European Union (Definition of Treaties) (Economic Partnership Agreements and Trade Agreement) (Eastern and Southern Africa States, Southern African Development Community States, Ghana and Ecuador) Order 2018

Baroness Sheehan Excerpts

Tuesday 27th November 2018 Lords Chamber

Finally, we need to choose a different direction for our independent trading policy, should we have one, that prioritises transparency and works not only for our self-interest but for the interest of the developing world. I beg to move.

[Baroness Sheehan (LD)]

My Lords, I thank the Minister for her opening remarks. However, I should say at the outset that I am not quite as sanguine as she is about the benign nature of the EPAs. I also thank the noble Lord, Lord Stevenson of Balmacara, for tabling his amendment to regret this SI, drawing attention not only to the shortcomings of the current parliamentary procedures when it comes to accountability and the scrutiny of trade deals but also to the iniquities of the EU EPAs. Although we on these Benches will not oppose ratification, we think it important to draw attention to some of the issues that the EPAs will raise politically, both for ourselves and the EU and for the third-world countries in Africa that I will predominantly be talking about.

The economic issues raised will not be that immense but I think the political ones are problematic. EPAs are controversial. The key question that arises is: who benefits more from EPAs, the partner country from the ACP nations—African, Caribbean and Pacific—or the member states of the EU? That is a question worth asking because EPAs were conceived as drivers of change to kick-start reform and contribute to good economic governance, helping ACP partners to attract investment and boost their economic growth. However, I am more inclined to agree with Traidcraft when it says in its well-argued briefing that rather than doing what they say on the tin, EPAs instead undermine development and hinder regional integration. Take, for example, Tanzania in east Africa, part of the ESA EPA. Tanzania, as a least-developed country, currently with duty-free and quota-free access in the EU under “Everything But Arms”, obviously has little interest in an EPA that offers reciprocal preferential access. Why would it?

On the other hand, Kenya, a non-LDC, stands to lose preferential market access for flowers in the EU if the EPA is not signed. Your Lordships will see the problems posed by EPAs pitting one east African nation against another. That is certainly not conducive to regional harmony, let alone promoting regional trade integration.

This is especially problematic now that efforts have been stepped up about the African Continental Free Trade Area. AfCFTA is unlikely to be fully implemented for some time, but it is indisputable that Africa needs regional integration without distractions, so that African countries can give each other the same preferential access as they give the EU. In the words of Vera Songwe, executive-secretary of the UN Economic Commission for Africa, and formerly a country director and senior economist at the World Bank:

“There should be a strategic pause on the EPA negotiation processes until the finalization of the CFTA”.


Will the Minister comment? It does not need much imagination to see that premature liberalisation will undermine development of infant industries and domestic production, leading to a decline in manufacturing and industrialisation and increased unemployment.

How shall we proceed? One way forward as we negotiate further free-trade agreements once—or if—we leave the EU and the implementation period is over, would be to pursue a more flexible EPA agenda which addresses specific concerns of the ACP countries, for example allowing greater flexibility if it can be shown that specific clauses undermine regional integration. EPA support measures could be reinforced to satisfy the requirements to promote inclusive and sustainable growth, in keeping with the sustainable development goals.

In particular, we should strive to meet the overarching commitment to leave no one behind. Under SDG 9, “Industry, innovation and infrastructure”, the UK has committed to meet targets 9.1 and 9.2. Paragraph 9.1 commits us to:

“Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure”.


Paragraph 9.2 commits us to:

“Promote inclusive and sustainable industrialization”.


It would be useful to hear from the Minister what thought has been given to how the UK will approach trade deals with the developing world, should the unthinkable happen and we leave the EU with no idea of our destination—something that seems about to happen, maybe. I have little doubt that, should the opportunity to renegotiate these deals arise, they will be embraced enthusiastically by EPA countries.

Before ending, I raise reservations about the current process of ratification of international treaties and trade agreements. That this debate is taking place after implementation underscores how ludicrous is the current process, lacking accountability and parliamentary scrutiny. It is crying out for reform. The need for urgent reform is reinforced by the Government’s impact assessments, which are inadequate to say the least. Those for the Ghana agreement are a case in point. Within it are claims of unequivocal benefits from the agreement, despite acknowledging that there is a lack of quantifiable data to back up those claims. The assessment is one-sided and limited to the impact on the UK, with no mention of development impact. It makes unfounded claims that the Ghana EPA will support “more-integrated regional markets” and “simpler and more flexible rules of origin”, with no mention of the political friction created by Ghana signing a stand-alone agreement outside its customs union. Some might say that it was signed under duress.

Further, the impact assessments, although they concede a net deficit for Ghana, nevertheless, still propose that this is a developmentally friendly agreement. Examples can also be found in the other impact assessments, including the SADC countries—the South African Development Community—whose assessment states clearly that the impact on poverty reduction will be marginal.

It is clear that these impact assessments are not fit for purpose and highlight why greater parliamentary scrutiny of free-trade agreements is essential if the UK leaves the EU and moves towards negotiating its own trade agreements.

[The Earl of Sandwich (CB)]

My Lords, as the noble Lord, Lord Stevenson, said, I was not sure that I would still be here this evening, but owing to changes in the timetable I am delighted to be here. The noble Baroness has already received advance notice of some of these remarks.

I support the amendment to the Motion because, from my limited understanding, ratification of these SIs has been a very disappointing procedure both in another place and in this House. It seems as though Parliament has somehow been the loser when it no longer has any influence in these international agreements. It is therefore perhaps inevitable that the Opposition have tabled an amendment, which deserves support from around the House.

I welcome the noble Lord’s remarks, first about the Trade Bill, because this is a preamble to what we expect to come; it is just a rehearsal. I also agree with the noble Baroness and the noble Lord that we need a committee dedicated to this particular subject—as we reorganise the EU committees, perhaps. There is no question about that.

Be that as it may, as we have heard, there are questions hanging around the EPAs from a decade ago that still concern many organisations with expertise on trade. I have worked with some of them over the many years that I have been working on development. Taking Africa alone, I can think of worries about rules of origin, GIs, reciprocity, and about tax—in short, about whether EPAs or interim EPAs are really worth having when you already have 100% access to EU markets through the EBA agreements and the GSP+. There is also a concern, as we have heard, about whether the regional groupings such as SDEC and ECOWAS can truly reflect the situation of individual states, which are all so different. Then there is education: how many citizens in these countries are sufficiently aware of the pros and cons of entering these agreements?

I know that I am bringing up very old concerns that have been expressed by civil society over many years. I hope that the noble Lord, Lord Judd, will follow me and show some of his experience of fair trade over many years. ActionAid, ODI and Traidcraft have done a lot of work on the effects of EPAs on wealthier countries such as Ghana and Kenya. But the question is whether our Government have provided enough answers. Should there not have been more impact assessments to accompany these SIs? The whole point of scrutiny is that you are given a proper opportunity to make judgments, and quite apart from the strange ratification process already referred to, it seems that proper briefing on this occasion has been sadly lacking. So does the Minister agree, apart from answering all the questions first, that this whole procedure is back to front anyway; and, secondly, does she believe that some countries affected are being dragged into this by the EU without proper consultation and examination?