Trade Bill
Lord Purvis of Tweed Excerpts(5 years, 3 months ago)
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Lord Purvis of Tweed
“( ) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if—(a) the provisions of that international trade agreement do not conflict with, and are consistent with—(i) the provisions of the Sustainable Development Goals adopted by the United Nations General Assembly on 25 September 2015,(ii) international human rights law and international humanitarian law,(iii) the United Kingdom’s obligations on workers’ rights and labour standards as established by, but not limited to, the commitments under the International Labour Organisation’s Declaration on Fundamental Rights at Work and its Follow-up Conventions, (iv) the United Kingdom’s environmental obligations in international law and as established by, but not limited to, the Paris Agreement adopted under the United Nations Framework Convention on Climate Change, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety,(v) existing standards for food safety and quality as set and administered by the Department of Health, the Food Standards Agency and any other public authority specified in regulations made by the Secretary of State,(vi) the United Kingdom’s obligations as established by the Convention on the Elimination of All Forms of Discrimination Against Women and by the Convention on the Rights of the Child, and(vii) the sovereignty of Parliament, the legal authority of UK courts, the rule of law and the principle of equality before the law,(b) the provisions of that international trade agreement do not in any way restrict the ability to determine whether public services at a national or local level are delivered by public sector employees, and(c) the Secretary of State has laid before Parliament an assessment of the potential economic, social, human rights and environmental impacts of the international trade agreement on the contracting parties.”
Lord Purvis of Tweed (LD)
My Lords, I shall speak to Amendment 8 and the other amendments in this group. Amendment 8 relates to the continuity agreement, and Amendment 53, which is also tabled in my name, relates to future agreements. We return somewhat to an earlier debate where there is perhaps more complexity than the Government have alluded to until now about some of these agreements. I shall explain why this is important before I refer to the components of the amendments.
I shall use three examples of agreements which the Government so far have not said whether they wish to replicate in the continuity agreement: Singapore, Japan and Mexico. This is more complex than the Government have alluded to so far because a European Court of Justice judgment two years ago indicated that free trade agreements should not now include investment protection components. In relation to the Japan agreement, which this Parliament has approved and which will come into force on 1 February this year, as a result of that judgment separate negotiations are now being carried out on an investment protection agreement which Japan has not yet agreed. What is the UK’s intention in rolling forward the trade and investment components, or is it just the trade component? The Singapore agreement, which has been agreed and which would be one of the agreements that we wish to take forward, has, again, been separated out. The Mexico agreement has been agreed and is going through legal scrubbing.
Those three examples, which are significant to UK trade, highlight important aspects. They represent some of the best components of what modern deep and comprehensive trade agreements can include, but they also signify the difficulties that our Government have in wanting to make them continuity agreements, simply and straightforwardly rolling them on. That is why Amendment 8 on continuity agreements is important. It is important because it now sets the principles for agreements which have been signed in principle but which, through the process of seeking continuity, might include practical changes. We do not know yet, but they might. Although we know that it is the Government’s intention that they will not, we have yet to see them or any of the details. Therefore, it is appropriate that we would want to set some criteria for how they can be rolled forward, especially if we are to take forward what the European Union is now doing, which is separating out investor protection agreements from trading agreements. Of course, these amendments relate to trade agreements, but I want to stress the complexity to highlight the fact that the principles should be set down in statute.
In recent years, UK trade, through these agreements, has been transformed to take into consideration much wider aspects than just tariffs, and that is part of the reason that consideration of investment protection is a domestic requirement, whereas other trade is an exclusive competence of the EU. It is why the Japan agreement with the EU, for the first time, includes a specific commitment to the Paris accord. The Japan agreement sets the highest standards—which we are now told by the Prime Minister are to be guaranteed—for labour, safety, environmental and consumer protection, as well as data protection, and it fully safeguards public services and has a dedicated chapter on sustainable development. Curiously, that does not seem to be a concession from the Government today, whereas it would be included in one of the continuity agreements that the EU has already agreed. However, that is not surprising because, with the growth in the wider aspects of trade in our relationships, with many more non-tariff measures in international trade agreements, the impact on domestic legislation and on wider public services is much greater.
If you go on to the EU website, you will find that there have been significant discussions with Australia on trade and sustainable development, taking into consideration provisions on trade and labour, multilateral environmental agreements, climate change, biodiversity and forests, and civil society groups. These are now core elements of how the European Union negotiates trade agreements. How did I know that these were part of the discussions with Australia? I knew because this information is made public. Transparency at the European Union level is such that I was able to find all the elements of the last round of discussions with Australia that took place in November. However, I looked in vain to find any similar background material that led to the mutual recognition agreement that the UK has signed with Australia.
It may well be that mutual recognition over wine will be very necessary, come Brexit; we will probably be enjoying Australian wine a lot more. But the point of making sure that trade agreements meet ethical standards and have a clear set of benchmarks, with a requirement on Ministers to report that they are carrying out these discussions, is now of fundamental importance. It is important because the continuity agreements may not all ensure continuity. I would not be surprised; as we have heard, the Government are seeking “as much continuity as possible”, which could mean there are likely to be some changes.
Lord Purvis of Tweed
I am grateful to the Minister. She may have got the author of Amendment 53 slightly mixed up in her thorough summing up, but at this time in the evening, and speaking as one who is looking forward to sampling a wee dram of one of our country’s best exports at the highest standards, the Minister may be forgiven.
There is a paradox at the heart of this issue. I mentioned the complexity of some of the trade deals that the Government seek to take forward with Mexico, Singapore and Japan. They are either in force or agreed but components of them require further discussion. That means that it is relevant, as the noble Baroness, Lady Hooper, and others have said, to bear in mind that they will be considering the future when we have asked for them to be rolled over.
To prove the point, we need to look at the only example that the Government have so far published: Switzerland. The Swiss themselves, although the Government have not said so, said explicitly that this agreement could serve as the basis for future economic trade relations. Interestingly—perhaps unhelpfully for the Government—they frame it as part of their “mind the gap” strategy on the basis of what they term the disorderly manner in which the UK may leave the European Union. We can rely on the Swiss to be frank and honest.
The paradox also exists that the rolled-over agreements will be on the basis of the existing EU regulations that the Government have committed to putting into law, which we could follow in three-year tranches under the Bill, again and again, but the Government have said that the justification for leaving the European Union is to change the way that we operate our trade policy. There is no surprise that when we are asking countries to roll over the trade agreement, but telling them at the same time that we are likely to want this agreement in place for us to have the flexibility to negotiate trade agreements based on separate regulations, they have been slightly resistant.
My amendment, and others in the group—I appreciate all the contributions from all the Members who have spoken—is an attempt to establish some basic principles and ethics. This is exactly the right moment to do that. Since 2010, the European Union has insisted on having sustainable development chapters in trade agreements. That has been positive for the world. It has been consistent in the contributions of colleagues who have tabled amendments that our argument is not just about concern that the UK would reduce its standards. One reason why we want to operate to the best standards is that if we are opening our markets to other countries, we do so to countries who are increasing their standards across the piece in environmental and labour law, and so on. It is an overt ambition of the Vietnam agreement that we use that clout as an economic market. That addresses the point of the noble Lord, Lord Kerr, that we should move standards up.
Finally, I am still scratching my head about all the Minister’s comments about how unnecessary it is to have something in the Bill because the Government have given their assurances. When it comes to workers’ rights and the environment, the Government have said time and again that we need not worry, so why did the Prime Minister say just today that she would provide Parliament with a guarantee that we would not erode protections for workers’ rights and the environment? That is our concern: that the Government can give an assurance but when it comes to putting something in legislation they pull back until they have to.
Lord Purvis of Tweed
I am most grateful to the noble Lord. He has been a leader in this regard. He will remember when I had the privilege of supporting other Members in taking through the 0.7% development Act. It is only when commitments given at a political level are enshrined in law that we can be reassured. That is our ambition with these amendments. However, I accept what the Minister has said at this stage. I shall not press the amendments. We will come later in the Bill to disputes and the other aspects of trade referred to by the Minister. For the moment, and on the basis of what the Minister has said, I beg leave to withdraw the amendment.
Trade Bill
Lord Purvis of Tweed ExcerptsTuesday 11th September 2018
(5 years, 8 months ago)
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Baroness Kramer
This is not a scare story. I think the Government will be able to confirm the description that I have just given. I will make one, more general comment but I do not want to go on because of time. Different countries have different patterns of production and trade. Over the past 40 years the UK has integrated into a supply chain, just as the Northern Ireland economy has integrated across those borders. I cannot speak about the Swiss because I do not know that economy in detail. It requires detailed knowledge of the specific economies. We are part of a crochet, deeply embedded into it, just as many of the supply-chain countries are, with constant trading across borders within the EU.
Even under the Chequers proposal, rules of origin certificates are required on every good. I have talked before about the small company that sells party supplies across Europe. It would be £30 every time they sent out a shipment of cups, £30 for the plates, £30 for the paper napkins, £30 for the tablecloths—you can go on with those kinds of numbers and you quickly realise why for many companies this is a totally destructive additional cost, which changes the game completely. I ask the Minister: can we please have some comprehensive answers? Can we have the impact assessment of what this will do to our businesses as they are today—not the fictitious new businesses that may develop in the next 20 years which will abandon the kind of trade that I have described and specialise in something different, perhaps more along a Swiss pattern, but the real businesses that exist today, in which people have invested and by which people are employed?
Lord Purvis of Tweed (LD)
My noble friend may be interested to learn, on the Swiss example, that the regulations associated with all agricultural, tradeable and industrial goods are fully aligned with the European Union, and Switzerland is part of the Schengen agreement, so for the movement of people and those agricultural and trade goods there are no necessary checks.
Lord Purvis of Tweed
My Lords, with all the travails afflicting Italy, they should be relieved that they can rely on the sunny optimism of the noble Lord, Lord True, to see them through in the future. I am perhaps in the same pickle as the noble Lord, Lord Browne of Ladyton, who could not find any common cause with his previous speaker, the noble Lord, Lord Hamilton. I shall take a trick out of his book and find something positive to say by congratulating the noble Baroness, Lady Meyer, on a wonderful maiden speech. I see she is back in her place.
It seemed easier a year ago, when Liam Fox suggested at the Conservative Party conference—reportedly to cheers from activists—that it would be a breeze to get all the existing EU trade agreements in place before Brexit in March. He said,
“believe me, we will have up to 40 ready for one second after midnight in March 2019”.
The Trade Secretary added:
“All these faint hearts saying we cannot do it—it’s absolute rubbish”.
I have never considered the noble Lord, Lord Tugendhat, to be a faint heart, but the term he used was “miraculous”. I think that that is more accurate. Perhaps Dr Fox, on the Marr programme 10 days ago, showed himself a little faint-hearted. When asked if he stood by what he said then, he replied:
“That remains our aim. Of course a lot of countries are waiting to see exactly what that relationship will be with the European Union”.
Well, they are not the only ones. However, the noble Lord, Lord Callanan, seemed to be back on track for the second-after-midnight position during Questions today.
As the noble Lord, Lord Browne, and others have said in this debate, we are expecting the Minister, in her summing up, to clarify how many countries have confirmed, in writing, to the UK Government that there is agreement in principle to ratify agreements before March 2019, and on what terms. If they have not, what are they asking of us? This information should be with the Government. If it is not, it is extremely alarming. If it is, the Government need to tell the House and the best opportunity would be for the Minister to do so when she sums up.
Time is nearly up. Businesses cannot wait any longer. I told the House before the Recess that our pharmaceutical industry was starting to stockpile because there was no clarity on what customs arrangements would be. As the industry has said, it is estimated to take 10 years for the technological side of any new customs arrangements to be in place and operational. The Government have rolled over and rubbed out one of their previous red lines, of being distinct and separate from the European Medicines Agency, thereby ultimately now accepting the jurisdiction of the European Court of Justice by taking its rules and having no say in the making of them. Irrationally, they cannot see the case for other regulatory bodies critical to UK trade. As the noble Lord, Lord Whitty, asked, why is this the case? What is the Government’s position as to why they are not in this Bill?
The trade association EURIS, which represents thousands of British businesses and £148 billion of UK trade, together with the independent UK Trade Policy Observatory, has published a survey just today, showing that 83% of British industrial product manufacturers support continued regulatory alignment in order to remain competitive in a global market. Respondents overwhelmingly say that they see no benefit in moving away from the EU regulatory system for industrial and manufactured products. The report states:
“UK companies told the survey that their supply chains have already been disrupted by post-referendum currency changes and that EU27 companies have started to select non-UK suppliers amidst the ongoing uncertainty of post-Brexit arrangements”.
It added:
“It is not a choice of exporting to Europe or the rest of the world. If we become less competitive in the EU we will be less competitive in other international markets. The UK Government’s target to develop stronger trading relationships with other non-EU countries is a positive move, but this can only be achieved if we maintain a strong alignment with EU regulations and supply chains”.
That is an industry response to the position of the noble Lord, Lord Lilley, who is not in his place for the winding-up speeches. Perhaps, as he did this afternoon, he has nipped out to be in Committee Room 9 to share a desk with Boris Johnson, if the BBC reporting is accurate. It is telling that one of the first to speak up for the Government left this debate to be with Jacob Rees-Mogg and Boris Johnson, when they said this afternoon that the Chequers position, which the Minister supports, is now worse than the status quo of staying in the European Union. I wonder what the Minister’s response to that will be.
The Bill is all about disruption, or the futile attempts to prevent or minimise it. The UK has a trading relationship or is in discussion for one, over and above WTO base rules, with 143 countries. In addition to the single market with the EU 27, we have an FTA with 36 countries, with a further 46 where the agreement is provisionally applied. Agreements with eight countries are pending ratification, and five are being updated. With a further 21 countries, negotiations are ongoing or paused, and we have had a role in all those discussions.
This cannot possibly, by any stretch of the imagination, be called a cut-and-paste job simply to put it into UK law. For the noble Lord, Lord Lilley, to indicate that that would be a straightforward process is a flight of fantasy. The agreements in place are also indefinite. I hope that the Minister will be able to answer this, too. Are we asking them to ratify an indefinite deal but also telling them that it will last for only three years unless we renew it? Can she confirm that she has stated that to all of our partners? What of those likely to mature into force after next March but during the implementation period?
It is now incumbent on the Government to publish what they have told each of those countries and let Parliament know. If we rollover those deals and then deviate from them—because we will be part of a common rulebook, as is the Government’s position, but from which the Government say we will be able to deviate—we will, by definition, deviate from all the agreements that we will have rolled over because we are adopting the existing EPA or FTA components. Parliament cannot possibly approve any of those agreements with confidence when we do not know what our customs or non-tariff regulations will be.
I take just one example: food and plant health imports from South Africa, where the Government say that we are having constructive discussions. If we are part of a common rulebook, importing a vegetable product from South Africa requires 13 sets of regulations out of 43, from warehousing to labelling and exports. All are under the jurisdiction of the CJEU, which will define whether they are being met. A third country will go to that court if it thinks that we are not satisfying those criteria. I hope that the Government can be clear on the relationship between their position on a common rulebook and their view on rolling over the agreements.
Some of the EPAs which we have said we shall be rolling over include ongoing discussions on services. Are we also committed to run a parallel process on those services, because they are currently part of the discussion that the EU is having on them? The SADC EPA agreement includes a joint council and proposals for structures and a framework. What is the Government’s position on rollover agreements and joint framework arrangements to discuss them?
A government statement recently promoted the rollover for the South African customs union agreement, representing 0.7% of all UK trade—less than one-quarter of what we export to Belgium. No. 10 spun that as the first new trade agreement that is now going to be in place for after Brexit. However, the SACU Ministers said that they welcomed the UK’s intention to avoid disruption for its trading partners as it withdraws from the European Union. If you study the fine print, it states that we are committed to having the agreement in place in the event of no deal. It is not even necessarily going to be in place if there is an agreement on the withdrawal.
This leads on to why Parliament needs to have an enhanced position in the scrutiny of it. Under the existing EU arrangements, a mandate would have been sought and secured by the Commission from the Council to enter any of these discussions and then published for Parliament to see. A public scoping exercise would have been carried out and published and Parliament would have been able to see that too. This Bill and the Government’s proposals, not just for the rollover agreements but also for other trade agreements, will afford this Parliament fewer opportunities to provide scrutiny than the European Parliament currently does to the Commission and the Council.
In her opening remarks, the Minister said that the Bill was about transparency and heralded consultation. As preparation for this debate, I was enthused to go on to the DIT website and complete the consultation for the United States. I filled it in as an individual business from Scotland, potentially concerned about the impact there may be for Scottish farmers on beef products et cetera. I was asked my age and ethnicity and where I lived; that was all fine. The first question was:
“What concerns, if any, do you have about a free trade agreement (or related trade talks) with the United States, and why?”
I filled in a simple response. It then asked:
“Which of these areas of a free trade agreement best describe the concerns that you have outlined above?”
I clicked: “Products. Standards, regulation and certification”, because of the concerns, mentioned by other noble Lords, about animal products, environmental regulations, health and safety et cetera. In order to provide feedback, as the Minister said, I was expecting to see what the current discussions were, what the terms were, and what was being outlined with America. What turned out to be the final question then came up, asking:
“Is there anything else that you would want to say about the UK’s future trade relationship with the United States?”
That was it. I do not think that that is sufficient consultation with the public, so I am submitting my comments in Hansard instead.
Why does this matter? It matters because one of the key elements of the discussions with the United States and with Europe is the equivalence of how we see and interpret these regulations. They are core to any of the discussions. Do we consider equivalence with the European Union, as the White Paper has said, or see equivalence in the United States’ regulations, as it has asked us to do? As the noble Baronesses, Lady McIntosh and Lady Jones, said, we will not be able to do both.
On issues concerning devolution, there needs to be much greater clarity—in paragraph 3 of Schedule 1 and paragraph 9 of Schedule 2—on devolved Ministers having to consult Ministers of the Crown. What happens if Ministers of the Crown disagree? When there are joint actions with devolved Administrations, UK Ministers cannot act alone without the approval of devolved Ministers. What if they refuse? We need to know more about the Government’s intentions for the operation of a UK single market. You cannot separate that from any of the trade agreements either.
The noble Baroness, Lady Neville-Rolfe, may have built up her hopes about Liam Fox stating that we can rely on passing this Bill because any future trade agreements will require primary legislation, so Parliament will have a much greater voice. I will quote from what Dr Fox actually told the House of Commons. He said that the Government would,
“bring forward a bespoke piece of primary legislation when required for each new future trade agreement that requires changes to legislation and where there are no existing powers”.—[Official Report, Commons, 16/7/18; col. 42.]
Therefore, by implication, if a new trade agreement does not need changes to legislation, or if those changes can be made using existing powers, Parliament is bypassed. That is simply not acceptable. This is why the International Chamber of Commerce told a meeting that I chaired last week that the Government are proposing a 19th-century approach for approving trade agreements in a 21st-century trading environment. That is why the Bill will have to be scrutinised and, most likely, amended in Committee.
A trade policy for the 21st century for a truly global Britain would be based on zero tariffs to our largest and nearest trading partners and be an open market to those who share our high values; based on combined regulations where we have a say in how they are made and shape them for the economic and new trade challenges and opportunities of the future, such as e-commerce and technology; and based on principles of openness and fairness, especially for the least-developed countries that we trade with. This was at the heart of the commission that I chaired with the Nigerian Trade Minister for the All-Party Group on Trade Out of Poverty. A truly global Britain would use that group of trade partners to help us negotiate free trade with partners further afield, with no trading cost to our businesses, to take advantage of the growth potential of non-EU countries. Therefore, a truly global Britain would see that the Bill necessarily has to be changed in order ultimately for us to meet those kinds of “Global Britain” requirements—which is to continue to be part of the European Union customs union and, if necessary, to give the British people the option of the right to make the decision that we remain a truly global Britain in a customs union based upon open principles, transparency and accountability. That is sorely lacking in what is currently offered.
Baroness Fairhead
We are working with the devolved Administrations and stakeholders to ensure that this future scheme takes account of the interests of all producers from the regions of the UK. Finally, in relation to the rest of the world, we are ensuring that the continuity agreements that we transition will fully protect UK GIs.
I turn now to the points made by noble Lords about scrutiny of the use of the GPA. The noble Lords, Lord Hain and Lord Grantchester, said that there is no ability to scrutinise the GPA. I disagree, but let me clarify that. The power in Clause 1 enables changes to be made to domestic procurement regulations in order to reflect the UK’s independent membership rather than membership through the EU, but in order to exercise this power, our accession will first have to be accepted by Parliament through the CRaG procedure. That is why the power is subject to the negative procedure—because Parliament will have had the opportunity to scrutinise the GPA before the powers in Clause 1 are exercised. The schedules to that have already been shared with the ITC and we would expect CRaG by the end of 2018 or early 2019. In order for the UK to accede quickly to the GPA after ratification, this Bill is necessary to avoid any loss of legally guaranteed market access for UK businesses.
My noble friends Lord Hamilton of Epsom and Lord Risby asked about the GPA and whether we must accede or lose our access. The truth is that we must accede or we will lose our access, so to provide continuity for UK businesses, we are already working on a timeline which sees the UK accede to the GPA as an independent member in time for EU exit, regardless of whether we have a deal.
I turn to readiness and the question of no deal, which was raised by many noble Lords, including the noble Lords, Lord Butler of Brockwell, Lord Taverne and Lord Purvis of Tweed. I have to confirm that it is absolutely not the Government’s plan to leave without a deal. Our plan A is to secure an agreement with the implementation period. We are confident of securing continuity for our existing trade agreements and indeed securing agreements to the implementation period under the draft withdrawal agreement. A number of noble Lords talked about resources. What I can say in response to my noble friends Lady Hooper, Lord Horam and Lord Astor of Hever is that the Department for International Trade is already recruiting staff to support the trade negotiations. We have recruited approximately 600 staff, who have made significant progress. I hope that that and the fact that we are closely focused on this issue meets the appeal of noble Lords to get on with it.
However, we need to continue to prepare for a range of potential scenarios if we do not reach such an agreement with the EU. In so doing, we will seek to bring into force the bilateral agreements with partner countries from day one. The powers in this Bill are an essential element in that process. We are actively engaged with partner countries. As one noble Lord mentioned, my honourable friend George Hollingbery, the Minister for Trade Policy, has said that it is clearly a challenge. There is no doubt that the timing is very tight but it is still our aim to maintain the effect of those agreements even if there is no deal on 29 March 2019.
Lord Purvis of Tweed
I am grateful to the Minister for giving way. The noble Lord, Lord Callanan, told the Chamber in response to my Question to him earlier today that it was still the Government’s position that they will all be in place one second after midnight on 29 March 2019, as the Secretary of State Dr Fox has already said. The Minister has said that this is a challenging timetable but that it is still the Government’s aim. Will she inform the House how many countries have currently stated to the Government in writing that they are willing to accede to that timetable? There will be a long gap between the Second Reading and the Committee stage of this Bill; in fact, we do not know when the Committee stage is going to be taken. Given that, between now and then will she also commit to providing written information in the Library on whether any of those commitments are provided to the Government between now and the Committee stage?
G7 Summit and Future Trade Relations
Lord Purvis of Tweed Excerpts(5 years, 11 months ago)
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Lord Purvis of Tweed (LD)
My Lords, we are indebted to the noble Baroness, Lady McIntosh, for bringing this Topical Question to the Chamber to elicit the Government’s position so fresh after the very worrying G7 summit in Quebec. We are grateful to her. I will address some of my points to the very pertinent issues she mentioned. I know that it is a gentle convention in the House that the Front-Bench speakers reflect on contributions made by the Back Benches. I can do that very briefly by saying that I agreed almost entirely with the contribution from the noble Lord, Lord Whitty.
The point that the noble Baroness, Lady McIntosh, mentioned that is probably the most troubling of all is that we see trends in global trade and global growth that are a worry. In a recent meeting, representatives of the World Bank were very clear that they are concerned that what has been happening over the past decade—a global growth trend that was uniform across the planet—is now under threat. We start to see this particularly with what is likely to be a looming trade war, where leaders’ pride and nation states’ interests collide. That will mean that many citizens and consumers will be worse off. I represented a constituency that is still living with the impact of a trade war in the 1990s with high tariffs on the textile industry. Trade wars impact people’s livelihoods and their futures. They are not to be taken lightly.
The Minister will know that for a number of months I have been concerned about the WTO’s capacity to address some of these issues. I was at the WTO ministerial conference in Buenos Aires in December. It failed to agree a communiqué as the US delegation left early. I was not entirely surprised, therefore, with the US’s approach in Quebec. I had the benefit of being in Washington last week, which I will return to a little later. It was fascinating meeting the Canadian ambassador, discussing with the US trade envoy’s office to Europe the very pertinent issues that the noble Baroness, Lady McIntosh, raised.
I also agreed with the noble Baroness in raising issues relating not just to tariffs. In many respects, the debate about non-tariff measures is as important as that about tariffs. While such measures serve highly legitimate policy goals such as protection of human health, animal and plant life and the environment, they make it more difficult for SMEs and small farmers in smaller nations and least-developed countries to compete effectively in the international markets.
According to the WTO, there has been a phenomenal increase in the number of rules and regulations affecting international trade. While most favoured-nation tariffs have declined from an average of 5% to 6% to below 3% to 4% between 1995 and 2015, the number of non-tariff measures rose from more than 1,500 in the mid-2000s to more than 2,500 in 2015. It was the UK’s desire in the 1980s to avoid what was known to be the trend of growth in non-tariff measures and to reduce the cost and burden on business and exporters that led us to support a single trading market in goods and services. No doubt we will return to Brexit in other debates in the House.
It is a simple fact that smaller nations and least-developed countries lack the financial and technical resources to develop effective policies, regulations and institutions to address non-tariff measures such as technical barriers to trade and vital sanitary measures. UNCTAD and other bodies are doing sterling work to raise issues regarding the burdens on least-developed countries. Those who lose out in trade wars between large nations are not just consumers in those nations; there is a considerable impact also on smaller trading nations especially on a regional basis. In many respects, they are the collateral damage of such trade wars. It is therefore no surprise that there is considerable concern among members of networks established for the very purpose of reducing trade barriers, such as Mercosur, the Pacific Alliance, within the Maghreb, SADC and ASEAN, all of which are focused on reducing non-trade measures, reducing time and cost of border crossings, reducing customs costs and aligning and then harmonising regulations. There is deep concern across all those networks that the WTO is in many respects hampered by the position of the United States and not assisted by the strategic position of China, with its alternative approach that we are starting to see in the Shanghai Cooperation Organisation.
The UK Government must have a clear position. We would have needed a clear position regardless of Brexit but, with it, the Government need to be clearer than ever. As we embark on the first trade negotiations in history to create trading barriers rather than reduce them, the Government need to be even clearer.
This might have been an easier situation to manage had it not been for the latest position of the United States. There is no doubt that the White House has a transactional, nation-state-first trade policy that is not likely to change in the foreseeable future. If we add to this the very clear position of our non-EU trading partners that they will need to know what arrangements the UK enters into with the EU before they agree positions with us, we see that this is not a conducive trading environment in which to be entering a new, third-country relationship with the biggest single trading bloc.
The position of the US was made clear to me on my visit there last week. As the noble Lord, Lord Whitty, said, it cannot be denied that there is no universal support for free trade anywhere within the United States and certainly within Congress. It is perhaps possible to re-engage in the TTIP discussions; it is perhaps possible to rescue from the embers the NAFTA relationship within the United States; and some form of relationship with the new progressive trade partnership being formed within Asia and the Pacific may well be possible, but it cannot be guaranteed—nor can we base our future trading relationship with the US on those assumptions. It cannot necessarily be taken for granted that the US Congress would be satisfied with a UK FTA. I met delegations in both the Senate and the House. Both Republicans and Democrats made it clear that they would not support a free trade agreement. They would support trading relations and look at areas where barriers could be reduced, but what they would ask for would be broadly unpalatable to us. It would be helpful to get a clear understanding of the latest position of our trading and investment working group with respect to the United States.
I met a Congressman who addressed the point mentioned by the noble Lord, Lord Whitty: the dichotomy of where we are. Republican Congressman Joe Wilson from South Carolina has a massive Trump-supporting base in his district, but he also represents a BMW factory that employs 10,000 people there. Any X range of BMW that you see on the streets of London is made in his district in the United States. He understands how interrelated are global supply chains in trade, but the White House has a position which is absolutely contrary to it. That is likely to be a contradictory position that we see going forward.
We know that the policy of the White House, with Ambassador Lighthizer and adviser Navarro, is for disruption, uncertainty and unpredictability, but we need to address the fact that it is not directed towards adversaries only; it is directed also towards allies and trading partners. That it is the President’s clear position to offend, insult and undermine a key ally to the United Kingdom in the Canadian Prime Minister should be a clear warning signal. Ultimately, it means that when we consider our approach to trade post Brexit—if it happens—we will need to address much more deeply the type of trading relationships that we have and not just what goods and services are included in them.
This Parliament will need a much clearer position on setting a government mandate, to enhance scrutiny arrangements and to have deeper means of ratification than those currently provided by the Government. I thank the noble Baroness, Lady McIntosh, for bringing these issues to the House. I know that they will set the cloth against which we look at our trade policies in a post-Brexit world. I look forward to hearing what the Minister has to say in response.
The Minister of State, Department for International Trade (Baroness Fairhead) (Con)
My Lords, I, too, thank my noble friend Lady McIntosh of Pickering for her Question. I thank her and other noble Lords for their rich and probing challenges. The noble Lords, Lord Whitty, Lord Stevenson and Lord Purvis, raised the challenges of the multilateral trading system, and I think we can all see that those challenges are there. As we said, the G7 was one of the most tense of recent years. My right honourable friend the Prime Minister made it clear that the discussions were difficult. But we also have to see that these meetings provide opportunities for close allies to discuss many things apart from trade, such as empowering women, security and sustainability, in particular of the ocean environment. It should be recognised that they have that purpose as well.
However, the debate today is on trade and that is where I will focus. I shall touch on the summit at the beginning. The agreed communiqué had two parts. The first was, indeed, about the importance of a rules-based international trading system and the continued fight against protectionism. The second strand was a trilateral discussion between the US, the EU and Japan, talking about level playing fields, industrial subsidies, inadequate protection of IP and non-market oriented policies. As noble Lords have highlighted, the communiqué was later dismissed by the President of the United States, but let me be very clear that the commitment of the UK to the contents of the communiqué and to the other non-US members of the G7 remains unchanged. Furthermore, there is a determination to work constructively with all parties, including the US, on that trilateral dialogue between the US, the EU and Japan.
As the noble Baroness, Lady McIntosh, pointed out, the summit took place against the backdrop of the US decision to raise tariffs on steel. We are allies—close allies—but where we disagree, we will say so. We disagree with these tariffs. We have made clear, and continue to make clear to the US Government at the highest levels, the importance of UK steel products to US businesses and defence projects. We will continue to work with the EU and the US Administration to try to achieve a permanent exemption because, as the closest allies, we think we should be permanently and fully exempt.
That said, we have proceeded with our complaint at the WTO. The noble Baroness asked for some information about the timing of that and where we were. On 1 June, through the Commission, we launched the case at the WTO. These typically last around two to three years. However, we are able to impose countermeasures relatively immediately. Those countermeasures were announced on 18 May and can be applied 30 days after that. We can also conduct studies and investigations, one of which is under way on steel, to look at whether any safeguarding is needed to protect our industry. That is what we are doing.
We have been very clear that we do not want a tit-for-tat escalation. The important thing here is to focus on the global overproduction of steel, and a multilateral approach is the right way to do it. The noble Lord, Lord Purvis, spoke of his concern about a trade war. It is a real concern and we need to work multilaterally to find a solution. Free trade matters. I take the point made by the noble Lord, Lord Purvis, about his visit to the US. Free trade is challenged at the moment in the US and elsewhere but we should look at what it has achieved: 1 billion people taken out of poverty. In the 1990s per capita income in developing countries grew three times faster if they opened their borders. In the developed world, the OECD found that a 10 percentage point increase in trade exposure led to a 4% rise in income per capita. It is good for consumers and good for choice.
In addition, multilateral systems allow us to bring down the cost of trade. I take the point made by the noble Lord, Lord Whitty, about some stalling in multilateral capability in the WTO but there is progress; for example, the recent entry into force of the Trade Facilitation Agreement. Once fully implemented, it will improve global trade by £70 billion. Yes, it has stalled in many areas. The noble Lord, Lord Stevenson, also made the point that the CPTPP was signed recently. That was 11 disparate countries. So there is progress.
The challenge for us is that we need to have free trade and a multilateral system that works for all. There has been a sense that it works on a broad basis but the costs and impact are local and immediate. That requires a much more sophisticated, joined- up reaction, both domestically and internationally. Domestically, we are making sure that the industrial strategy focuses on bringing skills and people so that we have skilled jobs all around the country, bringing a future for the young people of this country. We are linking that up with the export strategy that is coming down the track. We are trying to look at regional development as well.
The noble Lord, Lord Stevenson, mentioned the importance of trade for development. I am absolutely clear that trade helps not just prosperity but security and sustainability. I hope the noble Lord will be pleased to hear that the DIT has recently taken responsibility in government for leading the Prosperity Fund, aimed at development but with trade as one of its focal points.
Concern was expressed about leaving the EU. I will touch on some of the general numbers on our export performance that the noble Baroness, Lady McIntosh, gave. I think she gave the monthly numbers. I tend to look at the annual numbers because there can be volatility. On an annualised basis, exports grew by 7% and the deficit reduced. Historically we have seen a reduction in the amount of exports to the EU. We are likely to see non-EU trade growing faster over the long term because that is where faster growth is expected. As we leave the EU, we are clear that we need to grow and build a strong and ambitious relationship with our EU allies as well as countries outside the EU.
The noble Baroness, Lady McIntosh, raised rules of origin. Clearly, those are part of the negotiations. I agree they have a particular effect on food and drink. It is too early to say exactly what those will be. It is part of the technical way that we will have to adjust some of the agreements that we have with third countries, but we recognise that this is an issue that needs to be given serious attention and that is what we are doing.
A number of noble Lords raised concerns about the WTO and how it is working. We know it is not perfect but we believe the best way to manage it is from within. That is why I am happy to say that my right honourable friend the Secretary of State is in Geneva today with the WTO, meeting ambassadors there, including our ambassador to the WTO, making the case for free trade and a multilateralism that works for all.
As we exit the EU, our primary focus is on continuity, to make sure that there is no cliff edge for our businesses and the businesses of the EU. We are also working in parallel with the other parties that we are party to agreements with because of our membership with the EU. We fully understand the importance of EPAs with developing countries, which the noble Lord, Lord Purvis, talked about. I agree that non-tariff barriers are as much of an impediment as tariff barriers to their coming up and developing. That is clearly going to be a part of what we are making sure that we follow over.
When it comes to the TRA and the dispute resolution mechanism that we will have, we believe in free trade but we need to make sure that we have the powers to protect our consumers and our businesses. That is why we are working to set up the TRA—Trade Remedies Authority—before we leave the EU to ensure that we can continue to provide a safety net. We have taken a number of steps already, including a ministerial direction on 29 March 2018 to begin critical spend on the establishment of it prior to Royal Assent on the Trade Bill. We have begun recruitment, including of the chair and specialist roles. On 10 May 2018 we announced the location: Reading. Our aim is that the TRA will have a full suite of remedies at its disposal.
A number of noble Lords talked about the relationship with the US. Clearly, the US’s approach to free trade has raised some concerns. We have a commitment from the highest level to enter into preparatory discussions with us. Noble Lords will be aware that we cannot negotiate but we have a trade and investment working group. It has met three times already, focusing on SMEs and science and technology. We also have an official-led financial regulatory working group. We will be proceeding on that and there is active progression of that preparation.
Lord Purvis of Tweed
We are grateful for the Minister’s very clear response to the debate. While I was in Washington last week it was apparent that there is some lack of transparency over what issues are discussed and the scope of the working group’s discussions. Will the Government lay in the Library some more information about the meetings, their scope and the meetings that are planned for this trade working group?
Baroness Fairhead
I believe we give what we can. We obviously have to agree it with the US, but I will look into it and see what we can do in that context.
Environmental, human and labour standards do not have to come at the expense of future trade agreements, and we will be looking at all options in future trade agreements. The noble Lord, Lord Stevenson, made some very clear points about human rights. It is a very complicated area and I think I would prefer to write to him.
This is a challenging time for the multilateral trading system. However, we will continue to be a strong believer in the multilateral system in championing the needs of developing countries, and a strong voice that wants the lives of citizens all around our country and in the world to be strengthened so that we have a more prosperous, secure and sustainable world.
UK-US Trade: Iran Sanctions
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Baroness Fairhead
We are actively providing advice through our team on the ground in Iran and through our sector and other teams in DIT. We are trying to make sure that any business that is non-sanctioned is able to flow. We would say that all businesses have to take into account the commercial, legal and financing risks in any transaction, and clearly these sanctions make that difficult. We are trying to work with the US. The noble Lord is right that there was persistent lobbying but the sanctions were still imposed. That is why we are working with our EU colleagues and directly with both the US and the EU to try to protect our businesses and encourage the US to allow us to maintain our economic ties, because we think that they are important.
Lord Purvis of Tweed (LD)
My Lords, the Government have lauded the US-UK Trade and Investment Working Group for the progress that has been made in the relationship. Can the Minister confirm that this issue in particular has been raised at the trade working group, because it would be utterly unacceptable for UK businesses to lose US market access for carrying out perfectly legal trading relationships under an international agreement to which the UK as a sovereign entity has signed up? Can she further confirm that the arrangements being put in place potentially to shield banking transactions, which are critical to the City of London, will carry on post Brexit next March?
Baroness Fairhead
The conversations we have had with our US colleagues have been very significant. I would say that we do have a deep and strong relationship with the Americans, but when we disagree with them, we say so. There has not been a meeting of the US-UK Trade and Investment Working Group since the sanctions were imposed, so there has been no opportunity for discussion through that group. However, we are making representations through my right honourable friends the Prime Minister, the Foreign Secretary and the Chancellor and we are ensuring that those points are being heard. On banking, post Brexit, we are clearly trying to ensure that we have as fluid a border as possible, so we are trying to make sure that our financial services industry, which is critical to the economy and the country, is protected as much as possible.
Secretary of State for International Trade: Visits
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Baroness Fairhead
New Zealand is indeed one of the countries that we hope to have an early free trade agreement with. It is one of the nations with which we have trade and investment working groups. We have 14 of those and 21 countries are participating. It is clear that they are engaging with us. We are working with them very actively and they are looking to work with us on areas and sectors. The noble Lord shakes his head but I know that these trade and investment working groups are having an effect and people are starting to focus on specific areas where we will be able to start negotiating. As the noble Lord knows, we are unable to negotiate any future free trade agreements while we remain a member of the EU.
Lord Purvis of Tweed (LD)
My Lords, last month’s official data from the EU showed that UK exports to non-EU countries fell by 8% over the last year; to the EU they grew by 6%. The Government’s position to turn this around is that there will be trade deals with non-EU countries that we are not currently part of in the EU in operation immediately after the Brexit period. However, her predecessor said in an interview with the Guardian on Friday that,
“it will take three to five years. It won’t happen overnight and in the interim companies might think twice about investing and consumers might decide they want to be more cautious”.
Is the noble Lord, Lord Price, right?
Baroness Fairhead
Exports grew overall by more than 10% last year so there has been growth. Regarding how long it will take a free trade agreement to come into effect, we will be able to negotiate future free trade agreements from March next year as part of the implementation period. We will be able to negotiate, sign and ratify without implementing. There are a whole range of free trade agreements that can take anything from a year to multiple years. There are also many other types of cooperation that we are looking at, as noble Lords will be aware, such as joint trade reviews, economic partnerships and mutual recognition agreements. There are a whole series of trade arrangements we can have with other countries and we are looking at those. Our drive will be what is in the best interest overall of the UK and UK business.
Worldwide Free Trade
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Baroness Fairhead
Let me take that in two parts. On the relationship with the EU, it will clearly remain a very important trading partner for us. We need to make sure that we have as frictionless an environment with the EU as we possibly can. We believe that the freedom to be able to make free trade agreements with other countries will allow us to have the trading agreements in the future that can boost our trade further. Regarding those qualitative assessments that we made as part of the impact assessment, we looked at one report from Head and Mayer which had looked at 159 academic reports about the benefits of FTAs. All I can say is that from that information, while it depends on the scale, the relationship and the supply side, the median increase is around 32% from a free trade agreement.
Lord Purvis of Tweed (LD)
My Lords, the official international trade in goods statistics, which were published on Friday, show that in the year to February there was a growth of 1.7% in the EU’s trade with the rest of the world. Worryingly, those same statistics show a decline of 8% in UK trade with the rest of the world. As we embark on the first trade agreement in history with the EU 27 which will make trade harder rather than easier, if this House votes for the UK to remain part of the customs union with the EU—which, incidentally, saw a growth in our exports of 6% over the same period—we will be acting in the national economic and strategic interests of our country.
Baroness Fairhead
If we look at the exports total for the UK last year, it increased by over 11%. We therefore have seen export growth. We believe that the EU has to remain an ongoing and really important trading partner. We are working with trade and investment working groups across a number of countries—14 working groups involving 21 countries—in which we are exploring where we can improve trade further. As I said earlier, the CHOGM this week is particularly important because, in many ways, the Commonwealth is an area where we have underinvested in trading relationships. This is a great opportunity for all members of the Commonwealth to change that.
United States Tariffs: Steel and Aluminium
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Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Baroness, Lady Fairhead, for repeating the Statement. This is my first opportunity to debate her at the Front Bench, and I am looking forward to working with her on the international trade Bill when it reaches your Lordships’ House.
We have, over the past year, heard regular statements about problems affecting our steel industry, although this announcement of tariffs on steel and aluminium imports, blatantly aimed at protecting US producers, must rank as one of the worst because of its implications more widely for free trade.
The House of Commons Library briefing paper on the steel industry in the United Kingdom 2016 suggested that the steel sector accounted for £1.6 billion of UK economic output, which is about 0.1% of the UK economy and 0.7% of our manufacturing activity. It has about 600 businesses, and 32,000 people are employed in the sector. The UK is the 18th-largest steel producer in the world, the fifth-largest in the EU after Germany, Italy, France and Spain. Approximately 15% of 350,000 tonnes of steel was exported directly to the United States in 2017.
We should extend our concern and support to the employees of British steel firms and their communities, which must be very worried about this questionable and ill judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the economic hit that will be felt, particularly in communities outside London?
I have three further questions for the Minister. First, this announcement was not unexpected. It followed a series of pledges from President Trump to take what he calls “tough and decisive action” on perceived threats to the US national interest and to domestic producers as a result of international trade competition from overseas. It is very much in line with his “America first” platform. When did the Government become aware that President Trump was going to impose tariffs on imported steel and aluminium? What representations did the Government make to the White House prior to the announcement, and what assurances were sought that these tariffs would not be applied to UK exports?
Secondly, earlier this year, President Trump announced tariffs on imported washing machines and solar panels to give a boost to US producers in these sectors. President Trump also imposed a 30% tariff on imported solar cells, and last year the Department of Commerce sought to impose tariffs of up to 292% on imported narrow-body, medium-range jets until the US International Trade Commission accepted the arguments made by Bombardier and others and overturned that decision. What other sectors of the economy are the Government concerned about? What representations are they currently making to ensure that the UK will be able to export to the United States in the near term without facing unfair tariffs? For example, the President has mentioned additional protection for intellectual property. Given the strength of our creative industries, have the Government taken up that issue in particular?
Finally, the Secretary of State announced the establishment of a US-UK Trade and Investment Working Group in July last year, a group that has met twice since then. Given that the President has said he would welcome a trade war and thinks America would win it, what discussions have been had about steel, aluminium and the other new tariffs at these meetings? What assurances have been sought from the US Government about exemptions for UK exports in any free trade agreement that might be in consideration post Brexit?
Lord Purvis of Tweed (LD)
My Lords, we too are grateful to the Minister for repeating the Statement. Just at the time that we are loosening our ties with our largest single integrated market in the European Union, we see the next bilateral largest market in the United States moving towards a protectionist tone. Over recent months we have been repeatedly counselled by Ministers that we should look at not just the rhetoric of the United States President but at the actions. Now it is quite clear that there are repeated actions which are contrary to the interests of the British economy. The announcement of the Secretary of State today and of economic advisers last week are clear.
When I was in Buenos Aires as an observer at the ministerial conference of the WTO, the US left without a communiqué being signed. These worrying trends are clear to see. Last year, the Secretary of State, Dr Fox, said, while in the US, referring to the UK/US relationship:
“Firstly, we must lead by example, and work to encourage our trading partners across the world to support, and adhere to, the rules-based global trading system”.
Will the Minister therefore confirm that it is the view of Her Majesty’s Government that this action by the President is clearly contrary not only to how strong allies with a so-called special relationship should act but to international law?
We also know that in the presidential proclamation the President said that there would be a mechanism for reviewing the decision on impairing US national security if the countries concerned showed that their actions would not impair that national security. However, in recent discussions with the US, the EU and Japan could not discern on what basis these issues would be considered. What is Her Majesty’s Government’s view on these blackmail conditions that President Trump would seek to impose on allies for there to be adjustments to, or the removal of, these tariffs?
We have heard reference to the working group, which I have raised in this Chamber before. Did officials on the working group inform us that there was a likelihood of these tariffs being imposed on the United Kingdom? The Secretary of State indicated that he was due to visit the US and had no doubt planned to discuss the progress of the working group. What status does the working group now have given that we are clearly in a trade dispute?
Finally, we and our allies around the world continue to believe in free trade, even if the United States does not. How will we seek redress within the WTO mechanisms? Will the Minister reassure the House that we will be in precisely the same position as the European Union if we appeal for redress under the WTO mechanisms? This trend of protectionism cannot be in the interests of the United Kingdom. Clearly, our interests lie in standing shoulder to shoulder with our European Union allies on this issue.
Baroness Fairhead
My Lords, regarding the core of the problem, which is global excess in steel capacity around the world, we have been clear as a Government, and my right honourable friend the Prime Minister has been absolutely clear, that this is the wrong way to approach a global problem. The right way to approach it is the way we have been encouraging: through summits, where we have discussions about the measures countries will take to manage the problem in a balanced, global, multilateral way. We have been clear that we do not think this decision is in line with our approach, and we do not agree with it.
We are trying as a Government to work as part of the EU—as you know, we have a duty of sincere co-operation, which we fully expect and intend to fulfil. The first aim will be to stop this happening at all, through a process of negotiation and engagement. There have been multiple examples of engagement, from the Prime Minister to the President and the Secretary of State for International Trade, all the way through government. We will also work with the EU to look at the protections we can put in place if our aim cannot be achieved. My difficulty in addressing the comments of the noble Lord, Lord Stevenson of Balmacara, about the effect on jobs, is that we do not know what the state of the negotiations and engagement will be, what exemptions can be achieved and therefore what the effects will be on which products. It is too early to say.
However, we will absolutely be supporting UK steel and aluminium companies, through multilateral bodies, trying to ensure a global playing field, and, through various initiatives, ensuring that the EU is working at the global summit on 28 specific recommendations to address capacity. We believe that that will help our steel and aluminium industries.
We are also working with the steel industry. I mentioned that we have met with Gareth Stace, the director of UK Steel, and we are working within BEIS to ensure that UK steel companies which think they will be affected present their cases as actively as possible in the US, so that companies there ask for exemption for their products. We are encouraging trade unions and industry to work with us; we find that in the US there is significant support from both Republicans and Democrats in Congress for open and free trade.
The noble Lord, Lord Stevenson, asked how much of a heads up we had about this. There have been noises in the press about potential statements. It was broadly mooted before a meeting in Sofia, where my right honourable friend the Minister of State for Trade Policy in the DIT was present. It was discussed in broad terms then but, until an executive order was put in place on 8 March, it was speculation.
Before we leave the EU we clearly cannot be in any formal negotiations, so the trade and investment working group is discussing options only. It has been making progress and is due to meet, as planned, next month, so that work is continuing. I believe the noble Lord, Lord Purvis of Tweed, asked specifically about that. We welcome the US in saying that they look forward to a free trade agreement when the UK is in a position to negotiate one.
In terms of the EU and the safeguards, this Government remain absolutely committed to the WTO. We believe in the principles of free trade but in a rules-based, multilateral environment, and we will continue to support the WTO. We believe that our role here is to make sure that the benefits are seen and that we do not raise the temperature of the debate, and to engage with the EU and industry on behalf of the UK but as part of the EU.
Brexit: Trade Agreements
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Baroness Fairhead
I thank the noble Baroness for that input. It is true that, within the EU treaties, our trade agreements have been underpinned by really deep and enforceable environmental and human rights protections. There is an absolute commitment by the Government that those will be maintained as we go forward.
Lord Purvis of Tweed (LD)
My Lords, medicines, chemicals and aviation are a fundamental part of the British economy and will be key elements of any trade agreements going forward. Can the Minister confirm that it is the Government’s position to propose that those sectors will continue to be under EU regulation, rather than UK regulation? Any future trade agreements will therefore have to comply with EU regulations, over which the UK will not have a say, and those components will be under the ongoing auspices of the European Court of Justice.
Baroness Fairhead
I cannot give that assurance to the noble Lord, as it has not been agreed. What I can give an assurance on is that the UK has been at the very forefront of the highest standards for public safety and the environment, not just for the UK but, as the noble Baroness, Lady Hayter, said, for the world. We will continue that commitment because it is an absolutely critical part of the belief of, I think, all parts of this House.
Brexit: Commonwealth, Trade and Migration
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Lord Price
I very much agree with the noble Viscount that this is best handled on a business-to-business level. However, the Government have a role to ensure that we have the very best framework to allow businesses to prosper by trading with each other.
Lord Purvis of Tweed (LD)
My Lords, the United Kingdom currently enjoys free trade agreements with 32 out of the 52 Commonwealth countries by virtue of our membership of the European Union customs union. The Commonwealth Secretariat has said that if we leave that union and revert to World Trade Organization rules, such positive trading relations with those countries cannot be guaranteed, and not only that; the secretariat has also calculated that, on 2015 figures, the least developed Commonwealth countries would have faced $800 million of increased tariff payments to export to the United Kingdom if we were on WTO rules. Which part of that does the Minister agree would be, to quote the Foreign Secretary, “perfectly OK”?
Lord Price
The main point of our meeting last week with Trade Ministers from around the Commonwealth was to agree a smooth transition, whether there will be an association agreement, a GSP scheme, an EPA or even an FTA. As the noble Lord pointed out, there are a number of countries in the Commonwealth with which we currently do not have FTAs, or any agreement other than WTO. At the moment, we are on WTO terms with Australia, New Zealand, Canada, India and many others. We believe that in the new world all those can be improved to the benefit of the UK and the Commonwealth as a whole.
Brexit: World Trade Organization Rules
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Lord Price
The noble Lord mentions some research. At the moment much research and many figures are bandied around, all based on assumptions about a future which right now none of us is clear about. However, I can agree with the noble Lord that any disruption in trade will be to the disadvantage of people both in Europe and in the UK, of whom there are 500 million. That is why this Government have talked about a smooth path to the new order post-Brexit, and we will work diligently to achieve that.
Lord Purvis of Tweed (LD)
My Lords, it is exactly six months this week since the referendum and we are still waiting for the Government to be clear about their stance on the customs union. We are also still awaiting urgent clarification, for which last week’s Lords Committee report specifically asked, of the legal position regarding when the UK can start negotiating any trade agreements—while we are discussing the exit terms with the European Union, or afterwards. When will the Government provide that legal clarification? It does not have to wait on any of the politicking we have seen in the last week, with the Secretary of State talking about making a case in Cabinet rather than in Parliament.
Lord Price
My Lords, we are very clear on the position. We are clear that, while we are a member of the EU, we cannot negotiate or sign free trade agreements but we can have exploratory discussions, which we are having at the moment. Once we leave, we will be free to negotiate and sign free trade agreements for the United Kingdom.