David Collins

The Comprehensive Progressive Trans-Pacific Partnership (CPTPP) is a comprehensive free trade agreement which went into force in December 2018. Its membership consists of 11 Pacific Rim countries: Australia, Canada, Japan, Mexico, New Zealand, Singapore, Vietnam, Brunei, Chile, Malaysia and Peru, together comprising roughly 13 per cent of the world’s GDP. Despite having no geographical presence in the Pacific (unless you include the British Overseas Territory the Pitcairn Islands), the UK submitted formal notice to join the CPTPP in February 2021, a centrepiece of its ‘Global Britain’ trade strategy.

The CPTPP Commission stated in January 2019 that the agreement is open to all economies which accept principles supporting an effective, open, inclusive and rules-based trading system. On 19 January 2019, at a meeting in Tokyo the Commission further confirmed their determination ‘to expand the Agreement through the accession of new economies.’ Given the UK’s economic size and its status as the first potential new entrant, the UK’s application for accession is expected to spur the application of other countries, with Taiwan as another potential contender.

The process contemplated by CPTPP accession negotiations is lacking in detail. Article 5 of the agreement states merely: ‘After the date of entry into force of this Agreement, any State or separate customs territory may accede to this Agreement, subject to such terms and conditions as may be agreed between the Parties and that State or separate customs territory.’ Further details of the Accession Process are set out in an Annex to the main agreement that was also issued during the Commission’s first meeting in January 2019.

Applicant countries are encouraged to engage informally with all CPTPP Parties regarding their interest in joining the CPTPP prior to submitting a formal request. This is designed to ensure that any potential obstacles are identified and discussed with a view to their resolution. The formal request is instigated by a notification to New Zealand, which is the depository state of the CPTPP, meaning that New Zealand holds the original texts and facilitates its signing.

The CPTPP Commission will then decide whether to go ahead with the formal accession process. Once it has decided, the Commission will establish a Working Group to negotiate the accession formally. Since the CPTPP lacks a Secretariat, the agreement is managed through a rotating appointment of Commission Chairs (currently held by Japan to be followed by Singapore in 2022).

At the first meeting of the Accession Working Group, the country seeking accession must demonstrate the efforts made to date, as well as identify any additional changes it will need to make to its domestic laws and regulations, in order to comply with the obligations of the CPTPP. Within 30 days of the first meeting of the Accession Working Group, the applying country must submit its market access offers / Non‐Conforming Measures (on goods, services, financial services, investment, temporary entry for business-personnel, government procurement and state‐owned enterprises).

Through the Accession Working Group and bilaterally with other Parties as appropriate, the applying country must negotiate its market access offers and demonstrate how it will meet ‘Benchmarks’ for accession to the CPTPP. These are set out in Article 5 of the Annex in sparse detail. Applicant countries must (Art.5.1):

(a)  demonstrate the means by which they will comply with all of the existing rules contained in the CPTPP; and

(b)  undertake to deliver the highest standard of market access offers on goods, services, investment, financial services, government procurement, State‐owned enterprises and temporary entry for business-persons. These must deliver commercially‐meaningful market access for each Party in a well‐balanced outcome that strengthens the mutually‐beneficial linkages among the aspirant economy and the Parties, while boosting trade, investment and economic growth, and promoting efficiency, competition and development.

It is not clear precisely how the applying country “will demonstrate the efforts made to date, as well as identify any additional changes it will need.” Moreover, it is not clear how exactly market access offers as well as non‐conforming measures will be negotiated, either within the Accession Working Group or bilaterally between the Applicant and the Working Group. The process for verification of adherence to Benchmarks is similarly vague.

After the negotiations have concluded, the Accession Working Group will submit a written report to the Commission outlining the terms and conditions for the new country’s accession to the CPTPP. The Commission will determine by consensus whether to approve the terms and conditions for the new country to the CPTPP as submitted by the Working Group. The requirement of consensus means that the accession of a new Party can be blocked by only one existing party. This could become problematic should the CPTPP’s membership grow in size significantly.

If the Commission approves the terms and conditions and invites the applicant country to join the CPTPP, the new country is granted six months to accept by depositing an instrument of accession to New Zealand. It will become a Party of the CPTPP 60 days after accepting the terms and conditions and depositing an instrument of accession.

The accession of a new Party provides an opportunity for CPTPP Parties to modify the main agreement if all parties consent. This is because the CPTPP was conceived as a “living agreement” which could be adjusted to suit the needs of its Parties as they evolve. Parties could also use the accession of a new party to alter their own commitments, such as further lowering of tariffs or eliminating market access restrictions on services, or conceivably even narrowing their initial offers. Given that the main text of the agreement is already more than five years old, some of the more innovative areas of the CPTPP, such as material on SOEs and government procurement already look out-dated.

The possibility of such “CPTPP-Plus” or “CPTPP-Minus” commitments on a bilateral basis is created by the Side Letters facility. This approach was adopted by New Zealand to limit the compulsory application of Investor-State Dispute Settlement. It is quite likely that the UK will use Side-Letters to tailor its obligations to suit its needs, potentially resolving conflicts which might arise with its other international obligations.

The UK’s CPTPP offers will likely be prepared over the coming months and it will be interesting to see where the UK is prepared to make additional commitments or attempt to depart from those of the main CPTPP, where possible, during negotiations. In terms of the CPTPP’s larger role in the global economy, the process of the UK’s accession itself will be closely monitored as it will likely establish a precedent for how future members will join as the CPTPP expands its reach in the coming years.

David Collins

Professor of International Economic Law

City, University of London

In March 2021, David Collins submitted written evidence to the House of Lords Select Committee on International Agreements on the UK’s Accession to the CPTPP.