In a brilliant article by Chris Horseman, 28/09/2022 in Borderlex, the stark difference between acceding to an existing trading agreement CPTPP and a new Free Trade Agreement, such as we signed with New Zealand and Australia recently, is clear. Indeed, the fact that we worked quickly to gain those agreements is now playing against the UK as the concessions made in terms of agriculture to encourage the final agreement are now being heralded as the new norm. Especially where the UK were not part of the founding of this 11-country grouping any existing agreements are going to be treated as a benchmark. The hopes that the UK would join by the Comprehensive and Progressive Agreement on Trans-Pacific Partnership by the end of this year are fading.
Ironing out a few wrinkles first…
With the next major negotiating round scheduled for next week thoughts are turning to how this can be achieved and what is needed to change. The main issues are simple. The first is that CPTPP is such a new agreement even those who negotiated the concept and outlined the modus operandi for the group, had not covered how new member states would join. How new applications should be handled is not clear and the UK accession is being used to iron out the wrinkles in the process.
The need for clarity
The second issue is more complex and revolves around the way in which the UK is negotiating the scale of market access. Here it becomes clear that past deals with small countries like Australia and NZ are being examined to establish how the UK operates. So far, the UK has not been specific about the offer. Borderlex spoke to the Asian Trade Centre in Singapore and Deborah Elms, executive director there explained, “There is general dissatisfaction with the UK’s offer on market access, especially around agricultural market access.” She continued, “It’s seen as underwhelming – too many gaps, too many exceptions, and too long a time horizon [for phasing out tariffs],” she added. Reminding us back here in the UK that we are relatively new to trade negotiations and that we may need to take time to reflect on how these deals will operate.
11 countries with a lot to consider
Did we under-estimate the scale of the challenge and should we have developed, as they do around the world, a cross party strategy on trade and negotiation? Working with the CPTPP 11 countries who had already established a style of operating was going to be harder than starting from scratch. With no clear strategy on agriculture and how it should be managed, are we beginning to leave the UK farmers to look at new ways of trying to fund their businesses and compete against increasingly cheap imports. Currently, sterling is doing so badly imports are expensive again. But this is making long term planning hard for everyone, not just farmers. Interestingly, the NI Protocol was mentioned as one of the stumbling blocks as it has been with the US-UK trade deal. There is a lot to consider.
In my opinion, the UK needs cross party committees and working groups with a full understanding of the implications of these trade agreements before we sign our next one, possibly India, before opening a Pandora’s box of issues.