We are about to learn that the UK has reached ‘broad agreement’ to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This is according to a report in the FT yesterday. The FT’s correspondent Alan Beattie tweeted about it, so expect a lot of Brexiteers piling in with news of the ‘fantastic’ new deal in the coming days. The journey to this point has been a bumpy one apparently.
Today's Trade Secrets. The UK, that noted Asia-Pacific nation, is joining the Trans-Pacific Partnership. Entry talks have been a rough ride & it's conceded things (palm oil & beef imports) it might get flak for. Worth it in the end? I say no. A🧵: 1/nhttps://t.co/YUjrrrtmEG
— Alan Beattie (@alanbeattie) March 13, 2023
It is the usual post-Brexit tale of Britain being brought to realise that it isn’t as special as it thinks, of punctured hubris. The CPTPP members - even Canada - haven’t made things easy for us and while the other members are likely to benefit very little, the UK is set to gain even less. Beattie says, "If the UK felt any sense of entitlement at the beginning of the joining process, it certainly didn’t by the end."
To remind you, the CPTPP is a trade agreement between eleven Pacific Rim nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Read more about it HERE.
The economic impact is likely to be quite a bit less than fantastic if it’s noticeable at all. Beattie says in terms of noise the deal is equivalent to a cat sneezing three rooms away. It is worth just 0.08% of GDP in the long run if the government’s own modeling is to be believed.
Don’t expect this to dampen a Brexiteer's enthusiasm for it. Trade minister Greg Hands (who voted to remain BTW) is positively fulsome on the prospects and sees one of the big benefits as helping to block Labour from ever rejoining the single market or the EU customs union.
Hands is happy to see a massive 5.5% knocked off the UK’s GDP - something he opposed in 2016 - in exchange for about one-seventieth of that loss by joining a trade bloc 12,000 miles away. It's like losing £70 and someone offering a pound to make up for it. If nothing else it shows how stupidly tribal politics in this country has become. The national interest is nowhere compared to that of party unity and a ministerial salary.
We will have to change our laws to meet the CPTPP’s strict food and product safety rules although we will have zero influence over them. Britain is desperate to cast off thousands of EU laws that we voted on and even had a veto over, but happy to accept changes imposed unilaterally by a bunch of countries on the other side of the globe. It makes zero sense. I thought Brexit was all about sovereignty?
A blog on Sussex University's Trade Observatory website says:
"Having left the EU, the UK is keen to assert regulatory autonomy from the EU. How to achieve this and what the precise regulatory objectives are, however, is not clear. Joining the CPTPP requires compliance with existing CPTPP rules and accession will require the UK to demonstrate that UK domestic laws and regulations comply with CPTPP obligations. And, if not, the UK has to identify the necessary changes to its domestic laws and regulations for compliance. Until CPTPP members acknowledge the UK’s assent to CPTPP rules, market access negotiations will not start."
In short, to make exporting easier to distant nations around the Pacific, 10,000 miles away we must make exporting to what is by far our biggest market across 26 miles of water more difficult. It's like Japan wanting to adopt the entire EU acquis communitaire.
One of the reasons it isn't worth that much to the UK economy is that we already have FTAs with Japan, Australia and New Zealand - and Japan hasn't been growing very much at all for decades.
However, the impact of accession to the CPTPP is more bad news for British farming. As with previous deals with Australia and New Zealand, imports of meat are likely to rise further with Canada pushing for an increase in its beef quota. In matters of trade, even your friends kick you when you're down.
We have already conceded demands to immediately after accession cut tariffs on palm oil imports from Malaysia, something the environmental lobby will be unhappy with since it involves a lot of deforestation
Don't forget the USA was a member originally but pulled out on sovereignty grounds. The American cross-party organisation Coalition for a Prosperous America (CPA) argued against the TPP in 2016, because it “erodes sovereignty”. The CPA claimed:
“The majority of the TPP’s 5,500 pages delve deeply into the domestic laws of the US and other signatory countries rather than traditional trade issues. Issues include government procurement, investment and banking, food and product safety rules, telecommunications, electronic commerce and administrative rulemaking. Whether you support the new TPP rules is not the issue. Whether the TPP rules impact our ability to govern ourselves under our constitutional system is the issue”.
A body of opinion in New Zealand opposes the TPP on the same grounds. A website devoted to it claims the treaty is “binding” on the partnership member nations, “overriding the domestic laws and constitutions of the individual countries – which must be brought into compliance with them”
In a recent article in Conservative Home, Greg Hands says the CPTPP "includes no moves to any political union – indeed, it would be hard to see, say Canada and Vietnam agreeing to pool sovereignty" and he adds that under Donald Trump, "the US withdrew from the bloc’s predecessor, the Trans-Pacific Partnership (TPP), but the United States joining CPTPP cannot be excluded forever."
But he omits to say the US withdrew precisely because of the sovereignty issue.
His article headline is: Why joining CPTPP is the right choice – and would make it impossible for Labour to smuggle us into an EU customs union
But reading it to the end, the reason why it would apparently be 'impossible' for Labour to 'smuggle' the UK back into the EU's customs union is that it would "create a new trade disruption for this country and would certainly anger some of our closest allies around the world, like Canada, Japan and Australia."
One is bound to say, is that all it is?
Compared to the trade disruption we have already experienced after Brexit it would be the equivalent of that cat's sneeze against an earthquake of magnitude 7.0 on the Richter scale. There is no impossibility to it.
