Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Baroness Hayter of Kentish Town Excerpts

Tuesday 19th March 2024 Lords Chamber

Moved by

[Baroness Hayter of Kentish Town]

That this House takes note of the Report from the International Agreements Committee Scrutiny of international agreements: UK accession to the Comprehensive and Progressive Trans-Pacific Partnership (6th Report, HL Paper 70).

[Baroness Hayter of Kentish Town (Lab)]

My Lords, although no longer a member, I chaired the International Agreements Committee for the start of its work on the accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, before handing back the hard work and the drafting to my noble and learned friend Lord Goldsmith. I am moving the Motion on his behalf as he is unable to stay for the duration of the debate, although he is here now and, I trust, will be here for much of it. He did the hard work.

I am delighted that we will hear shortly from a number of past and present members of the committee: the noble Lords, Lord Fox, Lord Howell of Guildford, Lord Kerr of Kinlochard, Lord Lansley, Lord Marland and Lord Udny-Lister.

The UK’s entrance into the Indo-Pacific free trade agreement is important both for the partnership—as we are the first member to join the founding 11 and will be the second largest, after Japan—and for the UK, as the Government claim this as a flagship of their post-Brexit policy. For the 11, our accession renders it a global, rather than regional, agreement, and it will then represent 15% of global GDP. For the UK, the CPTPP might be more than simply a trade agreement as it is part of the Government’s strategy to deepen our engagement with the Indo-Pacific region. The report before your Lordships considers its importance in this light.

I will highlight two themes in the report. The first is the value of the trade bloc for British businesses, and how the Government can help the utilisation of the agreement. The second is the strategic implications of CPTPP membership for the UK’s engagement in the region.

On the first point, the economic value of CPTPP membership is likely to be modest. The impact assessment and the OBR suggest a 0.04% to 0.08% boost to GDP over 15 years, partly as we already have free trade agreements with nine of the 11 countries. While the Government claim that these low figures fail to capture the rapid growth in the region or future expansion of membership, the committee found it difficult to quantify that, while any expansion of the membership remains somewhat speculative.

The CPTPP affords market access to Brunei and Malaysia, with some limited export opportunities in agri-food and certainly greater legal certainty for services. Its rules of origin provisions could offer opportunities for manufacturers to develop and integrate supply chains into their business models and expand into new and growing markets. However, the evidence we received is that these rules of origin are very difficult to cut through and that there are insufficient measures to help businesses to take advantage of any new opportunities. Indeed, it is possible that, without additional help, only those businesses already exporting to the region will be able to take advantage of any such openings.

It is therefore vital that the Government provide effective ongoing support, particularly for SMEs. A key recommendation is for a new task force to run for two to three years, focusing on regional roadshows. I look forward to the Minister’s response to that suggestion, especially as we heard that the Government’s online guidance about CPTPP and trade agreements is inadequate and hard to find or navigate, with GOV.UK described as “woeful”, “almost impossible to use” and in need of “a complete overhaul”. We heard that businesses often turn to other countries’ websites for advice and information; that is surely unacceptable. Ministers must improve online guidance if any trade agreement is to be worth more than the paper it is written on.

The CPTPP is also about imports, particularly agriculture and food. The NFU welcomed the fact that farmers have been shielded from CPTPP imports in most vulnerable areas—an improvement on the deals with Australia and New Zealand—but has

“serious concerns about the cumulative impact of trade deals on British food production, especially … beef, poultry and pork”.

That is a reminder to consider the cumulative effects of successive deals on farmers and food production, not just the impact of each individual deal.

The Government have assured us that the UK’s right to regulate to protect human, animal and plant life is secure under the CPTPP. However, some academics remain concerned about the threat to our precautionary approach to sanitary and phytosanitary, or SPS, regulation. The precautionary principle permits regulation to protect the environment where there is a plausible risk of serious or irreversible damage, even in the absence of complete scientific proof. The CPTPP’s dispute settlement mechanism, as it affects the environment, means that future SPS measures might be challenged via the state-to-state dispute mechanism. The committee therefore asks Ministers to set out how they intend to address these challenges to our regulatory approach. I look forward to the Minister’s response to that.

I turn to the second consideration, the strategic value of joining the CPTPP. It has been something of a challenge to judge this in the continued absence of a cross-government foreign, defence and diplomatic vision into which a sustainable, long-term trade policy might fit. The committee therefore reiterates its call—we hope with a better response this time—for the Government to publish an overall trade strategy with clearly defined objectives. Such a framework would surely help to clarify and guide the Government’s priorities by spelling out their objectives for trade, but it would also facilitate parliamentary scrutiny of the Government’s aims as set against their achievements.

In assessing CPTPP membership, witnesses to the committee made three arguments in support of it. First, while wars in Ukraine and the Middle East, and the risk of reduced US commitment to NATO, create new uncertainties closer to home, CPTPP membership, given the Indo-Pacific’s geopolitical significance, sends an important political signal about the UK’s commitment to that region. The committee views engagement with the Indo-Pacific as positive. However, there is a lack of detail as to how the Government intend to utilise our membership as the trade strand of their so-called Indo-Pacific tilt. Ministers should spell out how they expect membership to contribute to their strategic aims in the region.

Your Lordships’ House does not need reminding that the international landscape for trade is rapidly changing and increasingly uncertain, which brings me to the second argument: that the CPTPP provides membership of a group of like-minded countries committed to free and open trade, high regulatory standards and adherence to the rule of law, together with the ability for member countries to align their standards and governance to promote fair and free trade. The committee agrees that the CPTPP can be seen as a rallying point for a rules-based liberal order, but this objective might be limited in an increasingly protectionist world. We should not forget that the CPTPP’s primary function is to liberalise trade among its members, rather than act as a political or strategic forum, so while we acknowledge value in using the CPTPP to engage with partners in the Indo-Pacific, we should be wary of overstating that potential.

Thirdly, the CPTPP could act as an incubator for new trading initiatives, particularly in emerging sectors such as digital and environmental trade, where the UK has a valuable opportunity to contribute. This possibility is particularly attractive as we grapple with a struggling WTO. We thus welcome this but acknowledge that plurilateral agreements cannot replace co-operation at the multilateral level. In the words of one witness, the WTO is

“really important. We need to keep trying … there is no real substitute”.

Innovation within the CPTPP should be viewed as complementary to, rather than a replacement for, multilateral efforts.

Accession is nevertheless welcome, and it will be important for the UK to take full advantage of its new seat at the CPTPP table. The committee considered potential avenues for UK input to the partnership’s future development and welcomed the invitation, prior to our full accession, for the UK to contribute to the first general review, which is taking place this year. It is aimed at consolidating the trade text and considering how to update and enhance it.

The report in front of your Lordships welcomes the stakeholder consultation and calls on the Government to publish their own priorities, both for this current review and for their longer-term future priorities for CPTPP development, hopefully prioritising areas of UK strength such as innovation in climate and trade in environmental goods and services, together with digital and other services. The House will not be surprised by my—and, in this case, the committee’s—regret at the absence of a consumer chapter, so we hope that its future inclusion could secure consumer protection within the agreement.

The partnership aspires to be a “living agreement”, although in the absence of a standing secretariat the rotating chair carries a heavy burden in marshalling the group. The UK should therefore respond favourably to any move towards a standing—although lean, I hope —secretariat.

There has been much debate on the possible future expansion of the CPTPP, with a number of countries already having applied to join, including China, Costa Rica, Ecuador, Taiwan, Ukraine and Uruguay, with other countries likely to follow suit. The process for any applicant is, first, for the country to demonstrate adherence to the required regulatory standards and a track record of adhering to the letter and spirit of existing international trade commitments. The second part of the process is for all current members to agree the new accession—a high bar, as our own application demonstrated. The IAC would welcome any country that meets these rigorous tests of entry, although, given the evidence received, it is unlikely that China will meet the necessary requirements any time soon.

The committee welcomed the Minister’s commitment that any new joiner would be subject to CRaG, but it calls on the Government to ensure that new accession processes go through the same consultation and impact evaluation as with any FTA partner—I see the Minister nodding. I note that, in the Commons at this very moment, they are trying to get such an amendment to the Bill currently going through. More seriously, it is vital that the Government start complying with the spirit, not just the wording, of CRaG.

Thanks to our Chief Whip, we are having this debate in this House, but the reality is that only the Commons has the power to delay ratification. We learned last week that the Leader of the Commons has denied that House the ability to debate or vote on the accession treaty within the CRaG period, making a mockery of the legislative power included in the 2010 Act. I note that the overwhelming vote of this House on 22 January—that the Rwanda treaty should not be ratified until all the promised safeguards are in place—has, to date, received no response from the Government, as required under the Act.

In addition to CRaG, there are other demands on the Government to ensure that successful trade deals will benefit the whole of the United Kingdom, including all its countries and regions. We acknowledge the improved consultation with the devolved Administrations, and we call on the Government to continue to share information and engage with them in a timely and transparent manner.

In summary, the committee welcomes the UK’s accession to the CPTPP and looks forward to the Government’s efforts to support businesses and consolidate their strategy to maximise the opportunities arising out of our new membership. I beg to move.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank all the speakers. It has been an excellent debate. The Minister referred to people watching it at home—I do not know whether he was referring just to my husband and his wife, but there may be others as well.

There has been in the debate a broad welcome for our membership, whether because it is a post-Brexit use of our freedoms or because of its real potential, particularly in services. Some talked about there being a very positive welcome, and some were wholly enthusiastic—but that has all now been trumped by a roar from the Minister, who calls it “astounding”. We will see. Some others have raised questions and wanted reassurances over ISDS or the need for a secretariat. What is sure is that trade deals are only enablers; they are not engines of growth. Businesses will have to be helped and assisted if they are to make those hopes into a reality. We will look to the Government for their role in that.

The partnership’s very future will be important, including its membership, scope and implementation. Noble Lords talked about the UK helping to shape that development—one of them even said lead that development. Whatever happens, I hope that Parliament can be involved in the direction of travel, including on the question of expansion of membership. As my noble and learned friend Lord Goldsmith said, if the Government do not play ball, even the current CRaG will not work. Some of us want it to go further and be improved, to give Parliament real grip over international agreements.

I cannot mention everyone who has spoken, but I would like to mention the noble Lord, Lord Marland. He urged the House to let the report do the speaking. I thank the committee chair, the members who did the work and the secretariat, led by Rhiannon Williams, and assisted on this by Bruce Sinclair and Sophie Andrews-McCarroll. I think all of us know that, when we get a good report, it is mostly their pens that have done it, rather than our brain power. I thank the House for its attention today and commend the report to the House.

Motion agreed.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Baroness Hayter of Kentish Town Excerpts

Committee stage
Thursday 14th December 2023 Grand Committee

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I will speak briefly to Amendments 25 and 30 and then touch even more briefly on Amendments 13 and 14.

Amendment 30, which will shortly be spoken to by the noble Lord, Lord Purvis, calls for a parliamentary debate on a CPTPP impact assessment. This is really important, because the influence of this House is not in the big decisions we take but over the Government—although it is too late when they have already signed a treaty—and the House of Commons. Although we do not normally tell the House of Commons what to do—I am sure the noble Lord, Lord Purvis, chose his words very carefully—in this circumstance it is really important.

In addition to the impact assessment, the International Agreements Committee, which the noble Lord, Lord Kerr, and I sit on, will also write a report on the treaty. We can get that to influence the real decision-makers down the Corridor only if this amendment is agreed and we ensure that a debate happens there. The request for an impact assessment is a nice little segue into a debate on our report as well. By concentrating on the wider impact assessment, it also allows a wider range of issues to be considered, such as prices. Nobody ever talks about the impact of these agreements on prices. We hope that and other issues will be very good for consumers but we need to see that, so a debate will be important.

Amendment 25, which my noble friend Lord McNicol will speak to, requests an impact assessment on labour and ILO standards. This is key. We want this and any other FTA not just to maintain but, we hope, to bolster ILO standards—not just through paper adherence but enforcement. I think we all agree that trade is good for jobs, consumers, our exports and the economy, but that must not be at any price. It cannot undermine any ILO standards. Indeed, I hope it will enable us and others to be rather more observant of them.

Very briefly on Amendments 13 and 14, I strongly concur with the noble Lord, Lord Holmes, about the importance of increasing investment. As I will make a wider point, I declare that I am a leaseholder and am on the board of the ABI, but I bring to the Committee an issue of core importance to prospective overseas investors that I have read about in the financial and specialist press rather than know about through any personal connection. In a completely different part of government, there is an attempt, with leasehold reform, to make retrospective legislation to reduce ground rents to peppercorn rents. That is very attractive for lots of people, but there is a real clash with the desire to increase overseas investment via the CPTPP, because many overseas investors—to say nothing of our domestic pension schemes—are concerned about non-compensated loss of property rights or contracts if their ground rents are suddenly taken away from them retrospectively.

That retrospective nature could undermine the Government’s welcome attempts to get more international investment into the country, because the attractions are not just over trade agreements such as this but over all the other things that we know we are known and valued for: stability, certainty and the rule of law. That needs to go hand in hand if the objectives of this deal are to be taken into account.

That was a little off-piste, but I could not resist it. My real point is that we need to know far more at a more granular level and after the event about what this agreement has produced. That needs to be debated in this House and elsewhere so that the influence of, in particular, my colleagues and the specialists we have heard from, who put so much into this, can be heard at the other end of the building.

[Lord Kerr of Kinlochard (CB)]

It is a great pleasure to follow the noble Baroness, Lady Hayter, who was an extremely effective chairman of the International Agreements Committee. I have only two points.

First, in response to overwhelming demand across the Committee, I have agreed to repeat the extraordinarily boring technical point I made in our first day in Committee about deadlines. The majority of the amendments in this group set deadlines that hang on the passing of the Act. I respectfully suggest that what matters for reports is the date on which our accession takes effect. That might be in the course of next year—I hope it will be—but that is not certain. Some of these amendments would call for reports almost certainly before we have actually acceded. Accession takes place when the last ratification is received by the depositary power, so the right peg to hang it on is not the passing of the Act, which permits us to ratify, nor our ratification, but the 12th ratification, which allows us in. I know that these are mostly probing amendments, but I suggest to their drafters that it might be a good idea to use the peg of our actual accession rather than the passage of the Bill. I exempt some of the amendments in this group; this is only for the ones that hang on performance and how it is working out, because it would be well for us to be in before we require the Government to report on how being in is working out.

Secondly, I am a little concerned about Amendment 32— the accession amendment in the names of the noble Lords, Lord Purvis of Tweed and Lord Foster of Bath. It would require the Secretary of State to produce

“an impact assessment of the impact on the United Kingdom of the accession of countries that have submitted a request … to accede to the CPTPP within the last five years”.

That would include us; it would be jolly useful to have an impact assessment for us, but I do not think that is the purpose of the amendment. The deadline is

“within three months of the passing of this Act”,

which is the wrong deadline, for the reason I gave.

However, my point is more substantive than that. Apart from us, there are six countries whose applications to join the CPTPP have been received in the last five years: Ecuador, Costa Rica, Uruguay, Ukraine, China and Taiwan. The rules of the game, of course, are that consensus is required before a negotiation starts with any applicant country and consensus is required before a negotiation is closed, completed, and then the ratification process starts. It is also the case—not so much in our case but in previous cases—that there have been a lot of side letters and deals done in the margins of the main accession negotiation.

It is misleading to call for an impact assessment of what would be the impact of the outcome of any of these six negotiations. One cannot do that now. A very good moment for dialogue with the Government would be when CPTPP was considering whether to open negotiations. It seems that three months after the passing of the Act, one simply does not know. I add, on a personal basis, that I do not think that six negotiations will start in the foreseeable future. The applications of three of these countries pose serious political problems. In one case, there will be an enormous change to the nature of the CPTPP if the accession took place—a change that I think would be undesirable and, I believe, a majority of members think would be undesirable. There are, however, two other cases where considerable political problems arise.

Setting early deadlines and calling for the Government to go public with their analysis, which would in fact present the Government’s negotiating position, would be unwise. I do not think that we should ask our Government to go on the record in advance about a hypothetical negotiation which, in my view, in three of the six cases is unlikely to start in the foreseeable future. The Government would not be wise to act on that requirement, so I hope that they will resist that requirement—or, rather, I hope that the noble Lord, Lord Purvis, will have second thoughts about Amendment 32.

CPTPP: Conclusion of Negotiations

Baroness Hayter of Kentish Town Excerpts

Wednesday 19th April 2023 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Minister is obviously younger than I thought, because he does not remember the great agreement we signed when we joined the European Union in 1973. But I am delighted that he reinforced that the Grimstone principles will be adhered to and that we will have months, rather than days, to scrutinise this agreement. On behalf of the International Agreements Committee, I thank him for that.

I want to raise the question he mentioned of standards, particularly food standards, which are of enormous importance to consumers. Not only are they important in themselves, but any divergence of them from the rules that we keep for importing or exporting food to and from the European Union would be really difficult for manufacturers and importers. Can the Minister reassure us that nothing in any change to standards will impact either on our consumers or, indeed, on our ability to trade with our near neighbours in the European Union?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Baroness for her comments and for her continued support, through the process of scrutiny, of this very important treaty. I look forward to working with her and her committee’s members closely over the coming months. On food standards, it is very important for me to repeat my point that nothing in the CPTPP lowers our food standards. All food and drink products imported into the UK will have to meet the same standards on the day before the CPTPP comes into force as they will the day after. The whole point about this is that we control our borders and the standards of goods and services sold to our consumers.

I too can quote from people who have been observing the situation. In a statement published on the National Farmers’ Union website, its president, Minette Batters, was pleased that the Government

“continues to maintain its commitment to our food safety standards”.

Questions were raised as to whether the CPTPP will lead to exports of food at lower standards, such as hormone-fed beef and chlorinated chicken. No: again, nothing in this treaty lowers our food standards. As I say, the standards we have the day before this treaty comes into force and the day after are exactly the same.