The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement is gaining its first new member with the announcement this morning of substantial conclusion of accession talks for the United Kingdom.
While the Ministerial statement containing the good news amounted to just four paragraphs, regular Talking Trade readers will know that getting this far in accession talks is an important milestone.
The process has taken nearly two years, driven partly by Covid-19 pandemic travel disruptions which meant early talks were held online.
This was not the only challenge. During the Working Party discussions, the CPTPP’s own active membership increased by three, with the ratification of Peru, Chile, and Malaysia. (Only Brunei remains an original signatory, but not yet an active member of the group.)
Covid was not the only disruption during the past two years either. The UK itself went through substantial domestic upheavals. The country was also wrapped up in complex talks to help sort out its own trade strategy and engagements across the globe.
As trade experts are keenly aware, there can be a lag between the announcement of “substantial conclusion” and the actual closure of a trade deal. Often this gap is described as allowing sufficient time for “legal scrubbing” to take place. However, international trade lawyers will argue that a good legal eagle should be able to review any final changes that arise from a last marathon sprint in negotiations very quickly and, certainly, good lawyers should not need weeks or months to get their jobs done.
In this instance, there are still some gaps to be addressed between the UK and Canada, largely over dairy access. (Readers may recall that Canadian concerns over dairy also derailed the original closure of the TPP in August 2015.) But the distance to be traveled for UK entry was apparently seen as short enough to give ministers confidence in declaring the end of talks.
Once the legal scrub takes place, ministers will sign the final set of commitments. The UK will then put the CPTPP through their own domestic ratification procedures. After these are completed and New Zealand has been notified (as the official repository country), the UK will be an active CPTPP member in 60 days.
The next CPTPP Commission meeting is set for July in New Zealand and it would clearly result in good publicity for the members to be shown celebrating together in person at that time. It would also allow the UK to be part of the process of discussing future accessions, as the queue of applicants has continued to grow.
The accession process for China, Taiwan, Uruguay, Costa Rica and others has been largely put on hold pending the conclusion of the process for the UK. This was driven both by the need to establish better precedents and procedures for managing new country entry and by a desire by current members to postpone a tough set of decisions on future membership for as long as possible.
Members have certainly learned that accession to a complicated agreement is not easy for anyone. It requires deep knowledge of the agreement, schedules of current members, and an understanding of what different offers from the accession member mean for the group and for each individual member.
The current procedures have meant that the legal text is not up for discussion, nor are existing member commitments. But the process of adding the UK has encouraged a closer look at the legal text, which was largely wrapped up in late 2015. For some members, this inspection has revealed some gaps and opportunities which might benefit from a review of the commitments and potentially, some changes to existing arrangements.
While the CPTPP provides for such reviews and even mandated a thorough review at year 3 (and every 5 years afterwards), members have not really done so. Of course, the disruption caused by Covid over much of the recent time period has not helped. Nor does the lack of a CPTPP Secretariat, with full-time staff members to keep track of commitments and timelines. The annual rotation of Commission Chairs (based on the dates of entry into the agreement) is also a challenge.
Thus, while members are (mostly) basking in the good news that UK accession is wrapping up, they also know that difficult decisions on entry for new members are ahead, as well as potentially fraught conversations about opening the texts for adjustment.
The latter discussions were an issue during the transition from the TPP to the CPTPP. Once the United States withdrew from the TPP in January 2017, members struggled to adjust the legal commitments in the texts that would take into account the differences between an agreement with 12 members and one with 11. It was very possible to imagine much of the deal unraveling in debates over how much adjustment to allow.
In the end, members held the line at making just 22 specific changes, largely to suspend certain provisions. The bulk of the adjustments were found in the intellectual property rights chapter. With these changes in hand, the remaining members were able to rebrand and launch the CPTPP after less than a year of delay.
CPTPP members have already proven that they can manage to push an agreement forward and make modifications. They have now also demonstrated that they can add new members.
For an agreement that has been counted as “down and out” what feels like hundreds of times over its short history, these are remarkable achievements.
***This Talking Trade was written by a delighted Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore. For information on how to prepare for using an expanded CPTPP, contact us today at info@asiantradecentre.org***