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Talking Trade blog

Joining the TPP: A path forward for the UK?

Published 04 January 2018

The Financial Times has reported that the UK’s Department of International Trade has begun circulating a proposal for the UK to join the Trans-Pacific Partnership (TPP) trade agreement.

There are at least four issues to be addressed:  1) Why would the UK want to join the TPP? 2) Does the TPP even allow the UK to join in the first place?  3) Why would the TPP members want the UK?  4) Is it possible to make a deal happen and when?

1)             Why would the UK want to join the TPP?  Joining the TPP would solve at least two problems for the UK.  First, once the UK leaves the European Union, officials promised to deliver big, beautiful trade deals.  However, getting these done requires time, effort and resources.  The UK faces serious constraints in all three. 

Second, docking onto the TPP would rather quickly deliver high quality trade agreements with at least 11 other countries all at once. 

The TPP would not, of course, make up for the preferential loss of the European market for UK exports. On the whole, the TPP member countries--Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam--do not currently make up a significant portion of the UK’s portfolio.

This is not to say that British firms would not benefit from better access to markets like Japan or Mexico, for example.  But given the existing, relatively limited connections between the UK and many TPP members, it is unlikely that substantial trade would quickly take off.

2)             Does the TPP allow the UK to join?  The agreement, as currently drafted, privileges APEC members.  TPP members originally crafted the trade deal as a pathway towards the Free Trade Area of the Asia Pacific (FTAAP). 

FTAAP is supposed to be the future trade architecture knitting together all 21 member economies in APEC. The TPP, the Regional Comprehensive Economic Partnership (RCEP), and the Pacific Alliance (PA) grouping in Latin America are all routes to help achieve the final goal.  At the moment, all TPP member are APEC members.  RCEP and the PA have non-APEC members included.

The TPP started under APEC auspices and most major announcements have been timed to APEC events, however, there is no explicit reason why the TPP has to be connected to only APEC members.  The TPP text allows non-APEC members to join.  The UK would not be prohibited from TPP accession.

3)             Why would the TPP members want the UK to join the TPP?  While the UK has strong incentives to want into the TPP, it is less clear why the Pacific countries would want to expand the deal to the Atlantic and the UK. 

The UK market is not insignificant, of course.  Getting additional members into the TPP helps the existing countries by increasing the size of the overall market included in the agreement.

While some potential TPP members are likely to be challenging to integrate, the UK would presumably have fewer issues with matching the existing TPP rulebook.  As a strong historical supporter of global free trade, it should be relatively easy for the UK to agree to market liberalization within the scope of the agreement.

One goal for some TPP members has been to help set the rules for global trade.  The more members covered by the agreement, the more likely it becomes that the TPP could set benchmarks for future trade deals or to have provisions that transfer over into other settings. 

4)             But how likely is it that the UK can join the TPP?  At the end of the day, can the UK actually join the TPP?  It will be challenging.  The UK has to complete several key steps before it can realistically talk to anyone about joining anything. 

The UK has to finish Brexit and, more important for TPP, has to confirm its own independent schedules at the WTO for tariffs and services.  The WTO schedules will form the base line for TPP discussions.  Any preferential tariff rates for TPP members have to be an improvement off WTO tariff levels.

The TPP itself also has to be finished.  The agreement is done, but the final signatures are expected shortly. 

Entry into force will take place 60 days after the 6th country completes domestic procedures or ratification.  It is likely to be later this year.  TPP members might decide to wait on allowing any new members to join until more (or all) original signatories have finished up domestic procedures. 

The accession procedures for TPP would require the UK to meet with each existing TPP member to discuss any bilateral irritants.  Once these have been addressed, the group has to decide whether or not the prospective entrant can be admitted.  If the answer is yes, then negotiations commence. 

The UK (or any other new member) will not be negotiating on the rule book.  Instead, they are working through their country-specific schedules or commitments on goods, services, investment, government procurement, state-owned enterprises and any other specific reservations or requirements that they may want to try to include. 

If the UK were to continue to express an interest in the TPP, and the current members were equally keen to expand the deal well beyond the existing geographical space, the fastest the UK might start negotiations is 2020 or 2021. 

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).

Dr. Deborah Elms is Head of Trade Policy at the Hinrich Foundation in Singapore.  Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).

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