The CPTPP does not prevent the UK from aligning its agri-food regulations with the EU.

Written by: Emily Lydgate, Achyuth Anil

Published On: 17 December 2024Categories: Blog, UK - Non EU, UK- EUTags: , , ,

One reason the UK Government wanted to join a trade agreement consisting of Pacific Rim countries, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), was to prevent any current and future UK Governments, from undertaking regulatory alignment with the EU. As Lord Frost explained in 2021, ‘…. to do trade agreements with other countries [i.e. CPTPP] you need to have control of your own agri-food and SPS [Sanitary and Phytosanitary] rules”.

A UK-EU SPS agreement, which the Labour government has promised to pursue, would likely result in at least some alignment of regulation in SPS areas: human, animal and plant life and health. In these areas, the UK would lose some control over its rules. So, can the CPTPP prevent the UK from concluding an Agreement with the EU? We argue that it cannot.

New Zealand conclusively proves that it is indeed possible to be a CPTPP party and also have an EU veterinary agreement. Its EU veterinary agreement reduces the incidence of border checks in a few areas on animal products.

However, such a light agreement (New Zealand, which exports few products to the EU and from 18,000 kilometres away) would hardly resolve the border barriers facing UK farmers. So the question is, would the CPTPP prevent the UK from negotiating a deeper agreement?  For example, one that looks more like the EU’s arrangements with Switzerland, which involves broad and ongoing alignment of regulation on human, animal and plant life or health (SPS)? Again, we don’t believe so, but our argument here is more nuanced.

Like many areas of trade law, whether such an SPS Agreement would contravene CPTPP obligations is open to interpretation. Those whose interpretations are most relevant are CPTPP parties.

Here, a crucial consideration is that EU SPS regulation was already considered compatible with CPTPP, at the time of UK accession. During the accession process, CPTPP parties reviewed UK SPS regulation and found it compliant.  While there has been some divergence since then, during CPTPP accession in 2021 the UK’s agri-food product regulations were virtually identical to those of the EU, as they had just been ‘retained’ from EU law.

CPTPP parties did require the UK to make changes in one area: processes for registering Geographical Indications. While the UK might need to discuss these obligations with the EU, they are unlikely to be deal-breakers – Canada, a CPTPP party, raised concerns regarding the UK’s prohibition on hormone-treated beef, but the UK was allowed to accede despite this.

However, do CPTPP provisions prevent the UK from aligning with post-Brexit EU SPS regulation? Some CPTPP obligations are process-oriented and open-ended. Obligations on risk assessment and equivalence are the most relevant. On risk assessment, CPTPP requires that countries conform to relevant international standards or base their regulation on documented, objective scientific evidence (Article 7.9(2)). This reduces the scope for CPTPP parties to rely upon a WTO exemption that allows regulation when scientific evidence is uncertain and subject to certain conditions (a limited application of the precautionary principle, WTO SPS Agreement Article 5.7). CPTPP parties could argue that EU regulation, with which the UK is aligning, contravenes this obligation – indeed, the EU’s precautionary approach to agri-food regulation has been controversial in international trade circles.

This leads to the important question: what happens if the UK breaks this rule? The risk assessment obligation is exempted from the CPTPP’s dispute settlement mechanism, which means that members could not challenge the UK in a CPTPP dispute on the basis that it wasn’t adhering to international standards or objective scientific evidence. CPTPP parties can still put pressure on the UK Government. But the UK is free to decide that EU alignment is more important to achieving its domestic objectives than responding to these pressures – for example, growth of the agri-food sector or easing border barriers between Great Britain and Northern Ireland.

The CPTPP also requires that the UK recognises the equivalence of SPS measures of an exporting party. The exporting party must prove that its measure achieves the same level of protection or has the same effect in achieving the objectives of the UK’s measure (Article 7.8(6)). Importantly, the obligation would not require the UK to lower its chosen level of protection or change its regulatory objectives.

This could be a problem for an EU-UK SPS Agreement if the UK is pressured to remove regulatory barriers to entry to products that are banned or restricted in the UK and the EU (say, for example, rice that has a higher level of arsenic than permitted in the EU/UK, but at a level allowed by international standards). A CPTPP party could claim that their measures achieve the same level of protection. (Article 7.8(6)(a)). This provision does include recourse to dispute settlement, and the ability to potentially impose trade sanctions for non-compliance. Even if other CPTPP parties challenged the UK on this basis, it still seems unlikely to us that the UK would lose a dispute resulting in the imposition of trade sanctions. This is because the CPTPP also recognises that equivalence determinations may not always result in recognition by the importing party and only requires that the exporting party is provided the rationale for any non-recognition (Article 7.8(9)). The UK, therefore, can legally conduct an equivalence assessment and not grant recognition if it provides the reason(s) to the exporting party.

In a worst-case scenario, the UK could lose a dispute and be subject to trade sanctions, probably in the form of increased tariffs for some agri-food products. Or parties could be so aggrieved that they decide to apply sanctions against the UK anyway (though if they do so outside the legal routes provided by CPTPP, the UK will not lose any face for having broken its treaty obligations). Even if retaliatory tariffs are involved, the UK could still decide that putting up with tariffs from trade partners who are less economically important is worth the price of reducing trade barriers with the EU, its most important agri-food trade partner.

As a CPTPP party, the UK is bound by some transparency obligations. Members must notify other members of significant changes in food safety, pest or disease management, or control policies that could affect trade (Article 7.13(11)). For example, Australia has previously notified the CPTPP SPS Committee about its progress in negotiating certification arrangements for raw milk cheese with France. It would be good practice for the UK to notify CPTPP parties about its ongoing negotiations with the EU, but the agreement does not provide any mechanism for other parties to intervene, limit, or block such negotiations.

Will the EU object to the UK’s CPTPP membership? As the recent EU-Mercosur agreement demonstrates, the EU is not averse to concluding FTAs with trade blocs that have different SPS regulations. However, the EU has been clear that food entering its market must comply with its standards. If the EU waives border checks for certain UK products to enter the EU, it will also expect that the UK enforces these requirements effectively at and beyond its border. The UK’s CPTPP membership could perhaps increase the pressure or requirements that the EU places on the UK to maintain effective enforcement. But, as we have argued in a recent Briefing Paper, these pressures will exist regardless, in a ‘deep’ SPS Agreement negotiation.

In the Brexit era, the UK’s positioning of the CPTPP as incompatible with an EU SPS agreement was a convenient fiction to solidify its regulatory independence from the EU. This position can and should be, revisited.

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By Published On: 17 December 2024Categories: Blog, UK - Non EU, UK- EUTags: , , ,