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UK poised to join Asia Pacific trade deal

The Financial Times reports that The United Kingdom is “poised” to join the Asia-Pacific trade deal CPTPP, according to people involved in the talks.

Part of the deal is reportedly that the UK will eliminate tariffs on palm oil from Malaysia, as a price of joining. Current UK tariffs amount to 12pct and would be scrapped in order to enable the UK to enter the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

The UK is reportedly expected to finalise broad agreement on the CPTPP over the next couple of weeks, before final signing in the summer. Originally, the U.S. were supposed to be part of this trade arrangement, when it was called “Trans-Pacific Partnership (TPP)”, but then U.S. President Donald Trump decided to withdraw in 2016. Observers note that the UK managing to join this arrangement can be considered the UK’s first post Brexit trade success.

Palm oil, harvested from oil palm trees and found in about half of all supermarket packaged products, has been criticised by campaigners for years, but a Financial Times comment argues that “rich nations are not looking good in the palm-oil dispute”, noting that “the WWF points out that palm plantations have impressively heavy yields. Replacing them with soya bean, coconut or sunflower would require between four and ten times as much land, leading to environmental degradation elsewhere.” It stresses: “The EU and other rich economies are failing to address concerns that their actions are arbitrary and lacking in good faith. There’s a case for environmental regulations on trade, but Brussels is making it poorly at the moment, and bringing the whole idea into disrepute.”

The comment also defends the UK’s decision to cut the tariff:

“Criticisms of the UK’s cut in tariffs similarly miss the point. You can make a strong case in principle for placing green conditions on trade if you’re protecting a public good (carbon-sink forests and wildlife habitats), and they are equivalent to domestic environmental regulations. But tariffs are a bad way to do it. They do not discriminate between destructive and sustainable producers within each country, thus failing to create an incentive for individual growers to improve their practices.”

The EU and the UK treat palm oil imports very differently. As UK merely requires to comply with local regulations, the EU aims to force its own regulations onto trading partners. The latter has angered the likes of Malaysia and Indonesia, which is why no progress is visible on opening EU trade with South East Asia.

Malaysia is particularly annoyed that its efforts to put certification for sustainable palm oil production in place are not sufficiently appreciated. Sime Darby, a Malaysian enterprise and the world’s largest producer of certified sustainable palm oil, has thereby pledged to reforest a 400-hectare area of peat plantations in Sabah and Sarawak, two Malaysian provinces. It is doing so as part its commitment to net-zero by 2050, so achieve a more sustainable future. The company also secured a major success recently as the US Customs decided to award it a clean bill of health. As a result, it is again able to import palm oil into the United States, after a two-year import ban on these products.

Last week, Britain’s trade chief Kemi Badenoch and her Canadian counterpart Mary Ng settled differences regarding the U.K.’s post-Brexit hopes of joining the pact. Ng and Badenoch “tackled some of the remaining issues” and are “now wrapping up final negotiations” on market access, a senior Canadian official told POLITICO. This, they stated, “breaks [an] impasse with the U.K. on CPTPP negotiations.”

Copyright Picture: By L.tak, Afiaki – File:Comprehensive_and_Progressive_Agreement_for_Trans-Pacific_Partnership_members.svg, CC BY-SA 4.0,