Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Viscount Trenchard Excerpts

Tuesday 19th March 2024 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Kerr of Kinlochard, from whose speeches I always have much to learn. I congratulate the noble Baroness, Lady Hayter of Kentish Town, on securing this timely debate today. I declare my interests as an adviser to several Japanese companies, and to some British companies in connection with their businesses in the Indo-Pacific region, as stated in the register.

It is very good that your Lordships’ House has an opportunity to debate a report within one month of publication—very much earlier than has been the rule in recent years. I congratulate the members of the International Agreements Committee on producing what I think is, in the main, a fair and balanced report. I note that it “broadly” welcomes the UK’s accession to the CPTPP; this implies to me that there are areas in which it has reservations.

Are the members of the committee not, on balance, a little less enthusiastic about the significance and the future economic potential of the UK’s accession to the CPTPP than they should be, and is there not at least some evidence that supports that? The report’s summary suggests that accession to the CPTPP will have only

“limited economic benefits to the UK in the medium to long-term”,

and that

“it remains to be seen whether the Government’s intended trade and geopolitical benefits will materialise”.

Professor David Collins, of City, University of London, correctly recognised that, in the longer term, the economic benefits of the CPTPP are likely to be significant, as the world’s economic activity shifts towards the Asia-Pacific region. The trend growth rate for the GDP of the 11 members is around 2%, roughly double the 1% by which the EU economies are expected to grow. The CPTPP accounts for roughly 15% of global GDP, around the same as the EU today.

The noble Lord, Lord Purvis of Tweed, made the case that the RCEP is a more important agreement than the CPTPP. I am not sure he is right there, because it is much shallower. He also said that the CPTPP’s growth was much greater than the EU’s only because of trade with China, but he then said that UK trade with China was massively significant, so he rather contradicted his point.

The committee’s members acknowledged the “potential advantage” of the partnership as part of a British

“‘tilt’ to the Indo-Pacific”,

and

“think there is some, albeit limited, value in CPTPP membership providing access to a forum for members committed to a free, open trade order”.

I think they might have been a bit more enthusiastic about this enormously important and highly significant development. The geopolitical significance of the UK’s accession is already enormous, both for the UK and the CPTPP itself. For the UK, it shows our strong commitment to the Indo-Pacific region, reinforcing the AUKUS pact, the continuing importance of the Five Eyes intelligence pact and the reciprocal access agreement with Japan. For the partnership itself, the UK’s accession goes some way to replacing the intended participation of the United States, and makes the perception of the bloc a bit more global.

Since President Trump turned against US membership, Japan has been strongly encouraging the UK to join, a point which may not be sufficiently appreciated in this country. My noble friend Lord Lansley also drew your Lordships’ attention to this point in his impressive speech. Our Japanese friends recognise that six of the 11 members of the CPTPP are Commonwealth countries —now, with the UK, that is seven out of 12. There has been an active group within the Japanese Government’s Cabinet Office working on the CPTPP for more than six years. It recognises that the UK could become, with Japan, the de facto joint leaders of the partnership and that the UK’s contribution to the way the partnership operates, and to its rules and methods, would be highly valuable. It has also played an invaluable role behind the scenes, in encouraging the other members of the CPTPP to welcome UK accession and in helping us overcome the small number of reservations about our accession that appeared in a few members of the partnership.

Having lived and worked in Japan for 11 years, and with continued parliamentary and business involvement in that country ever since I returned to the UK, I am very pleased that UK accession to the CPTPP has made an important contribution to our excellent relationship with Japan. Indeed, together with our growing bilateral collaboration in defence and security, exemplified by the trilateral GCAP programme with Italy, it can be said that we have entered the age of the second Anglo-Japanese alliance.

More specifically, the report identifies some issues with the rules of origin provisions provided by the CPTPP. I understand that these are working well in some areas, such as the seafood sector, but could my noble friend the Minister comment on how they are working for the automotive sector?

Paragraph 28 of the report celebrates the fact that there is a

“good balance between new market access for food exporters and access to the UK market”.

Are the Government doing enough to encourage farmers to exploit opportunities in those sectors where they have an advantage?

It is interesting that the report suggests at paragraph 29 that the UK can retain its current precautionary approach to SPS controls, consistent with CPTPP rules. Is that the case even where our current standards, inherited from the EU, do not comply with WTO rules? Is it not the case that we may have given too much weight to the precautionary principle as an EU member? Where the evidence suggests that there are no significant risks to human health, does not accession to the CPTPP provide us with an opportunity to permit, in certain circumstances and with appropriate safeguards, the introduction of hormone-fed beef, chlorine-washed chicken and some GM crops, which could significantly lower food costs for hard-pressed consumers? I think that our membership of the CPTPP gives us a good platform on which to work with like-minded partners to restore the reputation and influence of the WTO.

The members of the committee struck me as being a bit sceptical about the significance of our role in the CPTPP and its contribution to the achievement of the Government’s strategic aims in the region. In paragraph 72, the report asks for more detail on this. From my interactions with contacts in Japan, Australia and South Korea, which I hope may soon become an accession candidate, I believe it is already very clear how significant it is, and I hope my noble friend will set out his view on this in his winding-up speech.

Finally, I welcome the proposal that, following the current general review, the Government should set out their priorities in the context of a longer-term plan for the development of the CPTPP. Does my noble friend think this should include a small standing secretariat to assist businesses in maximising the trade benefits offered by the UK’s membership? I look forward to hearing from other noble Lords and to my noble friend’s response to the debate.