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LONDON — The flagship trade deal Rishi Sunak is pursuing in the Indo-Pacific could deal another crushing blow to Britain’s food and farming industries as more members join the bloc in the coming years, according to internal government data seen by POLITICO.
Government analysis — prepared before the U.K. began its bid to join the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — predicts that joining the trade bloc could wipe millions off the value of Britain’s semi-processed food and agriculture sectors when new members join the pact.
It comes amid increasing debate in the U.K. over the effects of its post-Brexit trade agreements on the country’s food and farming sectors, and as Sunak talks up the country’s increased Indo-Pacific focus at the ongoing G20 summit in Bali.
The U.K. government has argued that joining CPTPP would put it “at the heart of a dynamic group of countries” after Brexit, and stressed that the “more CPTPP expands, the greater the benefits to the U.K.” as it enjoys tariff-free trade with a greater range of countries.
But the analysis makes clear there will in fact be clear winners and losers across the British economy if it joins.
Ahead of launching its formal bid to join the pact, the Department for International Trade (DIT) in 2021 produced modeling of the deal’s expected impact on different parts of the U.K. economy, including crunching the numbers for an expanded CPTPP to account for its likely expansion in the coming years.
The underlying data for this document was obtained through a freedom of information request by former Shadow Trade Secretary Emily Thornberry and has been shared with POLITICO, which has separately interrogated the figures.
The department projected that if South Korea and Thailand join CPTPP, taking its overall membership to 13, there will be a 4.97 percent decrease in the value of the semi-processed food sector to the U.K. economy. That would make it by far and away the hardest-hit area under such a scenario, the data shows.
Agriculture would be the second-most affected sector, suffering a -0.82 reduction in its value to the U.K. economy, up from a slight 0.09 percent increase if CPTPP stays the same size as it is now.
In real terms, this means £98 million would disappear from British farming’s economic output — with a £1.7 billion blow to semi-processed food predicted under a 13-member CPTPP.
Highlighting the trade-offs facing ministers as the U.K. vies to joint the bloc, Britain’s beverages and tobacco products sector and its motor industry are expected to do well out of a 13-member CPTPP, posting a respective 2.45 percent and 0.95 percent increase in value to the U.K. economy under such a scenario.
The prospects of the bloc staying the same size as it is now are slim. Several nations, including Taiwan, South Korea and even China, applied to join after the U.K. filed its bid early last year. Thailand has stated that it too wants to join the bloc.
A spokesperson for the National Farmers’ Union (NFU), Britain’s major agriculture lobby group, said: “Should the U.K. accede to CPTPP, the government should make sure that future candidates to join the bloc do so on terms that do not put further pressure on U.K. producers.” Nevertheless, they added, CPTPP does “provide opportunities for British farmers to sell more” to south-east Asia.
“Trade deals we strike must be balanced and offer benefits for both sides,” they said, “including safeguards for sensitive sectors.”
The fresh scrutiny of Britain’s CPTPP hopes comes after a former Cabinet minister blasted the way the U.K. negotiated its free trade agreements with Australia and New Zealand. Both deals have been sharply criticized by the country’s agriculture lobby.
Speaking in the House of Commons, ex-Agriculture Secretary George Eustice argued that both deals granted too much market access to overseas farmers at the expense of Britain’s own, and urge ministers to learn lessons for CPTPP talks.
“Unless we recognize the failures the Department for International Trade (DIT) made during the Australia negotiations, we will not be able to learn the lessons for future negotiations,” he said. “There are critical negotiations under way right now, notably on the CPTPP and on Canada, and it is essential that the department does not repeat the mistakes it made.”
In a statement issued Tuesday evening, a DIT spokesperson said joining the CPTPP “will create unparalleled opportunities for British businesses and consumers in the fast-growing Indo-Pacific.”
“UK businesses are expected to benefit from an increase of £1.7bn billion in exports to CPTPP members, and a £1.6bn increase in imports,” they added. “Our accession to CPTPP will be on terms which are right for UK companies, consumers, and farmers as well as ensuring our right to maintain our food safety, environmental protection, and animal welfare standards.”