UK Lawmakers Slam ‘Lack of Clarity’ on Major Trade Deal Benefits

Bloomberg | 19 February 2024
By Lucy White

UK Lawmakers Slam ‘Lack of Clarity’ on Major Trade Deal Benefits

  • Panel calls for MP vote on Pacific trade bloc accession
  • Committee flags concerns on food safety, legal challenges

British lawmakers said the benefits of the UK’s accession to a major trans-Pacific trading bloc are unclear, in another blow to Prime Minister Rishi Sunak’s post-Brexit trade policy.

The House of Commons should be allowed to debate and vote on Britain’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Parliament’s Business and Trade Committee said in a report on Monday. It cited concerns around food safety standards and the ability of overseas investors to sue the UK government.

The report by the cross-party panel calls into question the merits of a deal that the Conservative government has held up as a key benefit of leaving the European Union, widening the UK’s access to markets in the 11-nation free trade bloc, whose members include Australia, Japan, Canada and Mexico.

UK Joins Trans-Pacific Trade Partnership With 11 Nations

Labour MP Liam Byrne, chair of the committee, said lawmakers needed “some hard-headed analysis of the economic benefits of the trade deals ministers propose to sign.

“If we want our economy to grow faster, we need to trade more,” Byrne said, noting that the UK was currently set to miss its target of £1 trillion ($1.3 trillion) of exports by 2030. For all CPTPP’s merits or drawbacks, “if we’re serious about parliamentary sovereignty, government must let MPs debate the deal and vote on it,” he said.

Marginal Gains

The UK formally agreed to join the pact, whose other members are Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, in July 2023. The deal was was seen as a Brexit win, as forming closer ties with nations beyond the EU had been touted as one of the key benefits of leaving that bloc. At least six members of the CPTPP, plus the UK, must formally ratify the UK’s accession.

Byrne’s panel said it was “difficult to estimate the potential benefits of CPTPP or its impact on economic growth,” partly because Trade Minister Kemi Badenoch has distanced herself from her department’s own economic modeling, which suggested the deal will boost economic output in 2040 by about £2 billion — or around 0.09%.

The committee also expressed concern about measures under the CPTPP which allow overseas investors to sue the government over actions which damage their profits. The panel also warned that it had taken evidence indicating CPTPP could allow challenges to UK food safety rules banning the import of beef and pork which has been treated with growth hormones. Still, they noted challenges are possible under existing World Trade Organization provisions, but none have materialized to date.

The UK’s refusal to loosen its food safety standards to allow hormone-treated meat imports from Canada has already angered Canadian farmers, who hoped the UK’s accession to the CPTPP would grant them more market access. It was a source of friction in negotiations for a bilateral UK-Canada free trade deal that werepaused last month.

source: Bloomberg