The government is right to weigh the options but there is more than economics to considerby David Henig / September 28, 2018 / Leave a comment
Early in 2019 one of the largest free trade agreements of recent history should go live. The Trans-Pacific Partnership was originally signed by 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam) in February 2016, but the election of President Trump saw the US withdraw and doubt as to whether the other members could or would proceed. After some discussion, and the suspension of some elements the remaining 11 countries disliked, the slightly rebranded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (or CPTPP) was signed in early 2018, and is now going through domestic approval processes.
From the start of discussions it was always intended that the agreement should be open to new members, and there is no geographical restriction to membership. Hence at first sight it could seem like the UK joining CPTPP shouldn’t be too difficult a decision. It would give us preferential access to 11 markets, which represent 13-14 per cent of global GDP, 7 per cent of UK trade and are home to around 500m people. International Trade Secretary Liam Fox has said “the government is determined to break new ground, putting the UK at the heart of the world’s fastest growing regions—that is why I am also announcing a consultation on potentially seeking accession to CPTPP.”
Yet the decision to do so will not be easy. For while the economic gains just from joining CPTPP are likely to be real, if not necessarily substantial, and joining will be a clear signal of the UK’s commitment to a rules-based economic order, there will also be costs. Most notably signing up to CPTPP’s provisions will mean, slightly oddly despite their withdrawal, signing up to US food standards, and also processes their major drug companies asked for on how state-run health services set drug prices.
The UK government’s consultation on whether we should join this agreement closes at the end of October. But the debate is already starting, sparked at least in part by the unexpectedly frank IEA report “Plan A+, creating a prosperous post-Brexit UK” which noted that “acceding to CPTPP, for example, would be very difficult, if not impossible, for a country to do, without control over its regulatory rulebook.”
The main problem the UK will…