortar Business Setup

Not setting up a traditional business establishment in the country you operate in brings forth the problem of getting supporting infrastructure into the country to aid your expanding business. This then calls into question the need for an Importer of Record (IOR). If you are looking to send your gear to be housed in a colocation facility, why can’t the data center act as the importing entity? Unfortunately, this is not as easy as it seems. Importing hardware, like servers or cooling systems, is highly restricted, even if there are reduced tariffs on them, and various licenses and regulations are in place to ensure that the goods are not used for nefarious activities. On top of this, the data center will never own these goods and, therefore, cannot act as the Importer of Record.

What is the Solution?

Third-party importers not only take on all the risk involved with shipping your goods by importing on their entity registration, but they also have the correct licenses and documentation to compliantly act as the importer. The IOR ensures that all compliance documentation, which, mind you, will vary from country to country even with an FTA in place, and pay the duties and taxes to customs. Twelve different territories will also have twelve different compliance regulations impacting data security all the way to IP regulation. Again, this is where an experienced IOR will be able to understand the needs and requirements, however slight, of each of the territories within the bloc.

The CPTPP presents impressive opportunities for the countries involved. A more significant consumer base, reduced barriers to trade, and market transparency make this agreement an opportunity for you to capitalize on. Do not let nuanced compliance issues be the barrier for you to trade in this bloc. By using an IOR, you can rest assured that your goods will compliantly get through customs and be delivered to any data center within this region.

Don’t delay, contact TecEx today – let us help you get your gear into the CPTPP bloc.

Get in touch for more information.

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