Ignore the scaremongering: becoming part of the CPTPP would boost our economy and reduce dependence on China
This article by Anthony Mangnall MP for the Telegraph dated 17.01.22 begins with these optimistic words:
Outside of the EU, the UK has the opportunity for the first time in almost 40 years to negotiate its own trade deals. The speed at which new agreements can be signed will no longer be determined by obscure European regional parliaments. Instead, wide-ranging free trade deals can be committed to with British interests at their heart.
While much has been made of the 70 continuity deals that have already been rolled out, the real excitement comes with those deals created from scratch: those that offer us the opportunity to build something genuinely new.
With the ink still drying on the UK-Australia free trade agreement and rumours of an imminent announcement on the UK-New Zealand deal, our trade negotiators have confounded the critics by reaching agreements in record time. These deals are the foundations for evolving relationships, both diplomatic and military, but will also steadily expand and develop to the benefit of our producers and economies.
In a new report with the Centre for Policy Studies think tank – Looking East – I specifically focus on arguably the most exciting of these opportunities: the UK’s ambition to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
CPTPP is one of the world’s newest and most significant trading blocs. Consisting of 11 members, it has a combined GDP of £9 trillion and covers 13 per cent of global GDP. The UK now seeks to become the first nation to accede to CPTPP since its creation. Our membership alone would increase its combined GDP value to £11 trillion and 16 per cent of global GDP. But perhaps most importantly, it would put us at the heart of a global trading initiative based in the fastest-growing region of the world – the Indo-Pacific.
With our attention turning increasingly eastwards, membership would slash tariffs on 99 per cent of UK exports to CPTPP members. It would boost our economy initially by £1.8 billion, with the possibility of reaching up to £20 billion per year (and even the Government admits that its estimates are likely to undervalue the full potential of the deal). Standards would be set and new global trading benchmarks agreed upon. Industries such as green tech, digital trade, food and drink and the automotive industry are all likely to benefit. As will all of the UK’s regions and nations.
As non-tariff trade barriers are removed and cooperation is enhanced, there will be greater cooperation between Cardiff and Chile, Belfast and Brunei, Sunderland and Singapore, and Aberdeen and Adelaide.
And while the economic benefits of membership are clear cut, so too are the geo-political. Member states will be able to cooperate in developing more robust supply chains, looking beyond our current dependence on China and exploring new opportunities within the region and bloc. Standards – whether environmental, welfare or financial – can be enhanced and protected. As a counterweight to the One Belt One Road policy, CPTPP offers a platform for like-minded nations to come together under the banner of free trade.
Britain is not alone in seeing the opportunities represented by CPTPP. Already Taiwan, Korea and the Philippines have expressed an interest in joining. Just last week Ecuador applied to join. The former EU trade commissioner, Cecilia Malmström, has even argued that the EU should seek membership.
Inevitably, the usual suspects have expressed the usual concerns about CPTPP. But as I show in my report with the CPS, the scaremongering about the impact on our agricultural standards, or the NHS, is simply that: scaremongering.
The balance between benefits and costs is emphatically and overwhelmingly in the positive side of the ledger. And there is an opportunity to go further than CPTPP itself, by building deeper relationships and partnerships with its members and others that put high standards at the heart of global trade. The recently agreed Aukus defence deal points to yet another example of how diplomatic and defence relations can be enhanced and improved, with trade binding us closer together in common cause.
The Government has delivered Brexit, but by delivering new trade deals that expand our export markets, reduce tariffs, and create new and better trade standards we can provide more wealth, jobs and opportunities to every part of the UK, connecting Global Britain firmly to the levelling up agenda.
They used to say to young people seeking their fortune that they should go west. Today, Britain needs to look east.
Anthony Mangnall is Conservative MP for Totnes, and the author of 'Looking East' for the Centre for Policy Studies think tank
Details of the CPTPP from Wikipedia
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP11 or TPP-11, is a trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It evolved from the Trans-Pacific Partnership (TPP), which never entered into force due to the withdrawal of the United States. The eleven signatories have combined economies representing 13.4 percent of global gross domestic product, at approximately US$13.5 trillion, making the CPTPP one of the world's largest free-trade areas by GDP, along with the United States–Mexico–Canada Agreement, the European Single Market, and the Regional Comprehensive Economic Partnership.
The TPP had been signed on 4 February 2016, but never entered into force, as the U.S. withdrew from the agreement soon after the election of president Donald Trump. All other TPP signatories agreed in May 2017 to revive the agreement, with Japan widely reported as taking the leading role in place of the U.S. In January 2018, the CPTPP was created as a succeeding agreement, retaining two-thirds of its predecessor's provisions; 22 measures favored by the U.S., but contested by other signatories, were suspended, while the threshold for enactment was lowered so as not to require American accession.
The formal signing ceremony was held on 8 March 2018 in Santiago, Chile. The agreement specifies that its provisions enter into effect 60 days after ratification by at least half the signatories (six of the eleven participating countries).Australia was the sixth nation to ratify the agreement, on 31 October 2018, and it subsequently came into force for the initial six ratifying countries on 30 December 2018.
The chapter on state-owned enterprises (SOEs) is unchanged, requiring signatories to share information about SOEs with each other, with the intent of engaging with the issue of state intervention in markets. It includes the most detailed standards for intellectual property of any trade agreement, as well as protections against intellectual property theft against corporations operating abroad.
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