Source · Select Committees · Business and Trade Committee
Recommendation 2
2
Rejected
Provide revised CPTPP impact assessment and develop independent methods for measuring future trade agreement benefits.
Recommendation
It is difficult to estimate the potential benefits of CPTPP or its impact on economic growth, not least because the Secretary of State has resiled from the models used by her department to estimate benefits in the published impact assessment. It is, therefore, hard to debate what investment in trade promotion and export support would be appropriate to unlock the full potential of the Agreement. Nor has the Government explained its own ambitions for the future of CPTPP or provided any sort of roadmap for its evolution to include a much bigger proportion of Indo- Pacific markets. This renders speculative much of the commentary about CPTPP’s future advantages. We note that the Secretary of State wants to see the development of better ways to measure the impact of trade agreements but has not yet found a way to achieve this. We recommend that the Government provide a revised impact assessment, setting out its current expectations of the gains from CPTPP; and the Department for Business and Trade should explain what steps it is going to take to help ensure that UK business exploits the treaty to the full. The Government must also say what it will do to develop better ways of measuring the impact of future trade agreements—including the involvement of an independent body, to avoid the Department “marking [its] own homework”, as the Secretary of State put it. (Paragraph 13) 22 UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Government Response Summary
The government rejects the recommendation for a revised impact assessment, stating the current one is fit for purpose and a new one would not offer substantial improvements, and existing scrutiny arrangements with an independent body are sufficient.
Government Response
Rejected
HM Government
Rejected
The Department published an impact assessment for the UK’s accession to CPTPP in July 2023 (https://www.gov.uk/government/publications/cptpp-impact-assessment) which sets out the expected gains. The headline modelling provides an indication of broad orders of magnitude, amounting to several billion pounds of benefit to the UK economy each year in the long run. However, all modelling is a stylised representation of reality, based on necessary assumptions and approximations, and subject to uncertainty, and a single number cannot express the full impacts. The impact assessment focuses on the marginal and isolated effect of changes to trading terms based on current CPTPP membership, and by its nature, does not comment in detail on broader geopolitical shifts, technological influences, or future membership and depth of CPTPP. These strategic benefits are outlined in a separate document (https://www.gov.uk/government/publications/the-strategic-potential-of-the-uks-accession-to-cptpp). The Department’s analysts produce high quality work, scrutinised by the independent Regulatory Policy Committee (RPC) who rated the impact assessment as ‘green’ (fit for purpose). The Department continuously strives to improve modelling methodologies and data, staying at the frontier of Free Trade Agreement modelling and analysis, including following up on recommendations of the external and independent Trade Modelling review. The existing impact assessment continues to be fit for purpose. A revised version at this point would not contain substantially more recent data nor improvements to the methodology. The Department has committed to conducting ongoing monitoring and evaluation of all new FTAs, and will publish a comprehensive ex-post evaluation report for CPTPP accession within 5 years of entry into force. For these reasons, the Government does not propose to prepare a revised impact assessment and believes the current scrutiny arrangements for impact assessments, including review by the RPC, an independent body, are sufficient.