The United Kingdom’s impending entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has raised criticisms and garnered positive response in equal measure.
Labour organisations worry about the impact on affiliation with and independence of trade unions, but trade groups see new business opportunities on the horizon.
Experts in London see it as more than just about trade given the small impact it will have.
By the UK government’s own projections, joining the CPTPP will boost the country’s gross domestic product (GDP) by only 0.08% — a drop in the ocean.
Moreover, the UK already has separate trade pacts with nine of the 11 members of the partnership so potential economic gains are limited.
Akademi Nusantara senior fellow Azmi Hassan said the UK foreign policy focus since Brexit has shifted to the Indo-Pacific.
“It sees the Indo-Pacific as the place to be involved with, as is clear from its participation in Aukus, the trilateral security pact with the US and Australia, as well as its growing security cooperation with Japan,” he told FMT Business.
“The CPTPP is not just for UK’s trade ambitions, but to extend its geo-political influence in the region, too,” he added.
Azmi said that by getting the UK to comply with its rules as a condition for membership, the CPTPP will also show that no concessions will be made for any prospective member, an issue that China has raised.
Emir Research president Rais Hussin said UK’s entry will turn the regional pact into a global entity. More than that, he told FMT Business, the UK can leverage on its unique position for strategic gains.
“Given that the EU is not part of the CPTPP, the UK can serve as the gateway to Europe. Its domestic ports such as Belfast can be the entrepot and transshipment centres for EU goods,” he told FMT Business.
Responding to trade and industry minister Tengku Zafrul Aziz’s observation that the UK’s entry into the bloc could bring significant opportunities in technology transfer and capacity building for Malaysian companies, Rais said it was incumbent upon local businesses to leverage on the opportunity through joint-ventures and equity investments.
He said that with British investments set to increase, the areas that Malaysian companies could explore are green and renewable energy, including carbon capture and storage, life sciences and nanotechnology, all of which the UK is a global leader.
Small and Medium Enterprises Association (Samenta) president William Ng said the UK’s entry could open new preferential market access to Malaysian businesses.
“Since the wholesale and distributive trade, including retail and small-scale trading, remain protected, there is minimal risk for domestic SMEs,” he told FMT Business.
However, he said, expectations would rise and requirements tightened in areas such as labour practices, sustainability as well as quality and safety.
“This means that SMEs that are exporting or planning to do so must prepare to comply with existing and future international standards,” he said.
Even in Britain, the reception has not altogether been warm.
The Trade Union Congress (TUC), a federation of British trade unions, said the UK’s entry into the CPTPP would sanction the exploitation of workers in Vietnam and Brunei “where independent unions are banned” and Malaysia “where migrant workers are subject to forced labour”.
On the use of secret courts to arbitrate trade disputes between CPTPP member countries and the UK, the TUC said it would enable multinational corporations to sue the UK government in these courts for introducing policies that threaten their profits.
It cited increases in minimum wages and bringing energy companies back into public ownership as examples of such disputes.
Trade experts also expressed fear that membership in the CPTPP could harm the UK’s ability to re-join the EU at a later date.
It claimed that harmonising trade rules with the CPTPP countries would drive a wedge between Brussels and London.
Membership in the CPTPP means that the UK has secured a seat at the table among countries committed to free and fair trade while strengthening its economic presence in a region that will account for more than 40% of global GDP by 2050.
For the UK, the future could very well be in the CPTPP.
Source: Free Malaysia Today