UK closing in on major Pacific trade deal after Sunak’s Brexit breakthrough

06/03/2023    67

Expectation is mounting that the U.K.'s bid to join a major Pacific trade bloc will soon be green-lit following Prime Minister Rishi Sunak's breakthrough post-Brexit pact with the EU.

The U.K. is on the verge of reaching an agreement in principle to accede to the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the coming days, three people familiar with the negotiations said.

A well-placed diplomat from one CPTPP member nation said they had their "fingers crossed" that the U.K. can secure accession this week, while a senior business figure said government had been briefing that a deal is expected soon.

The Department for Business and Trade declined to comment on the state of negotiations, while a U.K. government official played down the suggestion that accession is coming within days. They stressed that Britain is still "talking to 11 different countries, all with different asks and needs" that need lining up.

The U.K. first applied to join the bloc in early 2021 and accession is a major part of its wider post-Brexit foreign policy shift toward the Indo-Pacific. Members include Canada, New Zealand, Australia, Singapore, Japan, Chile, Vietnam and Malaysia, and the latest round of talks is being held on the Vietnamese island of Phu Quoc this week.

Key sticking points as talks have progressed include CPTPP member Canada’s bid to get Britain to drop a ban on controversial hormone-treated beef, something U.K. ministers have stressed will not happen.

There has also been a push from Canada and Mexico for access to Britain's agricultural market on a par with that granted to Australia and New Zealand in their own bilateral trade deals with the country.

Brexit factor

CPTPP accession would be seen as a major win for Sunak, who produced a landmark deal at the start of this week after long-running talks with the EU over post-Brexit trade rules for Northern Ireland. Sunak must now sell that Brussels agreement to his own party.

Member nations have been keeping a close eye on the U.K.'s EU talks.

Japan — which has been leading the U.K.’s accession process — had been “very closely watching” negotiations between Britain and the EU to resolve the dispute, said a Japanese diplomat.

That’s because the Northern Ireland protocol — which introduced checks on trade from Great Britain to Northern Ireland post-Brexit — is baked into the U.K.’s trade deals with Australia, New Zealand and Japan.

When the U.K. accedes to CPTPP, the Northern Ireland protocol and Britain’s trade relationship with the EU will also become part of the deal. Changes agreed with the EU will have knock-on effects on trade with bloc members.

The U.K. is now dropping legislation to change the protocol unilaterally. All members of the deal were “watching those negotiations and relationship,” said another diplomat from a member nation.

British trade chief Kemi Badenoch has downplayed the role of the EU talks in the CPTPP bid.

She told POLITICO last week that “many countries, even within CPTPP” had raised the Northern Ireland protocol issue in trade talks, but claimed they had been "spooked by what they think it is, rather than what it actually is."

"I don’t think it is blocking [talks], even though it does come up in discussions," she said.

A Department for Business & Trade spokesperson said joining CPTPP would create "new opportunities for modern industries like tech and services," and boost "high-value jobs across the U.K."

“We intend to join on terms that work for the U.K.’s interests and domestic priorities, and look forward to concluding negotiations at the earliest opportunity," they added.

Source: Politico