Vaughan Gething MS, Minister for Economy
I understand that an agreement has been reached for the UK to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP agreement currently includes 11 countries (Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan) in the Indo-Pacific region. It initially came into force in December 2018.
According to latest data, the value of goods trade between Wales and CPTPP members was £2.8bn in the year ending December 2022, of which imports and exports made up £1.5bn and £1.3bn respectively. Around 6.3% of Wales’ total goods exports were destined for CPTPP member countries during this time.
This agreement marks an important shift in the UKs trade policy towards the Indo-Pacific region, signifying the regions increasing importance. However, it is important to remember that the majority (around 56.5%, £11.6bn) of Wales’ goods exports continue to be destined for the EU market. Whilst we understand why the UK Government may have assigned such importance to this trade deal, it is vital that we ensure it is fully compatible with the deal we now have with the EU and must not harm the UK/EU trading relationship or set a precedent for future trade deals with other trading partners.
We have always been broadly supportive of the UK Governments free trade agenda and of the potential benefits new Free Trade Agreements could bring to Wales. However, CPTPP is significantly different from the bi-lateral negotiations that the UK has undertaken to date. CPTPP is an existing plurilateral agreement and, whilst there is some opportunity to seek carve outs to elements of the existing deal, it has been up to the UK Government to demonstrate compliance with the terms of CPTPP, rather than negotiate new provisions. It is also worth noting that the UK Government has already signed, or is already negotiating, bi-lateral trade agreements with many CPTPP members, such as Japan, Australia, New Zealand, Canada and Mexico.
We have always had, and continue to have, concerns with certain elements of the existing agreement. Provisions in areas such as climate change, labour and women’s economic empowerment are not as ambitious as we would typically want to see in FTAs, or do not contain robust enforcement mechanisms. The deal also contains provisions on an Investor State Dispute Settlement (ISDS). Now that agreement has been reached and we are able to see the agreement in its entirety, my officials will be working over the next couple of months to understand whether our concerns have been addressed, what market access has been agreed with CPTPP members and where, if at all, there may be benefits to businesses and consumers in Wales. A full report detailing our perspective on the UKs accession will be published in due course.
Whilst we do have concerns around the UKs accession to CPTPP and the impacts this may have for Wales, the engagement on the UKs accession has been predominantly positive. My officials have been kept up to date, particularly in the later stages of the accession process and we have had numerous opportunities to make our views known. The accession to this deal marks an overall improvement in engagement between the UK and Welsh Government and hope to see this continue with future trade deal negotiations.