DLA Piper raises the question of whether the recent signing of the UK into the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) is net positive or net negative (Lexology).
They say that the media will jump in and raise arguments for why the UK should not have become a member. Campaigners are concerned about palm oil imports from Malaysia. The UK Trade and Business Commission raised concerns about the potential for environmental and animal welfare standards to drop.
The agreement is likely to result in £1.8 billion in trade over the next decade or so. 95% of import tariffs and charges will be reduced with partner nations, accounting for 99% of UK exports to these countries.
This is good news for international trade. But not enough to make up for Brexit. Estimates are that the UK has lost £33 billion in trade since Brexit (The Independent).
Current members of the Comprehensive and Progressive Agreement for Trans Pacific Partnership include Malaysia, Singapore, Brunei, Vietnam, Japan, Australia, New Zealand, Mexico, Canada, Chile and Peru. The UK is the first non-founding member to be accepted. China has applied to be next. The USA may resume their membership, which lapsed under Trump.
The UK was already trading with 9 of the 11 members. The two countries that the UK is not trading with, Malaysia and Brunei, are controversial for environmental reasons (The Conversation).
The boosted trade is likely to accelerate technology for electric vehicles and renewable energy as it includes minerals and semiconductors used in their manufacture. The cooperation is expected to aid low carbon and energy-efficient technology needed for the transition to net zero.
Skilled workers are more mobile under CPTPP. Business mobility for highly skilled workers is increased, cross-border investment and the free flow of data will be beneficial for UK finance firms.
In fact, the agreement will benefit all industries except agriculture. So access to the market will be staged and permanent limits have been placed on sensitive agriculture like meat and sugar.
Low or zero tariff palm oil imports from Malaysia are of concern but Business and Trade Secretary Kemi Badenoch says being a member will allow the UK more say on sustainability policy.
“Distance really does matter in trade” (The Conversation). There is a reason we are not currently trading with distant countries. Increased trading will require more transportation. That will have an impact on our climate commitments, says Caroline Lucas, MP and a member of the UK Trade and Business Commission, in a statement (CNN).
“When it comes to trade, distance matters. Not only will joining this bloc fail to replace trade we have lost with our closest neighbors, stretching supply chains makes a mockery of our climate commitments and will undercut environmental and food standards in the UK”Caroline Lucas, MP
The government counters claims by reiterating that the CPTPP allows members to set their own levels of protection, so the UK will still be able to prevent imports of hormone treated meat from Canada, for example (BBC).
Only time will tell whether joining the CPTPP was beneficial for the UK and by how much.