One of the great problems with the Chequers proposals is that it severely inhibits the United Kingdom’s ability to strike new comprehensive free trade agreements with trade partners across the world. Chequers’ commitment to a ‘Common Rulebook’ which would see continued acceptance of EU rules and regulations on goods and agri-foods, precludes Britain from regaining an independent trade and regulatory policy. Australia’s former ambassador to the World Trade Organisation, Geoff Raby, perhaps explained this predicament most lucidly, stating,
‘By aligning UK policy to EU policy on agriculture and manufactured goods, the [Chequers] white paper will constrain the opportunities that the UK has to pursue an independent trade policy, [Theresa] May is setting UK up for the worst of all possible worlds. It is one in which UK no longer has the full benefits of the single market and yet still does not have sovereign control over its own trade policy’.
As the EU themselves confess, over 90% of future global economic growth will come outside the continent of Europe, and therefore, the potential for Britain to exploit such opportunities must be the cornerstone of our future trade and regulatory policy.
Despite Chequers failing gravely in this respect, an alternative Brexit plan has been presented by the Institute of Economic Affairs, entitled ‘Plan A+’. Plan A+ has set out a viable means for the UK to not only regain a fully independent trade and regulatory policy by seeking an enhanced and comprehensive UK-EU free trade agreement modelled on CETA, but more crucially has suggested how best and effective an independent trade and regulatory policy can be immediately utilised.
One such suggestion is the United Kingdom’s accession to the newly formed CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc on exit day. The bloc is a successor agreement to the defunct Trans Pacific Partnership and currently consists of 11 signatories, including Australia, Canada, Japan, New Zealand, Mexico and Singapore. In sum, the combined GDP of current signatories to CPTPP is $10.6 trillion. However, six other countries, most notably South Korea and the United States have expressed an interest in accession in the future. Excluding a potential UK accession to the bloc, a seventeen-member CPTPP bloc would have a combined GDP of $34 trillion, almost twice the size of all EU27 members put together.
CPTPP is one of the most advanced free trade agreements in the world. Unlike the single market, CPTPP does not impose common regulatory standards, nor sets a common external tariff akin to membership of the customs union. Instead the agreement focusses principally on guaranteeing comprehensive market access with the eliminations of 98% of all tariffs between member countries. Thus, CPTPP promises all the great benefits of free and open trade without compromising on the independence of trade and regulatory policy.
Plan A+ is the only viable option thus far presented that allows the United Kingdom effortless accession to the bloc. British membership of CPTPP has been endorsed by the Japanese Government, who would ‘spare no efforts to support’ the UK’s accession.
Currently the 11 members of CPTPP account for £82 billion of the UK’s trade, more than the Netherlands, France or China, and unquestionably has substantial potential to increase. This opportunity cannot be delivered by Chequers, but only through an adoption of Plan A+. Let’s chuck Chequers and seek the opportunities beyond.