Tuesday 18 July 2023

Britain signs up to the CPTPP

The government has formally signed up to accede to the CPTPP. Kemi Badenoch the trade secretary did this in New Zealand where the trade bloc's commission is based. The agreement and Britain’s accession will now be ratified in all eleven member states which will take some time and probably won’t happen before October 2024 at the earliest. The announcement has triggered the usual furious exchanges between the pro and anti-Brexit factions on social media.

Remainers can’t understand why we want to be part of a trade bloc thousands of miles away with little economic benefit, while Brexit supporters shout from the rooftops what a fantastic deal has been negotiated.

There’s no reason we should be churlish, anything that increases trade is to be welcomed. That goes without saying. But what grates with a lot of remainers, me included, is how a deal that the government’s own projections say will increase GDP by 0.08% (ie, less than 0.1%) in ‘the long run’ can be lauded to the skies, while leaving the EU at a cost of 4% of GDP (50 times greater) is dismissed either as scaremongering or simply wrong - and wrong, of course, always meaning too high.

It’s another of those Brexit contradictions that the government is having difficulty explaining away.

There is an irony in that the deal was formalised this week just as Sunak faces a rebellion over issues in the Windsor Framework. Yesterday he ‘sacked’ five ERG members of a committee who were planning to vote against government plans to implement more of the WF involving parcels sent from GB to NI, prompting Mark Francois to call the government ‘bent’. 

The events are connected in that the UK was only able to join the CPTPP by dropping any idea of breaking international law over the NI protocol and agreeing to the Windsor Framework compromise. Sunak can’t resile from the WF that he negotiated without creating problems in CPTPP ratification.

Apparently, Japan, Canada and Mexico all explicitly warned the UK that to become a member of the CPTPP - another rules-based organisation remember - it must abide by international agreements that it has signed up to. So much for having complete sovereignty, eh?

The Northern Ireland sea border is here to stay. Permanent partition of the country is the price of entry to a trade bloc on the other side of the world, a point that those cheering the news seem to overlook.

And the forecast of 0.08% growth in GDP in the long term - about £1.8bn - mere chicken feed in a £2.5 trillion economy - is being rubbished by pro-Brexit economists like Robert Kimbell. He says the 2019 strategy document used 2014 figures which are out of date.

Andrew Neil, who pretends to be neutral but is usually to be found penning what looks to me like pro-Brexit articles in The Daily Mail, tweeted the claim although I suspect he doesn’t understand it himself.

The forecast may be wrong but even if it’s 100% out which I doubt, the range of outcomes is between zero and 0.16% growth in our GDP, not even a rounding error in a rounding error. It’s like arguing about the number of fairies on the head of a pin.

The 4% hit from leaving the EU may also be wrong, but you can’t develop policy on the notion that your best estimates might be wrong. It could just as easily be an underestimate.

Neil also seems to suggest there’s no reason why we can’t emulate Germany’s performance in exporting huge amounts to China and the Pacific Rim, distance being no problem. 

The difference is that the Germans have hundreds of companies with world-beating products and well-established subsidiaries manufacturing and providing world-class aftermarket support in the CPTPP member states. We don’t, and probably never will. He’s an idiot. It's like claiming that because Usain Bolt can do the 100m in under 10 seconds so can your asthmatic grannie.

If you want to pack cement into 25kg paper valve sacks at the rate of 3,000 per hour reliably for example the only place to go is Germany, and you'll have to pay the price. There are plenty of similar examples in dozens of sectors, as anyone will tell you.

The leader of the Reform Party, Richard Tice, even thinks it closes the door on ever rejoining the EU!

This is nonsense, you can quit CPTPP by giving six months' notice. If it WAS true, we would have given away all our sovereignty and been unable to leave no matter what. It makes no sense, especially coming from him.

Our lead negotiator Graham Zebedee (his real name apparently) has been congratulated by none other than Lord Frost, which is like having the mark of Cain applied to you. 

If you read the thread he explains the next steps which is, "For us, ratifying means Parliament passing legislation and approving the deal.  That’s when things change in the real world for UK business."

And here's the rub. The CPTPP deal is six thousand pages long all of which we must swallow whole and change our laws to be compliant.  This will be an interesting process for the ERG and sovereignty purists on the Tory benches. 

I predict that when the details do emerge, it will end up like all the other Brexit-related deals, hailed as a triumph but within days or weeks turn into a disaster. This happened to the Withdrawal Agreement and the hated NI protocol. Industry has belatedly recognised what a mess the TCA is and there is much talk of trying to ease trade frictions, while we are busy renegotiating membership of Horizon. Import controls on EU goods have yet to be implemented.

Trade deals with NZ and Australia (both in the CPTPP) are now being criticised for harming British farmers.

No doubt we shall find out soon enough what the malign impact of the CPTPP will be.

Sunak faces another backlash if he loses all three by-elections being held this week, which may yet happen.  Uxbridge and Somerton & Frome seem foregone conclusions and here in Selby, the fate of Claire Holmes the Tory candidate, hangs by a thread. 

Her election literature is stripped almost bare of any mention of the Conservative Party, its traditional shade of blue, or the famous tree logo, such is the toxicity of the brand. You wouldn't know she was from the governing party unless you read everything very carefully.

What does this say about the Tories, sinking into a quagmire of sleaze and ineptitude? Their political Armageddon is just months away.

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