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Friday, June 21, 2024

Spotlight: Trans-Pacific Partnership

Atul Bhakta asks, should we be excited that the UK has joined the CPTPP?

On 31st March, the government announced that the UK had joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

Kemi Badenoch, trade secretary, declared the UK’s joining of the bloc, which consists of 11 countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – was its most significant trade deal since Brexit.

Meanwhile, on unveiling the agreement, Rishi Sunak stated: “Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies.” The Prime Minister added that the deal was proof his government was seizing opportunities promised for “post-Brexit freedoms”.

However, cut through the political rhetoric, the wider response to the UK joining the CPTPP was more muted, to put it politely.

Controversy beneath the surface

At first glance, criticism of the deal may seem unfair. After all, those 11 countries boast a combined population of 500 million and, with the addition of the UK, the bloc will represent 15 percent of global GDP.

Yet there are important details that were buried further down the government’s announcement about the trade deal. For one, the UK already has bilateral trade agreements with nine CPTPP members (all those but Brunei Darussalam and Malaysia).

More controversially, the agreement will see the UK cut tariffs on imports of Malaysian palm oil, production of which has been linked to the destruction of rainforest. Daniela Montalto, head of forests at Greenpeace UK, described this as “outrageous”.

Another issue that the British farming and food standards industries have pushed back on is the fact that Canadian beef – not currently allowed to enter the UK because the country’s cattle are treated with hormones that are banned in Britain – will now be allowed to be imported, albeit with an annual cap of 13,000 tonnes and UK food standards checks implemented.

Positives to build on

This deal is not the game-changer the government made out. Indeed, the government itself only predicts a boost to the economy of £1.8 billion by joining the CPTPP; in other words, an increase of less than 0.1 percent.

However, there are positives, and they should not be overlooked. The UK has been crying out for major trade deals for two years now. This is what was promised in the aftermath of Brexit, but it has taken a long time for meaningful trade agreements to be formed.

This deal is significant. It could become more significant over time, too, with other global powers such as South Korea touted as joining.

Perhaps most notable for now is that the UK is the first new nation to join the CPTPP since it was established five years ago. And the UK is the only European member of the bloc. So, in joining the CPTPP, the government has shown that it can get the UK a seat at the proverbial table – that it can strike sizeable deals with important trading blocs, not just bilateral agreements.

Ultimately, being part of the CPTPP will undoubtedly open up new opportunities for British businesses to export globally, and anything that reduces red tape and helps the export market should be celebrated. It might not be a landmark deal for the UK, nor is it without some controversy, but it is one that does bring forward some positive developments that should not be unduly dismissed.

 

 

 

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