By John Harley Breen*
The United Kingdom is in discussions to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with UK trade officials stating that rapid progress on talks could see London acceding to the 11-member trade bloc in 2022.
The United Kingdom’s decision to join CPTPP falls under the UK government’s ‘tilt’ towards the Indo-Pacific — a cornerstone of the ‘Global Britain’ agenda. The Global Britain agenda seeks to rebalance UK foreign policy and to pursue independent trade opportunities shaped by national security concerns, while offsetting the economic costs of Brexit. London believes that CPTPP membership will address some of these concerns while offering economic benefits.
Acceding to the CPTPP demonstrates London’s deepening engagement and support for like-minded governments in the Indo-Pacific through a bloc committed to trade liberalisation. Since departing from the European Union, the United Kingdom has undertaken significant diplomatic investments in the region, secured dialogue partner status with ASEAN and deployed a range of naval assets, including a Carrier Strike Group in 2021.
On the economic front, London has signed a new free trade agreement with Australia, rolled over EU trade deals with Canada, Chile, Japan, Mexico, Vietnam and Singapore, and secured a trade agreement in principle with New Zealand — all of whom are CPTPP members.
More broadly, CPTPP accession falls under an overarching UK trade interest to ensure respect for World Trade Organization (WTO) rules. London’s membership may have the potential to transform the trade bloc into a global trading system that could revitalise or replace the WTO. The combined economic heft of an expanding CPTPP would increase the bloc’s credibility and force ideologically opposed economies to engage with members on their own terms.
But UK accession to the CPTPP is more about short-term political expediency than economic benefits and this will likely have implications for relations with its major trading partners, while undermining domestic support for London’s Indo-Pacific tilt.
Joining the CPTPP follows the UK government’s narrative that Brexit allows the United Kingdom to implement its own independent trade policy. But rather than set its own trading standards, UK accession to CPTPP will require that London accept the rules and standards already agreed to by existing members. Japan, one of the United Kingdom’s strongest supporters for joining CPTPP, has underscored this as a condition for new applicants.
China’s application for CPTPP membership complicates matters. Amid debate over Beijing’s intentions and the likelihood of accession, China could exploit anxieties that UK membership weakens the CPTPP as a regional trade vehicle. Beijing has influence considering the seven-country overlap between the Regional Comprehensive Economic Partnership and the CPTPP. Beijing’s application is likely to expedite London’s accession, but CPTPP members will likely insist on full compliance with existing rules to demonstrate a high threshold for membership.
It is unclear how accession to the CPTPP would further UK economic opportunities when London has secured, or is close to securing, trade agreements with the trade bloc’s largest members. Better deals on market access for services are more likely obtained through bilateral deals than the existing services concessions under the CPTPP.
UK accession risks regulatory divergence with the European Union in key export sectors such as industrial and agricultural goods. This is problematic as the European Union remains the United Kingdom’s largest trading partner, accounting for 42 per cent of all UK exports and 50 per cent of all UK imports in 2020. Trade with CPTPP members accounted for only 8 per cent and 7 per cent of all UK exports and imports respectively during the same period.
To be fair, UK accession will provide longer-term benefits should the CPTPP expand, particularly in terms of shaping future trading regimes and the accelerating shift towards a transnational digital economy on the back of COVID-19. CPTPP members in Asia welcome UK accession due to the attractiveness of improved access to one of the largest services markets in the world, access to which would help these countries modernise their economies. Their views are already reflected in the UK–Singapore digital trade agreement and Hanoi’s letter of intent on digital collaboration with London.
But while the CPTPP may offer rewards down the line, the United Kingdom’s accession is more about political ends than it is about economic gains and this will likely undermine its ability to sustain its commitments to support like-minded governments in the Indo-Pacific region.
British politicians and industry bodies are voicing their concerns. A House of Lords cross-party report argues there are limited economic benefits to come from joining the CPTPP, while accession will amplify concerns of domestic constituents, such as farmers, over tariff-free meat imports under the Australia–UK free trade agreement.
While the CPTPP remains important for UK political interests, London may want to prioritise strengthening its trade opportunities closer to home to offset the economic cost of Brexit. Failing to do so may undermine the UK ability to sustain its commitments in the Indo-Pacific. Domestic support for continued UK engagement in the Indo-Pacific will remain contingent upon London demonstrating real economic benefits for British taxpayers.
*About the author: John Harley Breen is a political risk consultant working in the United Kingdom and Ireland.
Source: This article was published by the East Asia Forum