New Pacific trade deal carries few benefits for the UK

Comment Central | 15 March 2024

New Pacific trade deal carries few benefits for the UK

by Leo Verity

Leo Verity is a senior political adviser at the Trade Justice Movement.

The UK is on the cusp of joining the Pacific trade bloc without Parliament having cast a single vote.

Membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, more commonly known as CPTPP, has been held up as a central Brexit prize; Prime Minister Rishi Sunak described membership as a demonstration of “the real economic benefits of our post-Brexit freedoms”.

However, despite wide and sweeping provisions that cut across a number of domestic and international policy areas, the UK’s accession to CPTPP has been negotiated behind closed doors with minimal democratic oversight, and there will likely be no final vote held to approve it.

Much of the public debate around CPTPP has been limited to wrangling over prospective GDP growth. Government ministers have been trumpeting the economic potential of membership of this pacific trade bloc while furiously refuting their own Department’s forecasts of CPTPP’s long term GDP impact, set at a projected 0.08% long term growth. The Office for Budget Responsibility recently put forward a more modest estimate of 0.04%.

In truth, though, some of the most significant implications of the UK’s accession to CPTPP are left behind in this squabbling over projections of marginal economic gain. Many of these implications are too little debated and understood, a measure of the shortcomings of the democratic infrastructure underpinning post-Brexit trade policy.

The most contentious example is the CPTPP’s Investor-State Dispute Settlement (ISDS) provisions. ISDS is a controversial mechanism set out in the agreement’s investment chapter which allows international investors to sue the governments of member states over measures which harm their profits.

Such provisions have been used thousands of times to challenge important environmental, health and social regulations, such as environmental practices around mining concessions or limits on oil and gas exploration, or cases affecting public health or workers’ rights. In addition to such cases, the presence of ISDS brings a substantial regulatory chill, deterring governments from introducing stronger regulations. Even when states win these cases, the costs of defending them are significant.

While ISDS brings risks anywhere, the most substantial additional exposure to potential arbitration facing the UK as part of CPTPP accession is with Canada. Canadian firms are particularly litigious, having brought over 65 ISDS cases using various international agreements, and so ISDS provisions with Canada contained in the agreement could have profoundly negative implications for the UK’s right to regulate.

Last Autumn, a joint letter signed by academics and organisations from both the UK and Canada urged Rishi Sunak and Canadian prime minister Justin Trudeau to urgently disapply ISDS provisions between the countries to ensure that CPTPP “does not block either countries’ ability to enact mandated climate and environmental policies”. The UK Government has repeatedly rejected this call.

This is not the only area of concern. This agreement fails to guarantee decent social and environmental standards. With regard to climate change, for example, the agreement contains only aspirational language that places no responsibilities on member states to meet their climate obligations. It contains no enforcement mechanism to ensure its environmental provisions are complied with, and environmental violations in member states carry no threat of sanction.

There are similarly flimsy protections for labour standards; CPTPP includes a number of countries where abuses of workers’ rights are widespread, but a challenge to any country accused of violations can only be brought under the provisions of the labour chapter if it can be demonstrated that failure to uphold labour rights was done “in a manner affecting trade” - something that is notoriously difficult to achieve. Since the agreement’s conclusion in 2018, no government has challenged another over labour abuses.

This is to say nothing of concerns that have been raised in a number of other specific areas, such as divergent pesticide use, inadequate safeguards regarding sustainable palm oil imports, public health, liberalisation of public services, impact on developing countries outside of the bloc, and much else besides.

Given the breadth of the policy areas that CPTPP accession will impact upon, how can UK membership have been subject to so little public debate? The answer is that the structures via which trade deals are negotiated and ratified are opaque and undemocratic.

There is no opportunity for Parliament, civil society or the public to set trade negotiating mandates, minimal transparency during trade negotiations, and no opportunity for Parliament to amend or vote on a final deal. We are likely to see the UK sleepwalk its way into accession to this major trade bloc without a single vote being cast in the coming weeks.

The fact that the little debate that has been held regarding the implications of CPTPP accession is happening so close to seemingly inevitable ratification is indicative of a creaking and unfit democratic framework, urgently in need of reform.

source: Comment Central