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UK-Canada trade chiefs to meet after ‘sour’ Indo-Pacific talks

Politico | 13 March 2023

UK-Canada trade chiefs to meet after ‘sour’ Indo-Pacific talks


LONDON — U.K. trade chief Kemi Badenoch meets her Canadian counterpart Tuesday after the two nations clashed over Britain’s bid to join a key Asia-Pacific trade bloc.

The U.K. is on the cusp of joining the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), long held out as a key post-Brexit prize.

But Canada’s demand that Britain opens up its beef market thwarted hopes of a breakthrough during talks on the Vietnamese island of Phu Quoc earlier this month, four people familiar with the talks confirmed to POLITICO. The U.K. government said it would not comment on live negotiations.

The confrontation between London and Ottawa at the week-long summit was “sour indeed” for all involved, said a diplomat from a CPTPP member country.

A Brussels-based trade expert briefed on the talks said: “The meeting in Vietnam ended with all the other participants basically throwing their hands in the air saying Canada and [the] U.K. must sort out their differences bilaterally.” They requested anonymity to speak about sensitive issues.

CPTPP member Canada is negotiating a bilateral trade deal with the U.K. at the same time as London vies to join the bloc.

Along with Mexico, Canada is pushing for the U.K. to offer the same market access it granted on agriculture as it did in pacts with Australia and New Zealand. In those deals, which have proven controversial among U.K. farmers who fear the impact on their livelihoods, London agreed to drop tariffs on beef and sheep meat imports over 10-15 years.

Another trade expert briefed on the outcome of the Vietnam summit said Canada is seeking to use its leverage in those dual negotiations — the CPTPP talks and a separate U.K.-Canada trade pact — to “try and get more concessions” out of the U.K. They claimed other CPTPP members had been happy to “sign off” in Vietnam on an agreement in principle for Britain to join.

That was disputed by an official from a member nation, who said that while Canada is chairing one of the last remaining chapters on the U.K.’s proposed accession, “it does not mean the outstanding issues are not shared among the 11.” There is also "a short list of other issues yet to be resolved,” they added. They requested anonymity as they were not authorized to speak about the negotiations.

CPTPP members also include Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Japan is leading the U.K.’s accession process.

But Canada is "playing hardball despite Japanese efforts to mediate and seal the deal," said a former U.K. trade official close to the negotiations, explaining how in "trade politics, this sort of thing happens pretty regularly."

’They will do the necessary to get in’

The CPTPP spat comes as Mary Ng, Canada’s minister of international trade, arrives in the U.K. Tuesday with a business delegation. She is due to meet U.K. Business and Trade Secretary Badenoch for talks Tuesday lunchtime before an evening reception in London. Canadian and British negotiators will also gather for another round of talks over a bilateral free trade deal next week.

With China among those in the queue to try and join the CPTPP trade bloc, member states are also “wary” of the “precedent-setting nature” Britain’s accession provides, a government official from a CPTPP nation supportive of Britain’s bid said. It’s in the U.K.’s future interests to ensure acceding parties provide ambitious market access offers, they added.

For Britain, which has trade deals with the majority of CPTPP members, accession is seen as a key plank of its post-Brexit foreign policy tilt to the Indo-Pacific.

“They think that being in CPTPP will give it some regulatory pull and shape what countries that may want to join in the future will have to do to get in,” said a senior U.K. business figure, who requested anonymity to speak on sensitive issues.

“So there are big, big geopolitical reasons all to do with the Asia Pacific shift and the ’Global Britain’ brand that this government will definitely want to get done.” They added: “So, they will do the necessary to get in.”

A U.K. Business and Trade Department spokesperson said the government intends to join CPTPP on terms that work for the U.K.’s interests and domestic priorities and looks forward to concluding negotiations at the earliest opportunity. The government will not comment on the details of live negotiations, the spokesperson added.

 source: Politico