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Liz Truss standing at the front of a group photo of heads of mission involved in CPTPP negotiations.

The Politics of UK Accession to Pacific Free Trade Club

Elly Darkin
Commentary, 25 February 2021
Navigating the Indo-Pacific, UK, Pacific
While political and strategic considerations may push the UK to prioritise speed over substance when it comes to accession negotiations, this strategy may well pay off if joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is seen as a starting point for greater commercial diplomacy in the Asia-Pacific.

As one set of UK trade negotiations concludes, another begins. This time, UK negotiators will be turning their attention from the EU to a different kind of trade bloc a little farther from home: the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). While the accession process will avoid the political sensitivities of last year’s EU negotiations, which centred on governance, fisheries and maintaining a level playing field, there will still be practical and political obstacles to navigate. So, what can UK negotiators expect from accession talks and what does the UK stand to gain?

A Natural Partner

The UK’s application to join the Asia-Pacific trade bloc has so far been well-received. Both domestic UK businesses and the other CPTPP members have broadly welcomed the UK’s interest, eyeing opportunities to deepen global trade links at a time when Europe and the US are pursuing more inward-looking strategies under the banners of ‘strategic autonomy’ and ‘Buy American’.

Japan has been particularly keen on encouraging UK accession, no doubt hoping that bolstering CPTPP membership will strengthen the pact’s geostrategic aims. Canada, Australia and New Zealand also have close diplomatic and security ties with the UK as part of the Five Eyes intelligence alliance. This makes the UK somewhat of a natural partner for the Asia-Pacific trade pact, despite its unconventional geography.

The UK is in fact already quite advanced in terms of its preferential trade relations with most CPTPP members. Bilateral free trade agreements (FTAs) are in place with seven of the bloc’s 11 members, and two more are under negotiation. This is expected to smooth the accession process, especially as some of those deals have been crafted with an eye to CPTPP accession. The chapters on digital trade and services in the FTA with Japan mirror many CPTPP provisions, for instance, and this is likely to be the case for future agreements with Australia and New Zealand. This existing treaty infrastructure has meant CPTPP accession is seen as both a logical and plausible next step for the UK.

Take It or Leave It

While the UK’s existing FTAs may expedite the accession process, they will also produce a fundamental asymmetry in negotiations. The current network of bilateral trade deals already grants key CPTPP members preferential access to the UK market. The UK also has a relatively open market for trade in services, with few restrictions in place for foreign companies looking to establish a commercial presence in the UK. This is likely to reduce the UK’s leverage when it comes to accession negotiations, with the onus being on the UK to prove its value-add as a new member.

CPTPP members may also be reluctant to grant too many concessions given the need to establish a precedent for future applicants. The UK is the first to formally apply, but other counties – including South Korea, Thailand and Indonesia – have all expressed interest too. Bigger players, such as China and the US, have also hinted at the possibility of joining the bloc, albeit at some point in the future. Current CPTPP signatories may wish to establish a ‘take it or leave it’ approach for future applicants to follow, limiting the prospects for a heavyweight newcomer to shape the deal in its image. This will restrict the scope of the UK’s ‘offensive’ negotiating objectives and may ultimately limit its ability to extract concessions. For these reasons, the UK may well find itself in a position where it must agree to join the CPTPP in its current form, with its current provisions.

The limited scope to shape the deal may, however, not cause too much concern in London. This is in part because the UK’s reasons for joining the pact are driven by political motives as much as policy objectives. At a domestic politics level, it is no secret that the UK government is operating on a new landscape with something to prove about the UK’s position in the world outside the EU. As trade negotiations with the US have stalled while President Joe Biden and his Office of the US Trade Representative appointees take office, the government is under pressure to demonstrate a tangible benefit of the UK’s new trade policy autonomy. Negotiating new trade agreements has always been an important pillar of the ‘Global Britain’ strategy, which has the explicit aim of securing, within the next three years, FTAs with countries covering 80% of UK trade. Joining the CPTPP would be proof that the UK can indeed tap into new opportunities outside the EU. As such, the accession process is likely to be driven by political time pressure to deliver on the dividends of Global Britain rather than concrete policy objectives.

Commercial Diplomacy

Negotiators will also be aware that the real benefits for the UK are likely to come from the commercial diplomacy that would accompany CPTPP membership, not the accession process itself. Simply joining the trade bloc in its current form, and with its current membership, will not deliver much in terms of economic gain to the UK. CPTPP accession is however an opportunity for the UK to position itself within the diplomatic and regulatory framework of the pact, which was originally designed to place a foothold for trade liberalisation and US regulatory preferences at Beijing’s doorstep. By engaging in new regulatory dialogues with CPTPP members and joining flanking cooperation agreements – such as the Digital Economy Partnership Agreement between Singapore, Chile and New Zealand, for instance – the CPTPP framework provides an opportunity to further expand the scope of the deal. This is where UK trade policy objectives such as encouraging better trade practices on intellectual property discipline, digital trade and trade in services are more likely to be realised. Such an approach will also cement geostrategic alliances in the region and create a sense of synergy between the UK’s trade policy and broader foreign policy goals, which has increasingly involved taking a hard stance on China.

These domestic and strategic considerations make it likely that the UK will prioritise the speed of accession over any concerted efforts to extract concessions from members or shape the existing provisions of the deal. This may, however, prove a fine strategy given that the benefits of membership lie in the CPTPP’s broader regulatory cooperation framework and flanking agreements. The extent to which these benefits will be realised depends on whether the UK sees accession to the bloc as an end in itself, or as a means to greater and prolonged commercial diplomacy in the Asia-Pacific region.

Elly Darkin advises on trade policy and manufacturing at Global Counsel, a strategic advisory firm.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.

BANNER IMAGE: Liz Truss chairs a CPTPP Head of Mission Roundtable, July 2020. Courtesy of Flickr/Number 10/CC BY-NC-ND 2.0

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