Trade
Prospects for the United Kingdom’s CPTPP accession
Author: John Harley Breen, Dublin
The United Kingdom is in discussions to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with UK trade officials stating that rapid progress on talks could see London acceding to the 11-member trade bloc in 2022.
The United Kingdom’s decision to join CPTPP falls under the UK government’s ‘tilt’ towards the Indo-Pacific — a cornerstone of the ‘Global Britain’ agenda. The Global Britain agenda seeks to rebalance UK foreign policy and to pursue independent trade opportunities shaped by national security concerns, while offsetting the economic costs of Brexit. London believes that CPTPP membership will address some of these concerns while offering economic benefits.
Acceding to the CPTPP demonstrates London’s deepening engagement and support for like-minded governments in the Indo-Pacific through a bloc committed to trade liberalisation. Since departing from the European Union, the United Kingdom has undertaken significant diplomatic investments in the region, secured dialogue partner status with ASEAN and deployed a range of naval assets, including a Carrier Strike Group in 2021.
On the economic front, London has signed a new free trade agreement with Australia, rolled over EU trade deals with Canada, Chile, Japan, Mexico, Vietnam and Singapore, and secured a trade agreement in principle with New Zealand — all of whom are CPTPP members.
More broadly, CPTPP accession falls under an overarching UK trade interest to ensure respect for World Trade Organization (WTO) rules. London’s membership may have the potential to transform the trade bloc into a global trading system that could revitalise or replace the WTO. The combined economic heft of an expanding CPTPP would increase the bloc’s credibility and force ideologically opposed economies to engage with members on their own terms.
But UK accession to the CPTPP is more about short-term political expediency than economic benefits and this will likely have implications for relations with its major trading partners, while undermining domestic support for London’s Indo-Pacific tilt.
Joining the CPTPP follows the UK government’s narrative that Brexit allows the United Kingdom to implement its own independent trade policy. But rather than set its own trading standards, UK accession to CPTPP will require that London accept the rules and standards already agreed to by existing members. Japan, one of the United Kingdom’s strongest supporters for joining CPTPP, has underscored this as a condition for new applicants.
China’s application for CPTPP membership complicates matters. Amid debate over Beijing’s intentions and the likelihood of accession, China could exploit anxieties that UK membership weakens the CPTPP as a regional trade vehicle. Beijing has influence considering the seven-country overlap between the Regional Comprehensive Economic Partnership and the CPTPP. Beijing’s application is likely to expedite London’s accession, but CPTPP members will likely insist on full compliance with existing rules to demonstrate a high threshold for membership.
It is unclear how accession to the CPTPP would further UK economic opportunities when London has secured, or is close to securing, trade agreements with the trade bloc’s largest members. Better deals on market access for services are more likely obtained through bilateral deals than the existing services concessions under the CPTPP.
UK accession risks regulatory divergence with the European Union in key export sectors such as industrial and agricultural goods. This is problematic as the European Union remains the United Kingdom’s largest trading partner, accounting for 42 per cent of all UK exports and 50 per cent of all UK imports in 2020. Trade with CPTPP members accounted for only 8 per cent and 7 per cent of all UK exports and imports respectively during the same period.
To be fair, UK accession will provide longer-term benefits should the CPTPP expand, particularly in terms of shaping future trading regimes and the accelerating shift towards a transnational digital economy on the back of COVID-19. CPTPP members in Asia welcome UK accession due to the attractiveness of improved access to one of the largest services markets in the world, access to which would help these countries modernise their economies. Their views are already reflected in the UK–Singapore digital trade agreement and Hanoi’s letter of intent on digital collaboration with London.
But while the CPTPP may offer rewards down the line, the United Kingdom’s…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
- Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
- China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
- U.S. national debt is its Achilles’ heel, but China sees it as an opportunity
- Business Update: Southern Sun Reports Earnings Growth; China Stimulates Property Market – News24
- Vietnam’s Approach to China: A Balance of Cooperation and Struggle
- 2025 Schedule of Public Holidays in China
