THE UK announced it would begin negotiations to join the Comprehensive and Progressive Trans-Pacific Partnership, with formal negotiations set to start in 2021.
Rigby Cooke Lawyers partner Andrew Hudson said the news coming out of London is good news for Australia and its CPTPP trading partners (even if the UK has no direct borders to the Pacific).
“It would enhance trade opportunities for Australian exporters at a time when many export opportunities to China are being challenged and access to the UK through the EU has been challenged by Brexit,” Mr Hudson said.
“It would also potentially enable the UK to enter into a multi-lateral trade agreement instead of waiting to negotiate separate bilateral deals with the members of the CPTPP. There could obviously be efficiencies in that approach, but it creates some challenges for the UK and the CPTPP.
“These challenges include setting new tariff rates between parties and setting a structure on which to build future bilateral deals and for all parties to adopt appropriate ‘consignment’ rules so that goods can be moved through non-CPTPP countries such as the US, the EU or some Asian countries which not parties to the CPTPP and not lose preferential status.”
Mr Hudson said it is not merely a process of the UK signing the CPTPP – the UK will need to commit to processes and procedures that are already in place and have been developed by others.
“That will pose some practical implementation issues which need to be addressed before the UK becomes a party to the CPTPP,” Mr Hudson said.
“It may also provide some more encouragement to the new Biden administration in the US to come back into the deal to which they were originally a party, although that accession may be challenged by the expansion and tightening of the ‘Buy American’ executive order which was one of the first orders signed by the new US President.”
A statement from the UK Department for International Trade said UK trade with the CPTPP countries was worth £111 billion ($200 billion) in 2019, growing by 8% a year since 2016.
UK Prime Minister Boris Johnson said, “One year after our departure from the EU we are forging new partnerships that will bring enormous economic benefits for the people of Britain.
“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade.”
New Zealand Trade and Export Growth Minister Damien O’Connor said the challenges facing the global trade and economic environment have been compounded by COVID-19.
“In this context, New Zealand sees the CPTPP objective of maintaining and growing open, rules-based trade, as more important than ever,” Mr O’Connor said.
“We believe the CPTPP can provide leadership in our region and beyond to drive post-COVID economic and trade recovery. The UK’s move to join the CPTPP underlines the agreement’s importance in this regard.” The CPTPP is an 11-member trade agreement involving Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It entered into force on 30 December 2018.
