The Liberal Democrats should oppose the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

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Adam Smith in his seminal work The Wealth of Nations made the clear observation that trade ‘carried on with a neighbouring country is…more advantageous’ than that ‘with a distant country’ and he was even clearer that the most beneficial situation would come from ‘greater trade with continental Europe’ (Smith, 537).

Smith’s words are as true now as they were then but unfortunately the Conservative party (the supposed party of the economy who idealise Smith) have decided to ignore this. Ever since 2016 the determination to pursue hard Brexit has trumped all forms of economic credibility and common sense.

As with the imperialists of centuries ago who wanted to maximise trade with the Empire over our nearest neighbours the current crop of Tories have decided to pursue far flung trade deals to try and compensate for the barriers they have erected against the EU.

The latest panacea is the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) a trade agreement between 11 countries who largely border the pacific ocean. There is a good reason why every other European country has heeded Smith’s advice and not joined the bloc. The economic advantages for one are trivial, 0.8% growth in GDP over 10 years compared to the 4% loss we are going to suffer from our departure from the EU.

More worryingly for a government so obsessed with sovereignty they have sabotaged our economy to maximise it, the new agreement (and its precursor) come with 5,000 pages of unalterable rules and standards, essentially ‘take it or leave it’. That means there are no decent mechanisms for redress or arbitration, nothing like we were used to in the EU. Additionally the UK already had agreements with 9 out of the 11 countries anyway rendering the extra burdens of the CPTPP unnecessary. It is clear that this alignment could constrain domestic policy

Neither Labour nor the Tories are seriously threatening the UK’s new place in the CPTPP, giving the Lib Dem’s a chance to highlight its harms and lead the charge for withdrawal. This includes the shadowy courts where corporations could potentially sue the UK government, for instance forcing the UK to accept substandard products like hormone treated beef or food treated with pesticides illegal in the UK  or anything that may interfere with their profits such as higher wages. This could render the current promises by the UK government, of maintaining high standards, redundant.

As a party we are currently trying to strengthen relationships with farmers and rural voters, who have been left in the lurch by the current government, their views ignored and votes taken for granted. In seats like South Northamptonshire we are increasingly being seen as the clear alternative to the Tories. I know that pushing to leave the CPTPP could potentially be very popular with these voters, who do not want their own high standards undermined by poorer quality produce from abroad and who are already suffering the full effects of Brexit.

When MPs like Andrea Leadsom tweet about how grateful we should all be for our accession to the CPTPP, we need to hit back that the Department of International Trade’s own analysis of the long term effects are a potential 4.97% drop in the value of the semi-processed food sector and 0.82% fall in the value of British agriculture.

Above all we need to point out that the real prize is better economic relations with the EU and the single market, the CPTPP will for instance stop us ever re-joining the Customs Union and could make it almost impossible to align on food standards or to achieve the hallowed goal of a veterinary agreement. In the end the CPTPP is a damaging distraction to the real and positive message we need to send about improving relations with Europe and our eventual re-accession to the EU and its economic structures.

The sanity of Smith is needed now more than ever, for the sake of not just our farmers, producers and business owners but the whole British population.

* Stewart Tolley is the Parliamentary Candidate for South Northamptonshire

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22 Comments

  • Yeah I don’t buy this.

    Sure CPTPP is mere shadow of a more comprehensive trade deal like the EU’s customs union and single market. Be against it if it conflicts with getting back into that by all means.

    But all we have here is the same nonsense we heard about TTIP back in the day. From the sort of people who opposed all trade deals, making up scare stories about the NHS or whatever it might be.

    What happened to TTIP in the end? Donald Trump killed it off. Why? Because anything that would benefit America’s allies clearly wasn’t weighted enough in America’s favour.

    Trade deals with the USA should really be grabbed with both hands while there isn’t a protectionist in the white house.

  • Peter Watson 25th Apr '23 - 6:07pm

    “The economic advantages for one are trivial, 0.8% growth in GDP over 10 years compared to the 4% loss we are going to suffer from our departure from the EU.”
    Given that the party is not for rejoining the EU, this isn’t really a valid comparison for Lib Dems.

  • Alex Macfie 25th Apr '23 - 7:12pm

    @Joe Otten:: But it wasn’t “nonsense”.There are quite legitimate concerns about trade agrements over the lack of transparency of negotiations (leading to their use by vested commercial interests for policy laundering, especially in intellectual property policy). lack of input from non-commercial, non-governmental groups, the use of dispute resolution courts that are not bound by any sort of solid law or precedent — among many other concerns. The fact that TTIP did not go ahead in its original form is something for which we can say “there but by the grace of God”.
    Recent trade negotiations have seen improvements in process, but the problem of lack of democratic accountability of the bodies that the trade agreements set ujp remains — especially in somewhere like the UK where trade agreements are passed by decree (Royal Prerogative). We may, as with the Brexit deal, get a symbolic vote if we are lucky.

    @Peter Watson: The Lib Dem party isn’t against rejoining either. And we are in favour or rejoining the SM+CU, which would give us back the 4% even if not the democratic accountability that comes from full EU membership.

  • Alex Macfie 25th Apr '23 - 7:15pm

    Joe Biden has said that a trade deal with the UK is not a priority for his administration. This is quite understandable from the US perspective as the UK market is much less important than the EU market. If the US does offer a deal, as Lib Dems we should look at it very carefully and remember that the US is far more powerful than the UK and any such deal is almost certain to mainly benefit the US.

  • >” This is quite understandable from the US perspective as the UK market is much less important than the EU market.”

    That also applies to practically everyone else the UK wishes to do a trade deal with; the UK is only a cul-de-sac market of 60M, before Brexit it was a gateway to a market of 500M; but even then Ireland was more attractive to US companies wishing to operate in the EU…

    Hence why India has demand better access to Indian nationals to the UK as part of any improvement on existing trade arrangements

  • Tristan Ward 25th Apr '23 - 9:57pm

    Personal as a good Liberal I’m uncomfortable with he protectionist tone of the original article. Bit I entirely agree that free trade agreements should not be used to allow us to dump our environmental problems outside our own borders. Profits of themselves don’t bother me – exploitation does.

    We do have to remember that free trade is one of those things that lifts people across the world out of poverty, when it’s done right.

  • David Goble 26th Apr '23 - 8:32am

    This “Government” keeps on about it’s “green” credentials; surely, it’s “greener” to trade with nations nearby, such as the EU, rather than the Pacific-rim nations which involve transporting goods thousands of miles by aircraft or by ship; both modes of transport are very high polluting. There is also the cost of transport, no doubt borne by the consumer.

    Is it not possible that the “Government” has got carried away by the “Global Britain” mindset?

  • Alex Macfie 26th Apr '23 - 9:01am

    It’s not really “free trade” if it makes trade with our natural trading partner (the EU) more difficult. I struggle to see how preferential trading with countries the other side of the world is “free trade” as envisaged by this party’s 19th and early 20th Century forebears. The main question is how will it affect the UK consumer. The Liberal Party’s 1906 election triumph was based on free trade (as opposed to Imperial Preference) sold to the electorate in terms of lower prices in the shops. Will CPTPP lead to lower consumer prices in this country? Unlikely as tariff barriers are already low and the cost of shipping is a much larger component of the price of imports from far-flung nations.
    It’s hardly “protectionist” to seek the ability of a country to control its domestic economic policy via a democratically accountable government. The rules of FTAs tend to be made and enforced in a secretive, corporatist manner (rather like the Brexiteer’s caricature of the EU). It’s mercantilism rather than genuine global free markets.

  • Martin Gray 26th Apr '23 - 2:01pm

    America does what it always has done – looking after number 1….Selling filthy fracked gas to the EU at inflated prices is one example…

  • @ Martin Gray “America does what it always has done – looking after number 1”.

    Oh dear, how ever did that manage to get through the net on LDV ? I’m afraid Mr Gray should reflect on the fact during the course of three months (in the early part of my lifetime), in the D.Day landings and the Normandy campaign, total battle casualties for the United States were 135,000, including 29,000 killed and 106,000 wounded and missing….. and that’s not to mention what happened through to May, 1945.

    And then …. maybe Mr Gray ought to look up the Marshall Plan on Wiki to see what happened in Europe after that terrible war.

  • Nonconformistradical 26th Apr '23 - 11:02pm

    @David Raw
    Perhaps you might explain why the USA didn’t seem exactly in a hurry to get involved in saving the free world (other than selling us a few old destroyers) until they were attacked on their own doorstep in December 1941…..

  • Chris Moore 27th Apr '23 - 7:50am

    Forgive the correction, Nonconformist Radical:

    the US didn’t SELL us the destroyers. They were exhanged for 99 year leases on certain UK overseas possessions to be used as US bases.

    This went through in September 1940 from memory.

    More seriously, you have forgotten Lend-Lease, a US policy enacted in March 1941. The US transferred massive amounts of war materiel to the Allied powers: UK had the lion’s share – close to 60% – followed by Russia, France and China.

    The materiel was officially “leant”, but in practice much was destroyed and never returned.

    Materiel already in transit when the war ended WAS paid for, but at 90% discount to real value and at generous interest rates. The UK’s last repayment was in 2006.

    Total amount “leant” was over 50 billion US dollars; around 800 billion in today’s money.

    Lend Lease had a possibly decisive impact on Britain’s precarious position in 1941.

    It was heavily criticised in the US, btw by isolationists and others as a violation of US neutrality.

  • Chris Moore 27th Apr '23 - 7:59am

    And there’s the rub: Europe seemed a long way away to most Americans at the time.

    Roosevelt worked assiduously to build support for military intervention. But In reality, the US was in no position to get DIRECTLY militarily involved in the European theatre in 1939-41 because of the obvious logistic difficulties and the pitiful lack of readiness of its own military.

    Lend-Lease was a life saver; let American generosity not be forgotten.

  • Nonconformistradical 27th Apr '23 - 8:24am

    “It was heavily criticised in the US, btw by isolationists and others as a violation of US neutrality.”
    Why am I not suprised?

  • Peter Martin 27th Apr '23 - 9:05am

    @ Alex Macafie,

    ” It’s mercantilism rather than genuine global free markets.”

    Do you mean by the Americans or the EU?

    Modern day America might have its faults but a proclivity towards mercantilism isn’t one of them. They are perfectly happy to buy more from everyone else than they sell to everyone else. This is in stark contrast to our biggest EU trading partner’s attitude to finance and international trade and which, incidentally, causes most of the EU’s economic problems.

  • Chris Moore 27th Apr '23 - 9:25am

    There have always been isolationists and pacifists in the US, set off against those Americans who wish to engage with the rest of the world.

    Trump and other right-wing Republicans maintain a long populist tradition.

  • Peter Martin: I mean by trade negotiators, who consult with business interests, leaving consumer, worker and civil society groups out in the cold. This does not necessarily result in genuinely free trade among the countries party to the agreement — big business is poften very happy with markets arranged to avoid competition (however much it may claim otherwise). For instance, genuine free trade would mean preventing DVD region locks and similar restrictions. Yet most free trade agreements have language that enshrine such restrictions, by mandating laws that prevent breaking copyright protection systems even if it is for lawful purposes. This is just one tiny example of the use of so-called FTAs to export maximalist intellectual property laws. It is also an example of use of international agreements by corporate lobbyists for policy laundering. Trade negotiators everywhere are guity of this sort of thing, but the US seems to be the worst offender — its international trade system has essentially been captured by corporate interests.

  • Peter Martin 27th Apr '23 - 1:30pm

    @ Alex Macafie,

    What you are describing isn’t mercantilism. Mercantilism is described by Investopedia as:

    “Mercantilism was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Its goal was to increase the supply of a state’s gold and silver with exports rather than to deplete it through imports. It also sought to support domestic employment.”

    It uses the past tense, presumably because there’s little or no gold and silver involved any longer, but if we consider holdings of overseas assets such as property, shares in key industries, and Govt bonds, then we can see it being as prevalent as ever it was. There is no developed economy running a large trade surplus which isn’t gaming the system in one way or another, but usually by exchange rate manipulation, to ensure it accumulates foreign assets.

    Germany ran a current account surplus of €265 billion in 2021. These are euros going into Germany that don’t easily come out again unless they are lent out. The rest of the EU do need these euros, the ECB does its best to ensure they get them. However the German govt doesn’t like the way the ECB contravenes both the letter and the spirit of the Maastricht Treaty to ensure that happens.

    Presumably the German government thinks that all other EU countries should be like them, and the Dutch, by running huge trading surpluses.

  • Peter Martin 27th Apr '23 - 5:22pm

    @ Chris Moore,

    “There have always been isolationists and pacifists in the US, set off against those Americans who wish to engage with the rest of the world.”

    Given the enthusiasm that post war USA has “engaged with the rest of the world” I’m not sure which group can be considered the goodies and which the baddies.

    The USA has bombed 24 countries since 1945. The list starts alphabetically with Afghanistan and ends with Yugoslavia. I don’t think they’ve ever bombed Zaire, Zambia, or Zimbabwe, but the Americans were probably thinking about including at least one of them at some point.

  • Chris Moore 28th Apr '23 - 7:54am

    Hi Peter, the neo-Cons were the most determined interventionists: trying to impose democracy on unwilling and unready beneficiaries is intellectually incoherent and has had appalling results in Iraq and elsewhere.

    But we shouldn’t forget the Americans’ saving role in the European theatre in both world ears

  • Chris Moore 28th Apr '23 - 7:54am

    ….world wars.

  • Peter Martin 28th Apr '23 - 10:31am

    UK trade with the USA is quite good considering that we don’t have a trade deal with them. The figures in the wiki link below could do with an update but they were still valid closer to the time we made our decision on the question of EU membership.

    The only problem with not having a FTA is that there can be WTO tariffs to pay. It is a bit of a chore, but more recently, in my day job, I’ve had to pay more attention to what are known as HS codes to avoid overpaying on tariffs. However, at least for most non-agricultural products they are no more than 2%. With a bit of work, its usually possible to fit a product to a category that is 0%.

    This is a typical page I have to sometimes read through! I know its all very boring but it does show that it isn’t necessary to have a FTA to have a successful trading relationship.

    https://www.trade-tariff.service.gov.uk/headings/8536

    https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_United_Kingdom

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