What is the CPTPP?
The CPTPP deal now covers a market of nearly 500 million people with eleven countries signed up to it: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The CPTPP is not a single market and so does not have uniform regulations or closely entwined economic policy across the member states. It also does not have a Common External Tariff. The CPTPP’s focus is on market access through removing trade barriers, aiming to get rid of 98% of all tariffs between members.
Why does the UK government want to join this regional trade agreement?
The first reason is to do with securing increased trade and investment opportunities that will help the UK economy overcome the unprecedented challenge posed by coronavirus. Secondly, to help diversify the trading links and supply chains. And thirdly, to place the UK at the centre of a modern, progressive network of free trade agreements with dynamic economies.
Moreover, the government believes that the CPTPP accession helps play a more meaningful role in strengthening and shaping the rules-based international system (WTO) and puts the UK at the centre of a network of countries committed to free trade and to the global rules underpinning international commerce.
The CPTPP membership should complement the bilateral FTAs the UK holds with CPTPP members, including deals the government hopes to strike with Australia, New Zealand and Japan, and existing EU agreements with Canada, Chile, Mexico, Peru, Singapore and Vietnam.
What are the next steps?
Since July 2018, the UK government has engaged with all 11 member countries to explore UK accession to CPTPP. It seems that all CPTPP members have welcomed the UK’s interest in accession. In its updated statement, the government clarifies that any final application decision will consider both the progress of bilateral negotiations with CPTPP members and the confidence that the UK will be able to negotiate accession on terms compatible with the UK’s broader interests and domestic priorities.
Before applying, they will publish an Outline Approach and a Scoping Assessment setting out the negotiating objectives and the economic impact and benefits of accession. They will also provide a formal response to the government’s public consultation on the UK potentially seeking accession to CPTPP, outlining how the decisions and approach to accession have been informed by the submissions received from members of the public, businesses, and civil society organisations.
皇家华人submitted its views back in 2018. You can read our response here and look at a briefing explaining what the CPTPP is and its trading terms here.
What's the NFU's view on joining the CPTPP?
While the NFU supports the multi-lateral phased reduction of average tariff levels for agricultural products, we believe that the protection of sensitive goods on a global market should be a priority when negotiating trade deals.
The CPTPP includes major agricultural exporting countries who already enjoy preferential access to the UK market in the form of Tariff Rate Quotas (TRQs) for certain key commodities – these include beef, sheep meat, sugar and certain dairy products. This preferential access is provided for in the UK WTO schedule and will be maintained.
UK agricultural producers could benefit from increased access to the CPTPP market. Areas in which there is potential to expand exports of high-quality UK produce include the beef, sheep and dairy sectors.
However, further exploratory work of the potential benefit gained from exporting to these markets through joining the CPTPP would need to be undertaken in order to give a comprehensive overview of the potential for UK agricultural exports.
皇家华人is concerned that in becoming a partner in the CPTPP, the UK Government will be asked to increase market access for sensitive agricultural products.
It is clear that agriculture is an area in which there is much pressure on countries to expand market access. This is of concern as a reduction in tariffs could lead to a surge in cheap imports which do not adhere to our high standards and would damage our domestic production.
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