All 10 contributions to the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024

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

1st reading
Wednesday 8th November 2023

(8 months, 1 week ago)

Lords Chamber
Read Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text
First Reading
15:10
A Bill to enable the implementation of, and the making of other provision in connection with, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The Bill was introduced by the Earl of Courtown (on behalf of Lord Johnson of Lainston), read a first time and ordered to be printed.

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

Second Reading
Scottish, Welsh and Northern Ireland Legislative Consent sought.
15:25
Moved by
Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton
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That the Bill be now read a second time.

Lord Cameron of Chipping Norton Portrait The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con) (Maiden Speech)
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My Lords, on behalf of my noble friend Lord Johnson of Lainston, I beg to move that this Bill be now read a second time.

It is truly an honour to stand at this Dispatch Box and make my maiden speech in this House. I have always respected the work that is done here, so often a patient, diligent and considered complement to the other place. I hope to play a full part in your Lordships’ House. Indeed, I was in the other place for only 15 years, 11 of which were as leader of the Opposition or Prime Minister, so I hope that I can look forward to many more years in this House. When I look at the ornate, carved wooden panels that surround us and compare them with my now infamous shepherd’s hut, I can tell your Lordships that this is already a significant upgrade.

I thank my introducers—the Lord Privy Seal, my noble friend Lord True, and the Government Chief Whip, my noble friend Lady Williams of Trafford. I have to admit that I recommended them both for the peerage. Indeed, I am in what Margaret Thatcher described in her maiden speech here as a

“delicate position … responsible as Prime Minister for proposing the elevation to this House”—[Official Report, 2/7/1992; col. 897.]

of quite so many of its current Members. I hope that noble Lords will forgive me for my part in putting—how can I put it?—space here at a premium. I note that the Liberal Democrat Benches are particularly full. I always said to my Deputy Prime Minister, partner and friend Nick Clegg that his party would feel the benefit of participating in the coalition for many years to come. I just did not predict exactly how that would manifest itself. I also thank Black Rod, the doorkeepers, the police and other staff for facilitating my introduction yesterday and for warmly welcoming me back to Parliament.

I first set foot in this place as a teenager in the 1980s, when I worked briefly as a parliamentary researcher. I watched from the Gallery as Lord Macmillan, aged 90 and leaning elegantly on a stick, delivered his maiden speech. It was a thoughtful, measured evisceration of the late Lady Thatcher’s Government and their handling of the miners’ strike. I intend no such censure for my successor in 10 Downing Street. Indeed, wanting to serve under Rishi Sunak, whom I believe is a strong and capable Prime Minister, was one of the reasons why I accepted his offer of this role.

I had two former party leaders in my Cabinet, alongside many veterans of Tory leadership campaigns, one of whom was the noble Lord, Lord Clarke, and I valued all their advice. I hope that some of my experience will help the Prime Minister in meeting the vital challenges that we face as a country. That said, it was a surprise to be asked. I have not been sitting like some latter-day de Gaulle at Colombey-les-Deux-Églises waiting to be asked—how shall I put it?—to take back control. Nor am I Cincinnatus, hovering over my plough. I leave all classical allusions—and illusions, for that matter—to another former Prime Minister with whom I shared a number of educational experiences.

There is a strong precedent for Members of this House from all parties serving in the Cabinet—Peter Carington, Alec Douglas-Home and, more recently, the noble Lords, Lord Mandelson, Lord Adonis and Lord Frost, and the noble Baroness, Lady Morgan of Cotes. Like all of them, I respect the primacy of the other place. As tradition dictates, a Secretary of State who sits in the Lords is mirrored by the most senior Minister in their department. That Minister is the right honourable Andrew Mitchell MP, who will deputise for me in the other place. I believe that he will do an excellent job.

I look forward to answering noble Lords’ Questions monthly and will appear before all the relevant committees. I recognise my responsibilities to this House and am happy to consider other appropriate mechanisms so that Parliament is able to scrutinise all the work of my department.

The noble Lord, Lord Mandelson, sent me a particularly charming welcome, but he pointed out that I am a comeback novice, as this is only my first compared with his three. I suppose my response should be to point out that to make three comebacks you need both his prodigious talent and to be sacked twice by the Prime Minister, which is a fate I hope to avoid.

I take my seat bearing the title of Chipping Norton. In fact, the first message I received after my appointment was from the vicar’s wife, making sure that I would take the town’s name, but I am not claiming divine intervention; it was an easy choice. This beautiful place is one of the west Oxfordshire towns I represented in Parliament. It is the place where I brought up my children and the place our family still considers home.

The Chippy Larder food project, where I volunteered for over two years after the start of the pandemic, will have to manage without me for a while. Last year, three of us loaded up a lorry full of food, clothes and supplies, and drove it to the Red Cross centre on the Polish-Ukrainian border. Our leader was Rizvana Poole who, Members will be pleased to hear in a House that values cross-party collaboration, is one of the town’s Labour councillors.

It was a privilege to make my first visit as Foreign Secretary to Ukraine last week. I told the President how much we all admire the bravery and fortitude of the Ukrainian people. We will stand with them for as long as it takes. I was proud to hear him describe Britain as their best partner in their struggle.

His country’s plight is a reminder of the great challenges we face. The things we take for granted— freedom, the rule of law, democracy—are under threat across the world. These are daunting times: invasion in Europe, war in the Middle East, climate change, growing world poverty, illegal migration, threats of terrorism and new pandemics. It has never been clearer that our domestic security depends upon global security.

We must approach these challenges from a position of strength. Our Foreign Office, Diplomatic Service, intelligence services, and aid and development capabilities are some of the finest assets of their kind anywhere in the world, and I have seen at first hand the professionalism, passion and patriotism of the people who staff them. I know that they have been expertly and diligently represented in this House for many years by my noble friend Lord Ahmad of Wimbledon, with whom I am proud to work.

As Prime Minister, I learned that the respect we command overseas also depends on success at home. We certainly did not get everything right but, over six years, we smashed some of the big political orthodoxies. We showed that you can grow the economy and cut carbon emissions, cut the deficit and create jobs, achieve the best school results in the poorest areas and start to build a society that is multi-ethnic, multiracial, proud and patriotic. Today, with a British-Indian Prime Minister at our helm, we have a good opportunity to do all those things and ensure that we stand taller and stronger in the world.

I turn to the subject of today’s debate. The UK will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, otherwise known as CPTPP. This Bill helps to make that happen. This is an age of rapid growth in the Indo-Pacific region, and the political shifts we face are the first reason to support this Bill. Countries in the Indo-Pacific are expected to drive the majority of global growth between now and 2050. I want to continue this Government’s work to deepen our relationships with this region and support shared security and prosperity.

We have signed the AUKUS pact with the US and Australia, and the Hiroshima accord with Japan. We have become a dialogue partner of ASEAN and agreed ground-breaking digital deals with Singapore. Membership of this vast global trade area is the next vital step on this journey, putting the UK at the heart of a group of some of the world’s most dynamic economies. It will bring us even closer on pressing challenges such as climate change, give us a new impetus to influence geopolitical competition around rules and norms, and help diversify our supply chains and therefore support our economic resilience.

The second reason for passing this Bill is the economic benefit this deal brings to the UK. Britain will join 11 countries spanning Asia and the Americas, with a combined population of 500 million people. We will have access to a combined GDP of nearly £12 trillion—15% of global GDP. This deal positions British companies to expand in new markets, giving us, for instance, our first trade deal with Malaysia—an economy worth almost £330 billion last year. It means more than 99% of the UK’s current exports to other members become eligible for tariff-free trade. The deal’s ambitious service provisions should also boost the £32 billion of services that British firms already sold to these countries last year.

UK businesses will be operating more on a par with local firms. Red tape can be cut and data localisation requirements removed. Traders will have more certainty, and it looks set to increase our attractiveness to global finance, even as competition for capital grows ever more intense.

Investors such as Japanese firm Fujitsu, an employer of more than 7,000 people here in Britain, see great promise from the deal. Free trade is good for British businesses, creating new opportunities and spurring innovation. I firmly believe that it benefits British consumers as well. Tariff reductions mean cheaper import prices, better choice and higher quality on a whole range of things, whether it is fruit juice from Peru or vacuum cleaners from Malaysia.

The final reason for deserving your Lordships’ support is the precise scope of the Bill. While the deal itself is wide-ranging, in many areas it does not require comprehensive UK legislation. The Bill therefore focuses on those few areas where we need primary legislation to meet our new obligations.

First, it covers technical barriers to trade. Conformity assessment bodies such as the British Standards Institution exist to assure consumers that a product meets certain standards. The Bill will allow for conformity assessment bodies established in other participating countries to apply for approval here in the UK, but I can assure noble Lords that these provisions will not change British product standards.

Next, on government procurement, the Bill will ensure that suppliers from participating countries have access on an equal footing to those UK procurements covered by the agreement. We have responded to the devolved Administrations’ previous concerns about the use of concurrent powers in such Bills by drafting these provisions in consultation with them. I believe that shows our commitment to working across all nations of the UK to forge a common approach.

Finally, on intellectual property, the Bill will align our approach to copyright with that of other members. For instance, it will expand the basis on which foreign performers can qualify for rights here in the UK. It will also align our approach to geographical indications and designations of origin, which I am happy to say is good news for things such as Lincolnshire sausages, Cheddar cheese and of course Scotch whisky.

In each of these specific areas, UK bodies and businesses will benefit from corresponding treatment in other participating countries. The Bill therefore reduces a whole series of complex obstacles to trade, including copyright, patent, standards and public procurement. These points are often underappreciated, but they will benefit UK businesses and consumers alike.

Noble Lords may well ask whether these benefits come at the expense of things we should hold dear. I believe that this is not the case, and I want to run through some of the concerns that have been expressed. Will it lower our own high standards on food and product safety, animal welfare, the environment or workers’ rights? No, we will change none of these in order to accede, and we will continue to set our own standards here in the UK. What about the issue of undercutting farmers? We have negotiated both quotas and transitional safeguards for agricultural imports. The National Farmers’ Union president, Minette Batters, has spoken of the deal’s potential, as she put it,

“to get more fantastic British food on plates overseas”.

There are often concerns expressed about the NHS and so-called privatisation by the back door. Let me be clear; the NHS and its services were never on the table in these negotiations. If you want to see the Government do more in this Pacific region to end unsustainable palm oil farming or to champion human rights, this agreement will increase UK influence in the region, which we can bring to bear on all of these vital issues.

Ultimately, we retain flexibility with this deal. We will continue to set our standards, determine our foreign policy and make the trade arrangements that best suit us with others in the future.

I look forward to hearing as much as possible of the forthcoming debate. I might have to be excused before it ends, should business continue into the evening, to welcome the President of South Korea at the state banquet hosted by His Majesty the King. The Opposition Front Bench has been very generous and understanding on this point, and I want to thank them. I also thank my noble friend Lord Johnson of Lainston, who has brought enormous private sector experience into the Government. He has led the work on this Bill and will respond to all your Lordships’ questions when closing.

This is a narrow Bill, but the benefits are considerable. With others queuing up to join the CPTPP, the Prime Minister, Rishi Sunak, has ensured that the UK got in there first. The deal offers possibilities for our whole country, from distilleries in Dorset to AI pioneers in Wales, car part manufacturers in Northern Ireland and digital forensic experts in Scotland. It is an investment in a brighter future—and I should know, because I was the future once.

15:41
Lord Collins of Highbury Portrait Lord Collins of Highbury (Lab)
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My Lords, I congratulate the noble Lord on his maiden speech to this House and of course welcome him back to Parliament. I can reassure him on one vital point: the Opposition are at one with the Government on support for Ukraine and that will continue. This Parliament is united and this country is united on that issue.

To pick up one of the points the noble Lord mentioned, in his last PMQs to the other place he reminded MPs that he had once been the future. Of course, now Rishi Sunak has given him a chance to go back to the future without the need for a DeLorean. However, given the recent high turnover in Foreign Secretaries, I fear time might not be on his side.

The noble Lord may not be aware, but I have repeatedly praised his legacy on global international development, following on from the leadership given by Gordon Brown. In his foreword to the international development White Paper, published yesterday, the noble Lord reminded us that, 10 years ago, he co-chaired a panel for the United Nations on the future of development. The subsequent report paved the way for the 2015 sustainable development goals, ensuring that no one was left behind.

I mention this because some of the key concerns we have on this legislation relate to its impact on the world’s ability to achieve those goals by 2030. Although we welcome accession to the CPTPP, it does not make up for the failure to deliver on the trade deal that was due in October for India or the US trade deal promised by the end of 2022. I point out to the noble Lord that the department responsible for the Bill projected that the CPTPP deal would offer less than 1% to our GDP—and even this has been the subject of doubt by the Secretary of State.

Our foremost concern in relation to the deal is the investor-state dispute settlement provisions. We need to understand whether the economic benefits outweigh the risks to jobs, workers’ rights and sovereignty that this association brings. This type of corporate court system allows foreign companies to sue Governments for any actions that they argue could affect their profits—a system used in the past to challenge increases in the minimum wage and countries’ attempts to bring public services back into public ownership. What is astonishing is that the Government did not have to subject themselves to such legal shackles. When New Zealand joined the CPTPP, it opted out of the ISDS system with the countries that invested most in New Zealand. The UK Government asked for no such exemption, which we had with the Australia and New Zealand trade deals. Why not? Surely that is the sort of reassurance that the noble Lord the Foreign Secretary referred to.

The TUC, the Trade Justice Movement and Greenpeace have all argued that its presence poses a threat to rights, jobs and sovereignty. They argue—I draw this specifically to the attention of the noble Lord the Foreign Secretary—that it will undermine SDG 8, on fair labour laws, making it easier for goods that are made with exploited labour to be dumped on the UK market and easier for unethical companies and investors to do business with countries where it is easier to exploit workers. They also argue the ISDS court system means that protections of workers’ rights in the UK, such as those around safe working hours, could be challenged by multinational corporations, which could argue that such protections affect their profits.

We know that jobs in manufacturing in the UK are already being threatened by cheap imports of goods, such as steel and aluminium from Vietnam, some of which, as we have heard, are actually produced in China but routed through Vietnam to avoid the anti-dumping tariffs that the UK has on Chinese goods. According to the TUC, the CPTPP is likely to increase the dumping of goods from Vietnam, by providing it with more access to the UK market. In his response today, will the Minister tell us whether the Government have made any assessment of these risks? How about an assessment of the number of British jobs in steel, aluminium and other UK manufacturing industries that could be put at risk as a result?

Nowhere in any of the intergovernmental discussions on China’s potential membership of the CPTPP has there been any mention of its record on human rights. The text of the treaty itself contains no meaningful, enforceable clauses on this issue. All Members of this House will be aware of the text of the genocide amendment passed to the then Trade Bill, put forward by the noble Lord, Lord Alton. I hope the Minister can tell us in his response whether the Government have assessed China’s application to join the CPTPP against the risks and challenges set out in the integrated review refresh. It is vital that we have transparency on this issue, so that we know the implications. The Opposition have put forward very clearly the need for an absolute long-term strategy on China, and we will potentially see attempts through back doorways to change our strategy on that.

The noble Lord the Foreign Secretary mentioned intellectual property. In advance of the negotiations, the International Agreements Committee highlighted two issues: first, that CPTPP rules directly conflict with the European patent convention, and accepting them could jeopardise the UK’s continued membership of the European Patent Office; and, secondly, that the CPTPP introduces a mandatory procedure for notifying the patent holder when seeking authorisation for a generic or biosimilar medicine. This would, despite what the noble Lord said, result potentially in higher medicine prices for the NHS. It is welcome that the Government listened to concerns in this area and have ensured that their existing international commitments have been protected, as well as protections for geographical indications and performers in other CPTPP countries. However, can the Minister in his response confirm that this means no risk to the NHS in terms of higher medicine prices?

Despite what the noble Lord the Foreign Secretary said in his introduction, concerns remain regarding access to UK agricultural markets, such as Canada’s desire to gain greater access to our beef market. I think we need to hear the specific safeguards that have been secured for UK agriculture. The issue of food standards has been raised by the NFU and the RSPCA among others. I understand that we are expecting an analysis shortly, but I hope again that the Minister will give us reassurances from the Dispatch Box today on these issues. Moreover, what further assessment have the Government made of accession’s impact on the UK’s ability to hit its climate and environmental targets?

As we heard in a Question this afternoon, we want to ensure that we have a proper level of parliamentary scrutiny, which in the past on trade deals has been severely limited. The International Agreements Committee is still undertaking its inquiry into the CPTPP. Witness submissions have closed, but the committee is currently in the middle of collecting oral evidence. I repeat the comment made by my noble friend Lady Hayter during Questions this afternoon: give us a categorical assurance that that report will be fully debated in this House before the agreement is finalised. This is what Parliament means and this is what sovereignty is about. Let us ensure that there is a debate on these issues.

15:52
Lord Lamont of Lerwick Portrait Lord Lamont of Lerwick (Con)
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My Lords, it is a pleasure to be the first speaker from this side of the House to congratulate my noble friend, as I must call him now, on his excellent maiden speech and to welcome him to these Benches. Time flies: today I am welcoming him to the House but it does not seem so long ago that I was begging him not to resign as Prime Minister. It is a notable day for the House of Lords when we welcome a former Prime Minister who is also the new Foreign Secretary. Whatever the House of Commons may think, it is indisputably good for the House of Lords to have an additional Cabinet Minister in its ranks. He is the first former Prime Minister to return to Cabinet rank since Alec Douglas-Home almost 50 years ago. Before the war, it was quite the norm, with Baldwin, Ramsay MacDonald and Chamberlain all returning to government. It is a mystery to me why, today, we still have this self-defeating idea that former Prime Ministers should never return to front-line politics. I am glad that my noble friend has broken that rule.

Many people were surprised at the appointment of my noble friend. I was not wholly surprised. I hope I am not breaking any confidence, and my noble friend has probably forgotten, but about a year ago we had a conversation in which I asked him whether he would ever be interested in perhaps a big international job or becoming Foreign Secretary. He was not wholly convincing in his denial that he was not remotely interested. What I do know about the noble Lord is that he strongly believes in public service, and that is the reason why he is sitting where he is today.

The noble Lord and I go back quite some way, to when we both worked in the Treasury. He was always my brilliant spad. He was the master of detail and strategy. I always thought that he would go far and would achieve high office, but what I did not foresee was the rapidity with which he did so, becoming leader of the party in 2005, only four years after entering the Commons, and Prime Minister five years later.

We had some difficult times together. There was one moment when the noble Lord gave me a present; he may have forgotten this. It was a mahogany box about a foot long, and it contained the biggest Cuban cigar you could possibly imagine. There was a yellow notelet attached, which had on it in his handwriting the words, “By the time you smoke this, all your troubles will be over”. Well, my Lords, I never smoked it; I still have it. At times, when watching my noble friend as Prime Minister, I was tempted to send it back to him, but he would never have had need of it, because he has huge resilience.

I need hardly say that my noble friend faces huge challenges as Foreign Secretary. It is a dangerous world. One thing we know is that, when you have an unbelievably large number of difficult problems in politics, there is always another unexpected one coming round the corner. My noble friend, however, has the ability and experience to face these difficulties. This House has great experience in global affairs and there is a degree of common ground between the two sides of the House. The whole House will therefore wish to support him and wish him well. As they say, we look forward to hearing him again.

I welcome the Bill before us today. Before I move on to the detail of the Bill, I want to make one general point about trade that worries me considerably: the whole world, including the UK, is slipping back into protectionism. The retreat from globalisation is in danger of going too far. Yes, we have had the shocks of Covid and of the war in Ukraine. The emphasis has been on terms like “resilience”, “security of supply”, “strategic autonomy” and “self-sufficiency”, but too often these words are just disguised protectionism. Every sector considers itself strategic; we have to be self-sufficient in everything from cheese to steel. That is not the way to go. That is the way to becoming uncompetitive and poorer. Of course we have to pay some regard to the risks to supply that have emerged in recent years, but the answer to uncertainty of supply is to diversify your suppliers, not always to reach towards self-sufficiency. We ought to recognise that a policy of self-sufficiency comes at a price: a price to living standards and to the cost of living.

Let us not forget that the globalisation of recent years raised living standards—sure, there were losers in Europe as well as gainers—and the world as a whole gained a huge amount. Freedom of trade is not just an abstract idea; it is a positive instrument for improving the condition of people worldwide. We should also remember that, in the 1930s, the retreat to protectionism was one of the factors that, combined with others, contributed to the Great Depression. Like my noble friend Lord Hannan, who often uses this quote, I very much believe in John Bright’s idea—I think it was him—that “trade is God’s diplomacy”, improving relations between countries and improving the stability of the world. I make this general point because one thing about the CPTPP that I very much approve of is that it incorporates a commitment to furthering the cause of free trade. I think that is extremely important.

My noble friend emphasised all the statistics— I will not repeat them—about the CPTPP area: the growth of population and the extent to which it is supposed to contribute to the growth of the world economy in the next few years. Indeed, I believe, half the world’s middle- class consumers will soon be around the Pacific Rim. When combined with the UK, the area will account for 15% of world GDP, which is roughly the same as that of the EU; but, by 2050, the CPTPP area will account for 25%, whereas the EU will account for only 10%.

The CPTPP is, I need hardly say, very different from the EU. It is not a customs union or a single market. There is no TPP law, no TPP commission and no move towards a single currency. I note with a degree of scepticism that the Government say our commitment to the CPTPP is also furthering free nations, but among our partners there is one communist single-party state and one Islamic absolute monarchy as well. I am not quite sure how those fit in—I am not in any way criticising—but this is a free trade area above anything else. It fits in, of course, with the Government’s political objective of the tilt to the Indo-Pacific region, which was reinforced by the defence White Paper.

A number of commentators, including the noble Lord, Lord Collins, have tried to dismiss the importance of CPTPP a little because of the statistic that it will contribute, as he put it, only less than 1% to growth. This ignores the political context of the region and of joining this organisation, whether or not the 0.08% statistic that is bandied about is right. Perhaps the Minister, the noble Lord, Lord Johnson, will comment on this when he comes to wind up, because I noticed in the Sunday Telegraph that the Secretary of State said she did not believe this figure, which has been officially quoted. But whether the contribution to growth of 0.08% is right or not, it ignores the potential. These are, as my noble friend Lord Cameron said, very fast- growing economies and we cannot predict precisely how trade flows will react to those.

Apart from anything else, this is a very deep free trade agreement. I stress that it is a free trade agreement, not a single market or a customs union. But it is a deep agreement and it has these advantages: it covers services, which are important to the UK, because we are the second-largest exporter of services in the world; for goods, there is a single set of rules of origin, which allows all content to be accumulated, provided that it originates in a CPTPP country; there is a good text also on sectors such as digital services, which are of increasing importance; it also gets rid of the need to have a local office before you can sell services into the market of the bloc. These are considerable advantages but, as I said before, one has to look at this very much in its political context and the tilt to the Indo-Pacific region.

The original TPP, the predecessor of the CPTPP, had the United States in it. Had the United States remained in it and President Trump not withdrawn from it, it would be one of the largest trading blocs in the world, amounting to 30% of world GDP. With 30% of world GDP, we would have been in a strong position with our allies there to play a huge part in influencing the rules governing the world economy. Originally, the United States was hoping that by joining the TPP, as it once stated that it was planning to do, it would be able to constrain the role of China in setting the rules of the world economy. We must hope that the United States will think again. I know that President Biden said initially that he might be interested in rejoining and then has lately tried to distance himself from it, but it would be important if America did join because the CPTPP has strong rules—much stronger than the WTO—about state-owned enterprises, which has been one of the main ways in which the Chinese have been criticised for how they compete unfairly with companies in the West.

In response, the United States has also set up the Indo-Pacific economic framework, a bloc that includes Indonesia. Perhaps the noble Lord, Lord Johnson, would comment when he winds up on how he sees the relationship between the two. To many it appears that the latest one, which America set up, is largely just a high-level discussion forum. It will not really be a rival to the CPTPP, but it would be interesting to know what the US Government have told him about this.

I welcome the Bill and our joining the CPTPP. It points the way to a very exciting future, which we should be very eager to grasp and take our full part in it.

16:05
Lord Razzall Portrait Lord Razzall (LD)
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My Lords, I rise as the first speaker from these Benches to congratulate the noble Lord, Lord Cameron, on his appointment as Foreign Secretary, and welcome him to this House. In recent years, we have had a tradition of welcoming new, often inexperienced and young Peers. I do not think that any of those adjectives apply to the noble Lord, but I add my congratulations to those of other noble Lords. I particularly congratulate him on what he has done today. Of course, this is a highly technical Bill, and normally only eight or 10 speakers would be speaking on it. When it was rumoured that he was speaking, suddenly we had 27, including a lot of people who had never expressed any interest in trade or trade Bills. So I congratulate the noble Lord on that.

As I said, this is a highly technical Bill, but all the previous speakers have clearly taken the opportunity to make more general comments before getting to the detail of the Bill. We were told in 2016 that a major advantage of Brexit would be our ability to make trade deals ourselves, outside the ambit of the European Union. Liz Truss, when she was the relevant Minister, used to boast that more than 50 to 60 trade deals had been agreed since Brexit. The truth is that, in all but three cases, the deal consisted simply in snowpaking out the word “EU” and substituting the word “UK”. In all other respects, our trading arrangements with the countries in question remained unaltered.

The first two original agreements were with Australia and New Zealand—both of course criticised by the farming community. Nevertheless, we have those deals, and now we have the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as CPTPP, which we signed up to in July of this year. The noble Lord, Lord Lamont, has touched on this, but I fear that, as usual, the Government have overblown the potential impact of our joining the CPTPP. As the noble Lord, Lord Collins, indicated, the Government’s own figures said that there would be a minimal impact on our economy: under 1% of GDP.

I take the point made by the noble Lord, Lord Lamont, that we are a member of a club that is in a fast-growing area. Of course, apart from in the cases of Malaysia and Brunei, we already have trade deals with all the other countries, which clearly affects those numbers. But, as the noble Lord, Lord Cameron, indicated, clearly there will be opportunities in due course for Malaysia. So I accept that we are part of a growing economic area, and that being inside the tent may bring future economic benefits, which we may not be able to forecast at present. But it would be helpful, as the noble Lord, Lord Lamont, indicated, if the Minister when he replies could be more specific about what future advantages the Government see in our membership of the CPTPP.

To turn to the technical parts of the Bill—which is, as has been indicated, highly technical, and needs to be passed simply so that we can sign up to this agreement —obviously joining the CPTPP has been criticised from a number of quarters. There are concerns over agricultural risks, including pesticides and palm oil, which have been touched on. There are concerns over labour and human rights, and no doubt other colleagues will touch on these concerns. I would like to focus on the changes to copyright law contained in the Bill, and the criticisms by a number of relevant organisations, including the Alliance for Intellectual Property.

There is no doubt that the treaty has brought little direct benefit to the United Kingdom creative industries. The main achievement, which the noble Lord, Lord Collins, touched on, is that the agreement regarding IP rights enabled the UK to remain complaint with the European patent convention, which was a fear to begin with.

The Bill also provides for changes to copyright laws so that foreign rights holders and performers receive payment where they do not currently. As I read it—and I may perfectly well be wrong, as may the NGO—the Bill as it stands does not limit the extension to CPTPP countries, so it allows the Government to extend the benefits to rights holders and performers in any country, whether or not a reciprocal arrangement is in place. This would be particularly important if there were to be a proposal to extend to the United States.

I understand that the IP Office has said that a consultation on extending the right to all foreign holders and performers will be concurrent with the passage of the Bill. However, if this is the case, it means that the result of the consultation will be too late for proper legislative scrutiny. So I ask, first, why the changes to copyright laws in the Bill are not limited to CPTPP countries’ rights holders and performers? Secondly, do the Government intend to extend the right to all countries, whether or not there is reciprocity? Thirdly, do the Government intend to consult on these wider rights extensions?

As I have said, this is not a trivial issue, as a widening of rights would result in a net loss of revenue retained by UK rights holders, as revenue would shift towards foreign rights holders without reciprocal arrangements. That is particularly of concern vis-à-vis the United States, which is of course a significant player in the whole recorded music industry. How we on these Benches seek to amend the Bill will depend on the Minister’s answers.

16:12
Lord Kerr of Kinlochard Portrait Lord Kerr of Kinlochard (CB)
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My Lords, we have a very nice tradition in this House of always warmly welcoming maiden speeches. We usually do it because we are a nice, polite House. In this case, we do it because we genuinely warmly welcome the Foreign Secretary to join us and we greatly admire the maiden speech he has just made. We genuinely do.

There is something wonderfully Alice in Wonderland and ironic about the fact that the noble Lord’s maiden speech is made in a debate on an implementing Bill that will implement a treaty that we have not yet seen; it has not been presented to us. We are going to debate the detail of a Bill that will put on the statute book the necessary changes, because it is assumed that we will agree that we should accede to the CPTPP. Of course, it is not an unrealistic assumption, because we in this House can do absolutely nothing to stop our acceding to the CPTPP—which is again nicely Alice in Wonderland.

Actually, I would not want to stop it—I think it is a very good thing that we are acceding to the CPTPP—but I do hope that the Foreign Secretary will find time to consider the paradox that we are stuck here on pre-Brexit arrangements for scrutinising and approving trade agreements even though, post Brexit, we no longer have as our trade negotiators the Christopher Soameses, the Leon Brittans, the Cathy Ashtons or the Peter Mandelsons. We no longer have the right, in the Council of Ministers, to give them a mandate; we no longer have a European Parliament scrutinising everything they do in a trade negotiation; and we no longer therefore have Select Committees in this House and the other place scrutinising very closely what our Ministers say in the Council of Ministers, with all of this done in public.

Since Brexit, trade policy has been a black box. Westminster is in the dark and Whitehall has taken back absolute control. It does not feel quite right to me. I do not suppose the Foreign Secretary will have the time, or possibly the inclination, to consider amending the CRaG Act 2010, but I hope that successor Foreign Secretaries will. The Alice in Wonderland arrangements are all very funny, but it is not right.

I also hope that the Foreign Secretary might consider why the International Agreements Committee of this House has so regularly called for the publication of a government trade strategy. Most grown-up Governments publish their trade strategies. I am a member of that committee, and we have repeatedly called for one. Not knowing what the Government are trying to achieve makes it quite tricky to work out, looking at each negotiation and its outcome, how far they have achieved their aim. I am not naive; I suspect that I have just described what some Trade Secretaries would regard as the best feature of our arrangement. Since it is not possible to say against any overall guideline whether they have done well, they can tell us that they have done jolly well.

As previous speakers have indicated, some Trade Secretaries have tended to do that a bit. As the noble Lord, Lord Razzall, said, most of the agreements that Ms Truss presented, for example, were simple rollovers of the existing pre-Brexit arrangements, but all her geese were swans. Most of them were perfectly respectable geese, but they had to be presented as swans. I hope the Foreign Secretary will seek to persuade his Trade colleague, who I think is more open to the idea, to listen to the recommendation from this place that the Government should publish an overall trade strategy. But let me reassure him that the task of seeing this Bill through the House will not be onerous and that accession to the CPTPP is a swan—or at least a cygnet that might, over time, grow into a perfectly respectable swan.

I heard what the noble Lord, Lord Lamont, said about what it is worth economically in the short term. The Government’s own impact assessment says that in the short term there will not be much economic benefit. Their economic impact assessment says it has taken full account of the likely dynamic—on which I agree with the noble Lord, Lord Lamont—and how the region is likely to grow. The impact assessment says that

“UK gross domestic product (GDP) could increase by the equivalent of £2.0 billion in the long run”

as a result of the CPTPP. It defines “in the long run” as by 2040. I agree with the impact assessment and those who say that all such long-range predictions have extremely wide margins of error, but it is important to remember that the Government thought that the central estimate of the likely financial benefit was £2 billion in the long term—in other words, about a third of 1% of GDP. That is not a lot. The reason is that we have existing free trade agreements with all CPTPP partners except Brunei and Malaysia.

But I believe that, over time, this agreement will deepen, widen and become genuinely significant, so I am glad that the Government have decided to get us on board. I hope that, during the course of our study of this Bill, the Government will set out for us how they see the future of the organisation. Do they believe, as I do—although I think the noble Lord, Lord Lamont, would disagree with me—that, to be effective, it will need to acquire some sort of permanent secretariat, possibly even a site? Do the Government believe that it will need to consider enforcement mechanisms? I do.

What is the government view of CPTPP accession and of the six outstanding applications? These include the Chinese application that, if accepted, which in my view is very unlikely, would be transformative—in my view very undesirably. The noble Lord, Lord Collins, was right to call for transparency on this. We need to know what the Government think is the future of the organisation we are getting into. Of course, it would be a perfect subject to be covered in a trade strategy document, which could also perhaps explore the wider issue of the future of the multilateral rules-based system, and whether it has a future or whether the future is bilateral and plurilateral arrangements like CPTPP.

I am with the noble Lord, Lord Lamont, on this. I am a free trader and I believe that the best for free trade is the widest-possible global rules: simple rules, but as wide as possible. But there are two obvious problems that he and I have to face: first, American protectionism. I warmly agree with what he said. It was free trading Republicans under Robert Dole who got the United States into the WTO, but that breed seems to be extinct, and their successors have destroyed the WTO court. The second problem is China, now the world’s number one trading power. Together with the rest of the global South, it does not mind global rules, but it does not see why they should remain the rules we set 75 years ago, in the very different era of Bretton Woods.

It has a point; we have been very slow to update the structures we built. Why have seven of the 10 heads of the WTO been Europeans, like all 12 heads of the IMF, with all 14 heads of the World Bank coming from America? There is room for new thinking on effective internationalism and on the institutions that should underpin a rules-based trading system. There is a perfect task for an experienced new Foreign Secretary to consider. Meanwhile, let us work on accession to the CPTPP and welcome his arrival in this House.

16:22
Lord Goldsmith Portrait Lord Goldsmith (Lab)
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My Lords, it is always an enormous pleasure to listen to and follow the noble Lord, Lord Kerr. I get the pleasure of doing that quite frequently because he sits on the International Agreements Committee, which I have the honour to chair. I want to say something about that, because it explains why I do not intend to say very much in my remarks today. There are two reasons. One is that, as has been pointed out, this is a technical Bill. It deals with some important but quite limited aspects of the CPTPP, and I do not want, as the chair of the IAC, to allow this debate to appear to be the debate on the whole of the treaty, which, as the noble Baroness, Lady Hayter, said in the earlier Question, we want to see on the Floor of the House. It is important that we do; it is important that we have scrutiny. I very much hope that the noble Lord, the new Foreign Secretary, agrees with that.

It is also the reason why, and I say this to the noble Lord, Lord Johnson, I did not contribute very much to the briefing that he very kindly held for Peers recently. It was again for the two reasons I am going to adumbrate that I did not think it was right to get too deeply into the subject. One reason is that it is quite a technical Bill. The second is that the Committee I chair is in the middle of an inquiry, as has been mentioned already. I do not want to pre-empt the outcome of that inquiry, or the views that the members will have about the treaty as a result of that.

I will tell the House where we have got to. We called for evidence between July and September. We have had 27 submissions and three oral evidence sessions already, and we intend to have further. We have had specialists in trade and foreign policy give evidence to us already, and we will hear from diplomatic representatives of at least two countries. I am therefore very keen that we should see the full results of the scrutiny we are doing and place that before the House.

We have had interesting evidence already and I invite noble Lords to look at that which has been given. For example, the Government may be interested to note that one of our witnesses, an expert and experienced witness, said that so poor is the Government’s information about free trade arrangements that some businesses look to other countries’ websites to find the answers to questions, including on how to navigate our own arrangements. They have also pointed out that the data is so difficult sometimes that some of it seems to show that a country is a net importer while other data shows that it is a net exporter.

These need to be dealt with as additional matters, but the fundamental point is that, when we complete our scrutiny, we will, I believe, have very clear views on the treaty. I do not want to pre-empt that today, so I will not say anything further about the detail of the Bill, but I will listen very carefully to what is said; I will study that and the rest of the proceedings on the Bill. I look forward to coming back when we are in a position to do as we intend: to present our report, on the Bill and the treaty, to the House fully.

16:26
Lord Vaizey of Didcot Portrait Lord Vaizey of Didcot (Con)
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My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Goldsmith. I welcome the scrutiny he is bringing to trade policy and look forward to his report being presented to the House; it is a very good example of why this House does such good non-partisan and detailed work behind the scenes that informs government policy.

I am here for a specific reason, but it is a welcome coincidence that I am here at the same time as my noble friend Lord Cameron has made his maiden speech in the House. It was a great pleasure to serve under him when he was Prime Minister. I was in fact his longest-serving Minister, because I was the last “Cameroon” to be sacked by Theresa May—I think that somebody had to remind her that I was still a Minister. When I heard the news that my noble friend was joining your Lordships’ House, I had a bitter-sweet reaction: I was overjoyed that he was joining our House, but I was then fed up with the endless WhatsApps from people asking why Rishi Sunak had not asked me to join his Government. Normally, this House sits out the heady 24 hours of a reshuffle.

My noble friend is joining an absolutely first-class Front Bench. I said to my noble friend Lord Ahmad yesterday that I was amazed that he could still get into the House given the praise that was heaped on him in the foreign affairs debate last week. My noble friend Lord Johnson is proving to be a fantastic and very creative Trade Minister, full of original and exciting ideas. I had a ditty about him, which has unfortunately been overtaken by events: he was introduced on a Monday, made his maiden speech on a Wednesday and was sacked on a Friday, by accident. He is the first comeback kid of the Front Bench; he was reinstated by the Prime Minister, and we are thankful for that.

I think that I am right in saying that my noble friend the Foreign Secretary was the first Prime Minister —or maybe the first Prime Minister for many decades—to visit Vietnam. That was a very big occasion, because, at the time, I became the trade envoy to Vietnam and had not realised quite what an economic powerhouse it is; it is representative of the south-east Asian nations. The CPTPP, which we are debating as part of this enabling Bill, is very important; it is very important that the UK has joined it. It represents part of a continuing strategic pivot—the latest, if you like—to the most dynamic and fastest-growing region in the world, the Indo-Pacific. It puts us in a place where we can have some kind of influence on the future trade policy of that region.

At the heart of the Indo-Pacific is the Association of Southeast Asian Nations. The big reveal is that I am the chair of the UK-ASEAN Business Council, so I am tremendously excited about the prospects the CPTPP brings to ASEAN and the wider region. We have an ambassador to the ASEAN region, now Sarah Tiffin, as well as a trade commissioner for the region and, as the Foreign Secretary pointed out, we are a strategic dialogue partner of ASEAN.

To pick up on the excellent points made by the noble and learned Lord, Lord Goldsmith, one reason why the UK-ASEAN Business Council is important, although it is a small organisation, is that it is an opportunity to hear from businesses about what is happening on the ground in the region, and indeed sometimes to hear their frustrations with how opaque some of the guidance and regulations from government are. For example, I was told by one member that the department of trade has a kind of artificial intelligence tool which it has purchased and paid for that would allow individual small businesses to search for their products and which, thanks to artificial intelligence, would throw up the easiest countries in the world with which to trade based on their product and a reading of those treaties.

There is a huge amount of work that can be done to make it easier for businesses to navigate the trade agreements that government puts in place. I know you cannot have an ambassador to a treaty, but it is certainly important for the Foreign Secretary to take from this debate that there is an opportunity to look hard at how we engage on the back of the opportunities that the CPTPP gives us. As he pointed out, it covers some 580 million people in 12 countries, with a combined GDP of £12 trillion. Four of them are members of ASEAN—Brunei, Malaysia, Singapore and Vietnam—while the Philippines and Thailand, also ASEAN nations, have both expressed an interest in joining, and they have seen how others have benefited.

The noble Lord, Lord Kerr, talked about what economic growth this might bring to us, and he is quite right to say that the estimates are always impossible to hold on to. One estimate was 0.08% over 15 years. Obviously, as a die-hard remainer before I became chair of the UK-ASEAN Business Council, I might have derided this and said to the Brexiteers, “Well, this is what you’ve given us in return for leaving the EU”. However, I am now a wiser person. The UK already has free trade agreements with most of the CPTPP members. It is important to note that the CPTPP will grow and expand, regardless of the issue of China, and our being the first non-Pacific country to join encourages economies looking to be a part of a free and open trading club. In that sense, the UK genuinely has led the way.

In this digital world, the connectivity infrastructure already exists which allows British businesses to provide services to anywhere in the world. Therefore, as part of the CPTPP, we can enable our trade infrastructure to connect our businesses to CPTPP members. Our services trade to CPTPP members last year was 43% of our total services trade. We do not need to establish local or regional offices to supply CPTPP countries, and it is very exciting to see companies anywhere in the UK now able to access markets such as Malaysia and Vietnam. In addition, many of those countries look to the UK for guidance and support in terms of digital trade; the agreement we signed with Singapore is ground-breaking. We are seen as a leader in this field, and we should certainly use our influence.

The CPTPP will also bring additional benefits over and above our free trade agreements. For example, we have a free trade agreement with Vietnam, which was the original EU agreement rolled over. That means that, as part of the CPTPP, our tariffs on engines, for example, will come down quicker. I know that the Foreign Secretary will be pleased to hear that the tariffs on chocolate and port will also be lowered at a faster rate, as well as duties on beef—duties will be eliminated. People travelling to do business in Vietnam will now be able to stay for six months instead of three months.

We now have a free trade agreement, thanks to the CPTPP, with Malaysia and Brunei as well. Brunei is an important ally and home to the largest UK military presence in the Asia-Pacific. Although our bilateral trade with Brunei is small, our relationship with Brunei is an excellent example of how we can work with some of the smaller economies in large trading blocs and shape the future of the region.

The real value is also strategic. Last week, our Secretary of State for Business and Trade, Kemi Badenoch, was in San Francisco for the first CPTPP meeting since July. The meeting was held on the sidelines of the Asia-Pacific Economic Cooperation leaders meeting, discussing free trade in the Asia-Pacific. Being part of the CPTPP therefore allows the UK to be there on the sidelines of the APEC meeting. One thing I have learned since I became chair of the UK-ASEAN Business Council is that there is something called the APEC business travel card. I do not want to upset any noble Lords, but it effectively allows free movement within the region; it allows short-term business travel, streamlines the entry process and fast-tracks visitors. You can use an APEC business travel card lane at airports in APEC economies. This is the kind of opportunity that presents itself to the Government to push for now that they have a seat at this table.

The real benefit of joining the CPTPP is just that: being part of a club, if you like, that the UK has not been part of before. By being a part of the CPTPP, the UK has a seat at the table of some of the world’s most dynamic countries, committed—as most of us are—to free and fair trade. The work to shape our future begins now.

16:36
Lord Howell of Guildford Portrait Lord Howell of Guildford (Con)
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My Lords, like others, I very warmly welcome the return to government, and indeed the entry into our counsels here in this House, of someone with as much deep familiarity with world diplomacy and world politics as my noble friend Lord Cameron. A decade or more ago, I had the privilege of serving in a minor role in his Administration—rather more minor, actually, than I had hoped for, but nevertheless it was extremely interesting—where we were dealing with the Commonwealth, which was all part of the repositioning of Britain. This was pre-Brexit, but many of the forces which are driving us along today existed then. I was Minister for International Energy Security. With hindsight, I do not think I did a very good job there—certainly there have been a lot of problems since. But this is a good moment, and I am very pleased.

My noble friend inherits an appalling set of problems, and there are no immediate solutions to any of the major crises that this nation or the whole world is facing at the present time. There is poison in every chalice. The skill will lie in handling the issues and in deploying new compounds of persuasive soft power and decisive hard power—they go together; they cannot operate separately—and a new understanding of the world of networks in which we now live. This means seeing the world order—or disorder, as it is now—through the eyes of others, as well as our own, and through the eyes of the future, as well as our history. It means ceaselessly creating new alliances, and swiftly, to meet endlessly unfolding new crises. This is the enlightened and agile sort of diplomacy that we will need to survive over the next decades of this century.

In my view, our new Foreign Secretary should not be judged by the instant diplomatic successes that he chalks up—although I suppose the media will have a shot at that—but by whether there is a real understanding that our nation is in an entirely new position, requiring many different sorts of alliances, backed by huge ingenuity and constant resilience, and readiness to recognise the totally new factors at work in the international landscape. We need a restart from a fresh realisation. Nowadays, in this digital age, most nations, large and small, want to be free of too much Chinese hegemony and pressure on that side, with all its traps and dangers, of which we can see a great deal going on, and from too much overassertive leadership and stale ideology, served up on the western side from some parts of the American establishment. It is partners that people want; they do not need overbearing bosses.

I come to the treaty and the legislation needed to bring it into effect. A moment ago, the noble and learned Lord, Lord Goldsmith, described how, in the committee that he so ably chairs, we are scrutinising the CPTPP arrangements, the treaty and the details very seriously indeed. Of course, there is a lot more work to be done, and no doubt we shall have an opportunity in this Chamber to procedure these things—always remembering that the complexity is of just the kind where a committee inquiry is the most effective way of getting at the details. Later on, we can deal with the legal aspects in the Chamber, but, if we really want to go into the depth of the detail, it is in the committee environment where we will succeed in doing so.

I regard the treaty as a step in a strategic shift of the first importance for our nation, and I am glad to see that the impact assessment echoes that sentiment. There are many more steps to be taken in the same direction but this is one that some of us have been urging the UK to move towards for at least the past decade, if not more. The Minister and the Foreign Secretary are quite right to depict membership of the CPTPP as a gateway, or pathway, to high-growth Asian markets as part of our Indo-Pacific tilt. The second version of the Cabinet Office’s integrated review makes this point very clearly indeed—of course, there will now have to be a third version, I am afraid, in the light of more developments in the Middle East. That third review will also need to reinforce the same message: this is part of a clear strategy.

I know that the estimated trade gains look pretty small, as the noble Lord, Lord Kerr, alluded to; I think that the figure is an extra £4.9 billion-worth of trade both ways by 2040, which is not very much. However, that is because, as the noble Lord, Lord Razzall, said, we already have trade agreements with most of the members—although not with Malaysia—and any gains from this treaty will come on top of those existing flows. More than that, the CPTPP is about far more than further increasing our measured volumes of conventional trade with other member states, which is always difficult to estimate anyway. Not only is the group going to expand in number—three more countries have already applied to join; China obviously wants to join, which raises all sorts of tricky developments which we will have to deal with in due course and which we are examining in the committee—but behind the trade deals lie several major new realities about the nature and patterns of trade and exchange in the 21st century that many people still seem reluctant to face or grasp.

The first of these is that, over the next 30 years, most of the growth in consumer markets and investments will be in the Asian region. We are looking here at something that is already as big as the EU single market and at new trade and economic groupings, such as the Regional Comprehensive Economic Partnership, which are already larger in overall GDP than the EU. Then of course there is the liquidity of ASEAN as a whole, which we are developing at the moment. At the same time, there are huge new infrastructure projects across Eurasia, weaving the whole Asian continent together, about which we have hardly any coverage in our media here. That is the first reality.

Secondly, the reality is that trade flows and investment of all kinds—direct and financial, both ways—are welded together, each promoting the other. They are inseparable.

Thirdly, half of what we broadly call trade, and which conjures up visions of thousands of containers on giant cargo carriers, is now trade in knowledge products, digital trade, trade in services, data and technology innovations. Every installed piece of capital equipment comes with a vast package of high-tech procedures, personnel and supporting consultancy. We are informed that 42% of all this country’s trade with CPTPP members is in services of various kinds—it is probably very much higher.

Fourthly, Japan has been of enormous assistance to us on the pathway to membership. Our growing ties with Japan on many industrial and technological fronts, including the enormous Tempest combat aircraft project, are a parallel story, maybe for another day, but are hugely important for our future. People forget that Japan is still the world’s third-largest industrial power and, in terms of underlying stability and conditions, is favourable to competitive enterprise. In a way it is vastly ahead of its Chinese neighbour. We should stick to Japan like glue on every front, security included. Incidentally, I declare an interest in past and present links with Japan and two of its biggest enterprises, Mitsubishi Electric and Central Japan Railway.

Fifthly, it is worth noting that when we join the CPTPP, more than half its membership will be members of the Commonwealth network. People may say, “What has that got to do with trade?” The answer is, “A very great deal”. Not only are matters often settled informally and in the coffee break, rather than over formal transcripts round the negotiating table; the whole trade and investment process works much the best within a broader context of unifying forces and activities, ranging from the cultural and artistic, education and scientific research, to constant new thinking in many fields of professional standards and training. Above all, there is the fact of the English-speaking world and a common business language between us all. English contains its own DNA, which grows and which no amount of official disregard, jealousy or historic dislike can eliminate.

It so happens that the binding values that hold the Commonwealth together today and cause it to grow and attract new members, as now, are just the ones which are of key significance in the digital age of hyper- connectivity—binding links not just between officialdom and Governments, which may seem at times to be at odds, but at every level of society and interest. These are such things as the rule of law, open societies, free speech and free press, independent judiciary, free elections, proper concern for human rights, due process and adherence to international norms and standards, all of which are now becoming part of the survival kits for the planet’s army of independent nations—the so-called “neo non-aligned” states.

We must get out of the patronising habit of bundling so many nations together as the so-called developing world. Every new nation today and every society—maybe even hermit states such as North Korea—are developing in different ways. That includes us, as we embark on the great energy transition which will bring with it a great social development transition as well—on which, incidentally, we have hardly started.

Today, the CPTPP needs a hinterland of support, activity and connection if it is to flourish. I was disappointed that last year, the Economic Research Institute for ASEAN and East Asia—ERIA, the powerful research wing of ASEAN—wanted to hold a major conference here in London with our leading think tanks and policy groups but was turned away or only offered co-operation, on impossible and ridiculous terms and fees. That is where the FCDO should have stepped in—if it even knew about it.

I hope that this lesson on the need for surrounding activity beyond trade itself in the areas of business, culture, science and all the rest is now understood in Whitehall and Downing Street, and that steps are even now being taken to bring the right groupings together between all the new Asian powers and the United Kingdom, covering all fronts and at the highest possible level. Trade rides with investment, security, culture and values, and with daily connectivity. Please can we not forget that.

16:50
Lord Trees Portrait Lord Trees (CB)
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My Lords, I too welcome the noble Lord, Lord Cameron of Chipping Norton, to the Chamber. We shall have to get used to using territorial designations, because these Benches have had a noble Lord, Lord Cameron, here for a number of years.

I also welcome the chance to debate this trade Bill but, as the noble and learned Lord, Lord Goldsmith, alluded to earlier, we are considering the cart before the horse. The Trade and Agriculture Commission report is “due to be completed” by 30 November, so we have no sight of that yet. The Section 42 report required under the Agriculture Act 2020 will be available after that, and formal parliamentary scrutiny under CRaG will follow. So we are being asked to comment on the Bill without the benefit of those important reports and that of the International Agreements Committee.

I am left considering the benefits and costs of this agreement. I acknowledge, as has been ably and eloquently detailed by previous speakers, the benefits of agreements of this type over and above the financial. But the financial benefits are extremely modest: I find the Government’s estimate of £2 billion additional GDP by 2040 rather underwhelming.

So I am left considering the downsides or costs and concerns. Noble Lords are aware of my interest as a veterinary surgeon, and my concerns concentrate on our animal health and welfare, public health, the health of our farming industry, and animal health and welfare in the countries that will be supplying us with animal products more freely under this agreement.

We and His Majesty’s Government are rightly proud of our high animal welfare standards. Ministers regularly assure us that we will not lower our standards in negotiating free trade agreements. With respect, that is the right answer to the wrong question. We should ask whether countries exporting to the UK will raise their standards to our level. The answer in this case is that they have no obligations so to do.

The organisation World Animal Protection, formerly the World Society for the Protection of Animals, a global charity for animal welfare based in London, produced a ranking of 50 countries based on its consideration of 10 indicators covering the most important aspects of animal protection. In its latest, 2020 ranking, all the countries within the CPTPP agreement are lower than the UK. Only New Zealand, arguably, comes close to our overall standards.

In our quest for free trade agreements we have yet to set minimum standards for food imports, with the exception of hormone-treated beef, chlorine-washed chicken and ractopamine in pigs. Ongoing tariff negotiations with Canada and Mexico raise concerns about the potential vulnerability of UK farmers, particularly with regard to eggs, pigs, pigmeat and beef meat products produced at standards that are illegal in the UK. Several CPTPP countries still allow practices such as conventional battery cages—banned in the UK since 2012. Similar concerns arise with pigmeat imports from CPTPP members that employ sow stalls—banned in the UK since 1999.

Of particular concern, nationally and globally, for both animal and public health, is the excessive use of antibiotics in several CPTPP countries, with the attendant risks of importing and spreading antibiotic-resistant bacteria in animal products. I know this will be a matter of concern to the noble Lord, Lord Cameron, who, to his great credit, raised the whole issue of antimicrobial resistance to the top of the political agenda and commissioned the O’Neill commission to report its important findings in 2016 on reducing our use of antimicrobials to prevent the severe downsides of antimicrobial resistance.

At a time when food security is rightly a concern, we should be extremally careful not to handicap, undercut or potentially destroy our own food production capability by importing products produced to lower welfare standards. At a time when climate change is such a dominant political issue, we should guard against exporting greenhouse gas emissions by importing products produced less efficiently than we do. A relevant example concerns beef, a kilogram of which we can produce in the UK with less than half the global average of associated greenhouse gas emissions. We should aim to not import beef from any country unless its carbon footprint is lower than ours.

In joining the CPTPP, we note that the Government’s own environmental impact assessment suggests that an increase in global greenhouse gas emissions will occur, but that it will be slight and negligible. But this does not take into account emissions due to transport, nor the potentially high starting point of the carbon footprint in the countries of origin.

In conclusion, we need to safeguard the UK’s indigenous, high-quality, high-welfare and sustainable food production capabilities. That does not mean that we require self-sufficiency—not at all—but we should ensure that we safeguard the core of essential food production capability.

So, finally, I ask the Minister: when will Parliament see the TAC report? Secondly, in his letter of 8 November to noble Lords, the noble Lord, Lord Johnson of Lainston, stated that

“the Government has ensured that joining will not compromise our high animal and plant health, food safety, or animal welfare standards”.

In view of the fact that we cannot influence current standards in member countries of CPTPP, how will this be achieved?

16:58
Lord Frost Portrait Lord Frost (Con)
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My Lords, it is a pleasure to support the Government on this important Bill at Second Reading, and to congratulate my noble friend on his excellent maiden speech. I must say that I cannot claim quite the same experience of the noble Lord’s time as Prime Minister as others who have spoken so far today. I was, for part of the time, a humble bureaucrat in the system, working for Vince Cable on EU trade agreements—so we are none of us perfect—and then as head of the Scotch Whisky Association. I must say that, while I was doing that job, his Government either froze or cut the duty on Scotch whisky, to which he alluded in his speech—a policy which has since, regrettably, fallen into abeyance. Perhaps his return to government will herald a change in that policy as well. Who knows? I guess we are going to find out tomorrow.

In this context, I pay tribute also not just to my right honourable friend the current Secretary of State for Business and Trade, who got this agreement over the line, but to her three predecessors who kept the CPTPP on the agenda when it was not obvious that it would stay on it. I single out in particular my right honourable friend Dr Liam Fox, who kept the prospect of joining the CPTPP alive in a Government who, at times, seemed—how shall we put it?—unduly attached to remaining part of the EU customs union and other trading arrangements. Of course, if they had succeeded in that, it would have precluded CPTPP accession and we would not be having the discussion we are having today—so he deserves to be congratulated on that.

I will say just a word about the process that we are in. I think it is fair to say that I do not always agree with my former mentor, the noble Lord, Lord Kerr, who spoke earlier, but I do agree with the points he made about the process. It is a little strange that, after Brexit, the degree of scrutiny and the ability to comment, shape and, indeed, vote on major trade agreements that this Parliament has in both of its Houses is actually weaker than when this country was a member of the European Union. Obviously, I supported and worked for Brexit and I do not think it is right that we have less ability to shape these things than we did when we were in the EU. I have said that to Select Committees of this House and of the other place. We should look at that in the interests of democratic scrutiny and developing a trade policy that we can all buy into in the future. I hope that can be looked at one day.

We have heard a lot already about the economic benefits of accession to this trade agreement. I will not repeat what has been said already, but I want to highlight a couple of slightly more technical points. First, the rules of origin provisions in this agreement are generous—unusually so. They provide for full accumulation, as has been said. That is potentially of considerable value and will be of particular benefit to firms, perhaps especially SMEs, that seek to diversify and make secure their supply chains, away from China perhaps in particular, because many will need to do that in the coming years. Indeed, many are already doing it. Of course, as the CPTPP enlarges, that will become a more worthwhile provision—so, again, it is very good to see that we will be part of that.

I also want to highlight the value of the arrangements for conformity assessment bodies in Clause 2. I note in passing that the EU refused us these arrangements during the negotiation of the trade and co-operation agreement, so it is good to see that, at least in some of our trade agreements, we are part of them. It is the difference between being part of a trade agreement that is genuinely about facilitating trade and one that is about a power relationship between the two partners. So, once again, it is very good that we are part of that. Of course, it should go without saying—but I do not think it has been said yet—that we get all the benefits of the CPTPP without having to pay in £15 billion a year to the budget or make ourselves subject to a foreign court to get them.

So much for the economics; the key arguments for the CPTPP are more strategic than purely economic. I will briefly highlight three aspects. The first is diversification of our national trade policy. As we all know, increasing openness and competitive forces on our own economy is crucial to boosting productivity and growth, so it is not surprising, although a bit disappointing, to hear from some noble Lords a set of worries about precisely that openness to competitive forces, whether on ISDS, food, agriculture or on much else. The problem we have in this country is not too much competition but too little, and trade agreements are designed to boost that competition, boost efficiency and bring more growth.

Since leaving the EU, we have not pushed as far as we should in this direction. Indeed, our trade policy so far can be seen as in many ways a giant preference scheme in favour of the European Union. That is particularly true in agriculture, where EU goods enter without tariffs and quotas; no other trading partners have that at the moment, so it is vital that we open this up, and begin to open up our trading options globally. The CPTPP is part of this. It is a bit disappointing that in our accession protocol the transition to zero-tariff access for some agricultural products is a little slow, and even includes permanent quotas in one or two places. I understand the political logic that has led to that, because the NFU is a mighty power in the land, but this will defer some of the gains to our consumers. Again, it is something that we might look at one day in the future and take a more liberal approach.

The second strategic aspect of CPTPP is about embedding our engagement with east Asia, particularly with close allies such as Japan. The Indo-Pacific tilt is clearly more than just a tilt, and CPTPP goes with AUKUS and the ASEAN dialogue partner status as one of the three pillars of strategic engagement in the Asia-Pacific region. Indeed, let us hope that there will be a fourth pillar before too long, in the form of an FTA with India.

The third and final aspect is the signal that CPTPP membership gives about this country’s global trade policy aspirations and role. As the noble Lord, Lord Lamont, said, it is to be deplored that we are moving to a world of blocs, industrial policy and protectionism. Although there is room for a little more focus on national security in trade and investment, this development will generally see reduced incomes, reduced growth and probably further international tensions.

By its very existence, the CPTPP can and does already stand for something different. It is a different kind of grouping; it is a group of mid-size but extremely important powers that support open and global free trade. They are an open and free-trading counterweight to set against these broader undesirable global trends. It is absolutely natural for Britain to be part of that arrangement and to push for these things further within the CPTPP at a global level. Maybe in winding up, or later, the Minister could set out a little more what the aspirations to use the CPTPP are, and what ability it gives us to shape and broaden out our own trade policy, now and into the future.

Those who said the UK could never pursue an independent trade policy outside the EU have been proven wrong. With CPTPP accession, we have FTAs covering over 60% of our trade, goods and services, and the only reason we have not reached the 80% target is the reluctance of the US to do new trade agreements with anybody, not just us. This is a big success area, and getting into the CPTPP is a big part of it. That is why I am delighted to support the Government on the Bill and getting it through rapidly soon.

17:08
Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, it is always nice to follow the noble Lord, Lord Frost. We sparred a few times on Brexit, and as he was running the Scotch Whisky Association and I was running Alcohol Concern, noble Lords will not be surprised that we have slightly different views about the duty on whisky. In welcoming the new Foreign Secretary, I assure him, as the first woman to be able to welcome him today, that he will find that we are a quarter of this House and are normally far more in evidence than perhaps we have been. If he thinks he is going to get away with gentlemanly behaviour in the future, he may find that we also have a voice.

I am particularly pleased that the Foreign Secretary made his maiden speech on the CPTPP, as it is the flagship of the post-Brexit policy that followed after he had left No. 10—despite, as we have heard, its very modest impact on our current trade arrangements. That is partly because, as we have heard from a number of speakers, we already have agreements with the majority of the 11 members, particularly Japan of course, but also Australia and New Zealand, the FTAs with which we have looked at the FTAs in this House quite recently.

I know that, in welcoming the new Foreign Secretary, the Lib Dem Benches will be particularly pleased to be reminded by these Benches that they were once in coalition with him in government, something they often fail to declare. However, my Labour colleagues and I of course welcome him. He has a vital role to play, partly in rebuilding trust and confidence in the UK following Boris Johnson’s attempts when he was Prime Minister to break international law by threatening to abrogate part of a treaty he had so recently signed, and today, at a time when the Government are threatening to renege on international law and our own legislation and common law in their desperate desire to fight an election with pictures of planes taking off to Rwanda. I hope that the Foreign Secretary, whom we know is an honourable man, will help to restore trust and decency in the Government and thus re-establish confidence in the bona fides of the country that we all love and want to serve.

The Foreign Secretary will by now have been well briefed—we hear from the usual reliable sources that he is very well briefed and reads everything—on the intricacies of the CPTPP. It was a pre-cooked agreement which involved us merely joining rather than being able to negotiate, as with other agreements. It is, as a number of speakers have said, a significant partnership. It embraces 11 countries stretching from Vietnam to Peru, many of which, if not all, are experiencing growth and—of particular relevance to this country—are increasing potential markets for the products and services for which we are so well known.

However, to make this work for our exporters, which is the important issue, the Department for Business and Trade will have to step up the support which it offers to companies and individuals who want to do business in a CPTPP country. The Bill hardly touches that side of the main part of the partnership agreement, which we trust will be fully debated here, as has been mentioned already. The Bill really just deals with three issues which require some tweaks to our legislation, whereas the majority of the agreement does not need any legislative changes, hence the need for a fuller debate.

When I was still chairing the International Agreements Committee some two years ago, it examined the negotiating objectives and there was very broad support for accession at that moment. Nothing seems to have diminished that, according to the evidence submitted to the new inquiry. Indeed, our committee’s current inquiry, as described by my noble and learned friend Lord Goldsmith, is into the outcome of negotiations. Some of the stuff we have been looking at already suggests that some of the major questions are about the practicalities. Those include whether the lack of a fully functioning and permanent secretariat to this rather complex agreement will suffice to iron out the technical and other issues that are bound to develop not just with our accession but with its continuing growth; and, I am afraid to say, why the department’s recent dialogue with stakeholders appears to been so dismal just when business most needs help to plan for and get help with our accession. The benefits of this agreement will be realised only with considerable assistance from the Government so that businesses can take advantage of what is there in the new trade freedoms.

The British Chambers of Commerce, which supports the “speedy ratification” of the agreement, says that it wants to work with the Government

“to ensure firms get the best possible access”

to what it defines as a “thriving market”, but this will depend on the department reaching out to stakeholders and providing the advice, guidance and, indeed, the access that they need.

When we looked at the agreement two years ago, the UK Fashion and Textile Association said that it had not seen much export development take place, while the NFU wanted the Government to put more energy and resources into export promotion and marketing. It would therefore be helpful to hear about the Government’s plans for working with relevant industries and professional associations to make the most of the enhanced business mobility possibilities that have already been touched on.

Indeed, to give just one example, I have had a query from a sector possibly impacted by the Bill, which I will outline here. My concern is less with this particular issue and more that it has not been ironed out by the department talking to the relevant industries. The question relates to Clause 4, which amends the rolled-over EU regulations to enable the Secretary of State to cancel trademarks and geographical indications retrospectively.

The question is: might this new power cause some conflicts with the EU should the Secretary of State remove trademarks that apply in the UK and the EU simply to satisfy a demand from a CPTPP member? Does the Bill really need to make this provision for the CPTPP to apply in UK law, given that GIs are determined on a bilateral basis between CPTPP member countries? Perhaps the noble Lord can clarify this matter and—more importantly—confirm that relevant stakeholders impacted either have been or will now be consulted before we ratify and the procedures come into place.

I turn to broader political issues. There is one early discussion, already touched on, that will involve the Government now that we are members—that is, of course, about the future expansion of the CPTPP. We are the first country to join since it was established by its 11 inaugural members, and we are the first European member—which sort of stretches the definition of “Pacific”. On the agenda for the partnership now is the application for China to join. Needless to say, we will be particularly interested in the Foreign Secretary’s view on this. As my noble friend Lord Collins and the noble Lord, Lord Kerr, have emphasised, this strategic issue is of central concern to the UK and, indeed, to other countries. We look forward to hearing the Government’s views on that in due course.

Most commentators see the importance of the CPTPP as being part of the Indo-Pacific tilt—a diplomatic and security matter as much as a straight economic one—so the Minister’s views on where we sit in that sphere will be of continuing interest to this House. It is particularly good that we have the Foreign Secretary, from the FCDO, sitting alongside the Minister from the Department for Business and Trade. It stresses again the need referred to by the noble Lord, Lord Kerr, for the strategic framework. Trade is part of foreign policy and, indeed, defence policy. Therefore, seeing how this all fits together is an important challenge for the Government.

The new Foreign Secretary has already been warned that there is a lot on his plate; we add this to it. For the moment, this Bill, a small but important part of our accession, is to be welcomed. I wish it well.

17:18
Lord Marland Portrait Lord Marland (Con)
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My Lords, it is a pleasure and a privilege to follow the noble Baroness, Lady Hayter of Kentish Town. I have sat on the International Agreements Committee with her for a number of years. She chaired it magnificently before handing back to the noble and learned Lord, Lord Goldsmith, who I think has found her a tough act to follow.

It is also a huge pleasure to see my noble friend the Foreign Secretary here. It is a boost for the House of Lords and for the international community. It is also a boost for those who play tennis with him, because during the fallow period his game has improved and we rather hope it will go back to the status quo. I worked closely with him on trade issues. In a moment of brilliance, he made me his trade envoy in his Government, putting trade at the heart of government. Between us we set up what is now the trade envoy network, which has been a successful cross-party network promoting trade across the world. I have therefore seen at first hand how, internationally, his status is so high. I have seen the energy he puts into international matters and the respect he is held in throughout the world, so we are incredibly lucky that he has chosen to give up an extremely comfortable and enjoyable life to return to public service.

It will be more comfortable here, as has been said by other noble Lords, but less comfortable as a lifestyle none the less. We wish my noble friend all the best—and, for heaven’s sake, this country needs a dynamic and vigorous Foreign Secretary. In my role as chairman of the Commonwealth Enterprise and Investment Council, I think I have done 45 flights this year—please do not tell the eco lobby this—all in the interest of international trade. Everywhere I go, the Foreign Office’s standing is diminishing. It is therefore critical that we have such a big hitter delivering for us in the world.

I also want to apologise in advance, because another thing that my noble friend made me do when I was working with him was to chair an Armed Forces charity. I am afraid that I am going to have to go to its huge celebration, which has long been in the diary, at the same time as him. I apologise to noble Lords if I have to leave at the same time as he does.

I shall not add to the comments that have been made by the excellent committee members who I have the honour and privilege of working with. I want to enhance the words of our chairman, the noble and learned Lord, Lord Goldsmith, who said that we are still very much scrutinising this matter and intend to give it a full wind. It would therefore be wrong for me to add anything more to those excellent comments, other than to say that it is a good start. As my noble friend Lord Frost says, it is a step in the right direction. It is a modest treaty but none the less a statement of intent.

Curiously enough, of the 12 countries now in the CPTPP, if we include the United Kingdom, seven are Commonwealth countries. I have told the great Trade Minister, my noble friend Lord Johnson, who is also a vigorous and dynamic man, that it is amazing to me that neither his department nor the Foreign Office has shown leadership in establishing a Commonwealth trade treaty. Why are we sitting on our backsides and not showing leadership in the world where we have an open goal, as my noble friend Lord Howell has said—many others would agree—of 56 English-speaking countries sharing so many interests?

When my noble friend the Foreign Secretary was Prime Minister he attended two CHOGMs, so he has been very much involved with the Commonwealth. Why are we not picking up the baton and showing real leadership in the world of international trade where, as my noble friend Lord Lamont ably put it, people are starting to put up trade barriers? As a parting gesture, and to make my speech as short as I possibly can, I put it to the Foreign Secretary and to the excellent Minister of Trade, my noble friend Lord Johnson, that this should become a priority.

17:25
Lord Foster of Bath Portrait Lord Foster of Bath (LD)
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My Lords, I am delighted to follow the noble Lord, Lord Marland, who, like a number of previous speakers, have thanked the new Foreign Secretary for posts to which he appointed them. I, too, wish to say my grateful thanks to the new Foreign Secretary for posts to which he appointed me —but I remind him that, on one occasion, he specifically required me to work alongside Michael Gove.

I genuinely welcome the Foreign Secretary to his new post and congratulate him on an excellent maiden speech. I suspect that I am right, although perhaps he will correct me if I am wrong, that, despite all his years in the other place, this is the first time that he has ever led for the Government in introducing a piece of legislation. It is a piece of legislation that we have mixed views about—but certainly, as others have already pointed out, because of the inadequacies of our trade scrutiny arrangements in this place, we are being asked to look at a small piece of legislation that will enable the implementation of a very large trade deal, with which your Lordships’ House has not had a real opportunity to engage.

In the words of the noble Lord, Lord Frost, we have not had the opportunity to all buy into the deal, and we are having to do it in the absence of some quite important information—information, for instance, that would be contained in the report to which the excellent chair of the International Agreements Committee has referred. We have not got access, because it is not yet ready, to the government-requested report from the Trade and Agriculture Commission. We are short of information, yet it is sadly one of the few opportunities that we have to debate the CPTPP, its processes and outcome, because we have this one Bill to look at.

As others have pointed out, on these Benches we are well aware that there are some benefits of the deal—particularly some significant geopolitical benefits, I would accept. But notwithstanding the rhetoric of major economic benefits, or the optimistic predictions of our new Foreign Secretary, the figures on the economic benefit show that it is very limited. After all, it was the Government’s own figures, as we have heard, that show that the increase in GDP will be only 0.1% of GDP—and I remind other noble Lords who earlier said that it was 1%. As the noble Lord, Lord Kerr, reminded us, that is up to a period up to 2040, so it is taking into account all the potential growth that would take place in the region. After all, it is a tiny fraction that we will get back in comparison to the 4% loss of GDP because of our exit from the European Union.

As we have heard, there are many concerns about the deal, such as on weak provisions on labour rights, which some argue could lead us to importing goods made by exploited labour. However, to echo my noble friend Lord Razzall, I want to concentrate on the area of intellectual property, with concerns that I raised some years ago, when I served as a member of the International Agreements Committee. The whole House has accepted on many occasions that our creative industries have become the powerhouse of the economy, and intellectual property rights and their enforcement are their lifeblood.

As the CPTPP negotiations began, the creative industries, recognising that other countries in the group with less developed creative sectors would have less concern about IP issues, made a number of recommendations about what the Government should seek to achieve. One such issue, as we have heard, was in relation to the patent grace period, raised by the noble Lord, Lord Collins, and by my noble friend. The Government were warned that the CPTPP rules require its members to have a grace period for patents, whereas the European patents convention does not. If we agreed to the rules, it would put at risk the UK’s vitally important membership of the European Patent Office. I am genuinely delighted that the Government were successful in enabling us to set aside the CPTPP grace period provisions—but, sadly, few others of the sector’s asks were achieved. I suspect that that was because we were in the position of being a rule-taker rather than a rule-maker.

When, for instance, we were negotiating with New Zealand for a trade deal, it was between equal partners, and as a result of the pressure we were able to put on, New Zealand agreed to increase its copyright term to 70 years after the death of an author. We had clout in those negotiations. But the sections of CPTPP relevant to copyright term are currently suspended, so, as a start, the sector wanted our Government to press for the suspension to be lifted. However, as the Government had no clout in the negotiations, it was not, so our creators, except where we have bilateral deals, lose out.

In the digital environment, content owners rely on a range of measures to prevent piracy and the resulting loss of economic value, but given that the CPTPP provisions that support these protections are also suspended, the sector again wanted the suspension to be lifted. It was not, so there is no protection of UK content owners in important markets such as Malaysia and Vietnam. The CPTPP has no measures in relation to artists’ resale rights, meaning that UK artists and their estates are unable to receive royalties when their work is sold on the secondary market in CPTPP member countries which have not introduced such a right unilaterally. The sector’s request for the inclusion of ARR went unanswered, and our artists lose out.

Of particular concern is that the CPTPP does not have the same firm view as the UK that creators should have almost exclusive rights on their work, underpinning their ability to generate income. The CPTPP, for example, talks of

“a balance of rights and obligations”

in the interests or promotion of technological advances. This, the sector believes—maybe the Minister could comment on this when he winds up—means that technology and social media companies could have undue influence in determining the reasonable rights of creators; again, there is the potential for those creators to lose out.

So, overall, it is not a good deal for our creative industries, many of which are worried that, by signing up to it, we have indicated a willingness to accept a lower level of protection for copyright than exists in the UK, and that it will set a worrying precedent for future negotiations. Another country might say, for example, “Well, you were happy to sign up to that level of protection with them, so why not with us?”

Clause 5 introduces a further concern, which has already been touched on. It introduces an obligation on the UK whereby foreign rights holders and performers, for works within the UK, would receive payment where they currently do not. That is fine, and one would assume therefore that the obligations will be limited to CPTPP country rights holders and performers. But the Bill as it stands, bizarrely, does not limit this extension to CPTPP countries; rather, it provides for secondary legislation that will, in due course, specify the countries to be covered. Will the Minister confirm that consultation on which countries are to be included is going to take place during the passage of the Bill? Does he at least accept that we are being asked yet again to make decisions without having all the facts, and certainly without knowing what the implications will be?

I hope that the Minister will make it clear in his response that the Government accept that the IP chapter of the agreement, including the suspension of some of the IP provisions, is deficient, is a real cause for concern among the creative industries and, frankly, is not what the UK expects from future international trade agreements.

17:34
Baroness Lawlor Portrait Baroness Lawlor (Con)
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My Lords, it is a pleasure to follow the noble Lord, Lord Foster of Bath, and his trenchant antidote to the enthusiasms we have heard for this enabling Bill. I look forward to the Minister’s response on copyright.

It is also a great pleasure to welcome the Bill and to welcome my noble friend Lord Cameron of Chipping Norton to this House. It is indeed an honour that we have a Foreign Secretary on our Benches; as other noble Lords have pointed out, it raises the stature of the House. I met my noble friend before he entered Parliament—he very kindly came to brief me on Conservative Party policy in advance of a programme I was appearing on. In his typically courteous and patient manner, he expounded on Conservative Party policy on a range of issues, which convinced me that he was very able and intellectually astute. Not only that, he was charming, patient and courteous and asked if I had any views on these matters. When I gave my views, he smiled and paused and said, “Typically robust, as I would have expected from you”. Well, I am delighted with his typically robust introduction of the Bill and the advantages of the CPTPP. I am truly glad that he regards this as a great opportunity not only for the UK, its trade and the lives of its people, but for other peoples in other parts of the world. I am truly delighted.

I welcome my noble friend’s analysis of the Bill, which, as he explains, will ensure that the UK’s legal house is in order for the CPTPP to come into operation, thus opening one of the world’s fastest growing markets to the UK’s people and businesses. I have an interest to declare as the founder and research director of the think tank, Politeia. I have benefited and learned a great deal from working with specialist economic and trade lawyers. In particular, we have published on how best to exploit the opportunities now open to the UK for free trade since leaving the EU and to help shape the framework for world trade in goods and services, as noble Lords have already mentioned today.

The CPTPP already accounts for around 12% of global GDP, covering 11 countries, as your Lordships have heard, that are party to the treaty. The UK will now be the 12th, and that will bring the figure expected as a share of global GDP to 15%. Today, the US accounts for around 15%, as does the EU, but their shares are declining, whereas those of this region are growing. As was pointed out, by 2050 the proportions will be 25% for the CPTPP and 10% for the EU.

Not only will UK businesses benefit from building their export trade; so will people themselves—from a trade deal that heralds a more competitive and wider marketplace, with goods and services meeting ambitious common standards in a rules-based system. It will also allow, as noble Lords have mentioned, the UK to be a force in shaping world trade as a historic champion of free trade, a path forged globally over many centuries, and for which it was known to stand and fight its corner. Good laws that were and remain clear and transparent, and which are enforced in our courts and elsewhere without fear or favour, allowed this country in one major area, financial services, to overcome Amsterdam in the 17th century and Paris in the 18th, to be rivalled today only by another common-law area, New York. Now, with the shift in the balance of global GDP to the Indo-Pacific region, we can help shape the appetitive for free trade and, I hope, be a force for stability and the rules-based trading system that the CPTPP champions. We know that its members stretch from Canada to Peru, from Japan and Singapore to Australia and, of course, Vietnam.

This Bill will enable the necessary changes to UK law, which I welcome, so that all is ready when the treaty comes into operation—the changes needed for IP, government procurement and technical barriers to trade here so that the different conformity assessment bodies of the CPTPP, spread across different CPTPP states, will be treated on an equal footing. The impact assessment prepared by the Department for Business and Trade for the Delegated Powers and Regulatory Reform Committee explains that a new delegated power is envisaged for such conformity assessment bodies and that Clause 5(3) of the Bill amends the existing delegated powers arrangements in Section 206(4) of the Copyright, Designs and Patents Act 1988. The new Bill gives the Secretary of State powers in Clause 2(1) to make statutory instruments to amend the subordinate legislation which places conditions on the location of the CDPA’s national treatment of conformity assessment bodies.

On IP, I welcome the extension to the eligibility criteria by which performers can qualify for rights in respect of their performances in the UK. The UK welcomes talent, and the digital provisions of the CPTPP have been welcomed as open and enabling by trade lawyers. The CPTPP departs from the trade deal with Europe primarily in its lighter protection of personal data in favour of a free flow of data. This is an area where Britain will be instrumental in championing the reforms needed to meet our data protection needs. That is another reason for bringing our influence to bear when we become the 12th member.

The CPTPP’s modern provisions on digital trade are designed to facilitate trade and underscore its attention to services trade generally. For instance, on legal services, the CPTPP has been described by one legal authority as

“among the most progressive trading arrangements in the world. Many of the barriers to trade in legal services are behind the border, including domestic regulations around licensing, certification and requalification. The CPTPP specifically encourages member countries to allow lawyers to operate on a temporary fly-in, fly-out basis and on a fully integrated basis with domestic lawyers”.

Before I conclude, may I trespass on the patience of noble Lords for a few moments and mention some of the points my noble friend Lord Trenchard would have made had he not withdrawn from the debate to be part of the group welcoming the President of the Republic of Korea? He has a particular interest in Japan and Anglo-Japanese relations. As the House will know, not only is Japan the largest economy in the CPTPP but the UK will be the second largest. If the US had stayed the course, my noble friend suggests, our accession might not have been quite so significant for Japan. He refers to the time when

“our Japanese friends felt a little hurt that some of us spoke as though our closest friend and partner for business and trade in Asia was China … the former Prime Minister … felt deeply that the old and close relationship between Japan and the United Kingdom, which was badly damaged by the events of the middle years of the 20th Century, should be restored”.

He notes that his successor has played a leading role in pushing for Britain’s membership of this trade partnership and that

“Japan was … keen to have us join, for geostrategic as much as for trade reasons … six of the eleven members are Commonwealth countries and with our accession seven”.

With those wise words from my noble friend, I thank noble Lords for their time.

17:44
Lord Curry of Kirkharle Portrait Lord Curry of Kirkharle (CB)
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My Lords, I add my congratulations to those of the noble Baroness, Lady Lawlor, and other noble Lords on the Foreign Secretary’s appointment to this House and his maiden speech. It was an excellent speech, as anticipated. I also commend that his first public engagement was the trip to Ukraine. It was such an important signal.

Like others in this House, I welcome this Bill and the CPTPP. It is clearly a hugely important step forward and crucial in opening up trade opportunities for British companies in significant and growing markets, which we absolutely need to do. I congratulate the Government on this agreement.

My primary interest and concerns lie in the potential impact of the agreement on the agri-food sector. I very much welcome the noble Lord’s reassurance that our standards will be protected in trade deals. He may recall that he and I had interactions on agricultural policy in his previous incarnation. I appreciate that, to some extent, I am repeating concerns that many of us raised during the passage of the Trade Bill through your Lordships’ House, but those concerns are still real and relevant. This agreement is much better on agriculture than the New Zealand and Australia deals, but there are still issues of concern.

I was actively involved in the introduction of voluntary assurance standards across the agricultural sector 30 years ago and personally helped draft the standards for beef and sheep farming. This led ultimately to full supply chain assurance and the establishment of Assured British Meat, which was chaired by the noble Earl, Lord Lindsay. It eventually led to the establishment of Assured Food Standards, which still exists and is responsible for monitoring those standards on farms. This huge voluntary initiative eventually covered all sectors of agriculture and was introduced due to a very real concern about the loss of consumer confidence through the late 1980s and early 1990s in our production systems. There was concern about the use of hormones, sow stalls, the random use of antibiotics and a relentless media focus on animal welfare issues which undermined the integrity of our production systems. There was also concern about the level of compliance with animal welfare standards and with legislation and a lack of transparency.

We banned hormones, growth promoters, the use of sow stalls in pig systems and numerous pesticides for environmental and ecological reasons. The majority of farmers have embraced the need for independent inspections of their farms to verify that the highest standards of animal welfare and husbandry are being practised. We now have global leading traceability systems in agricultural production. These measures have been embraced by farmers and growers, often with huge economic consequences. We have led the world in establishing higher standards to restore and maintain consumer confidence. We cannot put that investment at risk. We cannot jeopardise consumer confidence. We should not accept product from any exporter country that is produced to a lower standard than is acceptable and appropriate in our domestic market.

I assure the House that the noble Lord, Lord Trees, and I have not conferred, but I wholeheartedly support his comments. I also absolutely deny that what I am suggesting is protectionism. I agree with the noble Lord, Lord Lamont, on the potential benefit of free trade. British farmers are not in the least afraid to compete with any country in the world, including those in this CPTPP, provided that common standards are consistently applied—I am trying very hard not to use the phrase “level playing field”.

We should aspire to be a global influencer, without being arrogant or complacent, in helping establish international standards—on the environment, greenhouse gas emissions, animal welfare and food safety—that could become a meaningful foundation for global trade. We can punch above our weight, as we have done many times in the past, and have a massive influence on global standards of food production.

I know that the Minister will want to reassure us that this is the Government’s intention, and that the CPTPP agreement includes a provision that deals will conform to our internal standards. However, concerns remain about hormone-produced beef from Canada and Mexico entering our market, the use of sow stalls, farrowing crates, tail docking in pigs, and the use of growth promoters in other countries included in the agreement. There are concerns about the high use of antibiotics and regular application of numerous pesticides that are banned here in the UK, added to which there is a continued concern about palm oil.

I do not want to sound negative, but not only have these concerns the potential to undermine our market competitiveness, but they also put at risk the consumer confidence I referred to earlier, which has been hard-won. Antibiotic use of certain pesticides could also have impact on human health. I hope the Minister will be able to reassure us that rigorous auditing systems will be established to verify that equivalent standards are in place from all countries covered by this agreement. I must advise him, however, that supply chains in many countries are nothing like as transparent as our own, and that the signing of an agreement that standards are in place is not sufficient evidence without a credible audit trail.

Finally, many of us in the Chamber were successful in persuading the Government to put the Trade and Agriculture Commission on a permanent footing following an amendment to the Trade Bill, which was very welcome indeed. It has been established to scrutinise trade deals and for its views to be available for us to consider. I concur with the concerns expressed by the noble Lord, Lord Kerr, on the ability of this House to scrutinise deals. It is deeply regrettable, as the noble Lords, Lord Trees and Lord Foster, have stated, that this debate is taking place before the TAC has produced its report on the CPTPP agreement, to help inform our debate today. Hopefully, we will see the report before the Committee stage of this Bill.

17:52
Lord Livingston of Parkhead Portrait Lord Livingston of Parkhead (Con)
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My Lords, I would like to join others in welcoming my noble friend Lord Cameron of Chipping Norton to this House. Like many others, I am here due to him. I had the great honour of being appointed as Trade Minister, so it is very appropriate we are talking about trade, particularly as my noble friend Lord Cameron was such a great proponent of trade. I joined him on many export missions around the world. Also, if there was ever somebody considering investing in the UK, the Prime Minister, as he then was, would always make time to see them. The UK during that time was the number one by a very long distance for FDI in Europe. I thank him and I welcome him. I would also like to congratulate him on his outstanding maiden speech; it is not a surprise—it is almost as if he has done this sort of thing before.

Turning now to this Bill, it is, as many noble Lords have commented, an unusual Bill, as it relates to technical implementation and there is a lot of scrutiny that still has not happened. However, I think it is important to look at the agreement as a whole and ask: why does it matter? First of all, as my noble friend Lord Lamont referred to, it matters because free trade is being pushed back upon. We have to speak up for free trade in the UK.

Why is free trade important? First, it is good for consumers—the people who seem to be forgotten so often—who get more choice and cheaper products. Competition is good for consumers. Free trade has been, is, will and would be good for consumers.

Of course, free trade is good for our exporters, giving them access to fast-growing markets and inward investment. It also raises the quality of our own industry. Exporters produce better products; they are more competitive. When they compete against other products coming from around the world, they improve their own standards, again, to the benefit of UK productivity —something which we clearly need.

Another area that often gets forgotten is that free trade is important for the development of countries. While most countries in this agreement—though not all of them—are pretty advanced, any trade agreements we do around the world, particularly the number we have in Africa, will raise standards in these countries and also help with their development. This may be even better than straightforward aid. Trade and aid together make a big difference to countries.

The President of South Korea will be speaking here; we can see what this country has done over the last five decades as a result of becoming a trading powerhouse. This agreement is also important for international relations. We will be getting closer to many countries with which we have shared and similar interests in a very important part of the world.

This particular agreement—I will probably it call “this agreement”, rather than CPTPP, as most people seem to be struggling over it no matter how many times we try and say it; it is not the best marketing brand, I have to grant you—is a good agreement. One of the things we forget is that we are acceding to this agreement; we were not part of creating it. To get such a good agreement is a great credit to the Department for Business and Trade and to the civil servants and the Ministers involved in it. I think it is an excellent agreement. We know, of course, that it gets a big reduction in tariffs on goods. It covers data and critically, services, for the UK. The UK, as has been said before, is the second-largest exporter of services in the world. It is a strength, and this, excellently, covers it.

On government procurement, UK government procurement has been reasonably open for some time, but not all other countries are the same. One of the things I agree with the noble Lord, Lord Frost, on—there were not many—is rules of origin. The rules of origin are very helpful, particularly in building up supply chains through various countries, as it can be seen would happen with this trade agreement. It is very helpful to have cumulative rules of origin.

Technical barriers to trade are also being dealt with as part of this agreement. One thing that is often not understood with trade is that tariffs are, frankly, only part of the story. The barriers to trade in areas of conformity are very important as well, and it is excellent that this is being dealt with and will hopefully be taken further from here.

The agreement also protects UK standards. One thing we should remember is that other countries look at the UK and are not happy about certain things that the UK produces. Haggis is banned in the US; they think, for some reason, that it contains things that are not healthy. It is remarkable. Marmite is banned in many countries. So, while we will be able to maintain our own standards, it is important to understand that it is not only the UK that looks at standards. As we are doing a trade deal with countries like Australia, New Zealand and Japan, I would much prefer that we are looking at maintaining standards together with them, rather than, for instance, with China, or others doing it with China. Perhaps we will set a higher world standard than we might otherwise.

The NHS is also being protected. The accusation that the NHS is going to be privatised is a bugbear that always comes around. We have had it with every single agreement. In every agreement that the UK Government have been involved in, it has been front and centre that the NHS is not an area in which privatisation would form any part of the agreement. In fact, I remember in negotiating TTIP, as it was then, the US Government said that they did not want the NHS to be part of it, the EU said the NHS would not be part of it and the UK Government said the same. Yet in every single discussion we heard, “The NHS is going to be part of it”. The NHS is not going to be part of this agreement either.

I would also like to say something about ISDS, because this is something that gets a lot of criticism, like it is just a bad thing. Why do we have ISDS at all? It is because companies invest in a country in the knowledge that, should that country’s domestic legislation attack them or their country in particular, they cannot always, particularly in certain types of countries, rely on domestic courts to protect them. That is why you have some supranational panel.

The UK has about 90 ISDS agreements already. According to the review from the UN’s trade body, UNCTAD, between 1987 and 2020, 90 UK companies took action under ISDS clauses against countries outside the UK. How many were taken against the UK? One. How many has the UK lost? None. The reason why we do not lose these is that we respect laws and treat countries favourably. That is why we should not be that bothered about Australia and New Zealand—but there are other countries where it is more problematic.

Under that UNCTAD review, Argentina has had 62 cases against it. It has been involved in expropriating without compensation, and that is the sort of thing on which people win cases under ISDS. There are some spurious cases under ISDS that people tend not to win, so just quoting cases where people have tried to take action and not won is not sufficient. I am a big supporter of ISDS and it is good that we have access to it, particularly through a modern ISDS clause.

We know that this not a replacement for the single market, so this is a bit of a spurious discussion. Of course, it is not as big or as good, but it is pointless repeating that. If you look at the countries with which we might want to do trade agreements, the US has put up the “closed” sign on trade deals with anyone. That is a great pity and a great failure of the US. It is about the one bipartisan thing you will see in the US; it does not want to do trade agreements. We will talk about China later; it has particular issues. India will be a slow process; of course we would like one with it. Basically, we are hitting most of the next tier of countries: Japan and Canada, for example.

We may be forecasting only a relatively small enhancement to GDP, but if noble Lords use the word “only” followed by a number involving billions, they have to be a bit careful—it is worth billions. These forecasts are based on relatively static assumptions. Their real focus should be on how we can get more from this agreement than these static assumptions would say. The President of South Korea was not far from here earlier, so it is worth reflecting on the agreement with his country. There was trade agreement between the EU and South Korea in 2011, when my noble friend the Foreign Secretary was the Prime Minister. Since then, our trade with South Korea has gone up by a factor of roughly three times, so trade agreements can make an enormous difference.

What the Government need to do is focus on more than this agreement, with all its perfections and imperfections; however you debate it, it is only a very small part. We need two things. First, we need a proper activation programme for the Government. That is what you would do in business: you would say, “I have an agreement; now, how do we take advantage of it?” Secondly, we need a UK education programme. The FSB, in giving evidence to the International Agreements Select Committee, highlighted that small companies do not know about trade agreements and the opportunities arising from them. We have to get out to see them.

UK middle-sized companies are also laggards. When I was Trade Minister, only one in six UK middle-sized companies exported outside the EU. You may say that that was something to do with the EU, but the figure was one in four in Germany and, even more shockingly, one in three in Italy. UK middle-sized companies need to be helped; the big companies can generally do their own thing.

Generally, businesses are also not aware of what is on offer from the Government. The Government provide a lot of help and support, but they do not make businesses aware of it. It was a failure in my time, and it remains a failure. We need to ensure that there are sufficient trade staff at our embassies and consulates. We need to ensure that there are government-supported trade trips to those countries in the sectors that are important: decide what they are and have a focus there. I would like to hear my noble friend the Minister talk about that later. We need support for trade shows, and year after year, not just once. My noble friend Lord Marland talked about trade envoys; they have done a tremendous job, so we need to reinforce their work in these countries.

Remember that trade is not just for the Department for Business and Trade; it is a pan-government effort, so we need, for example, the Ministry of Justice to push legal services, the Treasury to push financial services and Defra to push food exports—although, perhaps we should steer clear of too many speeches about cheese, as they have not always gone well. We also have to ensure that we put a lot of effort into attracting inward investment from these countries. Canadian and Australian pension funds are two of our biggest inward investors; we have to do more. This is a multi-year effort, and we need to move forward with consistency. I would like my noble friend the Minister to talk about whether the Government will set targets for how much we can do for both FDI and exports.

I know I have taken up too much time, but, finally, we also need to strive to make this agreement wider and deeper. We need to work with more countries. China has been talked about, but it should be remembered that this agreement has four of the Five Eyes countries—or eight of the 10 eyes, as you might call them. I suspect that we, along with Japan, will have similar interests regarding the role of China. Many other countries are interested in joining.

We have to work more on services, and we have to do more on product conformity, so I hope that this enabling Bill will move swiftly through the House and that we can move on to the important things. We do not know what the ceiling is on what can be achieved, but we will be better as a country if we look outwards and upwards, rather than downwards, backwards and inwards.

18:06
Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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My Lords, I join many others in offering the Green group’s welcome to the noble Lord, Lord Cameron of Chipping Norton, and will take a moment to reflect on the last time I shared a platform with our new Foreign Secretary. He might recall that it was at the Oval cricket ground in 2016. He was standing in front of a blue Mini, Harriet Harman was in front of a red Mini, Tim Farron was in front of a yellow Mini and I was in front of a green Brompton bicycle. He might take that as a lesson in what to expect from Green scrutiny of foreign issues: we take a different approach and offer fresh, new perspectives. The Green Party is the future.

In reflecting on that, I respectfully disagree with the noble Lord, Lord Lamont of Lerwick. Ideas from the past—from the 19th and 20th centuries—about free trade and the desirability of more and more trade have gravely depleted our planet, heated our climate and inflicted human rights abuses, poverty and suffering on vulnerable communities and individuals, particularly women and indigenous people. The noble Lord counted the pounds in saying that the

“policy of self-sufficiency comes at a price”.

I point out that the policy of free trade at all costs has come perilously close to costing us the earth and has done huge damage to the health and well-being of billions of human beings.

Further, we are now in the age of shocks. I have noticed that, over my four years in your Lordships’ House, fewer and fewer people talk about going back to normal—some age, presumably, before the 2007-08 financial crash. Global, complex, just-in-time supply chains have gone out of fashion, for good reason. Instead of chasing maximum profits—an extra halfpenny if an item is shipped around the world for one bit of processing and then shipped back again—companies are focusing increasingly on resilience. So should Governments, particularly when it comes to food, in both their actions and policies. Rather than focusing on growth at all costs, they need to focus on security.

I turn to some specific elements of the CPTPP, starting with a point made strongly by the noble Lord, Lord Collins of Highbury, about the investor-state dispute settlement procedure, also known as the secret courts. The Intergovernmental Panel on Climate Change said last year that this presented a huge risk to essential action on the climate. A study in the journal Science found that Governments could be liable for up to $340 billion of payouts through ISDS, if they take away the essential environmental measures that we need to keep us all safe. High profile cases have seen Governments challenged by private investors over a phase-out of coal-fired power, bans on offshore exploitation of oil and gas, and moves to strengthen environmental assessments.

In reference to the comments of the noble Lord, Lord Livingston, I say that taking cases and dragging through the ISD process over years at a huge cost has what the IPCC and others have identified as a chilling effect on Governments taking action, whatever the final outcome of the case, years and many millions of pounds or dollars later. That has an impact.

The UK has agreed side letters with CPTPP members Australia and New Zealand to disapply the provisions of the secret courts. The key question I put directly to the noble Lord, Lord Johnson, is about Canada, which is a particular concern. Canadian companies have been particularly litigious, having brought 65 ISDS cases, which could have a profound negative impact on the UK’s right to democratically regulate our own conditions. In October, a letter was sent by 30 NGOs and trade unions and 50 professionals from both the UK and Canada calling for an immediate negotiation for a side letter. Will the Government at least consider that, given the Canadian track record?

I also want to pick up on the points raised by the noble Lord, Lord Curry of Kirkharle—and I speak now as a former resident of Thailand with some awareness of the environmental and farming conditions in south-east Asia. When we look across all the CPTPP countries, we see that 119 pesticides that are banned in the UK are allowed for use in one or more of the group’s members. Many of these countries will be keen to export agri-food products to the UK, and, as the noble Lord, Lord Curry, said, this risks further undermining our farmers after the potentially disastrous impact of the Australia and New Zealand deals. Of course there will be huge pressure, again in Canada, where hormone-treated beef is used, and, as he said, there is huge public concern about that in the UK, for good reason.

I also want to pick up a point raised by the noble Lord, Lord Collins, about the end of the tariff on palm oils in Malaysia. Trade Secretary Kemi Badenoch said in March in the context of the CPTPP that palm oil was “a great product”. I am afraid it is not if you are an orangutan, a member of a critical endangered species of our close relatives, who have seen their homes destroyed and once-biodiverse rich forests storing masses of carbon turned into serried ranks of sterile plantations. Indeed, it is also not great if you are a consumer of much of that palm oil in ultra-processed products, the damage from which is being set out right at this moment upstairs, as the All-Party Parliamentary Food and Health Forum hears from Dr Chris van Tulleken, author of the best-selling book Ultra-Processed People. That pretty well describes our current diet, and we certainly do not want to make it worse.

Finally, I want to cite the very useful Trade Justice Movement briefing for today’s debate, which said that this is an important opportunity for parliamentarians to debate the flaws in the UK’s trade scrutiny process and to highlight, as the noble Lord, Lord Razzall, did, that using what I would call whiteout—possibly that is an Australianism—on scores of documents to replace “the EU” with “the UK” does not amount to “a benefit of Brexit”.

As I often say, democracy—it would be a good idea. As the noble Lord, Lord Kerr, highlighted, the opportunities for democratic oversight of this Government’s trade policies are severely lacking. We have to take what opportunities we can to hold the Government to account on many issues, not least our relationships with the rest of the world. I finish by promising the noble Lord, Lord Cameron, that I will be doing that particularly on the development part of his portfolio, on which he as Prime Minister had a positive record, as he did on the subject of antimicrobial resistance. I remind him that, as we learned through Covid, no one is safe until everyone is safe. Antimicrobial resistance is very much an issue that it is in our interest to tackle all around the world.

18:14
Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, it is a pleasure to take part in this debate; in doing so I declare my financial services and technology interest in Boston Ltd and Ecospend Ltd respectively.

It is more than a pleasure to welcome my noble friend the Foreign Secretary to the Front Bench in his new role. I was fortunate enough to work with the then Prime Minister in the run-up to and during the London 2012 Olympic and Paralympic Games. He was incredibly supportive, to the extent that on International Paralympic Day and with a year to go to the opening ceremony of the Games, he agreed to play in the centre of Trafalgar Square a game of tennis against the then Mayor of London, Boris Johnson. I will not trouble the House with who was the victor of that sporting clash of titans but, due to the sotto voce classical cursing which was taking place, I feared that at any point either player might pull their Achilles. My noble friend’s support, particularly for the Paralympic Games, enabled us in the summer of 2012 to put on not just such a golden summer of sport but to do something which fundamentally changed attitudes and created opportunities for disabled people in a way that has not been rivalled since. That was so much to do with his leadership as Prime Minister at that stage.

I will touch on four areas: inward investment, the role of our regulators, how we look at the IP issues, and the broader geopolitical elements of this agreement. First, to take a step back, there could barely be a more appropriate time than the year of the 300th anniversary of the birth of Adam Smith to look at this agreement. We need to review and reconsider the “wealth of nations” and how we take a broad and deep view of wealth to ensure that we have a group of trading nations which truly delivers economic, social and psychological benefits for all citizens.

We have never been more connected. We are seldom off our screens, with so-called social media taking up so much of our time, yet we see so many issues of retreatism, populism and nationalism rather than the pressing need to come together to get after so many of the existential challenges which we now face. In essence, all the significant challenges are global in nature. If we wanted to recast ESG, we should see it as “existential, seismic and global”. This agreement comes at the right time and has so much potentially to offer in bringing nations together to solve some of the greatest challenges of any time, never mind just our time.

When the Minister comes to respond, can he say something on the Government’s approach to inward investment? We really need to consider the welcome mat that we need to lay down. When people seek to invest in this nation, they need to know so much about the intricacies and the details of many multiple factors. Does he agree that it would make sense if we had a specific team in the department to deal with that issue so that we could enable such a welcome mat in real time, with all our information, to ensure that we optimise the inward investment that we can pull in?

I come to the role of our regulators—not just financial service regulators but all relevant regulators associated with this agreement. Will my noble friend the Minister agree that they have a role to connect internationally to do everything they can to potentially increase trade between all the nations within this agreement as currently set out?

The agreement talks about prioritising digital services, as rightly it should. The great potential of so much in digital is that barriers to entry for new entrants are so low. You can potentially run a global business from your bedroom with a laptop and a decent broadband connection. Would my noble friend say something about how the Government seek to progress what we were able to push through with the Electronic Trade Documents Act? It was a small Act. I was fortunate enough to be a member of the Special Bill Committee, and I have often described it as the most significant law that no one has ever heard of.

It is the most significant law because I think it is the first time that the UK Parliament—or any Parliament—has legislated for the opportunities of these new technologies, tied with our financial services ecosystem and the extraordinary good fortune of English common law, used in so many jurisdictions around the world because of its certainty, flexibility and ability to develop through precedent and case law. Passing the law was significant, but can my noble friend in concluding say something on how we can connect with all the nations in this agreement to enable all our learnings from passing the ETDA to be shared so other jurisdictions can pass similar legislation—because, as we know, it takes two to trade?

To enable physical documents to be held in electronic format and to have the physical goods, having all the customs and legal documentation and all the financials combined in real time is nothing short of transformational when it comes to international trade. Enabling transfer of title to melt from between 10 to 14 days into mere moments: that is a way to transform trade. I believe this agreement is a good opportunity to parlay with those nations to convey the benefits of passing similar electronic trade document legislation in their jurisdictions.

There is a lot in the agreement concerning IP and copyright. I specifically ask the Minister: as currently drafted, does the agreement offer equal rights for UK performers to assert their copyright and other IP rights in other nations as it does for internationals to assert such rights in the UK? I am not sure it is entirely clear in the current draft.

In conclusion, I support this agreement. In terms of international agreements, it certainly makes the heaviest use of the letter “P”, but it is none the worse for that. As other noble Lords have mentioned, we have had extraordinarily impactful international agreements in the past and they have served us well, but many of them are well in the past in their formulation and construction. It seems an opportune moment to review all these agreements to see how we can achieve the optimum for nations and for all citizens around the world, because the challenges are global and we can solve them only if we work together collaboratively, truly connected, using all our good offices and all that we have learned in the UK, connecting with all our global friends so we can all move forward and truly deliver on wealth, in the deepest, broadest sense, for all nations.

18:23
Viscount Waverley Portrait Viscount Waverley (CB)
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My Lords, the noble Lord, Lord Kerr, referred to the lack of a published trade strategy by this and former Administrations. I am delighted he did so, as many times over I have attempted to have the Government at the very least publish quarterly regional trade commissioner reports. That would go a long way to assist an understanding of the opportunities and challenges that exist in any particular region.

CPTPP is rightly a cornerstone of the UK’s global trade strategy and serves useful as a prompt to be replicated with equal vigour with the important EU relationship-building exercise. Benefits of CPTPP accession can be readily identified: yes, but with qualification, to access to dynamic new markets; yes to ground-breaking digital and data provisions; yes to tariff reductions on goods; and yes to supply-chain diversification, for example. However, when scrutinised, an immediate boost for UK exports for the UK by CPTPP membership is not so immediately apparent, given that much of UK services exports already are to four major CPTPP members, and the UK having bilateral FTAs with three others.

I should state before continuing that I have never had any dealings with China and do not expect to do so. The noble Baroness, Lady Hayter, said the question of China is of central importance, but it is in the future that substantial gains could come, should future CPTPP expansion include China. I recognise that, for the UK, it could present dilemmas on the grounds of geopolitics, human rights and China’s economic system, with prolonged accession negotiations having consequential delay for others waiting in line to join. My view is that participation would be a good thing for China, leading to domestic reform and strengthening its role in the global supply-chain cycle, in addition to creating a more stable and open regional investment environment, with the additional benefits that derive from closer partnership with a family of nations.

That is important to us all, but let there be no doubt that China would have to be fully compliant with all the terms and conditions set out in the terms before us. But better China be de-risked without constant belligerence and be at the table. There are, after all, many shared experiences on which the UK and China could work together. The UK wrote a chapter of history with our past and, without wishing to be perceived as overly self-critical and accused of double standards, ensuring that others consider history and lessons learned is something from which we could all benefit, including China. China’s strategy and practices towards Africa, Sri Lanka and, more latterly, the Solomon Islands are examples.

The UK should not be caught out on a limb. The Government have a well-rehearsed backwards and forward series of strategies over China, which include geopolitical and human rights challenges, with some suggesting that the Government might frustrate China’s CPTPP accession aspirations. There are, however, many in and from China who view the state of the world and believe China may be on the verge of adjusting policies more favourably towards the West. This shift of tides can be felt internally, with indications that China is showing more interest in its bid for CPTPP membership, does not wish to be left behind by major trading partners and is recognising that its bid will require policy changes. This should be encouraged.

It is right however, that the UK be promoting a regional vision, focusing on an open and rules-based trading system, but in lockstep with our economic security. There are many in China of the view that the UK is a country with influence with other stakeholders, such as Japan. It should be remembered that President Xi has pursued improved relations with Japan’s Prime Minister Kishida, placing emphasis on shared economic interests and giving rise to hope that China might be preparing for a degree of flexibility in its talks on CPTPP membership. That preceded the more recent, equally positive, meeting with President Biden in San Francisco.

I suggest that we all watch with keen interest what transpires from the upcoming EU-China summit. We live in a complex world, with world powers not currently aligned on many values. While ideological change can be a long journey for the UK and US, by contrast, China’s power structure can allow for change to happen more quickly. It will be hard for some, but the UK should not be blind to a policy reset and recognise that a by-product of peace and coexistence is international trade. As the noble Lord, Lord Howell, pointed out, it is all about diplomacy and tolerance. That is surely why we are gathered here today.

18:29
Lord Udny-Lister Portrait Lord Udny-Lister (Con)
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My Lords, I add my congratulations to my noble friend Lord Cameron on taking on the role of Foreign Secretary. Let us never underestimate overseas Governments: they know who has influence in foreign affairs and who does not. They also know when they meet somebody who has influence in this country and overseas, so it is really great news. I have also had a lot of opportunities to see my noble friend Lord Johnson at work on the investment side. I can tell your Lordships that it is mightily impressive.

I welcome this Second Reading, as the CPTPP provides the UK with a truly unrivalled opportunity to deepen our economic ties with some of the world’s most dynamic and progressive economies. Like others here, I am a true believer in free trade. I have therefore felt a lot of excitement in following the UK’s accession to the CPTPP as it has progressed through your Lordships’ International Agreements Committee; the noble and learned Lord, Lord Goldsmith, went into that in some detail.

There are a couple of points that I want to pull out. I think we need—and I welcome clarity on—rules of origin, specifically in areas where existing FTAs are in place, so that UK businesses can ascertain more easily whether there would be more benefit in them trading under localised bilateral agreements or through the CPTPP itself. Further to this, I have highlighted that the Government need to take bolder action in securing more generous local content thresholds in order to protect UK manufacturers. I would be grateful if the Minister could provide some reassurance that mitigating industry’s concerns in these important areas will remain a priority for this Government as the Bill progresses.

By fostering an environment of free and open trade, the CPTPP promotes economic growth and encourages innovation, benefiting UK businesses both large and small. It opens doors for collaboration in areas that are important to the UK economy, such as innovation, technology and research. It is my hope that, through connecting with economies that are at the forefront of technological advancement today, the CPTPP will allow the UK to stimulate innovation and create high-skilled jobs, and allow us to remain a competitive force in the global marketplace.

Picking up on conformity assessments, I am pleased that the Bill will enhance regulatory co-operation between the UK and other countries, for trade agreements of any kind are pointless if they do not seek to reduce costs and bureaucracy for our domestic businesses at every possible opportunity.

We have touched a little on consumer rights. It is important to acknowledge that, as we are acceding to an existing agreement, the Government were limited in seeking the types of amendments that some would have sought; many people have made this point. I, for one, remain entirely satisfied that the Government have proven that they remain committed to ensuring that our high standards and protections, and the rights of the consumer, will be safeguarded in this agreement. However, I urge the Government to seek further joint statements on a bilateral basis, like the joint statement on sustainable agricultural commodity trade with Malaysia, to demonstrate that the United Kingdom’s reputation as a socially responsible and forward-thinking trading partner remains intact.

That is all the good stuff. Now, if I may, I will offer a bit of criticism; the noble and learned Lord, Lord Goldsmith, picked up on this point. We live in an era when technology is advancing at an unprecedented rate. Business needs quick access to the latest information for trade. It is therefore disappointing that our Government’s website, GOV.UK, falls well short in providing easy, accessible trade-related information. My request to my noble friend Lord Johnson is that he will get his department to ensure that our website equals the gold standard of other countries’ websites. I am sure that my noble friend Lord Frost will not be happy to hear this, but even the EU is better than the UK at this—but the accepted gold standard seems to be Australia. Trade agreements are absolutely pointless if businesses are not able to go through the door and trade. It must be easy to trade and get information; it is essential for SMEs that this is the case. This is a real plea that we make sure that all the information we need is easily accessible and understandable.

As we attempt to navigate the choppy waters of international affairs and the increasing complexities of global trade in an increasingly dangerous world, it is important to acknowledge the strategic importance of our accession to this agreement. Although, by the Government’s own assessment, the economic benefits of the UK’s accession will initially be small, our accession to the CPTPP signals our long-overdue tilt to the Asia-Pacific region and, in my view, the starting point of forging stronger bilateral economic and security ties with other major economies, including Japan, Canada and Australia. For the United Kingdom, the CPTPP ensures that our businesses will have increased access to markets that were previously characterised by high tariff barriers. By reducing these barriers, promoting regulatory co-operation and leading the CPTPP nations in promoting innovation and sustainability, our accession offers a significant opportunity for this country. I therefore very much support what I believe to be an exciting journey that we are on.

18:37
Lord Grantchester Portrait Lord Grantchester (Lab)
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I begin by joining others in welcoming the Secretary of State to his new position and congratulating him on his maiden speech. His standing can only enhance the reputation of your Lordships’ House.

This trade agreement is one of the residues left from the Department for International Trade, now disbanded and currently within the Department for Business and Trade. The department could well have been characterised then as rather reticent to stand up for UK interests, especially British livelihoods and the prevailing standards to which all domestic production must adhere. It seemed to rush through deals with all countries that trade with the UK. It also persisted in maintaining the extraordinary executive principle and stuck to the CRaG process of endorsing trade deals, originally set up before Brexit, when authority and jurisdiction ultimately rested with the EU. The noble Lord, Lord Frost, was correct in his assessment of the continuing appropriateness of the CRaG process. What prominence does international trade now have within the wider business department, with what budget and what headcount?

I join others in calling on the Secretary of State to outline the timetable and process for the ratification schedule that your Lordships’ House will have following this legislation. As well as being opaque, the CRaG process allows for a vote in the Commons only, following a debate outlining specific concerns. Will the Government at least mirror this process in your Lordships’ House? I thank your Lordships’ Delegated Powers and Regulatory Reform Committee for its report on the Bill and ask the Secretary of State to reply further on these technical issues.

The department’s impact assessment does not seem to examine critically the effects of this trade deal on existing trade with others—most notably members of the Commonwealth, seven members of which are in this agreement. In that regard, the comments of the noble Lord, Lord Marland, were well made. The UK has concluded a side letter with Australia and now New Zealand, as CPTPP parties, to disapply these provisions. What percentage of the estimated benefits from concluding the deal will now no longer apply? Of course, the UK has concluded a separate and possibly damaging one-sided trade deal with both Australia and New Zealand. Do this and other agreements rather undermine the merits of this treaty? Will this lead towards preference access arrangements being eroded on certain foods, such as bananas, that are vital to the interests of certain Commonwealth cultures? Certain other provisions, such as investor state dispute settlement provisions, have also raised alarm. Can the Minister commit the Government to seeking a side letter with Canada to disapply the use of such provisions between Canada and the UK and to maintain the UK’s right to regulate in its public interest?

When the House previously debated this agreement following ministerial statements, many questions were asked around the potential membership of China. Can the Minister expand on the process that China would need to follow and what procedures exist for the UK to take a full role to veto such an application if it was required and should it still be necessary to safeguard the integrity of existing relationships? Australia has already said that it would not endorse China’s application while China continues to block the import of Australian goods.

On one of these previous occasions, I asked the then Minister—not the noble Lord, Lord Grimstone, I hasten to add—whether the Government would give a commitment to safeguard trade with Taiwan. As the Minister will know, the UK has an enhanced trade partnership arrangement with Taiwan. I cannot say that my confidence was raised by the reply. Taiwan is one of the most advanced places in its innovations and skills in the technology and communications sector. Can the Minister now give the House confidence that the UK will continue to support the continuing independence of Taiwan from interference from China and safeguard present and future trade with Taiwan in all circumstances? What effect will the CPTPP have on trade with Taiwan?

The noble Lord, Lord Cameron of Chipping Norton, in his opening remarks, greatly emphasised that UK standards would be maintained across all food, animal welfare and environmental conditions. Here I declare my interest as having a dairy farm which is still receiving some residues of payments under the basic payment scheme. I do not entirely share the continuing endorsements that standards will be maintained, since all Ministers repeat this mantra rather too glibly. As my noble friend the shadow Minister asked, what safeguards will there be to follow up on these statements? The Government have already resisted amendments to underpin this commitment on a statutory basis, insisting that present agencies such as the Food Standards Agency exist for this purpose.

During the passage of the then Trade Bill, the Government conceded the appointment of a Trade and Agriculture Commission, opposed by the noble Lord, Lord Curry, who spoke about this well in his remarks. However, the then Secretary of State requested advice from the TAC only in mid-July this year. The TAC call for evidence concluded only in mid-August, and its report on this trade deal has yet to be published. That report will be important for your Lordships’ House to consider carefully. Can the Minister commit to replying to that report, publishing that reply immediately and, most notably, it being available for this House to study in Committee, to inform our deliberations?

As has been noted, your Lordships’ International Agreements Committee also has an ongoing inquiry. Surely it is important that all these committees and agencies be engaged in the process before the Government fully endorse any trade deal. Full transparency of all evidence and effects is paramount in all legislation and should be included in all impact assessments. In this regard, the geographical indicators provisions in the agreement are important and have some alarm attached to them.

Are there any independent inspection regimes that will be conducting investigations on the various countries party to the deal? Will the UK rely only on the exporting countries’ institutions to undertake certification of standards? Will any authority in this country be set up to assess these agencies for recognition and be able to inspect and assess the relevant countries’ assessments of their standards and whether these are necessarily sufficient and accurate? How would such arrangements work? In this, I recognise the lengths that the EU pursues in its assessment of standards that would be needed to qualify access in the EU. What powers would the Food Standards Agency have once a complaint was received regarding an imported product? I am grateful to the noble Lord, Lord Trees, for his remarks on this point. What protections will be written into the final agreement —that no divergence of supplies from countries outside of this agreement, such as China, can be re-routed to the UK, via intermediaries such as Vietnam? There are still many concerns to be addressed.

In concluding, I welcome all opportunities to increase trade and any advantages that this country can gain through exports and improving the choice and quality of goods that can be imported into this country. However, let us get the process right and be sustainable. The terms of trade must be beneficial and allow for greater prosperity for everyone, including our footprint on the planet. The Department for Business and Trade needs to enhance present support for business to secure these benefits—and that includes agriculture.

18:46
Earl of Effingham Portrait The Earl of Effingham (Con)
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My Lords, I congratulate the noble Lord, Lord Cameron of Chipping Norton, on his excellent maiden speech.

I am speaking at Second Reading because I support this Bill and the sensible changes that it makes to our domestic laws, which will enable us to take full advantage of this agreement. I am particularly keen to talk about the benefits to our SMEs, both exporters and importers, how it will enhance our trading relationship with Peru, and the multiple ancillary benefits to the wider UK community. I refer the House to my entry in the register of interests.

Prior to having the honour and privilege of joining your Lordships’ House, I spent over 20 years advising and winning business from around a third of the companies in the FTSE 100. I greatly enjoyed my trips to Derby to see Rolls-Royce and Farnborough to see BAE, two of our leading UK exporters. For the past few years, my attention has migrated to SMEs. This focus has made me realise that while our large, listed businesses of course make amazing contributions to the economy and employment, SMEs are the lifeblood of our nation. I speak daily to these firms and am constantly dazzled by their entrepreneurial spirit, their determination, their grit and their ability to innovate and adapt on what can often be a very bumpy ride. It is these enterprises which we hope will grow to be the future Rolls-Royces and BAEs. We should do everything that we can to support them. The Bill and the agreement behind it aim to achieve that.

The Minister—my noble friend Lord Johnson of Lainston—enjoys statistics, so please allow me to share some. UK exports are now at the highest level that we have seen in our history, £882 billion year on year as of September 2023. The Government’s strategy is to achieve £1 trillion of exports by 2030, so we are comfortably on track to exceed that target. In 2023, 84% of the businesses directly supported by our excellent UK Export Finance—some 529 companies—were SMEs. This is the highest annual figure on record and represents a steady uptrend in UK Export Finance’s support for SMEs since 2019.

These numbers are significant and to be proud of, but I will give you what I believe is the most important statistic of them all. If you were to go to Companies House today, you would find around 5.4 million firms registered. Of those, only 8.8% export at all. Through the Bill and agreement, we have an opportunity to increase that number significantly. We are starting from a low base, so it is much easier to incrementally grow that 8.8% to, let us say, 20% and higher in the longer term. This will deliver major benefits to the UK economy and workforce.

CPTPP membership will give us access to 15% of global GDP and to some of the world’s most material markets in the Americas and Asia-Pacific. I can see only upside to helping our great UK companies export, and the Bill and agreement will play an important part in that. The Institute of Directors’ feedback on the Bill was:

“Anything that makes it easier for British businesses to export is good news”.


I should also flag the benefits to our importers. Only a few weeks ago, I was speaking to a business owner who is investigating how to import chemicals from one of the CPTPP countries to manufacture his product in the UK. He needs to diversify his supplier base and the Bill will help give him greater access to the global supply chain.

Finally, due to my involvement with Peru, allow me to give you some examples of how both the UK and Peru will benefit from this agreement. Tariffs of 11% will be eliminated on UK exports of beef and tariffs of mostly 6% will be eliminated on UK exports of poultry. At the same time, we in the UK can take advantage of cheaper import prices for Peru’s incredible and diverse array of fresh fruit and juices, which I personally enjoy, as well as chemical and manufacturing inputs to name but a few. UK business visitors will enjoy an extended length of stay in Peru and we will enjoy greater transparency for British investors in Peruvian companies and their directors.

Our exports to Peru were £370 million in 2022, which represented a 46% increase year on year. There is no reason why we cannot continue to grow strongly. I hope, as part of the CPTPP, we will expand and continue to work together in sectors such as mining, energy, finance and tourism.

I truly believe that we have an opportunity here to help our FTSE and AIM companies, our SMEs, our exporters and our importers to create large amounts of new UK jobs over time and collaborate with our partners in the CPTPP, so that everyone benefits.

18:53
Earl of Sandwich Portrait The Earl of Sandwich (CB)
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My Lords, trade has always been a subtle and underrated form of foreign policy and, before he leaves, I welcome the new Foreign Secretary to the House for this debate, and I wish him well. He has just returned from Ukraine and I hope that, as a by-product of the war with Russia, this Government will work more closely with Europe, not only in defence but in trade and international development.

I recognise that this legislation is technical but, like others, I have questions about where the Bill fits within the UK’s trade scrutiny policy, and I wish to seek clarity on certain aspects of the agreement. I particularly acknowledge the help of Trade Justice Movement.

It is nearly a year since I left the International Agreements Committee, but I well remember our first meetings with the Minister—he is very friendly—which were chaired by the noble Baroness, Lady Hayter. I am glad to see her, and the noble and learned Lord, Lord Goldsmith, back today. I also welcome back the Trade Minister as one of the Government’s survivors from the last 12 months. Today I shall take him back to some of our previous conversations about scrutiny, deforestation and food standards. I must also say that we all miss the unique personality of the late noble and learned Lord, Lord Morris, who was nothing less than a stalwart on the subject of agriculture and especially the too often ignored interests of the Welsh uplands.

With regard to scrutiny, as others have said, I regret that the CRaG process by which the CPTPP and other trade treaties are ratified remains unfit for purpose. Parliament should have more input into shaping the UK’s negotiating objectives and should have sight of negotiating texts as talks progress. That is important behind-the-scenes business. There is international precedent for this in the US Congress. I agree with my noble friend Lord Kerr that we need a debate on trade strategy. That point has been made already.

I understand that accession to the CPTPP is a little different from the negotiation of a new trade treaty, but increased scrutiny will improve and not hinder our trade outcomes. Red lines established by Parliament could strengthen the hands of negotiators, so I hope the Minister will give us some reassurance that there will be a vote on a substantive Motion on accession and that it will be held in another place during the CRaG period.

As the noble Lord, Lord Foster, said, there is also a procedural question regarding timing, given that CRaG has not yet commenced. We are debating legislation that implements an agreement to which Parliament has not yet consented and on which the committee is still taking evidence. It does not have to be like this; is it not rather illogical? Can the Minister explain why the Government have introduced the Bill so far ahead of CRaG? It could have been the other way round.

On NGOs, the Minister may recall his response to a Written Question that he gave me in July: that the department had carried out one of the most thorough consultation exercises ever. But this is not the story I hear from the NGOs. They refer to the system set up originally by the DIT to generate dialogues, such as the trade advisory groups or TAGs, which are still not working properly. Does the Minister agree that these systems must be improved if we are going to have outside opinion?

On specific aspects of the agreement, there is still widespread concern about the effect of reduced tariffs, for example on expanding palm oil imports leading to deforestation. The noble Baroness, Lady Bennett, mentioned this. It is occurring in several member states, notably Indonesia and Malaysia. I have read the joint declaration on sustainable agriculture with Malaysia, which is obviously —at least potentially—a notable advance. I expect that the Minister will mention that.

I have also read the impact assessment, which says:

“The agreement is not expected to have a significant impact on wider environmental issues, such as biodiversity”


and “deforestation”, but it admits that Malaysia has suffered a huge 29% fall in tree cover over the last 20 years, owing to agricultural commodities such as palm oil and, of course, international trade. Can the Minister explain how the department can monitor British companies and the many supply chains that are engaged in those giant operations? Does he know of companies practising due diligence in the CPTPP countries? It may be an unequal agreement. In the countries concerned, such as Malaysia, should the Government work more closely with local NGOs, which often have experience on the ground and the capacity to work in partnership?

As for food standards, we shall have to wait for the TAC and the FSA. I do not envy them examining so many countries. The noble Lord, Lord Trees, mentioned veterinary standards, and the noble Lord, Lord Curry, and the noble Baroness, Lady Bennett, mentioned divergent standards on pesticides. Are the Government concerned that other member states will gain a competitive advantage from these divergences? The noble Lord, Lord Collins, mentioned earlier that there is also deep disquiet from the Canadian meat industry regarding the UK’s regulations on hormone-treated beef. What are the prospects of the UK making concessions in this area?

I turn to human rights. I heard the new Foreign Secretary’s reassurance, but I have to take the Minister back to the India free trade agreement, on which the committee took evidence during the previous year. We had an interesting session with the department’s negotiating team and I vividly recall the lead negotiator’s attitude to human rights. It was simple: this agreement is about trade, not human rights. Human rights was not in his vocabulary, and he was the negotiator. I do not think he had even read the impact assessment. In case this negotiator is still representing the UK, I think I must repeat what some of us said at the time: trade is not just about finance and investment. It is a relationship between states based on a range of criteria such as climate, standards and moral values. These issues are constantly discussed between friends. They are important even when the UK economy badly needs—as we know it does—support from trade agreements such as the CPTPP. They are not in contradiction with one another.

Finally, on 16 July there was a joint statement with five members of the CPTPP on the environment and sustainable development. It ignored human rights. It mentioned labour rights and indigenous rights in passing, but there was nothing about governance or the rule of law, let alone supply chains and minority rights.

There is a lot to catch up with, and we look forward to subsequent debates at the stages of the Bill. I thank the Minister for his listening powers and I look forward to his answers to at least some of these questions.

19:02
Lord Lansley Portrait Lord Lansley (Con)
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My Lords, I apologise that I was required in other meetings for much of the afternoon; I look forward to reading many of the contributions. I did have the pleasure of hearing my noble friend the Foreign Secretary and the opening speeches. It is 34 years since he and I first worked together, and I look forward to resuming the pleasure of working with him in this House.

One of his actions as Prime Minister was to nominate me to chair the UK-Japan 21st Century Group, so I declare my registered interest as co-chair. While I was listening to my noble friend Lord Lamont, I thought, happily, that I could reduce the scope of my speech by simply saying that I agree with him about the benefits that accrue to this country from free trade agreements, of which this is one, and the particular benefits associated with the opportunities in such a fast-growing part of the world in terms of services trade and digital trade. The CPTPP is the most advanced regional agreement on digital trade, but countries within it with which we have bilateral agreements, such as Singapore, give us hope that CPTPP will be, once more, a leader in developing digital trade. I very much look forward to that. That will, no doubt, be even more advanced if we bring Korea into the CPTPP in future. With the President of the Republic of Korea here today, I am sure that will have featured in our discussions.

I will not detain the House very long, and there is a risk of me repeating what has been said by others, but I want to say a number of things about the process, and the technical characteristics of the Bill, which I hope we will return to at subsequent stages.

First, on the process, I was rather heartened by the discussions we had last week; I am grateful to my noble friend the Minister for those discussions and his subsequent letter. It is important for us—I speak as a former member of the International Agreements Committee and following the noble Earl, Lord Sandwich, who was also a member of that committee—to recognise that we had an opportunity to report in preparation for the negotiations on the negotiating mandate. That led, as the noble Lord, Lord Collins of Highbury, rightly said, to some steps in the negotiating process that managed to deal with one or two of the problems that would otherwise have been in the document—the treaty itself—and that is rather important for us. I must confess that I have to depart from the noble Lord; I think the fact that we are not seeking to derogate from the investor-state dispute settlement provisions is a very good thing. We are a country that invests very widely, and is invested in very widely. My Japanese friends invest substantially here and around the world, and our accession to the CPTPP would have been much more difficult if we had sought to depart from ISDS provisions. As a country, we have never been successfully challenged on an investor-state dispute settlement, but I think many British companies that invest around the world would wish us to be participating in and promoting ISDS.

On the ratification process, we are still getting used to this after we left the European Union; part of the structure of that is waiting for the Trade and Agriculture Commission to report. On the assumption that it does so in the next few weeks and the Government respond relatively promptly, that should then—after a delay of maybe up to 10 days—permit the Government to notify the accession to CRaG under the legislation and give an opportunity for the International Agreements Committee, the chair of which I can see in his place, what it expects, which is an opportunity to report on the treaty and to ask the House either to consider it or to have a debate. That might reasonably all be completed before 16 July 2024, which is one year after the signature and, therefore, within the timeframe to which we have committed ourselves to complete the ratification process.

It is not easy to work out how these things work, but I think it is quite helpful for both Houses to decide whether they support ratification at a point when they have heard from the Trade and Agriculture Commission and their relevant Select Committees, and when the House has decided whether it is happy to put the necessary domestic legislation in place. That is what this Bill is about: putting the necessary domestic legislation in place. In that respect, when we come to debate it on Report and particularly in Committee, I hope we can explore a few issues.

First, as my noble friend knows, the provisions on procurement in Schedule 2 go wider than what is presently in the Procurement Act. Noble Lords who were involved in that Act will think it was not very long ago that we wrote all that stuff, and now we are having to change it. I think we will need to know why we are changing it and appear to be widening it. I am not concerned with the timing because, if that Act does not come into force until October 2024, we already have amendments to the Public Contracts Regulations that allow the necessary steps to have been taken. I think that is a legitimate question for us to debate on this Bill, because the language is different.

Secondly, noble Lords involved in these negotiations will be aware that we secured commitments on the part of Japan and Australia to enable us to have geographical indicators accepted in those countries. In this legislation we are extending what is in effect geographical indicator status to other CPTPP countries. I hope this will be an opportunity for us to ensure that we are making progress in a reciprocal fashion, because geographical indicators are very important, whether it is Lincolnshire sausages or any other product.

The final issue I want to mention is copyright. It is a difficult area, but I hope noble Lords who are perhaps more expert in it than I am will be able to explore why we again seem to be extending a power for Ministers to enable a country to be treated as the qualifying country, which will then allow rights holders to access what is called equitable remuneration in this country as though they were UK rights holders, in a way that appears to be wider than necessary for CPTPP countries and rather wider than has been the case in the past.

Those are simply issues that I hope we will have the opportunity to turn to in Committee, but I do not want any of them to detract from the fact that I very much welcome the CPTPP accession and all that goes with it, and the potential it offers. I am very glad that the Government have brought this legislation forward for that purpose.

19:10
Lord Ashcombe Portrait Lord Ashcombe (Con)
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My Lords, I am very grateful to be able to speak in the gap. The UK’s accession to the CPTPP is a golden opportunity to usher in a new era of trade relations in some of the world’s more dynamic and fast-growing economies. This Bill is to be welcomed.

I will focus on the specialty insurance sector, and I refer to my interest as an employee of Marsh, as stated in the register. Without insurance, much of this trade would not be able to happen. The capital which comes into the London market of specialty insurance and reinsurance is highly international and highly mobile. Almost 70% of it is foreign owned and 85% of market income is earned by companies domiciled outside the UK.

Now, at the advent of this new trading frontier, is the time to consider what more government, regulators and industry could do together to both access these fast-growing markets and encourage and welcome investment from these countries to the UK. The UK has a unique offer to CPTPP nations, many of which are at heightened risk from natural disasters and other risks. We are the only market that has the concentration of capital and expertise to protect nations against existential threats to their economies and people. Our offer is not replicated anywhere else in the world.

The financial regulators were given an international competitiveness objective within the Financial Services and Markets Act. CPTPP membership now offers us the chance to put theory into practice, but this will happen only if the financial regulators play an active role in deepening the UK’s relationships with our CPTPP partners, co-ordinating with regulators and businesses to promote cross-border trade.

What the industry would like to see is a welcome mat, as described by my noble friend Lord Holmes and alluded to by the noble and learned Lord, Lord Goldsmith: a dedicated and joined-up function within government that can create a coherent and co-ordinated pathway—a one-stop shop—for overseas investors wanting to come to the UK, set up businesses, create jobs and invest across the country. This is not some untried and untested idea; many of our closest competitors have teams with similar arrangements, including the Bermuda Business Development Agency and the Monetary Authority of Singapore. My home was in Ireland originally, where its foreign direct investment agency is making notable progress in encouraging high levels of inward investment and consequent employment—modest, maybe, by UK standards, but very important to Ireland.

Business as usual is no longer good enough. Let us seize the opportunity as the first new joiner of this dynamic trading bloc to welcome new and emerging economies to industries such as the London insurance market and show them exactly why we are a world leader in risk. I therefore ask my noble friend the Minister two questions. First, will he comment on what discussions he is having with UK regulators and what expectations he is setting about the role they will play within CPTPP structures to encourage cross-border trade in financial and professional services as our relationships within the bloc deepen? Secondly, will he look at how we can build this welcome mat approach, as it will require cross-departmental working between his department and others?

19:14
Lord Fox Portrait Lord Fox (LD)
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My Lords, as my noble friend Lord Razzall alluded to, this has been a longer debate than it probably would have been had not the Secretary of State, who has now departed the Chamber, been involved. However, it has been a very interesting debate, and I dare say never have so many “t”s, “p”s and “c”s been used in your Lordships’ House—most of them in the right order, so very well done all of you.

Despite the clumsy branding, this really is an important development in UK international trade. It must have been important because the noble Lord, Lord Cameron of Chipping Norton, chose it for his charming, graceful and amusing maiden speech, for which he has received universal plaudits, to which I add my name. It is a shame that he had to leave before the denouement of this debate, but I am sure he will be beating a path to Hansard in the morning. We look forward to many opportunities to hear from him and ask him questions in your Lordships’ House.

We heard from the chair of the International Agreements Committee, of which I am also a member, about how we should be scrutinising this treaty, and we heard many other pleas from your Lordships about how we have an opportunity to have meaningful and proper scrutiny. One thing that has not been noted is that the change in the machinery of government, to which the noble Lord, Lord Grantchester, referred, has changed the Select Committee structure, which means that we no longer have a designated trade Select Committee, which further dilutes the amount of scrutiny we are getting.

This has been a proxy debate: we have been debating the treaty without any of the proper information we need, and many of us have been somewhat ignoring the actual substance of the debate. We thank the noble Lord, Lord Lansley, for belatedly pushing our nose to the grindstone while looking at the technical issues in the Bill, which we are supposed to be debating. However, the debate we are having about this Bill is more of a debate than the Commons got on the Australian deal. That was promised and never given, so we have to take the opportunities when we can get them, but we should not be begging Ministers and the Government for Parliament’s right properly to scrutinise this really important trade deal.

I turn to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The name is an indication of the journey it has taken: with every step it has made, another letter has been added to its acronym. We should also note that it is, uniquely, a trade organisation designed by the United States but of which the United States is likely never to be a member. However, it was interesting to hear last week the US Chamber of Commerce—its largest business organisation —berate successive US Governments for not doing trade deals, so you never know; maybe something will turn up.

However, we should bear in mind that design hand that went into this organisation, because there are differences between a bloc with essentially US systems and processes, and us, with essentially EU systems and processes. It was interesting to hear the noble Lord, Lord Trees, set out the gradient between those two ways of looking at standards. I believe that we will see more of this. The noble Earl, Lord Sandwich, also referred to those differences and disparities. It is something we should be very concerned about and, if we have the opportunity to scrutinise it, we should get under the skin of it.

We know that the Government’s projected benefits for this treaty are relatively tiny—everybody has mentioned that. Frankly, if they were aiming to meaningfully boost trade the Government would have been better employed reversing our decline in exports to Germany, where we have fallen from number two to number nine. Perhaps, given the dexterity of our Minister, he could even try to do both at once.

With this backdrop of only a small nudge in trade, it is no wonder that so many in your Lordships’ House have emphasised the politics and the new focus on Asia-Pacific. I see this point and recognise its importance; I think we all do. We look forward to further discussions on this and its implications—politically, economically and in security terms.

Going back to the case at hand, during the run-up to the accession to the Australian FTA, there was much concern regarding agriculture. There were and are still significant concerns that in order to get that deal, the UK conceded too much on animal welfare and environmental concerns. As we have heard from the noble Lords, Lord Trees and Lord Curry, there are similar concerns that UK farming standards could and would be compromised by this agreement. Additionally, UK pesticide standards could and would be undermined. There are 119 pesticides that are banned in the UK that are allowed to be used in one or more CPTPP member states. We are back to this gradient again—to the differences in the way standards are operated in our respective organisations.

The Australian deal kicked off this spring. What have we learned so far from the Australian experience? Perhaps the Minister could set out how he sees reciprocal opportunities for British farmers, not just in Australia but in the whole of the CPTPP, and what his department and Defra will be doing to organise themselves so that we can take advantage of those opportunities and get some British food on CPTPP plates. As many noble Lords have noted, this will need a bit of export oomph.

Many of us watched with admiration how Australia stood up to the Chinese when China launched politically motivated and punitive tariffs on some of its products. The Aussie response was not to launch tit-for-tat tariffs against the much bigger China; instead, it weathered the storm by getting out and selling its products to other places and other countries. Now China has started to withdraw those tariffs.

Looking beyond agriculture, this country needs to be able to be on the front foot, like Australia was, when it comes to trade. There seems to be a lot of work to do. We have heard from the noble Lord, Lord Udny-Lister, and others about what needs to be done and the inadequacy of where we are now. As we have heard, small and medium-sized companies make up half the economy. When we were taking evidence from their representatives, it was clear that they do not feel they are getting the support and the help they need to get the activation energy they need to export things.

It was hard enough when Brexit happened; indeed, many small businesses have stopped exporting because they have not got over that barrier. But getting their products to Vietnam is a whole order of magnitude harder, and the Government need to be at least one order of magnitude, if not two, better at giving them the help they need. So can the Minister acknowledge that there is a huge amount of work to be done by his and other departments? If he does not, the export opportunities will not be taken up and, frankly, what is the point of a trade deal if you do not trade?

The risks of inadequately exploiting the opportunities extend beyond domestic farmers. The first thing I will point out is the treatment of workers, which was mentioned by the noble Lord, Lord Collins. While the Government are flirting with ILO violations with their strikes Bill, these infractions pale in comparison with those seen in countries such as Brunei, Mexico and Vietnam. How do the Government intend to deal with non-ILO-compliant economies and their products?

Meanwhile, there is a real danger to the UK’s commitment to the sustainable development goals, in that they could be undermined by the CPTPP. Since Brexit, the UK has been mindful of developmentally sensitive products, including bananas—here we are in “fruit territory”. We have to be careful to maintain the value of trade preferences when designing unilateral trade policies, including the UK’s global tariff and the recently launched developing countries trading scheme.

In recent bilateral and multilateral trade negotiations, however, there has been a less consistent approach. The market access schedules for bananas—I am using bananas as one example of such products—negotiated as part of the UK’s accession to the CPTPP included concerning concessions. As I am sure the noble Earl opposite knows, the UK granted a reduced tariff to both Peru and Mexico, and slightly lowered concessions for other CPTPP members. While at present Peru and Mexico are relatively marginal suppliers to the UK market, the change threatens to set a precedent. The same point was made earlier—if they do it for one, when we are negotiating another deal, perhaps with a central American country that has a much stronger and larger banana export market, we are undermining the market access provided via economic partnership agreements to least developed countries. This jeopardises our sustainable development goals. Will the Minister comment on how that is being addressed and what his department expects to happen in that area?

The UK economy has a much larger service sector, as we have heard, than its manufacturing sector. FTAs traditionally stumble when it comes to the services part of exports and imports; I would like the Minister to reflect a little on that. In particular, I would like to look at where we stand on future mutual recognition of qualifications, because services are driven by things such as mutual recognition of qualifications. It would be good if the Minister could explain where we are. Will that be dealt with through CPTPP or will there need to be bilateral or other ways of actually delivering that?

Another way that services work is through short-term visits by our professionals into those territories. It is not 100% clear to me where we are on short-term visas to facilitate that kind of work.

The noble Lord, Lord Lansley, set out some issues on data localisation. It is important to have some idea of how far we can take this, because that will be the blood that makes services flow through the system.

My noble friends Lord Razzall and Lord Foster set out really important concerns regarding the IP and GI sections of this Bill. I hope the Minister has been listening and takes on board the concerns we have here.

The noble Lord, Lord Lansley, is also correct on procurement. We spent a lot of time talking about procurement; we suffered more amendments from a Government than I think has ever happened before, yet straight away the Government are turning their backs on some of what we decided. That is not unique, by the way—in the negotiations for the Swiss free trade agreement for mutual recognition of qualifications, they also turned their backs on aspects of the Professional Qualifications Bill that we also worked on. There is a disconnect along the line here sometimes; we spend many hours scrutinising legislation and then a bunch of trade negotiators go off and ignore the legislation. Why and how is this allowed to happen? There is a bigger question, as well as the individual question that the noble Lord, Lord Lansley, raised.

I look at the time and I have already talked for too long, so I will sit down. I look forward to the Minister’s response to this debate and to Committee stage. But, most of all, I look forward to us having meaningful scrutiny of this treaty.

19:29
Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, it is always the detail. This afternoon we have had many thoughtful and detailed contributions for which I thank your Lordships. Let us have a look at the detail but, before I start, I first welcome the new Foreign Secretary to his place—or maybe not to his place, but we understand why he is not with us for these closing remarks. My only interaction with the new noble Lord, Lord Cameron of Chipping Norton, was through the National Citizen Service, which he set up when Prime Minister. I had the privilege of replacing my noble friend Lord Blunkett on the NCS board and of working with it, its chair Brett Wigdortz, the CEO and the staff to deliver many fantastic programmes and opportunities for young people across the country. NCS worked and continues to do so, and I wish it all the best.

As Nick Thomas-Symonds MP, then our shadow Trade Minister, said when debating the Comprehensive and Progressive Agreement for Trans-Pacific Partnership earlier this year:

“We on the Labour Benches are pro-trade, pro-business and pro-worker. Accessing new markets is essential, and it is particularly welcome because of the Government’s dreadful record on trade. The Office for Budget Responsibility forecasts that UK exports are due to fall by 6.6% this year, which is a more than £51 billion hit to the UK economy”.—[Official Report, Commons, 17/4/23; col. 44.]


It is not a great starting point when, on the Government’s own measures, as we have heard, the economic benefits of joining the CPTPP are negligible, adding a projected £2 billion, or less than 0.08%, to UK GDP over the next 10 years, so it is no wonder that we have rightly concentrated on some of the political benefits which we share. No amount of minor trade agreements will make up for this Government’s economic mismanagement.

In saying that, like many across the House I welcome the economic ties with Canada, east Asia and the Pacific. In line with the comments of the noble Lord, Lord Lamont, earlier, I say that it is vital that the UK plays a role in ensuring that development in one of the fastest-growing regions in the world benefits British business, British consumers and British workers. Lowering barriers to trade is good news, but there is a balance to be struck, and we have heard some of that across the House. Hearing from business organisations, it is clear that CPTPP membership will bring some noticeable improvements, particularly around digital trade and rules of origin for manufacturers.

I welcome the opportunity to speak today, but I am conscious of the fact that what we are discussing in the Bill is not the agreement itself but rather a handful of changes in domestic law to facilitate what has already been signed up to by the Government. I join my noble and learned friend Lord Goldsmith in calling for a full debate across your Lordships’ House. It seems clear to me that, in this day and age, Parliament needs and deserves a greater role in structuring, scrutinising and ratifying trade deals.

A number of the clauses in the Bill pertain to the devolved Administrations. It is always a bit strange when winding up trying to find something new. I do not think we have had many questions about the devolved Administrations, so they are possibly something new for the Minister. What engagement has his department had with the Welsh Assembly and the Scottish Government? What stage are we at with seeking legislative consent from the devolved authorities? Are we seeking concurrent powers? Are His Majesty’s Government listening and responding to any of the devolved authorities’ concerns?

Without such powers for all the Parliaments of the UK, trade will remain reserved for members of the Cabinet and, as we have seen in recent years, too often trade policy has been dictated by Conservative leadership hopefuls looking for a quick, but ultimately insubstantial, win. Just look at the free trade agreements with New Zealand and Australia which predated this. Our farmers in a decade’s time will suffer as a result of the hastily negotiated FDAs—I use “negotiated” in the loosest possible sense. At these very Dispatch Boxes, when discussing the FTAs with New Zealand and Australia we were told not to worry and that there would be no detriment to British farmers or our manufacturers. That is now patently untrue.

While the Tories are looking for the headlines, we need to look at the detail, and your Lordships’ House is particularly good at going through the fine print. What do we find there? In most of the areas, CPTPP membership does not in itself represent an improvement on pre-existing bilateral deals. Multiple organisations have pointed to potential issues with regard to the environment, food standards and workers’ rights. Let me take them in order.

With regard to the environment, the impact assessment of the Government’s Department for Business and Trade states on page 79 that:

“Deforestation in CPTPP countries, where it occurs, has been driven by production of commodities such as cattle, timber and palm oil. The majority of CPTPP members are not considered to be at risk of deforestation, except Malaysia which has experienced a 29% reduction in tree cover over the last 20 years. This has been driven by agricultural commodities which accounted for 93% of Malaysia’s tree cover loss since 2001, implying that international trade plays a key role in the country’s deforestation”.


What protections are being put in place to ensure that Malaysia’s deforestation is not exacerbated?

Like many civil society organisations, environmental groups and trade unions, I also have concerns over signing up to the outdated ISDS mechanisms which the Government have thus far wisely avoided in most free trade agreements. We must ensure that the right to regulate in the public interest for the sake of environmental protections, food standards and workers’ rights is protected by excluding ISDS terms through side letters. It is not too late, as the Secretary of State seemed to argue a few months ago, to seek similar agreements with countries such as Canada. British businesses will surely be asking why, if the Government can cut the red tape on imports from Brunei, they cannot cut the red tape that is strangling many SMEs and their exports, or attempted exports, to the European Union.

I turn to workers’ rights and ILO standards. Many unions globally have expressed concerns that the CPTPP has no effective mechanism to enforce fundamental ILO standards. Can the Minister share with your Lordships whether there are mechanisms? If so, what are they, as a number of CPTPP members have widespread labour rights abuses violating ILO conventions on freedom of association and collective bargaining, as we have heard? As the noble Lord, Lord Trees, said, it is not our standards or our protections that are the issue. It is the protections and the standards of other countries and them being used to undermine and undercut businesses within the UK.

What we need is a consistent and thought-through approach to reassure the public and companies, both here and abroad, that we are truly a nation open for business. As my friend the shadow Secretary of State for Business and Trade said last week:

“The next Labour government will finally publish the Trade White Paper this Government have failed to do, one that businesses will have shaped so they can have confidence when exploring new markets, and crucially that strategy will be connected to our industrial and foreign objectives”.


What we need is a Government with an industrial strategy that not only lowers the barriers to trade worldwide but supports and facilitates British companies in their desire to export abroad. I disagree with many of the comments made by the noble Lord, Lord Livingston of Parkhead, but a number of his points hit the nail on the head. We need to support more trade shows; through the Department for Business and Trade, the Government need to support our manufacturing abroad. We need to take advantage of these trade deals and accessions but, as he rightly said, that needs to come through support from the department.

While we are discussing trade, I would like to put another myth to bed. The Government have argued that the non-binding memorandums of understanding signed with individual American states are some kind of Brexit benefit. This is patently not true—they could have been signed anyway—but, as the FT senior trade writer Alan Beattie wrote last week:

“Mind you, when it comes to signing pointless pieces of paper there are few countries to touch the UK. Conservative ministers love agreeing non-binding memoranda of understanding (MoUs) with individual US states and pretending that they’re Brexit dividends (they aren’t)”.


With that, I welcome the new noble Lord, Lord Cameron of Chipping Norton, and look forward to the Minister’s response.

19:41
Lord Johnson of Lainston Portrait The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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I thank the noble Lord for the segue into my closing address. It is an enormous pleasure to conclude this debate. Before I do so, I draw Members’ attention to my entries in the register of interests. I have investments in companies that operate in CPTPP member countries but, as often in these debates, I do not believe they represent a conflict given the nature of this Bill.

I would like to join the very long line of Peers who complimented the opening and maiden speech made by my noble friend the Foreign Secretary, Lord Cameron of Chipping Norton. At one point I thought it was the popularity of my enthusiasm for free trade that encouraged so many people to sign up to speak in this debate. Only later did I realise that I had delegated the opening—as was heard earlier—to the newest Member of the House, of which I am extremely proud.

I reinforce my own message that to have my noble friend Lord Cameron of Chipping Norton on these Benches, and in this House, is an enormous testament to the importance of this Chamber. I think we all believe strongly that, as an individual, he is absolutely the right person to take forward our foreign policy agenda at such a perilous time in the state of the world, and such an important time for the United Kingdom. I am very proud to have sat next to him during this debate. I hope noble Lords realise that he took the debate extremely seriously, given the other pressures on him relating to the state visit from the President of Korea, dedicating himself to almost the entirety of the debate. I know he would want me to ensure that there was some element of recognition for the seriousness with which we take the important issue of the CPTPP.

I want to praise and pass thanks on to the IAC, which I believe to be one of the most important entities in this House, in ensuring that we reach strong conclusions as we prosecute our post-Brexit vision of Britain through our free trade agreements. The interlocution with the noble and learned Lord, Lord Goldsmith, has been particularly valuable for me over the past few weeks; I welcome him back to his usual place as chairman of the committee. It would be remiss of me not to pay homage to the noble Baroness, Lady Hayter, who has been a powerful representative of independent-minded Peers in ensuring that the Government are held to strong account when it comes to talking about our trade ambitions. I am extremely grateful to her that she remains highly active in this area.

We have heard a number of extremely insightful points raised by many Peers. Listening to this debate, I am heartened by the seriousness with which we take this important subject and the key points that people wish to raise. I will try to respond to as many as possible. It is a very long list. It would have taken me the time that it has taken to discuss the Second Reading in this debate to fly to most of the countries in the CPTPP. But I believe that free trade genuinely gives us longer, happier and wealthier lives so, just through this debate on such an important subject, our lives have been extended and we have become personally richer.

I hope your Lordships know that I will inspect the Hansard account of the debate afterwards and, if I have not covered everyone’s comments, ensure that Members of House are written to specifically. As a number of Members have mentioned, there is a sensible and lengthy journey around this process, which, as I will come on to, will include proper scrutiny of the CPTPP treaty itself.

I will start by talking briefly about some of the benefits of the treaty, which can get lost in the details. I am particularly grateful to my noble friend Lord Vaizey of Didcot, whom many Members will know as a celebrity on the radio but whom I know as an important advocate of free trade. Some of the points that he raised on the specifics—which, as I said, often get lost in the detail—are extremely valuable: business mobility, the ability to trade, the ability to increase our exports and our imports, and, of particular interest to me as Investment Minister, the essential nature of bringing in more investment to the United Kingdom.

This country is not a member of CPTPP but, today alone, we announced in conjunction with the President of South Korea’s visit to this great nation over £20 billion of investment into the UK. This is the value of trade writ large in pounds sterling. Imagine what we can do with countries with which we have an even closer relationship, through a treaty such as this.

One point raised by a number of noble Lords—my noble friends Lord Lansley, Lord Howell and Lord Udny- Lister, and my noble friend Lord Lamont in particular—was the strategic importance of our membership of the CPTPP, which gives us this crucial presence in the Indo-Pacific region strategically, economically, philosophically, culturally and for reasons of alignment through defence. It is not simply a pounds, shillings and pence trade agreement but an essential component of how we as a nation wish to define ourselves when it comes to ensuring our security and wealth creation into the future. I was very glad that so many Members, even Members who rightly had issues to raise on the specificity of the CPTPP, were fundamentally behind the crucial mission of this trading nation that is the United Kingdom. Fundamentally, the positive comments from noble Lords across the House I find extremely heartening.

I want to bring to bear some of the comments that we have had from businesses and representative groups across the country. I will go on to touch on some of the consultations that we engaged in. I am very aware of the comments made by Members across this House on the importance of both promoting consultation as we go into the trade deal and promoting its benefits as we come out. We have consulted wide and extensively and the feedback that we have had has been overwhelmingly positive. Minette Batters said that

“the government continues to maintain its commitment to our food safety standards”—

something that I ask noble Lords to bear in mind as I touch on that subject later on. She added that the UK achieved a

“balanced outcome, particularly with respect to managing market access in our most vulnerable sectors”.

This is very important. I hope that all Members of the House will hear those points from the celebrated president of the NFU.

William Bain, a former Member of the other place and now at the British Chambers of Commerce, said that the agreement was

“good news for UK business”

and offered

“new prospects in a fast-growing region”.

The Federation of Small Businesses—which the noble Earl, Lord Effingham, was right to point out is an essential component of all our trade deals—has said that it was

“very pleased to see the UK officially join the CPTPP trade agreement”.

I turn now to some of the specific points raised. I will go through these relatively quickly, but I invite your Lordships to intervene if I miss a point; I am sure they will. As I said, there will be some instances where I will be obliged to write with further information.

On issues of technical barriers to trade, a number of noble Lords raised questions as well as support. I was particularly grateful to my noble friends Lord Udny-Lister, Lord Frost and Lady Lawlor. This is important as it will enable us to certify conformity assessment bodies in CPTPP countries so that they can perform the relevant checks, which will enable trade to flow more efficiently. I have looked into this personally in some depth and I do not see there being an issue. The noble Lord, Lord Grantchester, raised a point on this. These arrangements are reciprocal, which enables us to have our conformity assessment bodies assessed by CPTPP members. It is common practice.

I would like to stress that CABs established in CPTPP parties do not receive automatic approval in the UK; they have to be assessed. All this really does is to enable us to rightly ensure that CABs can be properly accredited by CABs in the UK. I really do not personally see any issue, other than something that is positive, around that.

We touched on government procurement and I am very comfortable discussing further any specifics. My noble friend Lord Lansley has raised some particularly pertinent points. I hope that I answered those in my letter to him, which I am sure has been lodged in the Library for everyone to read. If not, I would be delighted to circulate it to interested Peers. Ultimately, I agree that bringing in some of the procurement changes when we will introduce them under the Procurement Act, which comes into force next October, so that we can comply with our 17 July obligations under CPTPP, seems a bit unnecessary. It is not unnecessary but extremely necessary for us to comply; clearly, it is not a specific or seismic issue. As I said, unfortunately we are obliged to fulfil those requirements of our obligations.

On intellectual property, it is important that the CPTPP provisions commit parties to a minimum level of IP standards. This is not uncommon in plurilateral trade agreements, which often seek to set a baseline on which parties can build, and the UK’s accession to CPTPP will not limit our ability to seek more ambitious trade agreements with others, including those that are CPTPP members. We intend to be a constructive member and to champion our values and priorities, particularly through the committees and councils set up by the agreement.

A question was raised on generic medicines to the UK market. Just to reassure noble Lords across the House, there will be no delays in the entry of generic medicines to the UK market as a result of the UK joining CPTPP and no increase in the cost that the NHS pays for medicines. We have made no domestic changes to our rules regarding the marketing of generic medicines and are committed to ensuring patient access to medicines and affordable medicine prices for the NHS, while also supporting the UK’s world-class life sciences sector. Our future trade agreements will not change this.

I believe that the noble Lord, Lord Foster, asked a question around grace periods. The UK has signed up to the IP provisions in CPTPP, which is required of all members. We have agreed with the CPTPP parties that the UK will comply with Article 18.38 on grace periods only once the necessary amendments to the European Patent Convention and Strasbourg Patent Convention have been made, in line with Article 18.38 of the CPTPP, and not before. There is a process that we are going through on this point to ensure that all the necessary grace periods relating to IP provisions are aligned.

The noble Lord, Lord Razzall, raised some justifiable points around the principles of copyright, as did the noble Lord, Lord Holmes, who asked whether there are reciprocal rights for our artists in CPTPP countries. There absolutely are; I reassure him that this is the whole point of signing up to this trade agreement. It is a free trade area rather than a country-specific free trade zone, so the reciprocity of the membership is entitled fundamentally to all the members. I am extremely keen to promote that. However, there will be a change in the artists’ rights paid for performances broadcast over media in the UK—not over the internet—and we are applying this to all countries which sign up to these measures in the World Trade Organization. As the noble Lord, Lord Razzall, rightly raised, we are embarking on a consultation which will enable us to ensure that we set the right level of protection for our music industry and for our artists. But fundamentally, the idea of giving our artists half their royalties, as we do here for UK artists and broadcast artists of many other countries, strikes me as a very fair and equitable thing to do and very much part of the spirit of the agreement. However, the consultation will inform us appropriately whether we have that right and I look forward to it being reviewed.

I turn briefly to geographical indicators. The noble Baroness, Lady Hayter, raised this, as did a number of noble Lords. These provisions would allow the Secretary of State to cancel future geographical indicators, not current existing ones, if it is felt that they are confusing or not appropriate. It is important to note that as part of our withdrawal agreement with the EU, we cannot cancel geographical indicators so any relationship between those indicators and other CPTPP members will be direct, rather than through us. I hope the House will be reassured by that.

I turn to the important point of parliamentary scrutiny in the two minutes or so that I have left. I totally agree with the views of noble Lords: we must have a good debate on both the Bill, which contains relatively specific technical provisions, and the essence of the CPTPP, which is such a wonderful thing. I look forward to having these debates with noble Lords and it is not unusual for the CRaG process to run in parallel to the Bill since, as the noble and learned Lord, Lord Goldsmith, will be aware, they are two completely different things in the essence of parliamentary activity.

I have made very clear to the noble Lords, Lord Kerr, Lord Trees, Lord Foster and Lord Grantchester, and to the noble Earl, Lord Sandwich, the importance of a strong, open and wide-ranging general debate on an FTA. That is right and I abide by the Grimstone principle—my formidable predecessor, whose immortality is secured by having a principle named after him; it is my own ambition to also work one into our future trade debates—to ensure that there is, as I say, a general debate. I think we have to go through a process when that is requested and I would be delighted to respond positively to that. I am also extremely available to the noble and learned Lord, Lord Goldsmith, and his committees, and to any noble Lord who wishes to spend time with me or the officials in my department to go through the intricacies of the Bill. We are waiting for the report from the Trade and Agriculture Commission, which I am told will come soon—certainly before the next part of this piece.

I will just cover a few brief final points because, quite rightly, the screen is flashing at me. The noble Lord, Lord McNicol, touched on devolution, the one area that had not been covered. I am pleased to say that we are not trying to run concurrent powers through the Bill but looking for legislative consent Motions. I have written to the Trade Ministers of Wales and Scotland and look forward to having strong interlocution with them, but the feedback that I have had from my officials so far has been extremely positive. I welcome that; there is no doubt that the benefits to Wales and Scotland from this deal are enormous. Scottish whisky alone is worth over £1 billion and the Malaysian opportunities, since we will see import tariffs cut from 80% down to zero, will be significant. That is just one commodity item.

If I may briefly touch on the agricultural side before I come to a conclusion, this is very important and clearly will be the subject of a great deal of the debate in the coming sections of this discussion. It is essential to understand one key point: that there is no derogation of our standards on account of signing up to the CPTPP. We have also introduced a number of clear tariff-rate quota mechanisms to ensure that we are protecting our industries from excessive levels of import. I reassure noble Lords in this instance that actual imports of beef, poultry, eggs and sheep meat from the non-Australia/New Zealand CPTPP countries are extremely low in terms of the pressures on our own agricultural sector. In fact, we have not imported an egg from Mexico, for example, since 2015. It is important to stress that sensational statistic, which I picked up this morning. I was very keen to get my knowledge of it into the debate. I should rephrase that: we have not imported a hard-shell egg in its entirety—we do import egg powder from Mexico, as noble Lords will know.

I turn to my final point before I come to a conclusion. In fact, there are two final points that I would like to cover briefly on China. It is very important in relation to China that we are clear, as are all CPTPP members, that decisions are taken by consensus. Applicant economies must be willing and able to meet the high standards of the agreement, demonstrate a pattern of complying with their existing trade commitments and be able to command consensus. Further to this, and importantly, we will join CPTPP first, so we will be on the inside, judging other applications, not vice versa. An entry into force of the accession protocol will permit us to be a party to the CPTPP, which is why it is so crucial that we ratify this agreement and become a party.

I have one last piece for noble Lords, if I may be indulged by the House, on investor-state dispute settlements. I was extremely grateful to my noble friends Lord Livingston and Lord Lansley for the vocal support for these principles. From my historic experience, running investments in many of these countries, the investor-state dispute mechanisms are very important for allowing British businesses to invest safely and build in these economies. We feel, from the UK side, very protected by the fact that we run and operate a strong degree of rule of law and, as a result of which, we are protected by our own systems. I would not be keen to see us derogate our responsibilities and links to investor-state dispute settlements, because they are important—and, in this instance, they will represent strong protections for our companies operating in CPTPP, resulting in more investment both ways.

To conclude, this Bill represents the continuation of our policy of expanding our horizons to the four corners of the world, being party to the crucial liberalisation of trade which has played such an important part in the economic well-being of our citizens and is an essential component of our strategy to truly immerse ourselves among the faster growing economies of the Asia-Pacific regions. As William Seward said in 1852—and this is my favourite quote—

“the Pacific Ocean, its shores, its islands and the vast regions beyond will become the chief theatre of events in the world’s great hereafter”.

He was correct, and I celebrate this new opportunity afforded us by our fellow nations in the CPTPP to join them in this new stage of development. We should be grateful to them, particularly to countries such as Japan, which led such an important campaign to encourage us to accede—but all the countries of the CPTPP. The Secretary of State for Business and Trade has stated:

“As CPTPP’s first ever new member, and the only European member, we are linking the UK to some of the world’s most dynamic economies, giving British businesses first-mover advantage in some of the fastest-growing markets in the world, and supporting jobs and economic growth right across the country”.


I would also like to thank the former Secretary of State, Dr Liam Fox, who started these negotiations, Elizabeth Truss, the previous Secretary of State, Anne-Marie Trevelyan, Kemi Badenoch, the current Secretary of State, and all the civil servants and officials who have been so hard working in this process. This is an issue that transcends party politics: it is intrinsic to our way of life and our prosperity, not just here in the UK, but across the world. I commend the Bill to the House.

Bill read a second time.
Commitment and Order of Consideration Motion
Moved by
Lord Johnson of Lainston Portrait Lord Johnson of Lainston
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That the Bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:

Clauses 1 to 3, The Schedule, Clauses 4 to 8, Title.

Motion agreed.
House adjourned at 8.03 pm.

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

Committee (2nd Day)
13:00
Baroness Pitkeathley Portrait The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
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My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division bells are rung and resume after 10 minutes.

Amendment 12

Moved by
12: After Clause 5, insert the following new Clause—
“Artist’s resale rightWithin 12 months of the passing of this Act, the Secretary of State must lay before Parliament an impact assessment of the possible benefits of seeking to extend the Intellectual Property Chapter of the CPTPP to include provisions on the artist’s resale right.”
Earl of Clancarty Portrait The Earl of Clancarty (CB)
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My Lords, this group of amendments concerns the arts and creative industries; although, in the case of intellectual property, not exclusively so. It therefore picks up directly from where the first day in Committee ended a week ago. I did not participate in that debate but recognise the faces of some who did around this table. It is noticeable that those in the House most closely associated with the arts—I emphasise the word “most”—do not tend to talk about copyright or intellectual property issues because it is such a technical area. I pay tribute to those—including present colleagues, the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, and one or two others—who, over a long time, have been keeping a watching brief on this important area. I also pay tribute to outside organisations such as the Alliance for Intellectual Property, whose briefing I am grateful for, and its member organisations.

Artists are acutely aware that a bad or compromised deal for the creative industries will directly affect the rights and livelihoods of UK artists not just in their work abroad but at home too—as was very much borne out in a debate on intellectual property in Grand Committee on 20 November in relation to new regulations. This is a corrective, in a sense, to the view of some of the public, who believe that these kinds of agreements are about conquering new markets and nothing else.

In this group I support Amendment 24, on the Intellectual Property Chapter, in the name of the noble Lord, Lord McNicol, and Amendment 28, on performance rights, in the name of the noble Lord, Lord Foster of Bath. Outside this group, I also mention Amendment 30, in the name of the noble Lord, Lord Purvis of Tweed, because there needs to be a debate on the effect of the CPTPP after the passing of the Act which also includes its implications for the creative industries. However, the concern about the extension of performers’ rights beyond this agreement needs to be sorted urgently.

My own Amendment 12 relates to the artist’s resale right, which is one important aspect of the wider landscape of concerns about rights for creators, in particular, the reciprocal rights—or potential lack of such rights—that this treaty has thrown up. Reciprocity is a key concept in much of this debate. I am grateful to the noble Lord, Lord Foster, and my noble friend Lord Freyberg for their support. Unfortunately, owing to illness my noble friend cannot be here today, but he has kindly passed on to me some notes for the speech he would have made.

The artist’s resale right is a vital element of our visual arts culture and is hugely important to our artists. It is a fundamental IP right that provides a royalty to artists on the secondary sale of their work. It has been introduced in some form in more than 90 countries worldwide, Mexico being the latest, in 2023. The noble Lord, Lord Clement-Jones, expressed it very well in Grand Committee on 20 November, when he said that he felt confident that these rights

“are now bolted fully into our intellectual and moral property rights”.—[Official Report, 20/11/23; col. GC 52.]

In the 17 years of its existence in the UK, the artist’s resale right has provided artists and estates with £120 million—moneys paid out by the not-for-profit organisation the Design and Artists Copyright Society, whose briefing for this debate I am also very grateful for. Artists invest ARR royalties into their practice which, in turn, supports the arts ecosystem. It is therefore not just individual artists who benefit but the culture as a whole, particularly since estates will also use the moneys to archive and restore work. It is important to note that, contrary to erstwhile concerns, there is no evidence that ARR has negatively impacted the UK art market or diverted sales to non-ARR markets. The UK art market is currently ranked second in the world, and ARR royalties represent only 0.1% of the market’s value.

I gave a very full speech on the artist’s resale right in the debate on 20 November on the new regulations. I refer the Minister to that. I will not say much more on ARR specifically, particularly as the Government should not need to be persuaded of the value of this right. I was very happy, in the circumstances, to back the Government in that debate on introducing the regulation that turned EU law on ARR into UK law. Of course, we now have reciprocal agreements on this right with two CPTPP member states, Australia and New Zealand, through separate trade agreements. I understand too from the letter that the noble Viscount, Lord Camrose, sent to us after the aforementioned debate that the UK is in discussion with Japan on this—a country, I believe, which does not yet operate this right. Could the Minister expand on that? Indeed, DACS has said:

“ARR should be introduced into more countries so that national artists benefit from this right, and UK artists get their due royalties for international sales”.


My noble friend Lord Freyberg has pointed out to me, with figures he researched, the particular significance of the Asian art market. This in part relates to Amendment 24’s reference to future agreements. Japan is a CPTPP member, while China and South Korea are among formal and potential applicants. Together, their art markets were worth around £10.5 billion in 2022 and are likely to continue to grow. My main question to the Minister is: what is the Government’s overall strategy for reaching agreements on this, both through this treaty with other member states, and with those outside it? Has this been broached in relation to this treaty, or will there be negotiations on the treaty so that provision for this will find a place in the chapter on intellectual property? That would be a preferable solution but if that is unrealistic, I would like to hear that from the Minister. I look forward to his reply. I beg to move.

Lord Foster of Bath Portrait Lord Foster of Bath (LD)
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My Lords, I entirely support the amendment in the name of the noble Earl, Lord Clancarty, and that of the noble Lord, Lord McNicol. Noble Lords will be aware that I made it clear at Second Reading that I had real concerns that our accession to the CPTPP was done on the basis of failing to get many of the improvements sought by the creative industries. I pointed out that I suspected that that had happened because we were being a rule-taker rather than a rule-maker.

That argument was well demonstrated by the Minister, who, in a subsequent letter, made it very clear that the CPTPP was “a pre-existing agreement”, and therefore we have little choice in this matter. However, I have been heartened by a further paragraph in which he says that

“we intend to be a constructive member of CPTPP and will champion our values and priorities, including through the committees and councils set up by the agreement. Our ambition is to play a full role to strengthen the high standards of CPTPP”.

He goes on to say in a subsequent paragraph that our accession

“will not limit our ability to seek more ambitious agreements, including with CPTPP partners”.

All I would say to him is that I hope very much that we will look to find ways of improving some of the current IP protection arrangements within the CPTPP.

However, I wish to concentrate specifically on performers’ rights—an issue we debated at some length in our last session. I confess at the outset, first, that I will have to speak for rather longer than I would normally hope, and secondly, that I remain somewhat confused about what precisely the Government are proposing. I am not alone in that. I have talked to a number of organisations that are concerned about intellectual property rights and the Bill’s implications for those. They too are confused. If I have got things wrong, I hope the Minister will be able to correct me and give a clear enunciation of exactly what the Government are proposing in the Bill.

Much of this is based on the concerns of the music industry, although I acknowledge that the issue goes somewhat beyond it. It is worth just reminding ourselves that the UK music industry’s contribution to our economy is enormous: £6.7 billion last year, with exports from the industry generating £4 billion. It is an important industry and it is founded on the fact that in the UK we have an incredibly robust IP rights regime, which includes performers’ rights.

The issue is extremely complicated, as the Minister acknowledged during our deliberations in the last session. However, in terms of artists’ rights we are talking, predominantly but not exclusively, about broadcast performances. If a recording of a UK artist, composer, publisher or record label is aired on a UK radio channel, we know that royalties have to be paid via the collection agency PPL and then distributed via an agreed split between the various parties involved in that recording. If it is aired on a streaming channel, exactly the same applies, although the split may be different. However, if that recording is aired in another country, whether royalties get back to the UK depends on the deals that we have done with those countries. That might be through a free trade agreement or other international treaties, such as the Rome convention or the WIPO Performances and Phonograms Treaty—the WPPT.

Rights are often reciprocal but in some cases they can be limited. For example, Canada wanted to protect its small radio stations and capped the amount of money that they have to pay, so the amount that comes back to the UK is effectively capped. It might be supposed that the CPTPP Bill would deal exclusively with the arrangements for handling these issues between the UK and other CPTPP countries, establishing a reciprocal arrangement, just as we have done with other FTA deals. In a letter to the noble Lord, Lord Lansley, the Minister says:

“We intend to lay secondary legislation under these powers in Parliament in February 2024. This will make technical changes that are necessary, along with the Bill, to comply with CPTPP and other treaty obligations. The secondary legislation will include changes to the rights that are extended to CPTPP Parties and the performers who have a qualifying connection to those Parties. In circumstances such as these—where the UK has little or no flexibility in how it must implement its international obligations—it would be inappropriate to consult”.


I have no concern about that whatever. However, the Bill goes much further and, as the BPI says, makes significant and broad changes overall to copyright law.

In the CPTPP Bill, the Government are proposing to make changes to copyright law that would introduce obligations for performers and rights holders to receive payment for public performances in the UK of their music via equitable remuneration. This would appear to apply to either all countries or some countries. I hope that in his response the Minister will make it absolutely clear which performers and which countries are intended to be covered. At the moment, as I say, there is considerable confusion about this.

In simplistic terms, as I see it, the plan is to extend an agreement whereby we would effectively be paying royalties to other countries and performers where there is a performance in the UK of their recording, either of the individual performer or that country, even when we have no reciprocal arrangements with them and then, at a later stage, to decide whether or not to limit those rights as, for instance, Canada has done. This could have a significant impact on the UK, with a potentially significant loss of income. For instance, we have no reciprocal rights with the United States of America, yet, until some limits are potentially imposed at a later date, we will end up paying royalties to the US and to US performers while they will pay no royalties to us for UK performances in the United States.

13:15
In his letter to the noble Lord, Lord Lansley, the Minister says:
“UK law currently does not provide this right to some foreign nationals. The measures in the Bill will indirectly result in more foreign performers becoming eligible for the right. The government is considering whether to make further secondary legislation on the powers in sections 206 and 208 to modify how these rights are provided to foreign performers”.
In other words, at a later date we will consider whether or not to impose limits on those rights. The Minister says in the letter:
“This is a complex and significant policy issue. The government intends to consult publicly to inform its approach and ensure that it continues to support the UK creative industries and UK users of recorded music. We expect that consultation to be published very early next year, and we intend to implement the outcome of it in parallel with the coming into effect of this Bill”.
We have a situation where something that is incredibly complicated could have a huge impact on resources coming into the UK or, more likely, resources having to go out of the UK, yet we are going to find out the real outcome only when the Bill comes into effect. We have no opportunity other than perhaps this debate to discuss what is going to happen, so it is not unreasonable to ask why this is happening.
It appears—again, the Minister can correct me if I have got it wrong—that because there have been some challenges there is a view as to whether we are correctly abiding with existing treaty obligations and the Government have therefore decided to use this Bill as a vehicle to resolve these issues. There are many—BPI, for example—who do not believe that the UK has got anything wrong and see absolutely no need for this step. I am not qualified to make a judgment, but I am clear that seeking to right a potential wrong with countries outside the CPTPP member countries has frankly no place in this Bill and should be dealt with separately, as is perfectly possible. I hope that the Minister will explain why we are using this Bill to address an issue that does not directly impact on CPTPP arrangements.
One further point is that we have absolutely no idea what the impact will be. In his letter to me, the Minister says:
“We do not expect the measures in this Bill to result in significant direct impacts on UK musicians and UK record labels, or on broadcasters, public venues, or other users of music, in the UK”.
He acknowledges in that letter that
“changes will result in more foreign performers becoming newly eligible for rights in the UK”,
yet he still concludes:
“As such, we expect the direct impact of the measures in the Bill on the UK parties to be small”.
I hope that he can explain the justification for the conclusion that he has come to when we have had no consultation yet—it has not even begun—on these issues.
I have proposed Amendment 28, which requires that we publish an assessment of the impact of performers’ rights provisions in the CPTPP on qualifying individuals in the UK. The Minister has told me in his letter that his conclusion is that it will be minimal. I have no understanding of the basis of that justification and I look forward to the Minister’s explanation.
I am well aware that I have not given the most brilliantly correct analysis of the situation. Frankly, that is because I have come across no expert who can give me that explanation. I look to the Minister to clarify these matters beyond any future concerns people may have. I look forward to his response.
Viscount Trenchard Portrait Viscount Trenchard (Con)
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My Lords, this group of amendments includes a number of calls for reviews and impact assessments of the intellectual property chapter of the partnership agreement.

I have listened with interest to the case made by the noble Earl, Lord Clancarty, for Amendment 12 on artists’ resale rights. He rightly draws attention to the importance of Asian countries to the international art market. Amendment 28 from the noble Lord, Lord Foster of Bath, seeks an impact assessment of the implementation of performers’ rights in the CPTPP. Amendment 24 from the noble Lord, Lord McNicol of West Kilbride, seeks a review of the intellectual property chapter within one year, which seems too short a period. The noble Earl’s Amendment 12 also requires an impact assessment within 12 months, which, as several noble Lords have said, would be too soon. Amendment 28’s requirement for an impact assessment within three years seems more realistic and reasonable. I hope my noble friend will respond positively to it. I also look forward to his reply on the points raised by the noble Lord, Lord Foster, on performers’ rights.

On the intellectual property chapter, I was happy to learn that the concerns previously expressed by the Chartered Institute of Patent Attorneys about possible conflicts between that chapter of the partnership agreement and the UK’s membership of the European Patent Convention have been satisfactorily resolved. Can my noble friend confirm that?

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, I thank the noble Earl, Lord Clancarty, and the noble Lord, Lord Foster of Bath, for speaking to their amendments. I will touch on my amendment in this group. The detail the noble Lord has gone into raises a number of questions, and the detailed answers he seeks will cover all the amendments in this group.

My amendment is very straightforward; we have further groups later on seeking reviews of the negotiation. I understand the point made by the noble Viscount, Lord Trenchard, about this being within one year, but we are in a very new situation with the CPTPP. Learning lessons quickly, both positive and negative ones, is crucial to our making correct decisions in future on FTAs and other negotiations.

Amendment 24 seeks a review within one year of the day on which the Act is passed. The Secretary of State must publish both

“a review of the lessons learned from the negotiation of the CPTPP Chapter on intellectual property”—

as we have heard, there are still a large number of questions outstanding there—

“and … an assessment of how this experience might inform negotiations of future free trade agreements”.

It is very straightforward.

Like others who have spoken before me, I have had a number of representations from UK Music and the Alliance for Intellectual Property. I seek clarification from the Minister of one of the points made by UK Music. There is a concern that the CPTPP parties are allowed to opt out of some of the IP provisions—for example, not recognising protection for the use of recorded music in broadcasting and public performance, which was one of the issues touched on earlier. The AfIP’s point was that

“the rush to join CPTPP may result in the embrace of IP”—

intellectual property—

“standards that are significantly weaker than those present in UK law”,

and thus cause growth issues.

I turn to geographical indicators, which may well come up in some of the later amendments and was touched on during our first day in Committee. There is a specific issue concerning the UK-Japan deal, which was rolled over. Geographical indication brand protection was promised in the UK-Japan agreement but was never delivered on. When the agreement was announced in October 2020, the then Trade Secretary, Liz Truss, promised that 77 specialist UK food and drink products would be guaranteed protected geographical indication status, alongside the seven that were then carried over from the previous EU-Japan trade deal. The former Department for International Trade said that the protections would be in place by May 2021 for all 77 new products. I will not list them all, although I am more than happy to. They included some iconic brands: Scottish beef, the Cornish pasty, Welsh lamb and Wensleydale cheese, to name but a few.

The DIT also boasted that, thanks to Liz Truss’s agreement, the UK would benefit from a fast-track process for securing brand protection that would not have been possible under the EU-Japan deal. It said that:

“The EU must negotiate each new GI individually on a case-by-case basis.”


The EU has added an extra 84 products to the protected list since October 2020, including 28 fairly recently, and the number of EU GIs with Japan now stands at 291, while the UK is still stuck with only seven protected products, which we inherited from the EU-Japan deal. Given this, can UK producers of geographically identified products be confident in the measures in the CPTPP, and is there any danger of the same occurring now with British food and drink products, putting them more at risk? Finally, will the Government revisit the UK-Japan agreement and deliver on those originally promised protections?

Lord Johnson of Lainston Portrait The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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I thank noble Lords for returning to this important discussion of the various ways in which they are looking to improve our CPTPP Bill. I hope I can give them some good answers, illustrating my belief that we have a very good deal, the integrity of which we should try to retain as much as possible.

I think the noble Lord, Lord Foster, who is an expert on many things, said that he had yet to come across an expert who could clearly explain artists’ and performers’ broadcast rights. I am well aware of this, as are noble Lords. I will try to do so today but, given that no one has so far managed to do so convincingly, I hope noble Lords will allow me to write giving further clarification and useful examples and anecdotes. It is certainly a complex point.

The CPTPP brings to bear on the United Kingdom an additional series of obligations regarding performers’ rights. Currently, if you are a performer of, let us say, British nationality, and/or your performance is in the United Kingdom, you are entitled to the performance rights. The CPTPP looks at performances and rights in a slightly different fashion. In the instance of a performance taking place in a non-CPTPP country—which is where the controversy of this issue has arisen—it could qualify for artists’ performance rights payments if it was released or produced in a CPTPP country or if there was another necessary association with a CPTPP country.

13:30
That is quite relevant. In all honesty, nowadays, music and performances are probably released globally at any one time, as a result of which it is highly likely that many performances not previously covered by the performance rights legislation will now be, simply because of the fact of the activity. I should clarify that the proposal is not to give global rights to all performances under all situations to anyone in the world, which is sometimes how this is misread. Signing up to the CPTPP is sensible for us because it protects our artists around the world and in CPTPP countries, which is very important. This is an additional way of allowing for the qualification of artists, but it is not as specific as people suggest. I hope that I was accurate in describing how the new process works and that noble Lords understood it, but, as I said, we are happy to clarify it further.
The noble Lord, Lord Foster, was right to say that we have not yet done a consultation. We will undertake a consultation, and it will begin very shortly, possibly in the new year, and we look forward to it. We are taking this very seriously. It is not as straightforward a situation as people suggest. It is very important that the IPO have the time and the bandwidth to do that consultation. It will report back relatively soon, I hope.
I am told that there are mechanisms for abrogating the potential unintended consequences of this legislation, particularly given the UK’s position in terms of performance and the relationship with the United States’ music. I am very sensitive to the points made by many noble Lords and people in the industry about reciprocity and the importance of trying to make sure that, where possible, we leverage off the reciprocity opportunities to get the best possible deals for our artists around the world.
I hope that I have clarified the point, although this will result in further complication, since it does not necessarily make it easy to identify what the specific situations will be. I want to reassure noble Lords discussing this important issue today that there is a consultation plan proposal, which we are confident will yield some useful and interesting pointers, as well as amelioration opportunities if it is decided that this is the right thing to do. This is an open discussion, which I am very comfortable to have.
I turn to the subsidiary point about consultations. I firmly believe that a lot of the impact assessment amendments tabled on these trade Bills are intended to enable a debate about a concomitant point, rather than an impact assessment necessarily. To have an impact assessment after one year on any activity as complex as a free trade agreement seems completely unhelpful, so I thoroughly recommend that, if noble Lords are going to table amendments under the cover of an impact assessment to allow broader debate, we say two or five years, which the Government believe is the right amount of time. We will do an assessment and review of the treaty after two years, and we have committed to doing one after five years. I personally think—I am not going against government policy by saying this—that even two years is a very short period in which to see the impact of many of these actions, but I accept the fact that in some instances, we are looking at the processes that led to the action itself.
Lord Foster of Bath Portrait Lord Foster of Bath (LD)
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I entirely take the point the Minister is making about the timescale for an impact assessment. Yet before we have even had the consultation on performers’ rights, the Minister is claiming that the impact will be minimal. I have not yet heard from him the justification for that claim. Also, while I am on my feet and to save interrupting him a second time, can he be absolutely clear that the details of the consultation on performers’ rights to which he referred will be available prior to your Lordships debating the Bill on Report? If we do not have those details and a clearer understanding of what is in the consultation and the implications of the Bill, we are put at a huge disadvantage.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am grateful to the noble Lord for pointing out that I am already talking about the impact, while also saying that we should not have an impact statement after one year; however, I do not think that that is fair. We are trying to have a broad gauge—is this a significant, multi-million-pound issue that needs to be confronted with urgency, or a relatively manageable amount of capital change? The instance we are looking at is not significant in relation to the music industry overall—it was a few tens of millions. I do not have the figure in front of me, but the noble Lord will understand.

That is the reason why we are having a consultation. Our estimate implies that it would not result in significant distortions of the music market in this country. Remember, this is for broadcast media. It does not include streaming, which is how most people access their music at the moment. It will result in additional artists being included, but many artists already are.

We should be aware that we often talk in these debates about the issues facing us—it is always about us. I would like us to look at the opportunities our artists will now have in terms of being protected. British music is the greatest in the world, and among the most popular. The Beatles are at No. 1 again; that must mean something. All the great bands are reforming to take advantage of these new benefits of CPTPP and the enormous revenues they will be paid, so something must be working. We should not lose sight of that. I think that my noble friend Lord Cameron of Chipping Norton told me that Blur are getting back together again. He will know more about it than me.

This is a very important issue. We must not lose sight of the fact that on the whole, these measures tend to result in additional protections which did not exist for our artists in many of these countries. That is very important. We can get lost in the detail. I am not saying that the detail is not important, but we should keep things in perspective. I cannot answer the question from the noble Lord, Lord Foster, about when the consultation will be completed. It is unlikely that we will have the consultation back by Report, which is hoped to be the second or third week of January. I am aware of the time constraints and recognise noble Lords’ comments, but we will continue to work together to find a good solution. I am extremely comfortable having further conversations with the noble Lord and other interested Peers on how we can delve more deeply into this subject. I am very sensitive to the fact that we are trying to come to the right conclusion.

Turning to some of the other key points, the noble Earl, Lord Clancarty, made a very fair comment on artists’ resale rights. We have tried to propagate this position. It is a new concept globally and so far, 90 countries have taken up the opportunity to employ artists’ resale rights. Unfortunately, very few CPTPP countries deploy ARR in their legislation. The noble Lord was right to mention Mexico, and Peru is similarly beginning the process. However, it is at an early stage and has not functioned in a way that is advantageous to our artists, so while the systems have been set up, they have not started to yield the payments we were hoping for. Therefore, we are not in a position to introduce ARR into the CPTTP, because many of the countries simply do not have that legislation to hand. It would therefore not be appropriate for what is a collective multilateral treaty that we are joining.

The noble Lord rightly asks about our strategy. I am happy to come back to him on our plans for continuing engagement, but he should be reassured that we specifically negotiated this in the Australia and New Zealand free trade deals and that we are in negotiations with Japan to see how we can implement that.

The noble Lord, Lord McNicol, asked about Japan and geographical indications. I cannot make a significant comment in reply, other than to point to our commitment to continue negotiations on this. It was a very important part of the initial negotiations and the Secretary of State at the time was determined to ensure that these principles were magnified. I, my officials and the trade team will be happy to reassure the noble Lord, I hope, that we are moving forward.

I hope I have covered the questions raised. My noble friend Lord Trenchard kindly supported me with his point about impact assessments and timeliness, for which I am grateful. He also raised specific questions which I will answer in writing.

Earl of Clancarty Portrait The Earl of Clancarty (CB)
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My Lords, I thank the Minister for his reply on my amendment, which I found reasonably reassuring. As far as I can see, the Government are moving in the right direction on this. Time will tell by how much and with what enthusiasm they can persuade other countries to reach reciprocal agreement with us on this important right. I detected a suggestion for a possible meeting about this with interested parties; that would be really helpful.

On the other hand, I think many of us are much less convinced on the other concerns, particularly those about performance rights raised by the noble Lord, Lord Foster. He asked whether we could have the consultation before Report. It is really important that the consultation precedes any secondary legislation. The Minister has said that that legislation is technical, but the experts, including the Alliance for Intellectual Property and people in the music industry, say that we cannot be so sure what the effect will be of widening rights to foreign rights holders. We are asking the Government to tread carefully, and not recklessly in a way that will damage the UK’s creative industries. The principle of reciprocity is paramount, as the noble Lord, Lord Foster, pointed out. It should be a guiding light. Crucially, stakeholders need to see precisely what is intended to be in the secondary legislation before it is made. As we know, once secondary legislation comes before the House, it is too late to change anything. With that, I beg leave to withdraw my amendment.

Amendment 12 withdrawn.
Amendment 13
Moved by
13: After Clause 5, insert the following new Clause—
“Review: inward investment into the United Kingdom(1) A Minister of the Crown must publish a review of the impact of the implementation of the CPTPP Chapter on investment on inward investment into the United Kingdom.(2) The review under subsection (1) should include a consultation of such persons the Minister of the Crown considers appropriate.(3) The review under subsection (1) must be published within 12 months of the passing of this Act and every 12 months thereafter.”
Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, it is a pleasure to take part in this second day of Committee on the CPTPP. In doing so, I declare my financial services interests as adviser to Ecospend Ltd and LEMI Ltd.

I will speak to Amendments 13 and 14 in my name. I also give a nod to the other amendments in this group and look forward to their introduction by noble Lords. In short, the purpose of my amendment is rooted in one simple premise: we need to increase our cross-border trade in financial services with other CPTPP nations. We have an extraordinary opportunity to do so. Chapter 11 of the CPTPP sets out the financial services requirements in the treaty and, as in any treaty, we need to play to our strengths. Financial services are obviously one such strength.

If I could have got it within the scope of the Bill, my amendment would have talked about strategies rather than impact assessments, because that is ultimately what we need here. However, for the purposes of these amendments, we are limited to impact assessments. In many ways, this is a development of many of the discussions we had on the Financial Services and Markets Bill 2023, not least what we achieved in your Lordships’ House in pushing through the international competitiveness secondary objective for the regulator. These amendments fit squarely with that intention and what we can achieve internationally with our financial services firms and ecosystem.

13:45
Turning to the specifics of the amendments, Amendment 13 looks at financial services and the potential for an impact assessment to see how our joining CPTPP can positively affect increased cross-border trade in financial services. The domestic barriers which currently frustrate this trade are set out in Annexe 3 of the treaty. Can my noble friend the Minister say something about the approach the Government intend to take to the removal of those current domestic barriers?
That naturally takes us on to the role of the regulator. We undoubtedly have some of the world’s finest regulators, not least in financial services. However, it is important that we look at how to develop their role, not least by looking outwards at what role they can play in the further development of the international regulatory landscape, a potential greater reduction in friction, and greater harmonising of the approach of the regulatory landscape for financial services internationally across the CPTPP nations.
Similarly, the amendment sets out the important issue of mutual recognition of professional qualifications in financial services. Let us consider the simple example of a loss adjuster having to go from London to, say, a disaster area, and remember the terrible events in Christchurch, on New Zealand’s South Island, and the important role the UK insurance market played in the aftermath. Importantly, to take one example, mutual recognition of professional financial services qualifications for loss adjusters would help to remove friction, resolve difficulties and get the best results for all concerned, particularly in traumatic situations and during the subsequent rebuild.
Amendment 14 looks at inward investment. In many ways inward investment and cross-border financial services trade are two sides of the same coin; again, our financial services regulator can play a significant role here. As a result of joining CPTPP, we can consider something others have mentioned—and I agree with the description: the need for a “welcome mat” for any individuals, institutions and businesses that wish to come and invest in the UK. We need a one-stop shop, so they do not have to find their way through various bits of the Whitehall machinery or put together their own plan to consider all the elements they will need to set up and invest in the UK. Rather, we need a dedicated inward investment team in Whitehall which can deliver on this need. We need our trade envoys—our trade commissioners—to be very much up to speed, in real time, with all the opportunities for inward investment in the United Kingdom.
If we needed any further convincing, other nations are, understandably, well on the way to achieving this. One example is Singapore and the work of the Monetary Authority of Singapore. What it is doing is impressive, and we can and must do something similar. Does the Minister agree that the concept of a “welcome mat” would be greatly welcomed by the Government and would increase inward investment as a result of our joining the CPTPP?
The CPTPP is a dynamic treaty—a dynamic document. We have various means of influence to bring about a positive impact for our financial services ecosystem, in both cross-border financial services and inward investment. I hope that, as a result of this treaty and these amendments, that will only be increased and that, when the Minister comes to wind up, he will be increasingly supportive of these amendments.
I have a final point: there is an obvious slip of the drafting pen, which I realised and now realise even more. On the timing for any of these impact assessments, I obviously meant to write “two years” rather than “12 months”, but I think that is self-evident in the coding of the drafting. With that, I beg to move.
Baroness Boycott Portrait Baroness Boycott (CB)
- Hansard - - - Excerpts

My Lords, I rise to speak to Amendment 15 in my name, and I support other amendments in this group, notably Amendment 16 in the name of my noble friend Lady Willis of Summertown, as well as Amendments 18 and 29.

I am grateful for the support of the noble Lords, Lord Randall of Uxbridge and Lord Goldsmith of Richmond Park, alongside my noble friend Lady Willis, for Amendment 15. My intention in tabling it was twofold: to understand how the Government expect the CPTPP agreement to operate in the context of the commitments that they have made on forest risk commodities and how they will ensure robust monitoring and enforcement with the new countries that we will trade with in that bloc and, linked to this, to query when the Government will enact the forest risk commodities regulations under Schedule 17 to the Environment Act 2021.

On the latter point, I welcome the announcement at the weekend by the Environment Secretary on some of the content of the regulations. The letter that we received from the noble Lord, Lord Benyon, yesterday said that they will be brought into force as soon as parliamentary time allows. These announcements suggest that the regulations are imminent, so I hope the Minister can now clarify for us exactly when they will be brought in. Will it be January, before he comes back? If he cannot tell me that, can he confirm that the regulations will at least be in place before we accept the rest of the agreement? That is a crucial point.

It is critical that this happens as soon as it can, not least because, following the Financial Services and Markets Act earlier this year, in response to an amendment passed by this House, the Treasury is required to assess the extent to which regulation of the UK financial system is adequate to eliminate the financing of prohibited forest risk commodities. This review can happen only after the regulations in Schedule 17 are laid.

Moreover, the Environment Act received Royal Assent over two years ago and the consultation on this research closed over 18 months ago. In the meantime, Global Witness’s research in November showed that the UK’s direct imports of forest risk commodities such as beef, soy and palm oil directly contributed to areas of deforestation nearly twice the size of Paris. This has happened during the Government’s two-year delay. In that time, the EU has introduced its own rules, which have much wider scope, and has really moved forward with some ambitious thresholds.

This is important and relevant to today’s debate, because evidence shows that some countries that are parties to the CPTPP may engage in both illegal and legal deforestation. Indeed, although Schedule 17 regulations need to be implemented quickly, because we do not yet have any environmental requirements for what is imported, they are not perfect. They cover only illegal deforestation at the moment, which would not address the risk of the whole CPTPP treaty incentivising the production of deforestation risk commodities in countries where national laws are not sufficiently robust on deforestation or the rights of indigenous peoples, as was the situation in Brazil, as we knew, and is certainly the situation in Peru, from where we import quite a lot of stuff.

Will the Minister comment on how his department has reviewed this risk and what action we, the UK, will take to minimise it under the new agreement? With the Schedule 17 regulations expected imminently—but, as I said, I am looking forward to the clarification—could he also confirm that any forest risk commodities prohibited by the regulations will be prevented from entering our country, and how? Without having sight of these regulations, it is unclear how they will interact with the provisions of the CPTPP, which is what my amendment is aiming to clear up. Also, can the Minister confirm that, if these regulations are expanded or strengthened in the future, the agreement will not prevent the implementation of strengthened regulations? It is critical that we ensure that UK trade does not contribute to global deforestation, whether legal or illegal, but especially not illegal.

Turning to other amendments in the group, I am very supportive of Amendment 16, to which I have added my name. The health implications of some of the pesticides used in many of the countries party to this treaty are truly appalling. If anyone wants to go online and look up what kind of things will be coming in on fruit and veg and other products, they will find it scary. In Britain, when we were in the EU and still today, we had and have rigorous rules in place to prevent our children and ourselves having access to these pesticides, which are carcinogenic, affect fertility and do all sorts of weird and awful things. This is something that we have proudly fought for and should proudly uphold. Anything that allows stuff to sneak through under the wire has to be stopped; otherwise, it is not just a question of what it will do to our health but also completely undermines our high farming standards, which we all agree are terrific and have to be maintained.

I am also very keen that we support Amendment 18 on the assessments and procurement provisions, particularly in the Bill. That is something we should do for every trade agreement—and we should always go further and do comprehensive environmental impact assessments on detail, so that we understand our footprint. I will be very interested to hear the Minister’s response to the amendments proposed by the noble Lord, Lord McNicol.

Notwithstanding the TAC’s limited resources, it has a really narrow remit and is not tasked to do this. I hope I have made clear the importance of understanding the climate and environment footprint in joining the CPTPP, as well as the health implications, which the noble Baroness, Lady Willis, will outline in a second. I look forward to hearing what plans the Government have.

Baroness Willis of Summertown Portrait Baroness Willis of Summertown (CB)
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I shall speak to Amendment 16 and to Amendment 15 in the name of the noble Baroness, Lady Boycott, on which we have just heard her speak. I am grateful for the support of the noble Lords, Lord Randall of Uxbridge and Lord Curry of Kirkharle, as well as the noble Baroness, who have added their names to my amendment.

In introducing my amendment, I pay tribute to Amendment 34, in the name of the noble Lord, Lord Davies of Brixton, on mitigating risks to the environment of food safety, which I support as highly relevant to the amendment that I have tabled and will talk about briefly today. Amendment 16 would ensure that the pesticide testing regimes at the UK borders are fit for purpose, when we have an increased number of food stocks for animals and humans arriving from CPTPP member countries. It specifically aims to ensure that our testing regimes are robust enough to monitor and prevent those foods that have these pesticides on them—because they have been used in the production of the food type—entering the countries.

As the noble Baroness, Lady Boycott, just said, our UK pesticide standards are some of the strongest in the world, and we should be very proud of that. In fact, they are stronger than those of all other CPTPP member countries. If noble Lords have not seen it, I recommend the Toxic Trade report, published in 2021 by the Pesticide Action Network. It revealed that 119 pesticides were banned from use in the UK but were still permitted in CPTPP member countries. Even more worrying than this, 67 of these are classified as highly hazardous pesticides, a UN concept that identifies pesticides that cause significant human harm.

I shall give two examples from when we ask whether we are over-worried about significant human harm. The first is Chlorpyrifos, an insecticide. To give noble Lords a hint of its problems, it was originally developed as part of a family of nerve agents during World War II and is now one of the most toxic and widely used pesticides globally. It is used by our CPTPP partners in Australia, Chile, New Zealand and Peru. What does it do? It has been identified through scientific research as a developmental or reproductive toxin. I checked through the good research on this, which demonstrates that it can permanently and irreversibly damage the developing brains of children. It is also a suspected endocrine disruptor, which means that it may interfere with the body’s hormone functioning. It is a cholinesterase inhibitor, which means that it may interrupt normal nerve signalling in the body. For all these reasons and due to this scientific evidence, it was banned by the UK and the EU in 2019.

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The second example is Carbaryl, another insecticide still used by a number of our CPTPP partners. It is a carcinogen that has all the potential health effects I have just listed and was banned by the UK in 2007 because of them.
However, we were promised that we would maintain our standards at the borders and that these things would not get through. This reassurance was given to us by the noble Lord, Lord Cameron of Chipping Norton, in his very good maiden speech as Secretary of State. He said of the Bill:
“Will it lower our own high standards on food and product safety, animal welfare, the environment or workers’ rights? No”.—[Official Report, 21/11/23; col. 675.]
He suggested that our quotas and transitional safeguards would be negotiated for agricultural imports. The problem is that we have a two-tiered system at the border for any foods that come in. The first, which I think everyone will be happy with, is mandatory testing via border control. The second is risk-based surveillance run by the port authorities. I give this detail because we have lost sight of this, despite a lot of the promises we hear about how it will all be fine at the borders.
Mandatory sampling is part of retained EU law. It requires certain countries’ commodities, such as beans from Kenya, to be added to the regulator’s annexes. That means that these products have increased paperwork such as export health certificates. Critically, a percentage of the product is tested at the border and, if the shipment exceeds those levels or has any of the pesticides I have just listed, it will be rejected. Another really important point is that the local authorities under which the border control operates can apply directly to the Government for funding for this.
That all makes sense, and I would be reassured if we were just using that system, but we are not. The second system, risk-based surveillance sampling, is applied to all food imports that are not in the annexes. This is a desk-based process. Officials go through case studies and use a WTO alert system, but there is no mandatory requirement for testing the foods that come in via that system. Even worse, local authorities are required to take the money out of their own budgets to test these products in this risk-based surveillance. Who will say, “Let’s prioritise testing wheat from Australia over social care or refuse collection”? It will not happen, and there is a lot of evidence to show that it is not happening.
The question is this: which route will potential CPTPP food and feedstocks coming into the UK go through? This is where the problem really emerges. The vast majority of agricultural imports coming in via CPTPP member countries will go through the risk-based surveillance system, not the mandatory testing system. In fact, only six crops are currently on the annexes, out of all those 119 pesticides that I mentioned, including some herbs from Vietnam—coriander, basil, mint—and Vietnamese dragon fruit. That is it. As things currently stand, everything else will go through the risk-based system, with the problems that I have highlighted. This is extremely serious, because the vast majority of foods being grown in these environments will come into our country with no testing.
These are not random, bizarre things that we have never heard of. They will include grapes—which come in from Australia, Chile, New Zealand and Peru and are grown in environments that use Chlorpyrifos—and wheat from Australia and Canada which is grown in environments using Carbaryl. That list of effects I mentioned earlier is what they do when they get into the human food chain.
With Amendment 16, I have tried to put in place a system to tighten up this review process at the border. It requires the Government to review this dual system for testing banned pesticides at the border and, when a potential risk is identified, to move those risks on to the annexes so that mandatory testing becomes part of what we do and we do not allow these pesticides to come into our country. We urgently need this. Going through the literature and the scientific evidence base has made me think that I will not buy some of the products from these countries, given the risk of the pesticides they will have on them. This is a very serious issue. We wrongly assume that our border control checks are currently fit for purpose. They are not and we need to look at this.
We have heard some assurances from the report of the Trade and Agriculture Commission on 7 December that this trade will have no adverse effects. I do not know where it got that from, but we should also note that it states
“the mere fact that CPTPP will increase imports from a variety of countries raises the question of whether it will have an impact on that regime”.
It notes that the increase of food sources coming in may well overwhelm the border control checks. That is a really important point.
I hugely support Amendment 15, tabled by my noble friend Lady Boycott, on deforestation. These forest risk commodities pose huge threats to biodiversity and our carbon drawdown. They also pose a risk to indigenous communities, as many of them come from areas where there are indigenous and forest people. There is so much evidence of dispossession of their collective customary lands, territories and resources in a number of CPTPP countries, including Peru, Mexico and Chile. The evidence base is strong. I hope the Minister can reassure us that recognition will lead to action and agrees that this amendment provides the Government with the opportunity to ensure proper monitoring and protection of these indigenous people’s rights. I look forward to his response on both amendments.
Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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My Lords, I am delighted to follow the noble Baronesses, Lady Boycott and Lady Willis, since my Amendment 27 follows on neatly from the thinking behind Amendments 15 and 16, introduced so eloquently by them.

Clearly, I made a slip of the pen when I asked a Minister of the Crown within 12 months—for which read “24 months” or longer—to publish an assessment of the impact of the implementation of the CPTPP chapter on government procurement on environmental protection, animal welfare, health and hygiene. My noble friend was very kind to take me for a cup of tea to discuss these issues on previous legislation, so he is well versed in my concerns here.

Amendment 27 is meant as a probing amendment to ensure that there are not just opportunities for fair, better trade between the CPTPP block and the UK but that we are mindful of what our consumers want and what our farmers are being asked to deliver: high food safety and high food production standards. My probing amendment seeks a commitment and a reassurance from my noble friend that those high food production standards required of UK farmers and insisted upon by British consumers are met equally in these imported products. It also asks at what point, as the noble Baroness, Lady Willis, insisted, these products imported under this Bill will be checked at the external borders.

Why is this of concern and why is it necessary? The Government’s own advisory body—the Food Standards Agency—and Food Standards Scotland go into some detail in this regard in their latest annual report, Our Food 2022. I will not rehearse exactly what the noble Baroness, Lady Willis, said, but she was very clear that there are effectively two different schemes. One is the EU, which, the report says,

“still accounts for two-thirds of all food and feed imports, and 80% of all meat and other products of animal origin”—

that must be true because it is from the FSA. It continues:

“All food and feed imported from outside the EU is subject to a series of checks to make sure it is safe. The type of checks carried out depends on the type of product and the level of risk it may pose to public, animal and plant health”.


Then, of course, there is the category of the Windsor agreement—I accept I do not fully grasp it but my noble friend will be much more familiar with it. For the purposes of this afternoon, what concerns me is what the FSA focuses on at page 49:

“Currently, all food and feed of animal origin coming from outside the EU is subject”—


only—

“to documentary checks (which confirm that appropriate documentation is supplied)”.

Therefore, we are entirely taking as read what the exporting countries are saying. The identity checks will only

“confirm that the product matches the documentation”,

and, as the noble Baroness said:

“Additional physical checks are carried out randomly on a pre-defined percentage”.


To me, that leaves a bit of risk.

The FSA and FSS go on to say:

“Overall, non-EU imports have remained largely compliant with import checks compared with”


the year before—2021—so they are saying that there is not any significant fallout. However, the FSA

“recently commissioned the food consultancy ADAS to identify measurable metrics and data sources for imported food production standards that might be used to give the public a fuller picture”.

The ADAS report highlighted three specific points, which I think are of concern this afternoon:

“A general lack of publicly available data and issues with the quality of the limited data available … A lack of measurable metrics or clear approaches to measure or monitor them”,


and

“The absence of frameworks to evaluate production standards”.


The FSA and FSS conclude:

“Although the current system of border checks gives us assurance on food safety, there is no similar system for food production standards. Being able to assess the production standards, like animal welfare or environmental standards, of imported food on a comparable basis to UK food, is essential if we as watchdogs are to be able to assess whether the food standards of the food the UK consumes has been maintained”.


That is the fundamental issue that Amendment 27 seeks to address.

I accept that the NFU regards this as a more modest and measured agreement, focusing on market access by removing trade barriers, which highlights opportunities for exporting UK products that to a high proportion have hitherto not been possible. I have not been able to find the details, but I understand that there has been an announcement of more agricultural attachés, which I applaud. The first one, which was appointed in Beijing a number of years ago, has had substantial results. We are way behind the Danes and other countries in this regard, so we are finally catching up, which is very good news indeed.

I conclude with a very simple question for my noble friend. Does he believe in his heart of hearts that there is enough in the Bill and its supplementary provisions to ensure that our consumers and our farmers, who adhere to the highest standards of food production, environmental protection and all the other things that this amendment would enhance, will not meet unfair competition from imported products from the countries that are party to this agreement?

14:15
Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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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 Portrait Lord Kerr of Kinlochard (CB)
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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.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, I speak first to Amendment 35 in my name. The Government are keen to strike deals with countries with which we have not previously had economic trade, especially in farming. While it is important for the economy of both countries involved, it is also important to ensure that our UK producers, farmers and industry are not disadvantaged by these trade deals. A published impact assessment is essential for public confidence to be maintained.

Currently the UK farming industry is undergoing a period of considerable change. It is being weaned off the basic payment scheme, which was based on the amount of land owned, and on to ELMS, which should see greater benefits for the environment and biodiversity. Both these steps will eventually be good, but the current state of flux around the funding under ELMS is unsettling at a time when the BPS is being phased out quite rapidly, as some farmers believe.

Our UK farmers produce their crops and raise their animals to extremely high standards. These standards are not necessarily replicated in other member countries of the CPTPP. Sow stalls, which are banned in the UK, are used by CPTPP members. This is just one example where, if the British public were aware of it, it would lead to an outcry. The animal and horticulture imports that are likely to come under the new trade deals may have been exposed to pesticides and fertilisers which are banned in this country—I will speak more on this later. These imports will have been produced at a lower cost than the UK farmer can meet, and our farmers will be at a disadvantage as a result of being undercut.

There is an impression among some people that farmers are all wealthy landowners. This is not the case. There are many smaller farmers who struggle to make a decent living out of the land. In the days before universal credit, I knew a farmer who earned so little from his land that, had he chosen to claim, he would have been entitled to income support.

14:30
The price of food is important, especially when households are making choices about food or heating through the winter months. However, a healthy, nutritious diet is vital to everyone, especially children, if they are to thrive. A fair price for the food that farmers produce is essential if farmers are not to leave the land, which, in some areas, would then be snapped up for pony paddocks by those who are better off.
Farming is not an easy career choice. It is a way of life. Whether you are a large farmer with lots of staff, or a single-family farmer, someone has to get up in the dark and cold at this time of year to tend to their stock, often not finishing until late in the evening. The Government should be supporting these men and women and ensuring that they are able to continue to manage the land and their crops and herds for the benefit of the whole country. The farming industry should not be undermined by imports of an inferior quality. A farming impact assessment should be conducted for any trade deal as a matter of urgency, but especially one set up under the CPTPP.
I speak in support of Amendments 15, 16 and 27, in the names of the noble Baronesses, Lady Boycott, Lady Willis and Lady McIntosh of Pickering, respectively. The noble Baroness, Lady McIntosh, has detailed her arguments in support of Amendment 27 for an impact assessment for environmental protection, animal welfare, health, and hygiene under CPTPP procurement. I support her comments. Amendment 15 looks for protection for trees and the prevention of deforestation. In a letter received yesterday from the noble Lord, Lord Benyon, on Government’s measures to alleviate and prevent deforestation—which are welcome—he said that deforestation is now the second leading cause of climate change globally, after the burning of fossil fuels, and is responsible for around 11% of all greenhouse gas emissions. He said that forests host around 80% of the world’s wildlife on land and are home to many species found nowhere else—and it is therefore really important that we tackle this issue.
The loss of habitat for animals and homes for indigenous people is progressing at an alarming rate. Everything that can be done should be done to prevent further loss. I fully support this amendment and look forward to a positive response from the Minister, as requested by the noble Baroness, Lady Boycott.
Amendment 16 deals with sanitary and phytosanitary measures on contamination from pesticides in food and feed of plant and animal origin, which is dear to my heart. During the passage of the agriculture and environment Bills, I and the noble Lord, Lord Whitty, spoke about the need to regulate the use and type of pesticides on agricultural land, especially near centres of population where children might be playing, such as school playing fields. I have considerable concerns that goods will be imported into the country which will have been contaminated by pesticides, the use of which is not permitted here. As the noble Baroness, Lady Willis, has said, 119 pesticides that are banned in the UK are permitted across CPTPP members for agricultural use. A large proportion of these are deemed extremely hazardous and some are known to kill bees. The noble Baroness, Lady Willis, has given details of the effects of these pesticides, and they are pretty drastic.
I acknowledge that it may be difficult to pick up residues of these pesticides, but surely this is what border control is all about. As the noble Baroness, Lady Willis, so eloquently explained, alongside risk-based surveillance we need border control to take extra steps. Both checks are needed before food and feed enter the country and into our domestic food streams. I support the need for a published report on this matter within 12 months of the passing of the Bill, followed by a yearly update thereafter.
Those who have spoken on these measures are extremely knowledgeable and understand the risks for our own safety and that of our animals. Border control is clearly not fit for purpose at the moment. I fully support the comments of those who spoke before me, and I look forward to the Minister’s positive response.
Lord Ashcombe Portrait Lord Ashcombe (Con)
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My Lords, I wish to return to our invisible trade and speak in support of Amendment 13, on inward investment, and Amendment 14, on financial services trade, tabled by my noble friend Lord Holmes. I declare my interests as an employee of Marsh Ltd, the insurance broker.

There are significant advantages of being part of CPTPP in its early stages and being able to influence the shape and development of many aspects of the treaty, in particular financial services. To get the most from membership, we need to develop trade strategies that play to our economic strengths and ensure that we are working to remove barriers to cross-border trade that could benefit the UK.

I will take the two amendments in reverse order—it may be my upbringing in Ireland. The assessment proposed in Amendment 14 would inform a strategy about how the UK Government, working with our regulators, could seek to expand partnerships with CPTPP markets and address market access barriers, which would expand growth opportunities for UK financial services. In particular, the assessment should look closely at the regulatory barriers within certain CPTPP countries. They are set out within Annex III of the treaty, which lists the domestic barriers to cross-border financial services trade.

We need to consider how we can reduce those barriers, to the benefit of both the UK and our new partners. For example, the Government have rightly identified Malaysia as a crucial trading partner. Malaysia is much in need of the kind of support our world-class financial services businesses can offer. The London insurance market could play a major role in helping the country to protect itself against the increasing threat of cyberattacks. Malaysia has fallen victim to an increasing number of such attacks. Indeed, 62% of Malaysian businesses have put off digital transformation efforts due to fear of cyberattacks.

The UK’s commercial insurance industry is made up of global innovators when it comes to protections against these risks. However, Malaysia has an extremely protective, complex and restrictive insurance regime to be navigated before permitting offshore reinsurers to be offered a risk. Many other CPTPP countries operate with differing restrictions, making it hard for UK markets to trade. Reducing these barriers would help treaty countries such as Malaysia to reinsure their risks through London and out of the country, taking advantage of the global insurance capital that London can access and thereby gaining better protection by spread of risk. It is not just cyber risk; we can help protect from a myriad of other exposures as well. These are the opportunities that are on offer, and Amendment 14 would give us a plan and a set of priorities to consistently pursue.

I turn to Amendment 13. Growing cross-border trade and encouraging inward investment are two sides of the same coin. We must ensure that the UK is a welcoming, agile, easily navigable place to do business, and use the opportunities that agreements such as CPTTP bring to really sell what the UK has to offer to our trading partners.

My noble friend Lord Harrington’s review of foreign direct investment is a very welcome addition to this debate. His recommendations for a business investment strategy, for our regulators to be much more focused on inward investment, and for a consistent government strategy towards encouraging investment are all applicable to financial services and would greatly enhance our offer to CPTPP investors.

This is an approach that other CPTPP members are actively pursuing. As my noble friend Lord Holmes mentioned, the Monetary Authority of Singapore has a team dedicated to growing Singapore’s share of global industry, separate and distinct from regulatory colleagues but providing a joined-up and seamless service to those seeking to invest, create jobs and support growth. Another example is the Singapore College of Insurance, which is regarded as the most powerful insurance qualification in the Asia Pacific region, extending Singapore’s influence and shaping markets. Ours are extremely well thought of as well and should meld in. Australia is also looking ahead and has been growing its influence in the region, having signed a free trade agreement with Indonesia in 2020—a potential future and very significant member of the CPTPP.

Both these amendments would therefore help to ensure that we can take full advantage of being part of this living agreement, which is likely to be significantly developed in the years ahead. We need to prioritise the areas where we are economically strong and use our expertise to the benefit of our economy.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I have a quick question for the Minister arising from Amendment 14. I need to declare an interest in the context of professional qualifications, and as a fellow of the Institute and Faculty of Actuaries. I heard what the noble Lords, Lord Holmes and Lord Ashcombe, said about the potential for financial services. There is a very big debate to be had on that, but at table 5, on page 46 of the impact assessment, the percentage change in trade shows a decline in the UK’s financial services and an increase in imports of financial services. Maybe the Minister could help the Committee by reconciling what the noble Lords said and what the impact assessment is telling us.

Baroness Hayman Portrait Baroness Hayman (CB)
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My Lords, I declare my interests as set out in the register as chair of Peers for the Planet and director of the associated company. I will speak very briefly, broadly on the environmental issues that have been raised in this debate and particularly to give my support to the general principle of impact assessments. The case has been made very clearly that we need in particular to understand issues such as farming and the environment, which I am sure the noble Lord, Lord McNicol, will speak to later. This is a complex area and unintended consequences are possible.

I want in particular to support Amendment 15 and the amendment from the noble Baroness, Lady Willis of Summertown. Amendment 15 relates to the very important commitments the Government made on preventing the use of forest risk commodities. We really do need clarity on this, and particularly when the Schedule 17 regulations will be laid. I hope the Minister can confirm that the regulations will be in force before we accede to the CPTPP. Although the agreement does not impact the UK’s ability to put these regulations in place, given that we do not otherwise have environmental requirements for what is imported, we should not enter into trade agreements that increase the likelihood of forest risk commodities being imported into the UK without those standards being in place.

14:45
The noble Baroness, Lady Boycott, also brought out very clearly the risk that the expectation is that our own regulations are unlikely to cover instances where domestic regimes of CPTPP parties legally allow deforestation which still impacts critical habitats and the human rights of indigenous peoples and local communities. I note that the EU regulation, in contrast, covers illegal and “legal” deforestation. I hope that the Minister can comment on how we will interact on these issues with CPTPP member countries.
Amendment 16 was very ably explained by the noble Baroness, Lady Willis. However, while the theory is there and we are assured that there will be no lessening of our standards on pesticides and the monitoring of pesticide residue, the explanation from the noble Baroness, Lady Willis, certainly made me very concerned that our UK border testing regimes may be unable to cope with the additional impact of growing agricultural imports. If that is true, we can on paper have the highest standards in the world, but it will not make any difference, so the implementation is extremely important.
The monitoring and enforcement actions that have been discussed in considering Amendments 15 and 16 are of course related to issues that the Committee will debate later in considering Amendments 26 and 33, on the effect of investor state dispute settlement provisions. I hope that I am not, in the words of the noble Baroness, Lady Hayter, about to go too much off piste. However, I want to apologise to the Committee for not being able to be here for that debate, and to say that it is important that we explore the potentially damaging effect on environmental policy-making of those provisions and understand whether the Government could be doing more to pursue side letters with CPTPP parties such as Canada, in order to obviate the risks that come with being bound by ISDS provisions. While I cannot be here to listen to what the Minister has to say on those issues, and apologise again for that, I will certainly read what he has to say with great interest.
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, this has been a significant debate and has had a number of themes. One is how we use this accession to benefit UK business. The Minister heard me say on the first day in Committee that I am a passionate advocate for the proper operationalising and implementation of trade agreements, to the benefit of UK business sectors. But of course, as my noble friend Lady Bakewell and the noble Baroness, Lady McIntosh of Pickering, said, there are lingering concerns that we need to monitor very closely.

My noble friend and the noble Baroness made the case for their amendments very well, as did the noble Baroness, Lady Willis, who comprehensively laid out hers. I too look forward to the Minister’s reply to the very strong case she made, to which I will listen very carefully. I suspect that she and I are both grateful to Hansard for putting the Ts, Ps and Cs in their correct places as we have debated this issue.

I have a number of amendments in this group. On Amendment 30, I am grateful to the noble Baroness, Lady Hayter, for her support. I had some notes to make the case for it but she made it better than I could, so I simply acknowledge that. Her fellow member of the committee, however, is slightly more quizzical with regard to my Amendment 32. I always listen extremely carefully to the noble Lord, especially when he agrees with me, but I do so even when he does not. To some extent, this amendment is a wee bit like a child of many of the cases that he has made, arguing strongly for Parliament to have a stronger say in the early stages of when we enter into trade agreements. He has made the case, with his great experience in the United States, that members of Congress were able to use the power that they had to allow the US trade negotiators to have a stronger hand when it came to many of these discussions. That is what I have called for in many respects in previous trade debates, and he has made that case very strongly.

If we are to do that, we need some form of mechanism, such as Amendment 32, to allow us to understand who is seeking to accede to the CPTPP, what implications there would be for the UK and what are the particular areas with regard to those countries that are important to the UK. If I have a concern about an accession to a trade area rather than entering into negotiations on a bilateral FTA, it is that we will have even less ability in Parliament to understand the consequences. This is no way to undermine the UK’s trading relations with Ecuador, Costa Rica or Uruguay, but it is perhaps even more important when it comes to China and Taiwan. To have transparency in parliamentary debates about the implications for and impact on the UK in advance of their accession is therefore even more important. I hope the noble Lord might be able to reconsider his position on that.

On the noble Lord’s point about the amendments relating to the commencement of the Bill rather than accession to the treaty, he made that point very well on the first day in Committee before he had to go into the Chamber. If he had had an opportunity to see Hansard, he would have seen my reply, which was that there are powers even greater than he and I—namely the Public Bill Office—which ask us to put forward amendments in scope of the Bill. I have tried as much as I can to go beyond scope but, unfortunately, I was not able to do so, which is why I have these probing amendments.

On Amendment 31, I hope the Minister will notice that I am asking for an impact assessment within two years of the passing of this Act, and I expect him probably to simply accept this, with great humility. Regarding an amendment on further accession, we will have an opportunity to debate that when we come to the next group, specifically with regard to the potential consequences for China.

Finally, I just make reference to Amendment 29, because I have repeatedly raised this matter in relation to trade negotiations when the UK comes to join FTAs, bilateral FTAs or, as now, a trade area, and the consequences for developing nations and our trading relationship with them. We now have the UK Global Tariff and the Developing Countries Trading Scheme, which maintain preferences for us trading with developing nations outside the European Union. I had the pleasure of welcoming Minister Huddleston when he launched that scheme in Parliament in a meeting that I co-chaired with Theo Clarke MP on the All-Party Parliamentary Group on Trade out of Poverty. I support this trading scheme and commend the officials who have put it together. My concern is whether, when we join new agreements, especially the CPTPP, there will be preference erosion for those developing nations. One of the concerns is that, with the CPTPP, there will be and, indeed, that it may well set a precedent.

I give just one example of why this is important for UK trade. Regarding the concessions that we have given, the tariff rate quota for Mexico and Peru could well become a precedent if there are new members. As the trade area grows, it has the potential to erode trade preferences even further. One of the strongest examples of such erosion is the UK’s import of bananas. We secure our bananas from African nations, as well as those that may well join the CPTPP. For the British consumer, it is very important to receive their bananas but, for the producing countries, it is even more important. In Ghana, a Commonwealth partner of the UK, exports of edible fruits and nuts accounted for nearly 5% of all exports in 2021. For Côte d’Ivoire and Cameroon, it was nearly 9% and over 1% respectively. These are rural developing nations, so we are talking about 80,000 direct jobs, affecting the livelihoods of and sustaining half a million people in very rural areas. These are sometimes vulnerable economies which rely very much on the UK as both a trading partner and a sustainability and development partner. Anything that could impact that gives me concern.

UK consumers enjoy high-quality, cheap fruit. So much cost has been stripped out of the supply chains that a consumer in the UK buying a banana from Ghana pays the equivalent of the 1987 price, according to the Office for National Statistics. Given that we have had 180% inflation since that time, the real price of what was then a 50p banana would now be £90 if we included inflation. No one on earth is suggesting that the British consumer should pay £90 for a banana but, if we are not paying £90 for a banana and we are still buying our fruit from developing nations at 1987 prices, it shows that the economic value of producers in those developing countries has been suppressed considerably. This question will not be answered by anything that we can say in this debate, but it highlights one of my concerns about entering into new trade agreements: we are not giving sufficient consideration to preference erosion. It makes little sense to enter into new preferential trading schemes if those preferences are eroded by our entering into new agreements that have a meaningful impact on them.

I would be grateful if the Minister could say what consultation we had with our developing nation trading partners as part of the accession to the CPTPP. What mechanisms are in place for us to ensure that the benefits accruing from the new trading preference scheme will be protected when we enter into new agreements? How are the Government carrying out assessments? If they are not doing so themselves, and the assessments are not published, some form of amendment will be necessary, however it is drafted, whatever the timeframe and however it is linked. If we have trade preference agreements, they must be protected, and we have to ensure that there is no further precedent. I look forward to the Minister’s reply.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, this has been a very wide-ranging debate across a large number of issues. Many of the points on which noble Lords have gone into detail were picked up at Second Reading, so I shall take in the comments made then with those of noble Lords who have spoken to amendments today and feed in all the information that we need.

I tabled three amendments on climate and labour standards and I shall focus on the labour standards one, which has been touched only on in passing. I thank noble Lords who have offered support. I shall turn to Amendment 25 and then take a step back to climate and other issues. Trade unions all over the globe have found consensus in concerns regarding CPTPP’s inadequate measures properly to enforce the ILO standards, which is why the amendment calls for an impact assessment.

15:00
We all take the points made by the noble Lord, Lord Kerr, about the final accession agreement—the 12th one—being approved, which then allows us to access properly, rather than the passing of the Act. When we come to Report, I am sure that that will be taken into account. That is one of the joys of Committee, as the noble Lord, Lord Holmes, recognised.
To take the point made by the noble Viscount, Lord Trenchard, my amendments in this group call for two years, which gives us more of a timeframe. If we take that on from accession, that ties in very neatly with the Minister’s—or the departmental—first assessment of the impact of the actual agreement. As the noble Lord, Lord Purvis of Tweed, just said, I am sure that it will be a nice easy step for the Minister to add a little more detail about the specific areas in which we are looking for those impact assessments to be laid.
To turn back to labour standards, one concern is that the agreement includes a number of countries that allow significant abuses of workers’ rights to take place—again we touched on this in the first day of Committee and at Second Reading. Brunei and Vietnam have actually banned independent trade unions, which is a further violation of ILO standards. While the CPTPP includes a chapter on labour, which could theoretically impose sanctions on labour standards violations, this can proceed only if there is an identifiable relationship between the country’s alleged violation and the level of effectiveness of trade. This is not morally intact, as it implies that concerns are valid only because they impact on trade, not because workers’ rights violations are fundamentally wrong in themselves. Nor is it practical, as it is difficult to prove that there is a link between the two factors, even when one exists, meaning that most attempts to highlight a country’s labour standards violations will fail. To date, no Government in the CPTPP accession 11 has challenged another over labour rights violations, which leaves little hope that the UK would have the capacity to do so.
By making it easier for public procurement suppliers to come from CPTPP countries, the agreement increases the risk that public money will be spent on goods produced by exploited workers as labour rights are abused in many of the CPTPP countries. We heard this on day 1 about Malaysian rubber gloves, whereby even the United States stepped back from accepting those rubber gloves for one year, while reviews were taking place. CPTPP’s labour chapter refers only to the 1998 ILO declaration, which in itself is a low bar. It does not require members to have ratified the ILO’s eight fundamental ILO conventions.
More specifically, Brunei has ratified only two and Malaysia and Singapore only five. Five of the 11 CPTPP nations have not ratified the freedom of association convention, including Mexico, where companies regularly engage in union-busting, and Vietnam, where the union leaders at workplaces are often the senior managers. I would be grateful for the Minister’s analysis of and response to that.
On climate, the department has produced a fantastic impact assessment, which a number of noble Lords have touched on. There is a statement on page 79 on land use and deforestation that is worth putting on the record as it goes to a number of points raised earlier:
“Deforestation in CPTPP countries, where it occurs, has been driven by production of commodities such as cattle, timber and palm oil. The majority of CPTPP members are not considered to be at risk of deforestation, except Malaysia which has experienced a 29% reduction in tree cover over the last 20 years. This has been driven by agricultural commodities which accounted for 93% of Malaysia’s tree cover loss since 2001, implying that international trade plays a key role in the country’s deforestation”.
If we as a country believe in and want to support the protection of forests and high standards across the globe, taking the Government’s own impact assessment, how will they do that given the real concerns raised in my amendment and a number of others, specifically the one on pesticides?
The final paragraph on page 79 says:
“As part of the CPTPP process, the UK and Malaysia have agreed a bilateral statement setting out a shared commitment to work together to promote sustainable production of commodities and to conserve forests”.
This is excellent, but it goes on:
“The UK and Malaysia have also committed to regularly share information with one another about ongoing domestic developments related to the environment and sustainable supply chains and production. This includes updates to the Malaysian Sustainable Palm Oil certification scheme”.
It would be helpful to know in what timeframe the Malaysian-UK bilateral shared commitment will be reported back to the UK—to Parliament or otherwise—and what format it will take.
The noble Baroness, Lady Boycott, made an excellent point about not contributing to global deforestation, legal or illegal, which ties back to this. I fully support the comments of the noble Baroness, Lady Willis of Summertown, on the testing regime.
The one area where I have struggled is around the fact that the Minister and, as we have heard, the noble Lord, Lord Cameron, have argued in the past and will continue to argue that the CPTPP does not undermine UK standards. That is fine, but the question is: if products, good or services are being delivered through this agreement in the UK, how will we ensure that the quality of the goods coming in remains at our high standards and does not undermine our internal high standards? That is why many of the amendments in this group are pertinent; it is about making sure that analysis is done so that, one or two years down the line, that does not happen and the resources for testing are in place.
The noble Baroness, Lady Hayter, and the noble Lord, Lord Purvis of Tweed, asked for a full debate in the Commons. It would be great to see that in both Chambers, as we heard at Second Reading, in order to look at this issue. With that, I look forward to the Minister’s response.
Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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My Lords, I thank noble Lords for their input on this group of amendments; I will try to cover them in thematic order. As always, we are looking to have a good debate here and reach sensible conclusions, so I would be delighted to follow up with any noble Lord who wishes to do so. Actually, I think it would be helpful if, in the new year, we celebrated 2024 by noble Lords making sure that their first meeting is with me to cover specific areas of the CPTPP.

We can refer to the CPTPP as the FTA, if noble Lords wish to. I like “CPTPP” because, of course, it is relevant—especially in terms of all the aspects being covered today, such as the importance of ensuring that the effects of the trade agreement align with our commercial interests and our values. As noble Lords will remember, it was originally called the TPP—the Trans-Pacific Partnership—but Canada added the concept of it being both comprehensive and progressive. Noble Lords should be delighted that I am facing that now, because it is precisely what they are discussing; they should be reassured that the principles of comprehensiveness and progressiveness are very much embedded in the title itself.

I am glad that my view of a two-year minimum window for an impact assessment has now been broadly accepted. I have always wanted something to be named after me, rather like the “Grimstone principle”. Can this be called the “Johnson term”? I am not quite sure whether we are allowed to do that. Just because the impact assessment amendment line has two years in it does not necessarily mean that we would accept it—but I will briefly cover the crucial first point, which is about the principle of understanding the impact of these free trade agreements.

In our last debate on a trade treaty, many noble Lords looked at it in some detail and some Dispatch Box commitments were made. I do not have them in front of me, but I would be happy to come back to noble Lords on them at the next stage. I want to be clear about which areas the Government would look to review. There is some reluctance for there to be a codified, formalised, legislated-for, mandatory impact assessment because, as we have discussed in the past, these can be unadaptable and may not necessarily fulfil the requirement that this Committee is looking for, which is a true impact study in the key areas. Also, things will change, of course. So it is better that there is a flexible approach to this, where we get the right information.

From the point of view of this Government, who believe passionately in free trade and the benefits of this agreement, an impact assessment is something that we want to do in order to show the country the power of these free trade agreements and what they will result in. We will certainly look at the trade in goods and services, investment flows, the effects on the nations and regions of the UK, the effects on consumers and the effects on businesses. We will certainly establish the effects on border activity and, importantly, we will look at the effects on agriculture and the environment. I can say that those will not be areas to which the impact review will be limited; as I said, I would be comfortable to have further discussions around this.

Like other noble Lords, my noble friend Lord Holmes of Richmond rightly referred to the opportunities of the CPTPP. I am not going to grandstand and dwell on the opportunities just for the sake of it, because this is an important debate that covers some of the risk mitigation around these free trade agreements and I am comfortable making those points the focus of parliamentary scrutiny, as they should be. However, it is also worth looking more positively at the opportunities that we have, how we manage our relationships going forward with CPTPP countries, the value we think we can add as a result of that and where we can make further gains.

15:15
For me and many of my colleagues, the opportunity to join the CPTPP is not simply about the trade opportunities that it presents today. There are some specific opportunities relating to the recognition of qualifications, tariff reductions, the ease of high-level intercompany mobility, protections on copyright and so on, and those are relevant—but we have many such agreements already with many of the CPTPP countries. The key point is that it allows us to confirm our relationships in many of these areas and set them on a regulatory discussion path that allows us to do more. That is the point about trade; hopefully, this is the ratchet that will allow us to have freer trade and closer collaboration.
The one area that I have always thought was particularly relevant is the list of committees related to the CPTPP Commission. I think there are 19 such committees—forgive me if I have got the number wrong. There are a large number of committees that cover a range of areas. Clearly, there are areas that are goods-related, but some are services-related and they cover professional services, financial services, temporary entry for business persons and telecommunications, for example. There are other committees on e-commerce, competitiveness, business facilitation, SMEs, co-operation and regulatory coherence, all of which were raised by my noble friend Lord Holmes of Richmond regarding the importance of doing more to utilise the opportunities that the FTA presents to us.
It is important for us to have an opportunity to report back on the effectiveness of those committees, and one of the joys of joining this organisation will be our participation in them. As an applicant country, as I understand it, we already attend some of these committees. What level we are participating at I am not quite sure, but the fact is that we are now starting to engage, which is extremely important.
The second section that I will move on to relates to standards. This is an important discussion. It was a cornerstone element of the debate that we had over the Australia and New Zealand trade deal. I want to set out a few important principles around these FTAs, which not all noble Lords or commentators necessarily see from the first instance. Undertaking a free trade agreement with another country, or joining a multiparty FTA as in this case, does not change in any way our standards in how we manage our country. Today is Thursday. If we joined any FTA with any country—in the way that we negotiate them currently—and it came into effect at midnight tonight, there would be no noticeable difference in how product standards and safety measures were brought to bear.
It is important to note that we already trade with all these countries. We have trade agreements with most of them already. So, to suggest that there will be some sudden and unmanageable increase in trade activity is, frankly, unreasonable. We look forward to trying to reduce pricing for our consumers in certain areas. Other countries have different production standards, some of which are right for those countries in terms of what they may employ or deploy, but that does not change how we manage our borders and controls.
I refer to the commentaries from the noble Baronesses, Lady Boycott and Lady Willis, around some of the risks of pesticides and so on. I share the view that we do not want dangerous pesticides used on foods in our food chain. There seems to be a view that somehow the British Government want to encourage low standards. That certainly does not seem to be the case, so I would be very careful about misconstruing FTAs as having to do with standards changes. I have never really understood why that seems to have taken root in people’s minds.
A separate discussion can be had about how we police our borders, and my noble friend Lady McIntosh and I have had good discussions about this. I believe that the FSA said, in the report she quoted from, that we have continued to meet our requirements when it comes to policing our borders. I take the very firm view that it is absolutely right to take a risk-based approach to how we monitor our borders. I visited one of our ports a few weeks ago and saw the very effective work undertaken by the authorities. It would be completely impractical to test every single grain of wheat that came into the country, but it is very important that we do not use scare tactics to give people the impression that somehow we have porous borders. Our borders are well controlled.
I will refer to the Trade and Agriculture Commission report. I will just quote again, as I may have done in the first section, the answers to these two questions. I would be very grateful for noble Lords to hear carefully this point, rather than to believe that somehow there is an attempt to derogate the quality of safety that we offer our consumers. This is not the case; we are looking for higher consumer quality, better standards and closer trading relationships. The first question is as follows:
“Does CPTPP require the UK to change its levels of statutory protection in relation to … animal or plant life or health, … animal welfare, … and environmental protection?
The answer is:
“No”.
The second question is as follows:
“Does CPTPP reinforce the UK’s levels of statutory protection in these areas?
The answer is:
“Yes”.
That is very important.
I am very open to being tested on the quality of border control and resourcing. That is a very healthy debate that this Government are absolutely comfortable having. We believe that the resourcing is at the right levels, but clearly these are sensitive and complex issues, technology is changing continually, and threats are changing too, as new products and developments require us to be adaptable and versatile. I am not unwelcoming in terms of the principle of ensuring that we have the level of resourcing to ensure that we have the right controls, but there is no issue in terms of changes to our safety measures on account of our FTAs.
Baroness Willis of Summertown Portrait Baroness Willis of Summertown (CB)
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The point I was making, which I think is being followed up, is that there is a two-tier system. Right now, the Bill as constructed does not acknowledge that two-tier system. The problem lies in that two-tier system and the fact that all of these things that will be coming through with the pesticides on them will go through the risk assessment because they are not on the annexes, which they would be if they went into the first tier. It is those annexes that need to be looked at. I do not think that anyone is doing scare tactics, but I think there is a very big risk here that, as we get huge amounts of wheat coming in from Australia, there may well be pesticides on that wheat that we as consumers do not want to eat. I am not sure right now how the present system will address that.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am grateful to the noble Baroness for raising those points, and I am happy to provide further reassurance in terms of how we control our borders. We already import products from Australia and have done for many years; the Australia-New Zealand FTA does not make any difference to that. In fact, I can turn now to the protections we have for our agriculture sector. I follow on from comments I made in the Australia-New Zealand trade treaty debates that protecting our farming community is absolutely paramount for us. We are very sensitive to the effects that global trade flows can have on industries and communities, and it is completely right that we do what we can to ensure that we take a very gradual and phased approach to the changes of our quotas.

However, I would say that for the CPTPP, the impacts on agriculture are significantly less significant—I am sorry to have not presented a particularly clear sentence in that instance—than they are for the Australia-New Zealand trade deal, in the sense of the areas where we have increased the tariff rate quotas, in particular areas such as whole shell eggs, pork and other products, which are not at significant import volumes from countries such as Mexico, Vietnam and so on. We have phased in our tariff rate quota allowances over 10 years; we have taken a very measured approach.

I spoke recently to the president of the National Farmers’ Union, and she was very pleased. I asked whether I was able to repeat her sentiments, and she said I was. She felt very comfortable and pleased with the way we have negotiated tariff rate quotas at the levels we have ended up with. I will defer to my colleague, if she wishes to make an intervention.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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I am sorry to intervene. I do not have the Trade and Agriculture Commission report in front of me, but I think there may be a difference between food safety and food production standards. Will my noble friend take the opportunity to look at the ADAS conclusions and the conclusions of the Food Standards Agency on food production standards just to be absolutely sure before we proceed to the next stage?

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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Yes, I will reply on that point. As I said, there will be differences in food production standards, production capabilities and so on because we are looking at having trade agreements with countries in different parts of the world which have different weather patterns. In many respects, the whole principle is to complement our production. We are talking here about ensuring that the safety of the British consumer is not jeopardised through FTAs, and I am comfortable expressing that very important point.

My final point is on deforestation and other standards and relates to production standards rather than simply importing goods, particularly agricultural goods. As noble Lords will know, as a result of the Environment Act, we are bringing in further protections such that companies above a certain level are obliged to ensure that their supply chain is compatible with the legal framework. I understand that that will include illegally occupied territories that have been deforested.

I am afraid that I do not have an update on the timing of that legislation. As I believe my noble friend Lord Benyon said recently, it will be taken through when parliamentary time allows. I know from my conversations with my noble friend that this is an area of great interest for him. That was not a light-hearted comment meant to play for time. Noble Lords understand that we have a parliamentary calendar and have to make sure that this is done appropriately. I cannot comment on that, but I can say that the Government are committed to ensuring that these things run in sequence as closely as possible. As I said, we are already doing business with many of these countries and, in my view, a delay of a relatively short or reasonable period would not make a significant difference to the timing. They do not have to run concurrently, as they are not linked together.

I hope I have covered all the points. I am very comfortable coming back to noble Lords—I see I have not so I shall take some interventions.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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I just press the Minister for some reaction to the fact that his department’s impact assessment shows a deleterious effect on our financial services sector. What is the department’s approach to those figures in its report?

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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On my Amendment 25, I am more than happy for the Minister to write to me and the rest of the Committee on labour standards and ILO conventions and adherence to them.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I thank the noble Lord for those comments. I can say firmly that our commitment to those conventions is firm and absolute. It is essential to us that we do not derogate our commitments to the supply chain. As the Committee is aware, a number of new policy frameworks have been put in place to ensure that the supply chain has the responsibility to ensure that it does not include poor practices. They are now in force, and I would be delighted to work with the noble Lord to reassure him that the CPTPP does not lead to a derogation of standards. In fact, we think that participation in this group will allow us even more influence to align other countries in the CPTPP with our labour standards. I am quite confident of that.

I will touch on one or two other points that were raised. The noble Baroness, Lady Hayter, rightly raised the importance of high standards in the UK in reference to the Leasehold and Freehold Reform Bill, which is currently going through the other place. I wholeheartedly agree with her that it is important that the UK retains its world-leading position as a country that respects the rule of law and property rights. I am sure that that Bill will do these things. I believe that a consultation is under way at the moment that will inform that debate, but I am not able to comment further on that.

The last point was about the impact assessment. If I remember rightly, it showed that there will be a growth in financial services exports and a more significant growth in financial services imports—if I have that right. The noble Lord, Lord Davies, must forgive me: I do not have his chart in front of me but I would be delighted to follow up on that. The impact assessment is a static one. It is not for me to criticise it because it says that there are several billion pounds-worth of additional trading opportunities that we can see immediately from CPTPP, which is to be celebrated. That is combined with the free trade agreement with Malaysia.

Is it worth our time today debating a multi-billion-pound benefit set out in a government impact assessment document? It absolutely is, but it is our convinced belief that not only will we have significantly more trade as a result of the CPTPP but it will give us the opportunity to do all the things that noble Lords opposite have been so particularly focused on: influencing the debates around labour standards, use of pesticides and how the environment functions, and how farmers can compete globally. Let us rejoice in the opportunities that it presents to our businesses.

15:30
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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The Minister has given quite an extensive reply, for which the Committee is grateful. At Second Reading, my noble friend Lord Fox raised preference erosion, giving specific examples of developing nations, but the Minister did not have time to respond to him. I met the Minister before Committee and said that I would raise it as an issue. I have tabled an amendment and given specific examples today. I am not doing that just as an academic exercise so that I can listen to my own voice. These are important issues regarding our relations with developing countries and I would appreciate a response.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am grateful to the noble Lord for raising that point and I ask his forgiveness if I have failed to cover it. It is very important. I did look at his maths: the price of a banana, if it goes up 180%, goes to £1.70, not £90—I just point that out, if I may. Aside from that, it is very important to say that our developing nation commitments are not derogated by joining the CPTPP.

We are very aware of the importance of the prospect of preference erosion and it is quite right for the noble Lord to raise it. I am very comfortable writing to him in more detail about this, but we are very clear that our developing country trading programme is an important priority for this Government’s trade policy. We will ensure that any new trade agreements, including this one, are compatible with that policy agenda. I am very happy to write in more detail and have further discussions. If there is further detail where he believes that this is not the case, I again give my sincere apologies for that.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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I am grateful to the Minister for writing, and I look forward to it. I am sure that would agree that cumulative inflation of 180% since 1987 would mean that £1 then is £180 now.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I will not get drawn into the debate on that, but I think that would be 1,800%, rather than 180%. However, the point is that the noble Lord is right to raise the matter of the estimated expected costs compared with the actual costs today, and the deflationary impact of global trade on some of our developing nation partners and the importance of ensuring that it can be mitigated in some way, regardless of the other trade deals that we are pursuing. I am grateful for his point.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
- Hansard - - - Excerpts

My Lords, this has been an excellent debate. I thank all noble Lords who participated and the Minister for his response. I was pleased that financial services and environmental concerns were grouped together, because that is, in many ways, the fundamental point that is often missed. There is no purpose in talking about financial services and finance without ESG being gold-threaded through it all. I can sum up today’s debate, in many ways, as: what purpose profit if no planet to spend it on? I again thank all noble Lords who took part and, with that, I beg leave to withdraw my amendment.

Amendment 13 withdrawn.
Amendments 14 to 16 not moved.
Amendment 17
Moved by
17: After Clause 5, insert the following new Clause—
“Report: accession of the People’s Republic of China to the CPTPP(1) Before any decision is made by the Government of the United Kingdom on the accession of the People’s Republic of China to the CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the impact of China’s accession on the United Kingdom.(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”
Lord Leong Portrait Lord Leong (Lab)
- Hansard - - - Excerpts

My Lords, I speak to Amendment 17, which was tabled by the noble Lord, Lord Alton, who is unable to introduce the amendment due to a long-standing commitment. The effect of the amendment would be quite simple. Proposed new subsection (1) would require the Government to produce a report on the impact of the People’s Republic of China joining the CPTPP, before any decision is made as to whether the UK could support the PRC’s accession. Proposed new subsection (2) would provide for a vote in both Houses on the UK’s position towards the PRC’s membership.

I do not believe that this amendment ought to be controversial. The prospect of the UK joining a trading bloc with China—one that has the potential to be the largest FTA zone, accounting for 53% of global GDP and 30% of global trade—has significant long-term implications for the people of the United Kingdom and beyond. As such, it ought to be a matter for parliamentary oversight.

I believe that the PRC should not be allowed to accede to the CPTPP, but it has become clear that what seemed like an impossibility a couple of years ago looks more and more possible. After the UK, China is next in line. China is a much more important trade partner for many CPTPP members. Close economic ties have already persuaded some CPTPP members, such as Singapore, Malaysia and Vietnam, to voice their support for China’s entry. Australia, which previously opposed it, has reportedly softened its opposition and Beijing is lobbying hard for membership.

There are three key reasons why the PRC should be kept out of the alliance, and why the UK must not be bounced into a position of support without the support of Parliament. First, China should not be admitted because it will not meet CPTPP standards. The CPTPP contains major commitments on labour, the environment, IP and state-owned enterprises regulations that China is unable to meet. As my noble friend Lord McNicol has already said, Article 19.3 incorporates the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and Its Follow-up of 1998, which provides the right to freedom of association and prohibits all forms of forced labour, child labour and discrimination in respect of employment. To further entrench these rights, Article 19.4 explicitly prohibits members derogating from these protections, meaning the labour laws cannot be weakened to encourage trade or investment.

The CPTPP also establishes a number of positive environmental obligations for members. Under Article 20.3, members must effectively enforce environmental laws and must not derogate from them to gain a trade or investment advantage. The environmental chapter is enforceable under the CPTPP’s broader dispute resolution mechanism. The CPTPP also recognises the sovereign right of each party to establish its own level of domestic environmental protection. Although China has recently made important efforts to address environmental concerns, including by announcing its goal to phase out coal investment abroad and by debuting its emissions trading system, CPTPP obligations may none the less prove onerous, given China’s status as the world’s largest emitter of greenhouse gases and the challenges it faces reconciling climate and pollution control with rapid economic development.

China will also be unable to meet the CPTPP’s data transfer obligations and standards, which eliminate data localisation and prohibits Governments of CPTPP members demanding access to an enterprise’s source codes as a condition of import, distribution or sale. Importantly, these provisions are subject to the CPTPP’s dispute settlement mechanism. Further, a national security exemption is not allowed to let members derogate from this regulation. Although China has made similar commitments on data transfer and data localisation, as a member of the Regional Comprehensive Economic Partnership, or RCEP, this agreement does not contain a provision prohibiting the forced transfer of source codes. Additionally, the RCEP’s digital trade provisions are not subject to dispute settlement, and members may use a self-judging national security exemption to circumvent these requirements.

Secondly, should China join the CPTPP, it would definitely block Taiwan’s participation, as it did with RCEP. Given Taiwan’s importance in the supply chain network, the island’s exclusion from the CPTPP will have significant implications for the restructuring of the global production network and for the setting of standards in key industries and technologies where Taiwan is the leader. Further weakening and isolating Taiwan is neither in the interests of the people of Taiwan nor aligned with the interests and values of the United Kingdom and our regional allies.

That brings me to the third reason why China should be kept out of the CPTPP. Accession will make China more powerful and increase its willingness and ability to act coercively. China’s joining of the CPTPP will not only expand the CPTPP’s weight in the global economy but increase its global influence. A significant driver behind the CPTPP was the region’s recognition of a need for an alternative to be able to de-risk from an overreliance on China. This is good practice.

The United Kingdom played a key role in supporting China’s accession to the WTO, which I firmly supported. China pledged upon its accession to adhere to WTO rules, to phase out subsidies, and to ensure fair competition. It promised that the state would not influence commercial considerations. As we were reminded by the US trade representative in 2021:

“After more than 20 years of WTO membership, China still embraces a state-led, non-market approach to the economy and trade, despite other WTO Members’ expectations—and China’s own representations—that China would transform its economy and pursue the open, market-oriented policies endorsed by the WTO”.


Good faith may have been reasonable 20 years ago. Sadly, China has changed, as has its global ambitions. We simply cannot afford to get it wrong again.

In closing, I urge us all to recognise the importance of the CPTPP to the United Kingdom’s future economic and geopolitical importance and interests, and to support this amendment, which would ensure parliamentary oversight of the UK’s position on China joining the CPTPP.

Lord Kerr of Kinlochard Portrait Lord Kerr of Kinlochard (CB)
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I understand why this amendment was put forward and presented so well by the noble Lord, Lord Leong, but I do not support it. I do not think it necessary or desirable.

There are three politically controversial applications to join the CPTPP. The Chinese application is, of course, much the most controversial. If I were asked to predict what will happen, I would predict that nothing will happen, and that the Chinese application and, sadly, the Taiwanese application will remain in the “too difficult” tray for a very long time. Unanimity among existing members is required both to open a negotiation and to end a negotiation by agreeing to accession, and that is not foreseeable under present circumstances. The amendment is unnecessary because the condition that it sets—the peg for the report it calls for, which is a decision on Chinese accession—is unlikely to happen in the foreseeable future.

It is also undesirable because, in general, there is quite a lot to be said for not requiring Governments to come clean on hypothetical questions. I admit that I used to work in government and, to put it in a pejorative way, it might be desirable to hide behind “There is no consensus”, rather than revealing which side one was actually on. That is conceivable and I do not think it is desirable.

15:45
So far, I hope I am being extraordinarily helpful to the Government. Let me now be extremely unhelpful to them: I think it is necessary to be much more open with Parliament on what our trade strategy is. What actually do we think is the future of the multilateral system? Do we think that plurilateral is the way it is going, or that there is any need to have a policeman—an authority? Does it matter that the WTO court is moribund and perhaps dead? Is there any way of reviving the WTO and what is the British philosophy on the future of trading systems?
We say that we believe in the global system of rule of law. It is collapsing before our eyes. The world is dividing into huge blocs. The policeman of the WTO is on its knees, if not on its back. I do not know what instructions we give our people in Geneva or what they are supposed to say about the future of the WTO. We look at trade relations through a narrow focus on particular bilateral relations and this very welcome accession to the CPTPP, which I am strongly in favour of, but we need a sort of philosophy.
In the United States, the USTR’s report is an annual event. I do not want to call what the United States has at the moment a trade philosophy—it is hard to dignify current US trade policy with the word “philosophy”—but the practice of the United States is set out in the USTR’s report. In many ways, the New Zealanders are an example that we should really try to follow. They encourage a public debate, which informs their Parliament. They discuss in public their record—what they have achieved in the past year and what they hope to achieve in the year ahead—against a coherent philosophy. They are strong free traders, as I hope we will continue to be, and as I wish the United States was.
The International Agreements Committee has, again and again, suggested to government that it might be quite a good idea to publish a trade strategy document— and renew it, year by year. That is the answer rather than amendments such as Amendment 17, which is not required and is mildly undesirable.
Baroness Lawlor Portrait Baroness Lawlor (Con)
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My Lords, I support the proposed amendment from the noble Lords, Lord Alton and Lord Leong. I take the point that it is sometimes a very good idea, as the noble Lord, Lord Kerr, said, for Governments not to reveal their hands. None the less, there is a lot to be said for having both Houses consider in Parliament the degree to which, without China having joined the CPTPP—as the noble Lord, Lord Kerr, said, it may never join it—it has already caused a global imbalance to supply chains, and the levels of dependency in other economies on Chinese production, right across a range of goods.

As far as I understand it, certain economic research, particularly in the US, suggests that we are far better off as states if we do not depend for more than 25% of our imports on any one country. If China were, for some reason or another, to be accepted as a member of the CPTPP, there would be a danger that the existing imbalance which we see already would grow, as would the powers to influence and destabilise the global economy and, indeed, the security of smaller countries on which it has its eye. For these reasons, I support the spirit behind the noble Lord’s amendment.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, it is a pleasure to follow the noble Baroness, and I agree with what she said. I start by apologising to the Minister. My maths in my intervention on him were wrong. I admit that and want it on the record—that prevents him mentioning it in the letter he will write to me, which I look forward to.

I support the noble Lord’s amendment, and the context of what he said is very important. Together with the latter part of the contribution of the noble Lord, Lord Kerr, it means that we must have a wider public debate about UK-China trade in particular. I acknowledge that China’s accession is a very large “if”, and I will come back in a moment to the many reasons why, but that would have an even greater impact on UK trade, because China already has five bilateral FTAs with CPTPP members: Singapore, Australia, New Zealand, Chile and Peru. It is also part of the two plurilateral frameworks which the noble Lord mentioned. We are already, in acceding to the CPTPP, entering into trading relations through FTAs with China.

This is even more important because, in 2019, according to the University of Sussex UK Trade Policy Observatory—I shall source my figures on this now—approximately 20% of Chinese exports were already going to CPTPP members, of which 50% were in intermediate products. What does that mean? It means that it is linked with what we debated on the first day of Committee: that when it comes to rules of origin, many aspects of UK trade will be involved with goods from China. That is notwithstanding the enormous trade deficit that we have in imports in our trade with China already. The Office for National Statistics report stated that, in 2021, China was the UK’s largest import partner. That is not to the extent of 25%, but 13.3% of all goods to the UK are imported from China. What gives me concern is that we have a £40 billion trade deficit in goods with China. When we look at certain key sectors, this becomes a strategic issue, not just a trading issue or one of the importation of goods. Our trade deficit with China in goods is larger than our overall trade with Italy, Switzerland or Norway, so this is of great significance. When we consider that Germany has a trade surplus in goods with China, it is a valid issue to debate.

The increase in Chinese exports to CPTPP countries has grown very significantly, including in services, which on average has grown by 11% a year. When we have been debating UK trade, moving away from the single market into the fastest growing part of trade within Asia, we know that we have a combination: we are heavily dependent on imports from China, and growth in Asian trade has been as a result of their relationship with China too.

On that basis, if we look at the position of China, what does the UK do? We know that we are heavily reliant on it, that the Government say our future is in this area, and that those countries are heavily reliant on China. The growth trajectory is based on Chinese growth, so when we look at aggressive military exercises, human rights challenges and abuses, or increasing territorial disputes—including of course with Taiwan, another applicant country or customs area—this becomes geopolitical. We have also seen clear examples of Chinese economic coercion against other trading partners. It probably would lead a rational assessment to consider that, if it was a choice for the UK between Taiwan and China, it should be Taiwan. But how do you make such a decision when we are so intertwined with the Chinese economy, as I have highlighted?

We are debating the various chapters for the UK. On digital trade, which we debate quite a lot in this House, we discussed concerns around China complying with standards on digital trade. Chapter 17 is on state-owned enterprises. These areas were debated considerably during the procurement legislation. Chapter 18 is about intellectual property, which we have debated quite considerably. The noble Lord, Lord McNicol, raised chapter 19 on labour and chapter 26 on transparency and anti-corruption. All of these aspects may lead to the conclusion that the noble Lord, Lord Kerr, gave: that this is a hypothetical situation.

That may be correct, but nevertheless it has applied. We will be a member; we may form part of the commission to discuss this, and we may have a key role in those discussions about consensus for the application. Up until the point that China withdraws, I believe that our Parliament needs to have regular debates and we need to be informed. That is why I am sympathetic to this amendment.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I thank noble Lords for their significant contributions to this important section of the debate. I will go through the key points one by one.

In joining CPTPP we are securing our place in a network of countries that is committed to free and rules-based trade, and which has the potential to be a global standards setter. The CPTPP acts as a gateway to the dynamic and fast-growing Indo-Pacific region, and expansion of this agreement’s membership will only bring further opportunities, in our view, for British businesses and consumers.

There are currently six economies with applications to join the CPTPP, including China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. As noble Lords will be aware, the CPTPP is a group of 11 parties and will become 12 when the UK accedes. It has been agreed within the group that applicant economies must meet three important criteria. They must meet the high standards of the agreement, have a demonstrated pattern of complying with their trade commitments, and command consensus of the CPTPP parties. It is very important that I clarify that for this discussion. These are strong criteria.

Our own accession was successful because we are demonstrably a high-standards economy with a strong track record, and we garnered the support of every party for our accession. This sets a strong precedent: the robust experience that the UK has been through has reinforced the high standards and proved the bar is not easy to meet.

As a new member of the CPTPP group, it is right that we work within the principles of the group to achieve a consensus decision, rather than giving our own individual narrative on each applicant, such as through the report proposed in this amendment. This is not a question about one particular economy. The UK is closely involved in discussions on this topic but will have a formal power to oppose an application only post-ratification, as I am sure the noble Lord, Lord Leong, will be aware. We joined first so that we would be on the inside judging other applications, not vice-versa. It is therefore crucial that the UK ratifies this agreement and becomes a party. This will ensure that the standards the UK has met and abides by are continually upheld under CPTPP, with every future applicant going through this same rigorous process.

I reassure the noble Lord and the noble Lord, Lord Purvis, who spoke so eloquently, that accession of new parties after the UK has joined will entail a change in rights and obligations of existing parties. Any new agreement requiring ratification by the UK would be subject to the terms of the Constitutional Reform and Governance Act 2010 as per the Government’s commitment surrounding the CRaG process.

I assure noble Lords that accessions will proceed only if applicants have met the rigorous criteria and have consensus of the CPTPP parties, of which the UK will be one only once we have acceded. We will continue to engage with the public and Parliament through the mechanisms I have just outlined, before any future negotiations. In this complex matter, I ask the noble Lord to withdraw this amendment.

16:00
Lord Leong Portrait Lord Leong (Lab)
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My Lords, I beg noble Lords’ patience as I share my business experience of doing agreements in China. I still have scars on my back. My first visit to China was in 1999, when I was a much younger law publisher. This was before China’s accession to the WTO. It wanted to acquire the subsidiary rights to every mercantile law—what a beautiful name—and commercial and international law book. I was happy to enter into agreements with various Chinese university presses. Noble Lords will know that most businesses in China are wholly or partially owned by the state, so you can enter an agreement in good faith but whether the agreement is abided by or complied with is a different conversation. After many years of doing business in China, the managing of agreements took its toll and eventually we stopped doing business there.

I will share a simple analogy with noble Lords. It is as if you allow a friend into your house and then suddenly notice that some things have been taken away. Much later, more valuable things are taken away, and then the friend starts dictating the terms of your stay in your own house. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.
Amendment 18 not moved.
Amendment 19
Moved by
19: After Clause 5, insert the following new Clause—
“Impact assessment: local businessThe Secretary of State must lay before Parliament an assessment of the impact of the implementation of the CPTPP Chapter on government procurement on the level of procurement by local authorities from businesses in the respective local authority area, not less than two years, but not more than three years, after the day on which this Act is passed.”Member’s explanatory statement
This amendment requires an assessment of the impact of the procurement Chapter on local businesses.
Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

My Lords, we are now on to the fourth group so we are getting there. We have been through the bulk of the detailed amendments, so these should be relatively straightforward. There are four amendments in this group, all in my name, so I will work through them. They all seek to have assessments of the impact of the implementation of the CPTPP after two years. If we come back to these on Report, we will look to change that timing to being from accession rather than from the Act being passed, which is eminently sensible. As the Minister has said, a review will take place on the four areas I have highlighted—local business, manufacturing, the job market and public services. I am sure that he will be more than happy to accept into it.

To go into a little detail within those four areas, we are concerned that the CPTPP could open up public procurement markets, restricting public authorities’ ability to support local businesses that recognise trade unions or pay the living wage, so there is a concern regarding the criteria provisions of the CPTPP and the fact that in some cases they are narrower than the UK procurement laws and could encourage more contracts to be based solely on lower prices rather than quality and access to integrity of service provision. On local businesses, we seek clarification from the Minister that this is not the case.

I turn to the manufacturing sector, where again we have concerns that the CPTPP could pose threats to jobs as it would make it easier, to take an example, for Vietnam to export goods to the UK that could include cheap Chinese steel or other manufactured goods such as tyres, cement and glass deliberately routed through Vietnam to avoid remedies and tariffs. The Trades Union Congress is concerned that this could increase the rate of trade dumping in the UK manufacturing sectors, putting thousands of jobs in steel and related supply chains at risk.

In 2017 the European Commission found that China had been shipping steel from Vietnam to evade tariffs, which led to dumping in the UK steel sector. The risk of increased dumping from Vietnam, as well as other countries, is compounded by the fact that the UK trade remedy system is currently too weak to be effective. The TUC is part of the Manufacturing Trade Remedies Alliance with the Unite, GMB and Community trade unions as well as a number of manufacturing employers’ associations. They are calling for stronger measures to deal with dumping from countries such as China and Vietnam in legislation and the removal of the public interest and economic interest tests, which prevent effective trade remedies being applied.

I turn to the job market. Following conversations with the TUC, I know there are concerns that the CPTPP may lead to job losses in some sectors due to increased imports from CPTPP countries. Of course there will be benefits from increased trade, but how do we ensure that important sectors of UK manufacturing are protected? I seek some reassurance from the Minister on that.

I turn to the public sector. CPTPP accession could also expose public services to further privatisation as it takes the negative list approach to service listings. This means that any services not explicitly exempted will be opened up to further privatisation. In the past, the Government have not adequately excluded services in trade deals to offer that protection. Meanwhile, the Government’s ability to exempt public services adequately in the CPTPP would be severely restricted as the UK would be joining the existing agreement with the 11, rather than at the start. This weakens and reduces our power to alter it. I beg to move Amendment 19.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
- Hansard - - - Excerpts

I am grateful, as always, for the debate we have had around these important points. I hope noble Lords will agree that I have covered in previous groups the importance of reviewing these free trade agreements and how they impact our economy. As I say, I passionately believe that they will be enormously positive. The noble Lord, Lord McNicol, may be overestimating the threats in areas such as privatisation, steel dumping and so on. We have strong protections from the TRA protecting our economy in areas such as steel. This free trade agreement does not affect our ability to control that area of our economy.

I am afraid that I cannot see how this FTA would lead to increased levels of privatisation. We have been very careful about protecting key areas of our economy. To some extent, my job as Investment Minister is to encourage flows of capital into the UK, and we were asked earlier for impact assessments around that. I would be comfortable with seeing flows of capital from CPTPP member countries into the UK: we are aligned with them, and they are our allies—we want to do more trade with them—but I do not think it will lead to the negative consequences to which the noble Lord alluded. However, I am comfortable to have further discussions. As I said earlier, we should look carefully in these debates at the sorts of areas that we wish to review to make sure that the impacts around FTAs are properly understood, but I would be very reluctant to have them codified in amendments to this Bill, for obvious reasons.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

I thank the Minister for his response. As he outlined earlier, there will be an opportunity to review the implementation of the CPTPP in two years. The point of these probing amendments was just to put on record the importance of the sectors in these specific areas. He has put in Hansard, in his own words, that there will be no derogations in those areas, and I look forward to holding him to that. With that, I beg leave to withdraw Amendment 19.

Amendment 19 withdrawn.
Amendments 20 to 25 not moved.
Amendment 26
Moved by
26: After Clause 5, insert the following new Clause—
“Review: Investor-State Dispute SettlementThe Secretary of State must lay before Parliament a review of the financial risk of the implementation of the Investor-State Dispute Settlement aspect of the Investment Chapter of the CPTPP, not more than 18 months after the day on which this Act is passed.”Member's explanatory statement
This amendment requires a review of the risk to the UK from implementing the Investment Chapter.
Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

This is a small group of amendments from my noble friend Lord Davies of Brixton and me on ISDS and the mechanism that comes with it. I am sure the Minister will respond, “Don’t worry, it will all be fine, the UK hasn’t been sued”—but we have. We and the French Government were sued with regard to previous issues on this.

My concern relates to two areas. First is the accession of Canada, which has shown under previous trade remedies to be quite keen, or at least a number of businesses in it have been. We have seen that in recent years. The other issue I am keen to put on the record and on which I seek clarification from the Minister is around the UK, or individual countries, changing their approach because of possible threats. I know that that is hypothetical—we do not want to go down to hypotheticals—but often Governments do not move forward with specific issues because there is a possibility of disputes or because in other areas there have been disputes raised against them.

The investor-state dispute settlement allows foreign companies to sue a Government for any actions that they argue could affect their profits. Conversely, it allows British companies—the Minister may well pick up on this—to sue other Governments that breach ours. In the past, the ISDS court system has been used to challenge increases in minimum wage and countries’ internal attempts to bring public services back into public ownership. When New Zealand joined the CPTPP, it opted out of the ISDS system with the countries that invested most in New Zealand. Why have the UK Government not asked for such exemptions? As a result, rather than taking back control, with the CPTPP the Government are possibly handing multinational corporations huge powers to challenge the potential overturn of UK government decisions and laws.

16:15
The risk of ISDS is not just in losing an action against us, but also in the possible legal fees required to fight and defend against any challenges that are made; some of the other defences that the Australian Government had to make have cost millions of pounds. ISDS can also affect the decisions of Governments not to act—we have not stepped away from that or got side letters. We saw this in New Zealand, whose Government did not introduce plain packaging—despite it being their intention—after they saw the challenge Philip Morris had taken against the Australian Government, even though the Australian Government won that case.
There are some inconsistencies, so I seek clarification from the Minister on the Government’s position on ISDS. As we know, the UK has negotiated side letters with Australia and New Zealand to exclude ISDS provisions bilaterally. Though the UK Government have not confirmed that such exclusions will have been negotiated—I presume at the request of both those Governments and not of the UK Government—it would be interesting to know why we agreed to those side letters in those cases if the Government’s preferred position is to include ISDS provisions. The UK Government are clearly happy to accede to those requests, as these side letters mean there is clear precedent for agreements to be made with CPTPP members and other states. As we progress the FTA with Canada, will there be there any willingness from our Government or the Canadian Government to look at bringing in any ISDS measures or remedies?
Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
- Hansard - - - Excerpts

My Lords, I speak in favour of Amendment 26 and my Amendment 33. As my noble friend has clearly explained, this is about investor-state dispute settlement mechanisms. This is a very important issue, so I make no apology for exploring it in further detail, even at this late hour for a Committee.

For the benefit of new readers of Hansard—I am aware that everyone here is by now more than aware of what we are talking about—the investment chapter of the CPTPP contains the ISDS mechanism. The provision allows companies to sue Governments over decisions that impact their corporate profits, even if those decisions are made in the public interest. That is the key point. In simple terms, ISDS allows firms to sue the Government for legislation that they have introduced for the general public good, where those decisions impact on company profits. This can have disastrous effects across the board of social and public policies, but particularly on policies on the environment and health and measures to combat climate change.

These concerns are widely shared and this is a big issue, which is why I wanted it to be discussed in a separate group. The noble Baroness, Lady Hayman, mentioned it, and she apologised for being unable to be here to support the arguments being made. ISDS has been used to challenge important environmental regulations under separate arrangements: water pollution controls in Germany, a ban on fracking in Canada and various regulations on mining in east Asia and South America.

I am a bit hesitant to mention the impact assessment because, effectively, the Minister suggested earlier that although I have read all 142 pages of it, I need not really have bothered. He did not seem to feel that what was in it should be taken seriously—but it does touch on this. There is one bullet point of 26 words, which covers the issue, and it says:

“A modern and transparent investor-state dispute settlement mechanism will ensure that UK investors can access an independent international tribunal should they not receive such treatment”.


Well, that is only half of what the mechanism achieves. The other half is foreign companies suing this Government for measures that they take. My view is that is the more important part, yet we have no assessment of its impact, which I would have thought is essential. The truth is there is a real proximate risk that ISDS would be used to challenge new regulations which are essential for fighting climate change.

There is also evidence that ISDS in recent trade agreements would be used to challenge health provision, labour rights and other important legislation. Here are some further examples. ISDS was used in Egypt to challenge an increase in the minimum wage. Philip Morris sued Australia for attempting to introduce plain-packaged cigarettes—albeit it lost, as was explained. However, it is the threat that is the real problem. Then Slovakia was sued for attempting to nationalise part of the health service.

I am not given to quoting the CBI—it is not my usual source—but it has expressed concerns. It stated in 2021 that there was,

“a risk of the UK becoming disproportionately targeted through ISDS”

and that

“there could also be environmental implications of the UK being exposed to the ISDS mechanism”.

That is the CBI expressing its concern. The UK did not include ISDS in its recent trade agreements with Australia, New Zealand and Japan, and the provisions were suspended in the rollover agreement with Canada. The Government could have sought explicit side-letters in CPTPP to be exempt but has chosen not to do this, which means that, if this treaty is passed, the UK will now, de facto, have ISDS agreements with Canada and Japan. This contract would effectively import these settlement mechanisms into the existing agreements, which the Minister has referred to.

In my view, the ISDS process is suspect in and of itself. Arbitrators appointed to reach a settlement are paid on a case-by-case basis and benefit from an increase in claims. Governments cannot do it the other way; they cannot use the ISDS system to sue investors, so arbitrators naturally have a bias towards companies or investors so that they encourage further investor claims and thereby benefit commercially.

There is a code of conduct for ISDS proceedings. It was established under the partnership to address legitimacy concerns that arise when a system allows adjudicators to act as an arbitrator in one case and legal counsel in another—so-called double-hatting. This provides some objectivity in the process, which other agreements lack.

However, if we look at the recent record, we find that the most utilised treaty for challenging climate action is the Energy Charter Treaty, under which many cases have been brought by western-based companies against Governments taking action to limit their expanded use of fossil fuels. So problematic has this flood of cases become that the largest European countries have now all signalled their exit from the treaty. The Government themselves have said that they are reviewing their Energy Charter Treaty membership and will

“carefully consider the views of stakeholders in business, civil society and Parliament”.

In this context, we are not really having a debate about the ISDS process in general—that is a big debate, and one we need to have—but there is a growing realisation that these clauses are an impediment to social policies and to climate action in particular. It seems perverse to sign us up to another ISDS clause in the partnership, exposing us to potential future lawsuits from companies with tens of billions of pounds invested in the UK.

I have two questions for the Minister. First, the impact assessment says that it is a “modern and transparent” mechanism, but what is modern and transparent about it? Secondly, should we not have an assessment of the likely impact of the mechanism where foreign commercial interests can require limits? In effect, they have a veto on our domestic policies. We are told that the whole point of leaving of the European Union was to take back control, as my noble friend mentioned, but these mechanisms reduce our control, taking it away from intergovernmental bodies and handing it over to people totally outside any sort of responsibility to the public.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

My Lords, I thank noble Lords for allowing us to raise very important issues relating to ISDS. We have previously debated these in considering trade Bills and particular FTAs, and I have a great deal of sympathy for the arguments that have been made. My party supports a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes. I have been studying the European Union’s recent proposals on moving towards a more global, multilateral element, and that is my party’s position.

As we have heard, these amendments are important because it is vital that the Government state their view. We knew that the noble Lord, Lord Grimstone, was a strong supporter of ISDS mechanisms because he said so during consideration of the Trade Bill, but, as has been mentioned, we then had FTAs that excluded them. There is now uncertainty regarding those who were excluded but who are now also members of the CPTPP.

Like other noble Lords, I have questions to ask the Minister. Does the UK support an appellate mechanism within the CPTPP? Will the UK, as an acceded member, seek to implement the mechanism through the CPTPP in our relationships with Canada and Japan? Without the side letter, there is uncertainty. Will a company or a member be able to choose to resolve disputes through the CPTPP process or the FTA process? I am not aware of how that would operate, so some clarity from the Government will be important.

16:30
It is vital for us to know because of the effect that the noble Lord, Lord Davies, indicated. We have discussed quite a lot about the potential chilling effect of both mechanisms being in place, but also their uncertainty as mechanisms. I am aware that, on most occasions, the UK is a beneficiary of ISDS processes: the statistics speak for themselves. Nevertheless, the UK can be a victim of these. We have to watch out for that.
We are making progress on removing the ability to have SLAPP mechanisms in other legal situations to remove what could well be vexatious approaches, and we would not want to see that through the mechanisms here. It is important that the Government provide clarity, not only with our relationships going forward but especially on Canada, because we are acceding to a treaty while negotiating an FTA where it has been agreed that part of the negotiations would be fed in by a review of ISDS. I simply do not know where we stand, so I hope that the Government might be able to provide some clarity.
Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
- Hansard - - - Excerpts

My Lords, I thank noble Lords for this important series of amendments and the discussion that we have been able to have around them. Since this relates to investor-state dispute settlements and I have investments in CPTPP countries, I declare that and direct all noble Lords to my entry in the register of interests—although I do not believe that I have any specific conflict and I am always happy to answer questions on any of those points.

For me, ISDSs are a very important element of protecting our businesses’ investments overseas. I spend a lot of my time talking to companies that make significant investments in many countries and, where they do not feel that they have protections, it creates a far higher level of work for the Government in trying to support them when they have disputes and clearly increases the hurdles for the necessary rate of return. So, from our point of view, having mechanisms where investors feel protected when investing into the UK economy by the consistency of the rule of law and the application of that law is very important. We are very comfortable with signing up to investor-state dispute settlement mechanisms.

The question from the noble Lord, Lord Purvis, on whether the FTA or signing up through the CPTPP is linked to ISDS, is perfectly reasonable. My view is that it would not make any difference. I am very happy to confirm that in writing. You would not pursue an ISDS case according to a specific route: from the investment point of view, the country either has that relationship or does not.

To the noble Lords, Lord Davies and Lord McNicol, I say that an important element of our system is that we have protections for our businesses when they invest internationally and that international businesses investing in the UK can have a high degree of confidence. It does not, at any point, derogate or hinder our right to regulate in the public interest, including in areas such as the environment and labour standards. In fact, this right to regulate is recognised in international law, and CPTPP expressly preserves states’ rights to regulate proportionately, fairly and in the public interest.

The noble Lord, Lord McNicol, is right to say that we have received a claim from investors relating to an ISDS. I do not think that that came from a CPTPP country, and it was in conjunction with another country. That is a fact, but not one that is necessarily in contradiction with the point that we have never singularly, acting on our own basis, had a successful claim made against us. That is important. We have nothing to fear without ISDSs, and I reaffirm that our flexibility to enact the legislation and frameworks that we want to run our country is not impeded if we stick to the rule of law and understand and respect the rights of investors putting their money in the United Kingdom.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

I thank the Minister for giving way. The bit I am struggling with is the contradiction, and I do not think that he has answered that yet: we signed side-letters excluding ISDS with New Zealand and Australia, yet the Minister says how important they are. How does he balance these positions?

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
- Hansard - - - Excerpts

I am grateful to the noble Lord. We did accede, in terms of their negotiating priorities, to do that. We have long-lasting relationships with Australia and New Zealand, and we are comfortable allowing that to be the case as part of the negotiating process. The point is whether we are willing to sign up for them, and my point to noble Lords is that we are. Clearly, we need to make sure these processes are properly followed and that they suit us into the future—but currently, today, we are very comfortable signing up for them. I think it gives us, and our businesses, benefit, and creates an overall higher level of investment confidence within CPTPP countries, and within the UK.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

I would like to thank my noble friend Lord Davies for his detailed explanation of this. It may well be something we come back to on Report.

I thank the Minister for answering the question regarding the side-letters, who was pushing, and how they came to fruition. I think that was important. The Minister’s position is that this is about protecting our companies. The amendment proposed by the noble Lord, Lord Davies, is a bit more detailed, but my Amendment 26 is simply calling for a review of the financial risks. I think that works well with the Minister’s position, so at this point I withdraw my amendment, but I am well come back to this on Report.

Amendment 26 withdrawn.
Amendments 27 to 35 not moved.
Amendment 36
Moved by
36: After Clause 5, insert the following new Clause—
“Review: application in Northern IrelandWithin twelve months of the day on which this Act is passed and every twelve months thereafter the Secretary of State must lay before Parliament a review of the application of section 4 to Northern Ireland, including—(a) a consultation of such persons as the Secretary of State considers appropriate;(b) an assessment of the impact of European Union legislation relating to geographical indications and conformity assessment of goods listed in Annex 2 of the Windsor Framework on Northern Ireland;(c) an assessment of the impact of Northern Ireland being subject to different geographical indication and technical barriers to trade provisions to England and Wales and Scotland.”Member's explanatory statement
This is related to the amendment in the name of Baroness Lawlor to clause 6, page 6, line 42.
Baroness Lawlor Portrait Baroness Lawlor (Con)
- Hansard - - - Excerpts

My Lords, my Amendments 36 and 37, to which I speak, relate to the proposed arrangements for geographical indications and conformity assessments for Northern Ireland.

First, I shall say a word on the background as to why I proposed the amendments. The Explanatory Notes to the Bill say:

“The GI and Technical Barriers to Trade … provisions in this Bill will extend to but will not apply in Northern Ireland. This is because, under the terms of the Windsor Framework, EU legislation relating to geographical indications and conformity assessment of goods, as listed in Annex 2 of the Windsor Framework, continues to apply in Northern Ireland. Article 15 of the Accession Protocol ensures that the UK can fulfil its obligations under the Windsor Framework”.


I have not been able to discover an accessible UK Government-consolidated version updating the withdrawal agreement and its Northern Ireland protocol with the changes under the Windsor Framework in Annex 2. This may well exist somewhere in Whitehall, but it is not clear how to find it. However, the EU has a consolidated version on its website, with Annex 2 in respect of decisions taken by the Joint Committee under the withdrawal agreement. The most recent version from September sets out these arrangements to which we refer in respect of the Windsor Framework.

Articles 15(2) to 15(7) of the CPTPP accession protocol deal with Chapter 29 of the treaty, on exceptions and general provisions, which provides for an exemption for the Windsor Framework clauses in respect of CPTPP where there is an inconsistency. There is also provision in Article 15 for the commission to review the implementation of the CPTPP.

I hope that noble Lords will forgive this tour of the relevant documents, but it is difficult to see from the Bill that its procedures in respect of geographical indications and conformity assessment procedures will not apply to Northern Ireland. It will instead be subject to EU law, as is clear from what I mentioned. I therefore have two reasons for tabling these amendments.

We do not know how the application of Section 4 on GIs and the designation of origin will work out for businesses in Northern Ireland by comparison with the rest of the UK in its trade agreements with CPTPP countries, nor do we know how it will affect businesses in respect of internal UK trade west to east. I therefore suggest that it is fair and proportionate to require such a review as I propose in Amendment 36—with a new clause after Clause 5—to assess the impact of EU legislation relating to geographical indications and conformity assessment of goods listed in Annexe 2 to the Windsor Framework and to assess the impact of Northern Ireland being subject to different GIs from those in the rest of the UK. Although the Minister made a fair point about the timing of such reviews in general, might he remain open to a shorter period of regular reviews for the assessment of the impact of EU legislation? This would not be a demanding exercise, given the proportionately small size of the economy.

It is important that the questions raised about the comparative impact of EU legislation on GIs and the conformity assessment of goods are a matter not of speculation but of fact, in so far as it can be established. We pride ourselves on consulting widely before laws are made, commissioning assessments on a range of areas potentially affected and measuring and reviewing the impact of a law once it is in operation. If Northern Ireland is to remain under EU law—itself a matter of some concern—it matters for Northern Ireland’s overseas trade, the smooth functioning of the internal UK market and the wider economy there that we have scope for such a review.

My Amendment 37 to Clause 6 is for the purpose of making it clear in the Bill that the arrangements for designation of origin and GIs extend to but do not apply to Northern Ireland. I suggest to my noble friend that inserting this at the end of Clause 6 would make for transparency and clarity and would remove the danger of appearing to brush under the carpet the non-application of arrangements in Clause 4 to Northern Ireland. With that, I beg to move.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
- Hansard - - - Excerpts

I thank my noble friend Lady Lawlor for her Amendments 36 and 37. I can assure her that exporters in Northern Ireland will benefit from CPTPP in the same way as exporters across the United Kingdom. It is also right that the people of Northern Ireland have a say in how EU laws apply in Northern Ireland. I would be delighted to have further discussions with her; this amendment was tabled quite late in the day, I am afraid, so I would like to explore further and see whether there are any nuances I could assist her with to give her a degree of comfort about how the CPTPP will apply to the whole United Kingdom, particularly Northern Ireland.

16:45
Once the Northern Ireland Executive is restored, the Windsor Framework will provide them with access to the Stormont brake, which is a powerful lever that enables them to block specific laws impacting Northern Ireland. There will also be regular opportunities for the people of Northern Ireland to have a say via the consent vote. For these reasons, Amendment 36 is deemed unnecessary, along with Amendment 37, as the clause relates to provisions that apply only in Great Britain, and the Windsor Framework makes clear which EU regulations apply in Northern Ireland.
On technical barriers to trade and conformity assessment, the clause’s application is limited to Great Britain, so under the Windsor Framework only EU legislation relating to conformity assessment of goods applies in Northern Ireland. The protocol for the UK’s accession to the CPTPP provides that nothing in the CPTPP will undermine the Windsor Framework. Therefore, the EU regulations on accreditation will continue to apply in Northern Ireland, rather than the requirement for national treatment of conformity assessment bodies.
The measures relating to geographical indications will also apply only in Great Britain—we debated this earlier—and will not apply in Northern Ireland, in line with our commitments under the Windsor Framework. Under the terms of the Windsor Framework, the EU’s GI schemes continue to apply to Northern Ireland, and our accession to CPTPP does not alter this. I do not know whether my noble friend will find this reassuring, but I have stated the case as it is. I am happy to have further discussions, but I would be grateful if, in this instance, she will withdraw her amendment.
Baroness Lawlor Portrait Baroness Lawlor (Con)
- Hansard - - - Excerpts

I thank my noble friend for his reply and I look forward very much to discussions. It is important that since the Bill includes exceptions, we should include this exception as well, and it should be clear in the Bill what is proposed and what is not, if only to give reassurance to the different parts of the United Kingdom. Otherwise, it is rather difficult to find all the information gathered together. We have reviews of the arrangements under the CPTPP as they apply to members, and we have arrangements under the Windsor Framework as it applies to those parties. However, it would also be helpful to have some potential for considering the arrangements as they specifically affect Northern Ireland, which is an exception to the arrangements for GIs and conformity assessments under the CPTPP and therefore appears to be in limbo. I look forward to discussing these points, I thank my noble friend, and I beg leave to withdraw the amendment.

Amendment 36 withdrawn.
Clause 6: Extent
Amendment 37 not moved.
Clause 6 agreed.
Clauses 7 and 8 agreed.
Bill reported without amendment.
Committee adjourned at 4.48 pm.

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

Committee (1st Day)
13:00
Clause 1 agreed.
Clause 2: Treatment of conformity assessment bodies etc
Amendment A1
Moved by
A1: Clause 2, page 1, line 16, at end insert—
“(1A) The Secretary of State must, within 12 months of the passing of this Act, by regulations made by statutory instrument require conformity assessment bodies to publish reports on the impact of the provisions on the treatment of conformity assessment bodies in Article 8.6 of the CPTPP on the accreditation of goods from CPTPP parties.”Member’s explanatory statement
This amendment would require that UK conformity assessment bodies conduct and publish a report on the impact of the provisions on the treatment of conformity assessment bodies in this Act on the accreditation of goods from CPTPP parties.
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

My Lords, it is always a reassuring sight on trade Bills in Committee to have a reunion of many of our colleagues who have participated in debates on previous trade Bills. I apologise to the Minister and others that I missed Second Reading; I was out of the country at the time. However, on that visit I was engaged in many discussions about trade, especially access to the EU market. If the Minister and his officials have been able to see the question that I asked the Foreign Secretary on Tuesday, they will be aware of the issues I raised with regard to that visit. I also apologise to the Committee that I will have to leave prematurely to speak in the debate in the Chamber on the relationship between the UK and Latin America. Trade is a considerable part of that relationship, which I will refer to in the Chamber.

At Second Reading there was much debate about the overall view that there is benefit to the United Kingdom’s trade with regard to CPTPP accession. The extent of that, and how we will be able to then utilise some of the benefits that the Minister has said will accrue to UK business, is probably part of this detailed consideration now, going forward. Amendment A1, as well as the other amendments in my name and that of my noble friend Lord Foster, and some of the others, are probing amendments, to iron out some of the technical aspects of the implementation of our accession and to explore and to hear from the Minister how we would be able to see our businesses take advantage of the opportunities that the Government have said are now open to them.

The first element with regard to standards, assessment of standards and certification, and whether it comes to conformity assessment, is one of these areas that is almost technical in nature but fundamental with regard to our trading relationship. As the Government have said in their own papers, about £10 billion-worth of UK exports to CPTPP economies form some degree of conformity assessment and enter into that market. The fact that there will then be no discrimination for those conformity assessment bodies that would certify goods entering into their markets, as well as those markets’ exports to the UK—there will be equivalent treatment with regard to those—is a positive.

I want to explore just two areas where some element of concern has been raised and ask for further clarification. That primarily regards countries that will be exporting to the UK, which will then have to have their goods assessed for a certificate. We already know in context that the vast majority of that £10 billion—if not all of it—is traded under CE marks already. Only with Brunei and Malaysia will there be some form of difference. We know that, if there is expansion of exports to CPTPP countries, the likelihood is that UK exporters will continue to use CE marking. In fact, as one business said to me, “It is all well and good that the UKCA as well as the conformity assessment will be operating, but we export both to CPTPP countries and we want to have access to the EU market—so we will continue to use the CE markings anyway”. It is likely, as the Minister will know, that countries that operate in exporting to the UK will also take advantage of the agreement that we have made with the European Union to continue to use CE markings anyway.

The issue then will be how we interact with imports to the UK from countries that will not be self-certified and will not use CE markings. My understanding is that, broadly, that will involve medical equipment and machinery, which are important parts of UK trade. As we do not have mutual recognition agreements, a process will have to be carried out so that our conformity assessment bodies can be satisfied that the standards of the equivalent conformity assessment bodies meet our standards for certifying that goods may enter the UK market, especially if the goods constitute medical equipment bought by the NHS. This probing amendment simply asks for there to be a report of the relationship between the UK conformity assessment bodies and those in the CPTPP countries, so that we are operating on the same level of standards.

I found the information from the Welsh Government quite interesting. They raised a slight concern: if there are further trade agreements where we offer equivalence of other certifying bodies but outside a mutual recognition agreement, how will we know that those other conformity assessment bodies will operate to the same standards as ours? I hope the Minister can allay some of that concern.

Fundamentally, we on these Benches wish to see exports grow, and imports of a very high standard. One of the ironies of the CPTPP, as discussed in our previous debates, is that the modest level of growth that is forecast is because we already have well-developed trading relationships with the majority of the members. The combination of the fact that their economies have grown because of their trading relationship with China and that they operate under CE marks to export into the UK means that there is perhaps a limited area of growth. The probing amendment seeks to ensure that, if there are areas of growth, they are equal to the standard that we would want to see. I beg to move.

Lord Lansley Portrait Lord Lansley (Con)
- Hansard - - - Excerpts

My Lords, I will briefly join this debate because I am interested in the question of the mutual recognition of conformity assessment. Earlier this year, the Department for Business and Trade said that it would accept CE markings on a range of products for the foreseeable future—or something like that. That led to a certain amount of confusion, with the medical devices industry wondering whether it extended to medical devices. Of course, it did not extend to that industry; the Department of Health and Social Care has that responsibility. If my memory serves me right, the CE marking is certain to be recognised until 2027.

If my noble friend the Minister were to ask me for something we should aim to achieve in the trade and co-operation agreement review, it would certainly be to extend mutual recognition agreements between us and the European Union so that it recognises the UK conformity assessment and we continue to recognise the CE marking. That would afford enormous benefit to the industry.

This is not a mutual recognition agreement; this is giving the opportunity to conformity assessment bodies in CPTPP countries to apply to UK authorities so that, in effect, they provide themselves with UK conformity assessment on their products for trade, presumably within CPTPP countries and with the United Kingdom. Of course, if you are producing products for which you want a UK conformity assessment, being able to do your work according to the UK standards in your own country may well be a useful advantage. That is why it is in Article 8.6 of the CPTPP agreement.

Therefore, I am not sure that we need to worry about the question of “to what standards”. The answer is in the design of this provision. It is to the standard required for a UK conformity assessment. The bodies in any other country that are accredited for this purpose have to work to the same standards as if they were doing so in the UK, so it is pretty straightforward. However, happily, it affords the opportunity to say that there is a step beyond this, which is mutual recognition. For example, among the CPTPP countries one might anticipate, for example in our relationship with Japan at some point, a move on to mutual recognition of conformity assessment, since in many respects the Government naturally are thinking, “That is the territory that we need to go on”. As we develop trade relations and as we develop free trade agreements, eliminating technical barriers to trade should be one of our principal objectives—and this is one important aspect of that.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- Hansard - - - Excerpts

My Lords, the noble Lord, Lord Purvis of Tweed, explained that this is a probing amendment, so I do not have a great deal to add to what he and the noble Lord, Lord Lansley, have said.

I pick up on one point: how do we ensure the conformity of that oversight when the products are coming into the UK? In the sixth group, which I do not think we will get to today, we will look at bringing in a good number of impact assessments and reports. The strongest part of the amendment tabled by the noble Lord, Lord Purvis, is the call for the publishing of a report on the impact of provisions on the treatment of conformity assessment bodies. That will give your Lordships’ House and Parliament the opportunity and oversight to ensure that there is no undercutting of quality and services. However, I am happy to support this probing amendment and look forward to more clarity from the Minister.

Viscount Trenchard Portrait Viscount Trenchard (Con)
- Hansard - - - Excerpts

My Lords, like the noble Lord, Lord Purvis of Tweed, I was unable to participate at Second Reading. I was asked by the Lord Speaker to be part of the reception party for the President of South Korea, which was a great honour.

I am very interested in this Bill. I have been involved with Japanese civil servants and Japanese companies in discussions leading up to the UK’s application for accession. I am very much aware of how important it was to the Government of Japan that the UK should accede to this partnership and as early as possible. Many Japanese associates have told me that they welcome that the UK will be able to exercise a de facto joint leadership of this group with Japan in the initial period, which will help ensure that the CPTPP functions efficiently and in the interests of all its members. I agree with the noble Lord, Lord Purvis of Tweed, that we do not want the CPTPP to enable substandard goods to come in. Obviously, it will be very good, as my noble friend Lord Lansley said, if we can move towards mutual recognition of conformity assessment bodies, especially with countries such as Japan and with other CPTPP members.

However, I am not sure that this amendment is necessary. If the conformity assessment bodies are doing their job, they will have to apply for the granting of equivalents of the standards to which the goods to be imported conform in their own country. Therefore, this amendment is possibly otiose because conformity assessment bodies will have to do this anyway.

13:15
Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
- Hansard - - - Excerpts

My Lords, I want to intervene at a late stage on this amendment. I, too, was unable to participate at Second Reading because I could not be there for the whole debate, which I understand the rules, quite rightly, insist on. I apologise for not being able to participate then.

The amendment moved by the noble Lord, Lord Purvis, seems to have a certain similarity to a later amendment in my name, Amendment 27. I have already spoken to my noble friend the Minister informally—I hesitate to say “casually”—and alerted him to the background to that amendment, to which I shall speak when the time comes. Can my noble friend help me by telling me what the relevant conformity standards body is for food and agricultural imports? He will be familiar, I am sure, with the report from the Food Standards Agency in England and the Food Standards Scotland, to which I shall refer in more detail when I speak briefly to my amendment.

I want to congratulate the Government on something that I have been asking for for some 10 years. I understand that they have appointed a larger number of agricultural attachés. The original one was appointed in Beijing by my right honourable friend Liz Truss when she was the Secretary of State for agriculture. If attachés can be placed in countries such as those referred to my noble friend Lord Trenchard, including Japan and others, under this agreement, it will be an enormous boost. I applaud that. If my noble friend the Minister cannot answer today, could he provide the Committee with details on what part of the cost the farming and food sector would have to pay and which part the Government may pick up, because it would be an enormous investment?

As I said, I would be interested to know also which conformity standards body would be relevant to food and agricultural products, but I shall keep my main thoughts for when I speak to my own amendment in more detail.

Lord Johnson of Lainston Portrait The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
- Hansard - - - Excerpts

I greet noble Lords who have been kind enough to come back for another wonderful discussion on the merits and benefits of free trade that will be visited upon our nation thanks to the vision of this Government in seeking to apply to and being successfully admitted, we hope, to the CPTPP. I am grateful to noble Lords for continuing their discussions, particularly those who have tabled amendments, and for the interlocution that we have had up until now, which has allowed us to have a good debate. I hope that they are well aware that I am available to them continuously to make sure that we draft the right legislation and profit from these free trade agreements.

I shall take the amendments one at a time if I may, though in this instance I think they are quite well grouped. The noble Lord, Lord Lansley, well covered the points raised by the noble Lord, Lord Purvis. There is no derogation of standards. This is not about standards; it is quite a helpful and straightforward process of authorising conformity assessment bodies to perform a function which, in many instances, they may already be doing—there may be mutual recognition in some areas and there may be other standards being undertaken or tested for. It simply allows the Secretary of State to authorise CABs to approve the activities of a CAB in a CPTPP country. Very importantly—we forget this, because often we look only one way in these agreements—CABs in CPTPP countries can authorise activities in the United Kingdom so that we can export more efficiently. It is of enormous assistance to industry, without question.

I have just been told the answer to my noble friend Lady McIntosh’s question: UKAS is the conformity assessment body for agricultural standards. That answer came through just at the right time, but, as always, I am happy to write to noble Lords if I do not have the specific information. On CABs, the statutory instruments or secondary legislation that will come from this will cover a whole range of specialist and manufactured goods.

I feel I have been brief, but I believe everything has been covered in the discussion, unless I have missed anything. This is not about regulations, changing standards or anything like that; it is about a straightforward process where conformity assessment bodies can be authorised to follow whatever standards the domestic CABs wish them to follow in any CPTPP country. This strikes me as eminently sensible, and we very much hope that the noble Lord, Lord Purvis, would be comfortable with withdrawing his amendment.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

I am grateful to Members who took part in this short debate. I like the Minister, and his enthusiasm for the 0.08% bounty to our economy from this Government’s vision is infectious. But we want businesses to take the opportunities from this.

I have a couple of points that the Minister might want to write to us about. If he will forgive me, the question I neglected to ask in moving the amendment is a concern that still plays slightly on my mind. If the United Kingdom Accreditation Service is now approving those within CPTPP countries, will those accreditation bodies be sufficiently aware of the Windsor agreement and the internal market of the UK? As the Minister knows, there is not just the UK certification badge on goods; if it is to do with the Northern Ireland market, there is also the UKNI certification process. This is complicated—we have debated it long and hard—and it will be a task for our accreditation service to judge whether the bodies within CPTPP countries are sufficiently qualified to understand our market and entering goods into all parts of the UK market, not just GB.

As the noble Lord, Lord Lansley, rightly said, there is currently a workaround for this because of the CE markings. From my point of view, it would be eminently sensible if we just kept that going on in perpetuity. However, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Frost, may have issues with that, because it would mean that we would have to maintain EU standards in perpetuity too—so there would perhaps be consequences to that. In the absence of mutual recognition agreements, we will probably have to keep an eye on this. I am aware that there are some MRAs within and between CPTPP countries, and whether we wish to take the next step forward with those countries is an interesting issue. I am certainly very open-minded about that, because it makes eminent sense, as the noble Lord, Lord Lansley, indicated.

Fundamentally, if we are to approve other bodies, it would be helpful to know, through a report, which bodies have been approved, which have not and why. If they are not able to certify goods properly within the categories that are not self-certifiable under the WTO, there will still be that lingering doubt that goods will be entering into the UK market without the proper process. If there is a reason why our accreditation bodies have not approved them, there is a reason why those goods should not necessarily enter into the UK market.

I hear what the Minister said. Can he give an indication about whether he will write to me on Northern Ireland? He is nodding from a sedentary position, but is he willing to intervene?

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
- Hansard - - - Excerpts

I will do that and, on the other point, clarify where I think there may be a misunderstanding about the conformity assessment bodies and our current imports. Do not forget that we already import a great deal from CPTPP countries without this arrangement in place; this just facilitates the effectiveness of the CABs internationally and vice versa. I hope we can clarify that—I can write to Members to do so.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

I am grateful for that—as we know, there are currently imports under both the WTO approach and the CE markings, so, if this is moving away from that, a little understanding is needed. On Northern Ireland in particular, I am grateful that the Minister said he would write. At the moment, I beg leave to withdraw.

Amendment A1 withdrawn.
Clause 2 agreed.
Clause 3: Procurement
Amendment 1
Moved by
1: Clause 3, page 2, line 7 leave out “wholly or mainly”
Lord Lansley Portrait Lord Lansley (Con)
- Hansard - - - Excerpts

We come now to Amendment 1, which, strangely enough, is not the first amendment, but there we are. Amendment 1 and Amendments 2, 3, 4, 5, 6 and 7 all go to the same point; it is just that Amendments 2 to 7 are concerned with the schedules that flow from Clause 3.

We have now moved to the question of the Procurement Act. The noble Lord, Lord Purvis of Tweed, is correct that the trade hacks have got together for this one, but there were procurement hacks as well, of which I was one. Some of us have returned; not many, but one or two of us—and I see that the noble Lord, Lord Alton, a procurement hack, is in his place. It is quite amusing really because it is only a matter of a few months back that we were debating the Procurement Bill. Among other things, it created a mechanism by which the Government could designate, under statutory instruments, that additional countries with which we had entered into an international agreement should be added to Schedule 9 to the Procurement Act as treaty state suppliers, and by extension therefore get the benefit of the treaty state supplier provisions under that Act.

However, the Procurement Act, notwithstanding that it passed through Parliament, has not yet been commenced. We are reliably informed that that will not happen until October 2024, whereas under the CPTPP we are looking to achieve ratification before 16 July 2024—and some time earlier than that, I hope. There is a gap between the commencement of the provisions under the CPTPP and our treaty obligations and the point at which the Procurement Act comes into force and those procurement-related obligations are in our domestic legislation.

This legislation fills that gap by doing two things: using the opportunity to amend the Procurement Act when it comes into force by adding CPTPP as an international agreement in Schedule 9, and, further—which is why the other six amendments are linked—changing the public contract regulations in various respects between now and the point at which they are all replaced by the Procurement Act being brought into force.

Just to make life even more entertaining, the Procurement Act repealed the Trade (Australia and New Zealand) Act, which we spent quite a bit time on. I am hoping that the power to bring Australia and New Zealand in was achieved by that Act, and it will be overtaken by the Procurement Act.

We come to procurement. Clause 3(3) adds CPTPP to the list of treaty state suppliers in the Procurement Act. It may be that we have a debate about whether Parliament should approve these things in future, but the fact is that, in future, when we have free trade agreements, we will see regulations brought forward under the Procurement Act to add treaty state suppliers, so this is perhaps the last time that we will do this through primary legislation rather than secondary legislation.

Schedule 2 to the Procurement Act 2023 sets out which are exempted contracts under the Act. Paragraph 24 of Schedule 2 specifies that, among those exemptions, is,

“A contract awarded under a procedure … adopted by an international organisation of which the United Kingdom is a member, and … that is inconsistent in any material respect with the procedure for the award of the contract in accordance with this Act”.


That latter sentence is pretty much the same in all these provisions, but it is helpful for noble Lords to remember the first part, as that is where this legislation will sit.

13:30
However, that is not what the relevant chapter of the CPTPP says. Article 15.2, paragraph 3(e)(ii), specifies as an exemption from funded procurement that which is
“funded by an international organisation or foreign or international grants, loans or other assistance to which procurement procedures or conditions of the international organisation or donor apply”.
What has clearly been picked up here is the intention that we should incorporate this into our legislation, which is what we see going on in Clause 3(2) of the Bill: a contract that is
“wholly or mainly funded by an international organisation”—
the key point is that it is an international organisation providing funds—
“of which the United Kingdom is a member”,
and which is awarded under a procedure of that organisation. It then goes on to mention being
“inconsistent in any material respect”.
The CPTPP says
“funded by an international organisation”
and under the procurement procedures of that organisation—we need to hold on to those two points.
What we have here in the Bill is that it is
“funded by an international organisation”
and “awarded under a procedure” adopted by that organisation. So we have the same two points, but the Government have inserted “wholly or mainly” before “funded”. My starting point was: why the difference? Why have we inserted “wholly or mainly” for the purposes of our legislation, when our legislation’s purpose is to incorporate the provisions of the CPTPP? The CPTPP article does not say “wholly or mainly funded”, “co-financed” or “funded for the most part”; none of that language is in the CPTPP text. I thought I had better find out a bit more about why that might be the case.
The CPTPP provision relies, to an extent, on the exclusions under Article II:3(e)(iii) of the Agreement on Government Procurement, which specifies procurement
“under the particular procedure or condition of an international organization, or funded by international grants, loans or other assistance where the applicable procedure or condition would be inconsistent with this Agreement”.
The Agreement on Government Procurement therefore has a similar provision—it is not precisely the same—that is about those two things: “funded by” and “under the … procedure … of”. Again, it does not say “wholly or mainly funded”. What is the reason for the difference?
I am indebted in my research to a 2015 paper in the Trade, Law and Development journal by Annamaria La Chimia, of the University of Nottingham. She examined exactly this question. Why is there, under the Agreement on Government Procurement, this exemption from the procurement rules for these organisations? The answer, essentially, is that it is about development aid—the noble Lord, Lord Purvis of Tweed, has forgotten more about this than I know.
The World Bank is a good example. Where the World Bank is funding, it has to decide under what procurement rules its grant or loan is being used for a given procurement. Ideally, developing countries become consistent with, or join, the Agreement on Government Procurement, but many have not, so in practice their procurement activity is conducted under the procedures of the World Bank, which specifies them. It may be that the World Bank provides the money, or most of it, but quite often a range of different organisations provide the resources for such a procurement. That is how development aid often works; it may indeed be leveraging resources within the developing country itself.
These are complex matters. Sometimes the development aid is tied aid, which adds another difficulty because very often that precludes the possibility of making it a procurement under the GPA, because it is tied to the donor country’s sale of goods or provision of services. Why, then, do we get into this question of whether it is “wholly or mainly” funded, when nobody else has included those words?
In practice, if you include those words, every time the exemption is claimed, somebody—in fact, many people—will ask to see it demonstrated that the majority of the funding has come from an international organisation of which we are a member. That is unwise. We would be much better off sticking to the chapter of the CPTPP and the proposition that what really matters is that the procurement is conducted under the procedures of an international organisation of which we are member, and that it is funded by that organisation. The degree to which it is funded, the nature of the funding and where it comes from is not an area into which we wish to tread.
I know this is a probing amendment, but when I tabled it I thought I had better go and find out what it is all about, and I did. The conclusion I have reached is that, with respect, the Government ought to accept the amendment—maybe not at this stage, but certainly on Report. I beg to move.
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, the Committee is in the debt of the noble Lord, Lord Lansley. He is rare among us in being able to identify the questions, ask them and then come up with a sensible answer, all in one. He did so on this. I am slightly anxious, because he took away the only thing I was going to mention: tied aid and some of the experiences that we have unfortunately had with it—we have banned it in the UK—and the Pergau dam situation with regards to contracts that have been issued. We have memories of how this can go awry.

I record a recent visit I made to Vietnam. I wish to see UK trade with Vietnam grow and am very supportive of any areas in which we can make that happen, but in some CPTPP member countries it is less clear than it is in the UK what the balance is between private and public enterprises and what are the funding mechanisms of bodies that would be open to potentially benefit from UK procurement access. The noble Lord asked valid questions, and I have a degree of sympathy with his conclusion that it would be worth accepting his amendment.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, there is very little to add to the detailed probing question—and answers—from the noble Lord, Lord Lansley. With that, I look forward to the Minister’s response.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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My Lords, it is a constant pleasure to debate with such intellectual firepowers as the noble Lords, Lord McNicol and Lord Purvis, and my noble friend Lord Lansley. It is a joy to learn new things, every day, about the opportunities and benefits of free trade, particularly the CPTPP treaty itself.

However, in this instance, the Government are not keen to accept the amendment, for the simple reason that this strikes me as an absolutely eminent clarification of the procurement relationship between a UK procurer covered by the CPTPP legislation and the international procurer who would not be covered by it. It clarifies the point that, if we are in a minority funding position, we have to be in a majority funding position in order to qualify under our own procurement legislation.

Therefore, this does something very sensible: it confirms that point. I am happy to clarify this further with the noble Lord outside this room, but it would be difficult for procuring agents in the UK who were not in control of the funding process to conform to the CPTPP procurement funding processes or our own national processes. That is why this is clarified. Otherwise, if you have a minority position, you do not have control over it—if you are putting in only a small amount of capital, it makes sense for the international body to make the procurement decisions.

Maybe I have missed something, but this strikes me as quite straightforward. I felt that, of all the amendments placed today, what we were doing here seemed to make things easier and clearer, rather than more opaque.

Lord Lansley Portrait Lord Lansley (Con)
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I intervene just to pre-empt my subsequent remarks. We are in Committee and may not need to return to this on Report, but it would be jolly useful to run through some case studies to examine how this works. My noble friend might help here, but this relates to whether it is exempted from covered procurement under UK procurement law. That may mean that there is less of a problem, but there is none the less a risk that these are procurements that may happen in the United Kingdom—Pergau dam buying consultant engineering services, for example. We might take that and say, “Here is a big engineering project in a developing country, and the procurement includes consulting engineering services in the United Kingdom. Do we need to know whether that it is wholly or mainly funded?” Maybe we could work through some case studies.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am grateful to the noble Lord for his intervention. The principle here is ensuring that our procurement laws cover our own activities, so it is right to clarify where that is the case. I am happy to write further on this matter. I do not see anything wrong here and, in fact, I suggested to my officials before this debate that we look specifically at an example that could help to illustrate this—one floated earlier, concerning World Bank funding, would be very good to follow up on. We are happy to demonstrate that. However, this seems eminently sensible, so, unless it were felt otherwise, I would be reluctant to give way on this point, which clarifies the issue very well.

Lord Lansley Portrait Lord Lansley (Con)
- Hansard - - - Excerpts

I thank my noble friend. I sense that the Committee would be happy for us to take this away and look at it. We may or may not need to return to it on Report, but I am grateful to my noble friend for that offer. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.
Clause 3 agreed.
Schedule: Amendments to procurement regulations
Amendments 2 to 7 not moved.
Schedule agreed.
Clause 4: Designations of origin and geographical indications
Amendment 8
Moved by
8: Clause 4, page 3, line 13, leave out “established by use” and insert “in use prior to that date”
Member’s explanatory statement
This amendment is to probe whether the concept of “established by use” has meaning under the Trade Marks Act 1994.
Lord Lansley Portrait Lord Lansley (Con)
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This is another technical amendment to a technical Bill. It seeks to understand why the language of the Bill is precisely as it is. We are dealing here with geographical indications—GIs—and the circumstances in which a GI conflicts with a trademark.

What is a trademark? A trademark is something that is registered as such under the Trade Marks Act 1994, and it distinguishes the goods or services of one undertaking from those of other undertakings. Interestingly, Section 2 of that Act says:

“A registered trade mark is a property right … No proceedings lie to prevent or recover damages for the infringement of an unregistered trade mark”.


So our starting point is that there are registered trademarks, in which rights lie, and unregistered trademarks do not enjoy that protection.

We are amending what I think is retained EU law—namely, regulation 1151/2012, Article 6 of which says that, in relation to a conflict between a potential designation for a GI and a trademark, the GI should be refused only if,

“in the light of a trade mark’s reputation and renown and the length of time it has been used”,

it

“would be liable to mislead the consumer as to the true identity of the product”.

That is the context of this. If the combination of the GI and the trademark could mislead consumers, you have a problem and should therefore not allow the GI to be so designated. The bit on misleading the consumer has not been carried through, but maybe it is not necessary.

13:45
The proposition in this legislation and the way in which the regulation is changed is that, under Clause 4(3), GIs should not be permitted in circumstances where it would lead to confusion over a trademark if,
“on the date on which the application for … the designation of origin or geographical indication is submitted”,
the trademark is
“the subject of a good faith pending application”
or
“the subject of a good faith registration”.
This applies if it is registered or there is an application for it to be registered, and not simply to frustrate the GI—that is the good faith bit—or if it is “established by use”. The proposition that it is in use seems consistent with the Trade Marks Act, but it has not been established by use. Alternatively, is the intention that GIs could, in theory, conflict with a trademark that is unregistered but established by use? That cannot be the intention. So why is the word “established” here?
This is why I tabled my amendment. If the point is that it should be in use prior to that date—namely, it is a trademark in use and, by extension, registered—then we know where we are. However, I worry that our lawyer friends, given the opportunity, will say, “This GI should not be allowed because, although this sign or description of our product does not happen to be a registered trademark, we have established it by use, as the legislation says”. I do not think there is a concept of trademarks established by use. Trademarks have to be registered. That is why the words
“in use prior to that date”—
namely, the date of the application for protection of the GI—would be a better way of describing it. I would be grateful to be educated in this matter by my noble friend. I beg to move.
Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, I thank the noble Lord, Lord Lansley. The Trade Marks Act 1994 at no point uses the phrase “established by use”. However, it specifically makes provision for registered trademarks, whereas—this was the final point of the noble Lord, Lord Lansley; he may be wrong and looking for clarification from the Minister—if it is established by use then it would presumably be unregistered, as he said. Therefore, would it not be subject to common law through the concept known as “passing off”? With that, I look forward to the Minister’s response.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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As always, I am grateful to noble Lords for their points. Clearly, it is easy to confuse trademarks and geographical indications. With geographical indications, there is a principle of established use, whereas with trademarks, something is either trademarked or it is not. That is why we are comfortable with the language as it sits.

There is no reference in the Trade Marks Act 1994 to the concept of “established by use”, because the concept refers to unregistered trademarks, whereas the Trade Marks Act is concerned principally with protections conferred on registered marks. However, “established by use” has meaning under the law relating to geographical indications.

Lord Lansley Portrait Lord Lansley (Con)
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I remain confused because, in Clause 4(3), “established by use” relates to the trademark and not to the GI. I see the point that my noble friend makes, but where is the concept of a trademark established by use?

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I apologise to my noble friend, but that is not how I read it. It is linked to designation—that is, if origin and geographical indication conflict with trademarks. It would be logical that “established by use” is in relation to geographical indications. I am afraid that that is how I have read it. I do not think that there is an inconsistency. As with all things, I am very comfortable having a further look at it, but I think it would be an issue if we took out “established by use” and inserted

“in use prior to that date”,

which could result in applications for GIs being rejected under our amended rule, which is not required under CPTPP.

It is important to note that this authority allows the Secretary of State to restrict the use of a geographical indication if it is likely to cause confusion for any GIs that come in after accession or after this Bill becomes an Act. Clearly, she must have an eye to the UK legislative framework. The provision gives her the power to clarify the geographical indications. I do not believe that I have missed anything, but I am probably about to be corrected.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab)
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You are not—I would not dream of doing so—but I think the point made by the noble Lord is worth further consideration. My—relatively recent—reading of it is that we are pointing in two directions. There is a question about trademarks and how they may or may not be protected consequent on us joining the CPTPP; there is also the question of the very new idea of GIs. They are recent inventions and I do not think we have quite tracked out where they go and what they do. For example, if Melton Mowbray pies are to become a standard under which we take this forward, we need to think quite carefully about what that means in relation to the countries that we are joining, because the tradition there is completely different. I am not saying that the wording is wrong, but it would be helpful to have a discussion offline.

I have always found in these matters—others will have heard me on this—that there is a small group in your Lordships’ House who really understand and like intellectual property. It has a nasty habit of tripping you up if you do not get it right first time round, and we might be in that sort of territory here.

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am grateful to the noble Lord. I hope that he does not feel that I have been tripped up by this. I am very comfortable with what we have drafted. It gives protections in the right way for GIs which are established by use, and it clarifies the difference between those and trademarks. As with all things, it is important that we have a deep discussion about this, so I am very comfortable having further debates about it. We will no doubt return to this matter, because it is important. It is not a political point to make but a technical point to ensure that we are doing it in the right way. As the noble Lord rightly pointed out, GIs are a relatively new concept. At the same time, it makes sense to ensure that our historical GIs which have been in established use are properly protected. We have the opportunity to protect them into the future against other GIs that may cause confusion with commercial intent.

I ask the noble Lord to withdraw his amendment, but, clearly, we are happy to have further discussions and I am sure that my officials will engage on that at the first possible opportunity.

Lord Lansley Portrait Lord Lansley (Con)
- Hansard - - - Excerpts

I am grateful to my noble friend. I am very happy to proceed on the basis he proposes, but I say that the way it is structured at the moment, “established by use” relates to the trademark, not to the GI, so the concept of a trademark established by use in statute when it is not in the Trade Marks Act seems a potential problem. I leave that thought. We will talk about it more and may need to come back to it, just as we did on the preceding group. I am grateful to my noble friend for his willingness to have a good look at it. I beg leave to withdraw the amendment.

Amendment 8 withdrawn.
Amendment 8A
Moved by
8A: Clause 4, page 5, line 4, at end insert—
“(13) The Secretary of State must, within 12 months of the passing of this Act, lay a report before Parliament on—(a) protections for UK geographical indicators in territories of each CPTPP party, and(b) accountability of the self-certification on rules of origin.”Member's explanatory statement
This probing amendment would require the Secretary of State to lay a report before parliament on protections for UK geographical indicators and accountability surrounding the self-certification of the rules of origin in each CPTPP country.
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, Amendment 8A builds on Amendment 8 to some extent because it also relates to geographical indications, and if there is to be further information from the Government with regard to the interaction with trademarks, I look forward to seeing it. It is linked. As someone who lives in and represented a consistency in Scotland, I know that there are particular aspects with regard to the Scottish and Welsh Governments and geographical indications in those areas. Indeed, it could well be that there are trademarks for certain products in those areas. If we are now in a situation where there is to be wider use of other CPTPP countries’ trademarks and geographical indications that are not to be policed under this treaty, the points that the noble Lord, Lord Lansley, raised are valid. I listened carefully to what the Minister said, but they are valid. I cannot speak on behalf of the Scottish Government or the Welsh Government, nor would I wish to, but the issues that they have raised are important.

Mine is another probing amendment and, indeed, another reporting amendment because it is seeking reports on how businesses are operating in what is potentially a more complex environment in addition to better market opportunities. Ultimately, where the treaty is going to be a success or failure is in whether our businesses understand what opportunities are available to them or whether they decide that there are more complexities in utilising some of the agreement than there will be economic benefits for them. For very small businesses that may be valid, given, as we know, that it is not the tariff aspect of this agreement that is important but the non-tariff aspects. Regular reporting on the protection of UK GIs in this market will therefore be very important. As I mentioned earlier, when it comes to GIs there are no more protections under this agreement, but the interaction with how we will be able to export very important UK GI goods will be vital.

The Minister will be well aware that very many businesses manufacturing products that benefit from an EU-protected UK GI are small businesses. Melton Mowbray is one example, as was mentioned, but there is a whole series. They are small businesses—some are micro-businesses—and therefore the complexities involved will require government help. Guidance and support will be vital for them. We know, because we debated it at length on the Australia agreement, that the protection of UK GIs in Australia, as it will be in many areas, is dependent on the European Union policing them, because that is a consequence of the UK agreement with the European Union. Our ability to police the protection of our GIs now resides in Brussels. That may or may not be desirable, depending on your particular persuasion, but it is a fact. The relationship and interaction with the European Union on this will therefore also be very important. GI protection for UK accession to the CPTPP is reliant on the European Union. I would be grateful if the Minister could say what discussions he has had with his counterpart, the European Trade Commissioner, about how the EU is minded about doing us the wee favour of protecting our goods in the CPTPP agreement. Is there a written understanding when it comes to UK accession to CPTPP that the Commission will police our goods for us because that is the situation in Australia?

Given that the vast majority of the CPTPP countries have trade agreements with the European Union, it will police both: it will police its champagne and our pork pies. I wonder which it will give preference to? Of course, they match, and they should have equal status for protections, but I would be grateful to hear what response the Minister has had to his pleas that the European Union will protect us.

14:00
The second aspect is rules of origin. I sometimes try to do a Lansley but fail when trying to understand some of the technical nature of this. My understanding of the rules of origin for the CPTPP is that there will be a different method of calculating regional value content, as opposed to that which we have agreed through the UK-EU TCA—I am happy to be corrected on that. On the face of it, the rules of origin accumulation is positive, and it could allow businesses to benefit from a wider and, potentially, a deeper supply chain with goods.
The calculation mechanisms, however, are different. Therefore, if a business is operating under a supply chain under the CPTPP and operating under a supply chain with the European Union—indeed, many of these will be the same supply chain because of the EU’s existing agreements with these countries—it will be asked to calculate the content value differently. I understand that, under the CPTPP, it will be a build-up or a build-down mechanism; these relate to the maximum and the minimum amounts of local content. The European Union uses a different calculating method for non-originating materials, under a