CPTPP: nothing to write home about
By Pete North - April 11, 2023
After some months of being permanently suspended from Twitter, Mr Musk finally restored one of my lesser followed accounts. In that time I’ve learned three new computer languages, rewritten two websites and massively improved my cooking skills. I can highly recommend a spell away from Twitter.
Though I’m back, I’m in no danger of getting sucked back into it. Already I’ve had a tweet go viral, and my inbox is again a trashfire, but I’m resisting the urge to engage with any of it. What my period of abstinence taught me is that what happens on Twitter doesn’t really matter outside of Twitter. I have missed it as a source of news but I haven’t missed the toxicity that goes with it and I really don’t need it in my life.
Similarly, I’ve been less inclined to blog anything, simply because there is so little new that can be said about any of the major news issues. The culture wars rage on, immigration is still out of control, and our politicians are no closer to waking to to the insanity of net-zero. Anything I could write about these issues has already been said.
As to Brexit, nothing has changed there either. There remains a core of rabid remainers and foaming Brexiteers, each talking to their respective confirmation bubbles – with nothing new to say to each other. It’s the same old zombie arguments between people who have learned nothing and don’t wish to learn anything.
One such example was the CPTPP debate last week, from which I conclude that Brexiteers haven’t read it, remainers haven’t read it, and neither would know what they were looking at if they had. Brexiteers, led by the Telegraph and the Express would have it that CPTPP is huge new market and our accession signifies the much vaunted “pacific pivot”.
Meanwhile, the remainer clan is convinced it marks an era of rampant deregulation, regression of standards and every other overhyped trade related scare you care to mention. The same ones listed by “trade justice” campaigners every time a new FTA is announced.
The reality is far less interesting. CPTPP is neither deep nor comprehensive, and for the most part merely restates standard WTO tract which had little real world meaning to begin with. To know what you’re loooking at with CPTPP you’d have to have at least some familiarity with the template of other FTAs. You then realise just how similar they are – and how much their importance is overstated.
The GATT/WTO system is, in effect, a constitution for the the post-war international trading system, and as such is meant to be self-enforcing. With CPTPP, there is no central surveillance system, no commission and it has no way to police its rules in the same way the EU does. It is not a regulatory union. It relies on its members to act in good faith and in accordance with its pre-existing WTO obligations.
In that regard, CPTPP does very little to enhance market access and there are no automatic benefits compared with regulatory harmonisation. It’s all dependent on member priorities and the extent to which they cooperate.
Even with CPTPP, the UK is still going to have to navigate the respective customs and rules of each member state, some of which have under-resourced and under-developed customs administration. Malaysia is one such instance where the governmental websites are cursory and badly translated – if they’re translated at all. Generally the rule is that if you want to trade in the far east then you must be in the far east.
We then have to assess whether the thin gruel of CPTPP goes much further than existing bilaterals, and whether it will be a focal point of regulatory cooperation. No and no I expect. Most CPTPP members already have far more comprehensive trade treaties with the EU, which will set the tone and direction of regulatory cooperation.
CPTPP has been described at best as a big geopolitical strategy gain with a small economic gain – but I’m not even sure that’s true. Britain could in theory hold the veto over whether China joins the agreement. But the importance is overstated. China has clout enough by way of cornering markets and hoarding material and mineral wealth. Tariffs and regulatory barriers present no real obstacle to China flooding global markets with pretty much everything. If politicians are still intent on inflicting net-zero, then it isn’t going to happen without talking to China.
Still, though, CPTPP accession is a very big propaganda win for the UK for those who want it to be. Whatever shores up the Brexiteer free trade delusion. The reality, however, is as we’ve often suggested – that the UK, in or out of the single market will continue to align with the EU because it’s in our best interests to do so, and because divergence simply isn’t worth the bother. UK industry has little appetite for regulatory disruption for the notional advantage of freer trade on the opposite side of the world.
We’re also beginning to see where divergence creates system conflicts with TCA and the NI Protocol. Rishi Sunak is keen to put Brexit hostility behind us – and if we want to improve the TCA when it’s up for review then he’s not wrong. The TCA in its current state is very far from adequate, and EU markets still matter. It seems that climbing down on the NI protocol is the price.
Little by little, die-hard Brexiteers will learn that so much of the sovereignty crusade could only ever be a symbolic gesture. We will implement a carbon border tax because the EU is implementing one. We will track EU policy trade developments because the penalty is too great otherwise – and because other trading nations prioritise trade ties with the EU over the UK. This was known before Brexit, and leaving the single market in order to radically diverge was a fool’s errand.
It’s certainly true that we can now diverge in a number of key areas, but the sad fact is, we won’t, because intelligent re-regulation is far beyond the abilities of our political class, and we’d need to see a departure from the prevailing groupthinks on energy and climate.
With the political establishment captured by the green blob, and academia bought and paid for, it’s going to take far more than Brexit to dislodge technocratic eco-tyranny. On that score, we’re still at square one.
