UK - CPTPP (Pacific) trade deal

UK - CPTPP (Pacific) trade deal

The UK is on course to accede the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2024. Also known as the Pacific trade deal, this trading bloc encompasses 11 countries in the Pacific region. Members include Japan, Canada, Australia, Malaysia and Singapore.

The agreement brings minimal benefits and significant risks in areas such as tackling climate change, improving standards, and protecting the right to regulate in the public interest. The UK's accession to CPTPP - from the beginning of negotiations to the domestic ratification process - has been subject to undemocratic processes that have largely shut out Parliament, civil society and the public. 

Trade negotiations: status update

On 22 March 2024 , the CRaG (Constitutional Reform and Governance Act) period, required for ratification of the UK’s accession to the Pacific trade bloc, was concluded.

Despite widespread calls, the Leader of the House Penny Mordaunt confirmed there would be no debate and vote on the full 30 chapters of the agreement.

The ratification of the UK’s accession to CPTPP has clearly demonstrated the urgent case for overhauling the UK's democratic processes around trade agreements.

Process and scrutiny

Despite demands from across Parliament and civil society, in March 2024, UK accession to CPTPP received parliamentary consent without a vote on the full 30 chapters of the agreement. Instead, parliamentarians were limited to a series of debates on the Trade (CPTPP) Bill, a narrow piece of implementing legislation for the agreement. 

This followed several years of negotiations in which neither Parliament nor external stakeholders had received any meaningful opportunity to shape the UK's negotiating objectives, or to have oversight of the negotiations as they progressed

The UK’s process for negotiating international agreements allows the government to initiate, negotiate and conclude deals without any scrutiny or consent from Parliament. MPs have no guaranteed votes on objectives or on the final deal. The shortcomings of this system have once more been illustrated throughout the UK's accession to CPTPP. 

Impacts on standards

The Pacific trade agreement risks significant negative social and environmental impacts that were deserving of extensive scrutiny. The UK’s own assessment predicts that greenhouse gas emissions will increase as a result of the agreement. Whilst the increase is very small at 0.025%, it is far from the significant reductions that are required to achieve our climate commitments. 

There are concerns regarding standards in partner countries. For example, UK pesticide standards could be undermined: 119 pesticides that are banned in the UK are allowed for use in one or more CPTPP members. Though accession to CPTPP does not necessitate any immediate lowering of UK standards, during the passage of this legislation peers debated practical questions around the sufficiency of the UK’s border testing regime to keep banned substances out. Provisions within CPTPP give member states opportunities to press for changes in the standards regimes of partner countries.

In addition, the UK acceded to Malaysia’s demand to lower tariffs on palm oil to zero. This is likely to increase palm oil exports, and with it the risk of deforestation, serving to undermine indigenous and local community land rights and threaten natural habitats for species like orangutans. This issue was debated in the Lords in the context of potential protections afforded by the UK’s forest risk commodities legislation under Section 17 of the Environment Act 2021; it is unclear when these regulations will actually come into effect.

CPTPP includes a number of countries where abuses of labour rights are widespread. In Brunei and Vietnam, independent trade unions are banned, while in Malaysia, forced labour has been widely documented. There are a number of CPTPP member states which have not ratified core ILO conventions. However, CPTPP’s labour rights protections are weak. A member state can challenge another over failure to uphold labour rights, but only if it can be demonstrated that such failure affected trade, something that is notoriously difficult to prove. The ineffectual nature of the chapter is demonstrated by the fact that since the agreement’s conclusion in 2018, no government has challenged another for abusing labour rights. The TUC have described the risk of CPTPP making it “easier for unethical companies and investors to do business with countries where it’s easier to exploit workers.”

CPTPP accession brings risks of preference erosion, under which preferential trade arrangements afforded to exporters in one country bring negative development impacts for others. For example, Afruibana, the association representing banana exporters across Africa, have set out concerns regarding the potential impacts of tariff liberalisation in South and Central America for those they represent.

Crucially, CPTPP includes Investor-State Dispute Settlement (ISDS), which allows firms to sue the governments of member states for measures which harm their profits, and has been used internationally to challenge important environmental, health and social regulations.

High profile cases have seen governments challenged by private investors over phase out of coal-fired power, bans on offshore exploitation of oil and gas, and moves to strengthen environmental impact assessments of mines and power stations. In addition to such cases, the presence of ISDS brings a substantial regulatory chill, deterring governments from introducing policies that seek to strengthen regulations.

The UK has agreed ‘side letters’ with CPTPP members Australia and New Zealand to disapply these provisions, likely at the behest of their Governments, which have both made commitments to exclude ISDS from future free trade agreements. The UK has not shown any intention of negotiating similar side letters with other CPTPP members.

In October 2023, a letter, supported by 30 NGOs and trade unions and over 50 academics and legal professionals from both the UK and Canada called for the immediate negotiation of a side letter between the UK and Canada to disapply ISDS provisions between the two countries.


Image: Prime Minister Rishi Sunak meets Japan's Prime Minster Fumio Kishida for a bilateral meeting at the Tower of London, January 2023. Picture by Simon Dawson / No 10 Downing Street

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