In July 2023, the UK formally agreed to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an Asia-Pacific trade bloc made up of 11 countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. This is the UK’s third post-Brexit new trade agreement, following bilateral deals with Australia and New Zealand. CPTPP is different as the UK is joining an existing agreement rather than starting negotiations from scratch.
The UK will be the first new member since the bloc was established in 2018 and the first country from Europe to join. Other countries (including China) have applied to join CPTPP or expressed an interest in doing so.
Why does the Government want to join?
The Government argues that CPTPP membership will bring a range of benefits, including lower trade barriers to a dynamic region expected to become increasingly significant in the global economy. CPTPP accession also forms part of the Government’s “Indo-Pacific tilt”.
Limited economic impact
The economic benefits appear to be small. The Government’s impact assessment estimated the long-run increase in GDP would be £2 billion (or 0.06%) but could be higher if other countries, such as South Korea, join the bloc. The impact assessment highlights the uncertainty around this estimate and the Secretary of State has distanced herself somewhat from the modelling on which it is based.
One reason why the gains are expected to be modest is that the UK already has bilateral trade agreements with 9 of the 11 CPTPP countries, Malaysia and Brunei Darussalam being the exceptions. The UK also does a limited amount of trade with CPTPP countries. In 2022, the UK exported £64.7 billion of goods and services to these countries (7.8% of the UK total) and imported £53.7 billion (6.0%). Many see the gains from joining CPTPP as geopolitical rather than economic.
Concerns raised about the agreement
Various organisations have expressed concerns about the implications of CPTPP for food safety, farming and environmental standards. The NFU and WWF note the UK has not developed core minimum standards for food imports. Concerns have been raised about a possible conflict between the UK’s ‘precautionary’ approach to regulation and the CPTPP’s ‘scientific’ approach. The Government has emphasised that food imports will continue to comply with UK import standards.
Concerns have also been raised over palm oil. Tariffs on palm oil will be reduced to from up to 12% to zero, potentially leading to more imports. Environmental groups argue that palm oil production is linked to deforestation and damages orangutan habitats. The Government has said that the UK and Malaysia have published a joint statement on sustainable agricultural commodity trade and cooperation to conserve forests (PDF).
Some groups have raised concerns over Investor-State Dispute Settlement (ISDS) provisions. These are highly controversial with some arguing that they allow foreign investors to challenge government policies in areas such as the environment, workers’ rights and health. ISDS provisions have been excluded between the UK and Australia and New Zealand under CPTPP, in line with the UK’s bilateral free trade agreements with these countries. The Government has said its right to regulate in the public interest will be preserved.
Reports on agricultural aspects of CPTPP
The Trade and Agriculture Commission’s (TAC) report found CPTPP did not require the UK to change its levels of statutory protection relating to animal or plant life or health, animal welfare or environmental protection. The TAC also found that CPTPP strengthened the UK’s ability to maintain levels of environmental protection. It concluded that the risk that CPTPP would increase palm oil imports from deforested land was “low”.
The Government published its report under section 42 of the Agriculture Act 2020 examining whether CPTPP’s provisions which apply to trade in agricultural products are consistent with UK statutory protections relating to (a) human, animal or plant life or health (b) animal welfare and (c) the environment. It concluded that accession was consistent with the maintenance of statutory provisions in these areas.
Parliamentary scrutiny
The Accession Treaty was laid before Parliament under the Constitutional Reform and Governance (CRAG) Act 2010 on 19 February 2024. This triggers a period of 21 sitting days, ending on 22 March, during which the Government cannot ratify the agreement.
There is no statutory requirement for a Commons debate or vote on the agreement. The Business and Trade Committee’s report did, however, call for a debate on a substantive motion in the House of Commons within the 21 day CRAG period as the agreement raised “contentious issues”. Kemi Badenoch, Secretary of State for Business and Trade, said she supported the idea of having a general debate, although this would not commit the Commons to an opinion on the agreement. CPTPP itself was not debated in the Commons during the CRAG period, although the Bill implementing the UK’s accession was debated. The Lords held a debate on the agreement on 19 March 2024.
The Government expects the agreement to come into force in the second half of 2024 once the UK and the other CPTPP members have completed the necessary legislative processes.