Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Wednesday 8th November 2023
(1 year, 1 month ago)
Lords ChamberRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Tuesday 21st November 2023
(1 year, 1 month ago)
Lords ChamberRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Cameron of Chipping Norton
That the Bill be now read a second time.
The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con) (Maiden Speech)
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.
Lord Collins of Highbury (Lab)
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.
Lord Lamont of Lerwick (Con)
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.
Lord Razzall (LD)
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.
Lord Kerr of Kinlochard (CB)
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.
Lord Goldsmith (Lab)
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.
Lord Vaizey of Didcot (Con)
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.
Lord Howell of Guildford (Con)
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.
Lord Trees (CB)
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?
Lord Frost (Con)
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.
Baroness Hayter of Kentish Town (Lab)
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.
Lord Marland (Con)
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.
Lord Foster of Bath (LD)
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.
Baroness Lawlor (Con)
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.
Lord Curry of Kirkharle (CB)
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.
Lord Livingston of Parkhead (Con)
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.
Baroness Bennett of Manor Castle (GP)
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.
Lord Holmes of Richmond (Con)
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.
Viscount Waverley (CB)
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.
Lord Udny-Lister (Con)
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.
Lord Grantchester (Lab)
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.
The Earl of Effingham (Con)
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.
The Earl of Sandwich (CB)
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.
Lord Lansley (Con)
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.
Lord Ashcombe (Con)
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?
Lord Fox (LD)
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.
Lord McNicol of West Kilbride (Lab)
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.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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.
Lord Johnson of Lainston
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.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Thursday 14th December 2023
(1 year ago)
Grand CommitteeRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-I(Rev) Revised marshalled list for Grand Committee - (6 Dec 2023)
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
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
The Earl of Clancarty
“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.”
The Earl of Clancarty (CB)
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 (LD)
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.
Viscount Trenchard (Con)
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 (Lab)
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?
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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.
Lord Foster of Bath (LD)
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 (Con)
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.
The Earl of Clancarty (CB)
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.
Lord Holmes of Richmond
“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 (Con)
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.
Baroness Boycott (CB)
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 (CB)
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.
Baroness McIntosh of Pickering (Con)
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?
Baroness Hayter of Kentish Town (Lab)
My Lords, I will speak briefly to Amendments 25 and 30 and then touch even more briefly on Amendments 13 and 14.
Amendment 30, which will shortly be spoken to by the noble Lord, Lord Purvis, calls for a parliamentary debate on a CPTPP impact assessment. This is really important, because the influence of this House is not in the big decisions we take but over the Government—although it is too late when they have already signed a treaty—and the House of Commons. Although we do not normally tell the House of Commons what to do—I am sure the noble Lord, Lord Purvis, chose his words very carefully—in this circumstance it is really important.
In addition to the impact assessment, the International Agreements Committee, which the noble Lord, Lord Kerr, and I sit on, will also write a report on the treaty. We can get that to influence the real decision-makers down the Corridor only if this amendment is agreed and we ensure that a debate happens there. The request for an impact assessment is a nice little segue into a debate on our report as well. By concentrating on the wider impact assessment, it also allows a wider range of issues to be considered, such as prices. Nobody ever talks about the impact of these agreements on prices. We hope that and other issues will be very good for consumers but we need to see that, so a debate will be important.
Amendment 25, which my noble friend Lord McNicol will speak to, requests an impact assessment on labour and ILO standards. This is key. We want this and any other FTA not just to maintain but, we hope, to bolster ILO standards—not just through paper adherence but enforcement. I think we all agree that trade is good for jobs, consumers, our exports and the economy, but that must not be at any price. It cannot undermine any ILO standards. Indeed, I hope it will enable us and others to be rather more observant of them.
Very briefly on Amendments 13 and 14, I strongly concur with the noble Lord, Lord Holmes, about the importance of increasing investment. As I will make a wider point, I declare that I am a leaseholder and am on the board of the ABI, but I bring to the Committee an issue of core importance to prospective overseas investors that I have read about in the financial and specialist press rather than know about through any personal connection. In a completely different part of government, there is an attempt, with leasehold reform, to make retrospective legislation to reduce ground rents to peppercorn rents. That is very attractive for lots of people, but there is a real clash with the desire to increase overseas investment via the CPTPP, because many overseas investors—to say nothing of our domestic pension schemes—are concerned about non-compensated loss of property rights or contracts if their ground rents are suddenly taken away from them retrospectively.
That retrospective nature could undermine the Government’s welcome attempts to get more international investment into the country, because the attractions are not just over trade agreements such as this but over all the other things that we know we are known and valued for: stability, certainty and the rule of law. That needs to go hand in hand if the objectives of this deal are to be taken into account.
That was a little off-piste, but I could not resist it. My real point is that we need to know far more at a more granular level and after the event about what this agreement has produced. That needs to be debated in this House and elsewhere so that the influence of, in particular, my colleagues and the specialists we have heard from, who put so much into this, can be heard at the other end of the building.
Lord Kerr of Kinlochard (CB)
It is a great pleasure to follow the noble Baroness, Lady Hayter, who was an extremely effective chairman of the International Agreements Committee. I have only two points.
First, in response to overwhelming demand across the Committee, I have agreed to repeat the extraordinarily boring technical point I made in our first day in Committee about deadlines. The majority of the amendments in this group set deadlines that hang on the passing of the Act. I respectfully suggest that what matters for reports is the date on which our accession takes effect. That might be in the course of next year—I hope it will be—but that is not certain. Some of these amendments would call for reports almost certainly before we have actually acceded. Accession takes place when the last ratification is received by the depositary power, so the right peg to hang it on is not the passing of the Act, which permits us to ratify, nor our ratification, but the 12th ratification, which allows us in. I know that these are mostly probing amendments, but I suggest to their drafters that it might be a good idea to use the peg of our actual accession rather than the passage of the Bill. I exempt some of the amendments in this group; this is only for the ones that hang on performance and how it is working out, because it would be well for us to be in before we require the Government to report on how being in is working out.
Secondly, I am a little concerned about Amendment 32— the accession amendment in the names of the noble Lords, Lord Purvis of Tweed and Lord Foster of Bath. It would require the Secretary of State to produce
“an impact assessment of the impact on the United Kingdom of the accession of countries that have submitted a request … to accede to the CPTPP within the last five years”.
That would include us; it would be jolly useful to have an impact assessment for us, but I do not think that is the purpose of the amendment. The deadline is
“within three months of the passing of this Act”,
which is the wrong deadline, for the reason I gave.
However, my point is more substantive than that. Apart from us, there are six countries whose applications to join the CPTPP have been received in the last five years: Ecuador, Costa Rica, Uruguay, Ukraine, China and Taiwan. The rules of the game, of course, are that consensus is required before a negotiation starts with any applicant country and consensus is required before a negotiation is closed, completed, and then the ratification process starts. It is also the case—not so much in our case but in previous cases—that there have been a lot of side letters and deals done in the margins of the main accession negotiation.
It is misleading to call for an impact assessment of what would be the impact of the outcome of any of these six negotiations. One cannot do that now. A very good moment for dialogue with the Government would be when CPTPP was considering whether to open negotiations. It seems that three months after the passing of the Act, one simply does not know. I add, on a personal basis, that I do not think that six negotiations will start in the foreseeable future. The applications of three of these countries pose serious political problems. In one case, there will be an enormous change to the nature of the CPTPP if the accession took place—a change that I think would be undesirable and, I believe, a majority of members think would be undesirable. There are, however, two other cases where considerable political problems arise.
Setting early deadlines and calling for the Government to go public with their analysis, which would in fact present the Government’s negotiating position, would be unwise. I do not think that we should ask our Government to go on the record in advance about a hypothetical negotiation which, in my view, in three of the six cases is unlikely to start in the foreseeable future. The Government would not be wise to act on that requirement, so I hope that they will resist that requirement—or, rather, I hope that the noble Lord, Lord Purvis, will have second thoughts about Amendment 32.
Baroness Bakewell of Hardington Mandeville (LD)
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.
Lord Ashcombe (Con)
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 (Lab)
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 (CB)
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.
Lord Purvis of Tweed (LD)
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 (Lab)
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.
Lord Johnson of Lainston (Con)
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.
Baroness Willis of Summertown (CB)
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 (Con)
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 (Con)
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 (Con)
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 (Lab)
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 (Lab)
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 (Con)
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.
Lord Purvis of Tweed (LD)
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 (Con)
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 (LD)
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 (Con)
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 (Con)
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.
Lord Leong
“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 (Lab)
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 (CB)
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.
Baroness Lawlor (Con)
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 (LD)
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 (Con)
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.
Lord Leong (Lab)
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.
“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 (Lab)
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 (Con)
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 (Lab)
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.
“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 (Lab)
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.
Lord Davies of Brixton (Lab)
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 (LD)
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.
Lord Johnson of Lainston (Con)
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 (Lab)
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 (Con)
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 (Lab)
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.
Baroness Lawlor
“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 (Con)
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 (Con)
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.
Baroness Lawlor (Con)
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.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Thursday 7th December 2023
(1 year ago)
Grand CommitteeRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-I(Rev) Revised marshalled list for Grand Committee - (6 Dec 2023)
Lord Purvis of Tweed
“(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 (LD)
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 (Con)
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 (Lab)
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 (Con)
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.
Baroness McIntosh of Pickering (Con)
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.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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 (LD)
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 (Con)
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 (LD)
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.
Lord Lansley
Lord Lansley (Con)
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.
Lord Purvis of Tweed (LD)
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 (Lab)
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 (Con)
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 (Con)
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 (Con)
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 (Con)
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.
Lord Lansley
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 (Con)
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.
Lord McNicol of West Kilbride (Lab)
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 (Con)
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 (Con)
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 (Con)
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 (Lab)
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 (Con)
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 (Con)
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.
Lord Purvis of Tweed
“(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 (LD)
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.
Lord Davies of Brixton (Lab)
My Lords, Amendment 34 is in my name. I first have to repeat what I discover is true of quite a few participants in today’s debate: I did not speak at Second Reading. I am afraid my excuse is not quite as good as those of some Members, as I was on holiday, so I ask noble Lords to forgive me for that. It was arranged some time before.
I understand that it is not in order to give a Second Reading speech and I do not intend to do so. However, I will say that I am in favour of free trade—of ever loosening-up trade—and I recognise the remarks that the Minister made at Second Reading and has repeated in today’s discussions. I could chase that issue but I will resist the temptation, except to say that free trade comes with conditions. The “free” aspect has limits, which have regard to wider policies, most obviously climate change but there is also food safety—the whole range. They are part of the process of agreeing free trade, and the objective of free trade should not supersede those other objectives. They have to work together; we have to find a balance between them and I accept that. In addition, I point out that this is an advance in free trade. The biggest blow that we have had to widening free trade over the last 10 years is of course, Brexit—I will leave that one there.
My amendment introduces some requirements on the Secretary of State. On reflection, it does not fit all that well with the first amendment in this group. However, we are where we are, and the common theme is placing a requirement on the Secretary of State to report. This is one of the shortcomings of the Bill. It is of course only narrowly focused on the technical aspects that require changes in domestic legislation, the treaty having been decided and promulgated on the royal prerogative, hence the involvement of Parliament in drawing up what is, effectively, a form of legislation has been limited. We have two committees which look at these sorts of issues, and I understand that we are still waiting to hear their views on the overall structure; here we are just looking at these technical aspects. Having said that, it is reasonable to introduce these obligations on the Secretary of State. They are broadly self-explanatory; it does not need me to explain to your Lordships the importance of these requirements of policy that have to fit with freer trade.
I will say just a bit more about proposed new subsection (1)(b), on the importance of the precautionary principle. As ever, it is a question of balance. You can carry the precautionary principle too far but it comes into this discussion. My understanding is that the CPTPP preferences the science-based approach to regulation over and above the precautionary principle in what is acceptable in limitations. The science-based approach requires parties to demonstrate a scientific basis for regulation, which could of course be a problem where there is no such basis, there are no means to develop it, or scientific papers have been published by an industry which has a vested interest in avoiding the difficult questions of supporting a particular outcome. Therefore, I stress that it is important that we understand the extent to which the precautionary principle has been superseded by vested interests in particular approaches. This is not a new principle; it is there in the Environment Act 2021. I should like the Minister to say in reply that he understands that issue, and perhaps it could be discussed in more detail prior to Report.
Lord Kerr of Kinlochard (CB)
I will say a brief word on Amendment 8A. Contrary to the habit of a lifetime, I played by the rules and did speak at Second Reading. I made clear that I warmly welcome our accession to the CPTPP and that I have no difficulty with the main points in this Bill.
On Amendment 8A, I am sympathetic, but I think that one needs to think quite hard about the timing. Within 12 months of the passing of this Act, the Government would be required to submit reports on two important areas of performance: how the—very welcome—rules of origin provisions are working out, and how respect for geographical indications is being honoured.
I do not know when our accession will take effect—none of us does—because it will depend on who is last to ratify our accession. It is conceivable that it might take all of 12 months or more than 12 months before this happens. To say that the report will be required within 12 months of our passing the Act is slightly odd. If the report is going to be useful, it needs to take account of what has actually gone on—the experience—with regard to how the rules of origin are being respected and how self-certification of rules of origin is working out.
Although I support the principle of the report—because these are both extremely important provisions within the CPTPP, and a report to see how they are working out seems a good idea—I really do not think that it is a good idea to ask the Government to do so within 12 months of the passing of the Act.
Lord Alton of Liverpool (CB)
My Lords, unlike my noble friend Lord Kerr of Kinlochard, I am afraid that I was not present for the Second Reading debate—I was with the noble Viscount, Lord Trenchard, who spoke earlier on, as the other half of the reception committee that welcomed the President of the Republic of Korea. I hope that we played our small part in deepening the friendship and relationship between this country and the wonderful, vibrant democracy of the Republic of Korea, with which I hope we will deepen our trade relations as the years go by.
I also have an amendment for consideration later, which will probably be reached on our second day in Committee. It also has within it a reporting mechanism. I agree with my noble friend that 12 months may not be the right time, but the noble Lord, Lord Davies of Brixton, and my friend, the noble Lord, Lord Purvis of Tweed, are right to have both articulated the need for Parliament to have reports laid before it. That is the principle, but how one does that, the mechanisms that we use and the timeframes we place on it are surely open to discussion. The Government should not quail at the idea of there being time for Parliament to look back at what has happened to something such as the CPTPP. I must say that I also welcome the CPTPP; I strongly believe that the Government have done the right thing in promoting this opportunity for the United Kingdom. I have no issues whatever with that; my issues would come later about some of the partners we might have in the future. We will discuss that later on.
This idea that Parliament should discuss the nature of trade is not new. With the help of the House of Lords Library, I was looking at the debates that took place in 1857 when the great champion of free trade, Richard Cobden, denounced the opium trade in a three-day debate in which two relatively young MPs—William Ewart Gladstone and Benjamin Disraeli—joined forces across the political divide to support him, just as Cobden had stood with William Wilberforce in denouncing the trade in human beings. He was against the slave trade. There were red lines not to be crossed.
Lord Foster of Bath (LD)
My Lords, I will speak very briefly. Like others, I will declare whether I spoke at Second Reading—the answer is that I did. I entirely agree with the Minister’s earlier remarks that we should learn something new every day. When I was a member of the International Agreements Committee, I learned a great deal from some of its members who are present today and I continue to learn from them—not least the noble Lords, Lord Lansley and Lord Kerr, and my noble friend Lord Purvis.
I will pick up a very small point, which has not quite been covered, on rules of origin. As everyone is well aware, the rules of origin chapters in all our free trade agreements are incredibly complicated, as is the way in which different bodies will have to check whether they have been complied with. I notice with great interest that a report was carried out into whether the UK was suitable for membership of the CPTPP, in which CPTPP countries checked out, through a round of questions and discussions, for example, our ability to comply with its rules of origin requirements. Bearing in mind that we already have trade agreements with a number of CPTPP members—Australia, New Zealand and so on—we know that there are details in the agreement on how rules of origin will be checked out. As part of that procedure, there will be a working party on rules of origin between, for instance, New Zealand and us for its trade deal and one between Australia and us for its trade deal. I have been unable to locate details of whether there is to be a similar committee, ad hoc group or working party that will look at compliance with rules of origin. Can the Minister tell us whether that is the case?
The ultimate arbiter of whether rules of origin have been complied with will be the customs organisations in the relevant member countries. They include our customs services, which will be required to make decisions about whether to investigate particular cases in relation to compliance with rules of origin. Given the possibility that there can be goods coming from, say, Australia to the UK using the Australia free trade agreement or the CPTPP arrangements, with a slightly different rules of origin arrangement, as my noble friend pointed out, this is clearly a very complex issue for the customs authorities. Can the Minister give us an absolute assurance that appropriate support, finances, additional personnel and training are being provided to our customs services to enable them to carry out this difficult task, particularly when other member countries have had time to interrogate whether we are up to scratch but we have not yet had an opportunity to check whether the other member countries are up to scratch?
Lord Lansley (Con)
I take this opportunity to remind noble Lords of my registered interest as the UK co-chair of the UK-Japan 21st Century Group, in so far as Japan is a member of the CPTPP—and, as my noble friend Lord Trenchard said, not only a member but a leading advocate of UK membership, for which we are very grateful.
I am reminded by the opening speech of the noble Lord, Lord Purvis of Tweed, on his amendment, that, in the past, when we have been looking at the free trade agreements into which we have entered with Australia and Japan, in both cases we anticipated that, in time, we would enjoy the protection of our GIs in those countries. As the noble Lord, Lord Purvis, said, where Australia is concerned, that was contingent upon the Australia-EU agreement. As far as I can tell, although the Australian Government have undertaken their own study, there is no such agreement, so presumably there has been no action.
My questions are these. First, are we making any moves with our Australian friends under our free trade agreement with them to proceed, notwithstanding the absence of an EU agreement with Australia? It seems very unwise and unhelpful for us to be tied to the EU agreement. Secondly, Japan was very willing to consider it, but it was going to be considered under its procedures and that was going to take some time. Are we making progress? It would be great to know that we are. I think there is a willing and important market for UK goods with geographical indications and so on in Japan, even where Scotch whisky is concerned. I think this is the case in many other CPTPP countries, so it is quite important that we get that GI protection. I hope my noble friend can say something, if not now then at a later stage, about the progress we are making with Japan and Australia on getting our GIs recognised there.
Viscount Trenchard (Con)
My Lords, I entirely endorse what my noble friend Lord Lansley has just said. There is considerable room for confusion between trademarks and geographic indications, a relatively new concept, especially the application of restrictions or protections for geographic indications in countries whose language is not only not English but is far away from any language used in the European Union. Consider, for example, suits. A common word for a suit of clothes in Japanese is “sebiro”, which comes from “Savile Row”. Is that not a kind of geographic indication? I think there is scope for considerable confusion there.
The other amendment in this group, Amendment 34, was ably spoken to by the noble Lord, Lord Davies of Brixton. I worry about giving additional protection to the precautionary principle. Putting too much store by the precautionary principle has led us to be too averse to risk in many aspects of our national life and it is likely to lead to restrictions on the economic growth that we so badly need. Our accession to CPTPP is an opportunity to enhance that growth by developing more trade with the fastest-growing part of the world, including countries which place less store on the precautionary principle. I worry that, if we try to export the unduly cumbersome regulatory regime that we have had until now into countries that are growing faster and which have a more proportionate approach to the subject, it will cause, at best, restrictions on us taking up the opportunities that are available.
Lastly, I entirely agree with the good point made by the noble Lord, Lord Kerr of Kinlochard, that our accession may not take effect until a year or more after the passage of the Act, and so the question of the timing of the report being made to Parliament is a very appropriate one.
Lord McNicol of West Kilbride (Lab)
My Lords, let us deal with this Second Reading issue. My understanding of the Companion is that there is no need to have spoken at Second Reading. It is very nice that noble Lords have apologised but there is no need; all are welcome in Committee, even if they did not speak at Second Reading, and so noble Lords do not need to give excuses for why they were not there.
The noble Viscount, Lord Trenchard, touched on a point about restrictions. The amendment tabled by my noble friend Lord Davies is a neat way of dealing with a number of the issues that will arise and that we will need to deal with. Let us take environmental principles and look at a number of the countries that we will be joining with in CPTPP. Take pesticides, which I am sure will come up again in the next group, on our second day in Committee. PAN UK analysis conducted in 2021 revealed that there are 119 pesticides, active substances, that we have banned in the UK to protect our health and environment but which are still permitted in one or more of the CPTTP member countries. Of that total, 67 are classified as highly hazardous pesticides. If these pesticides are used in these countries just now, and we have banned them in this country for very good and sensible reasons, how do the department and the Government protect consumers and farmers in the UK? The way to do that is very neatly set out in the amendment laid by my noble friend about taking note of this and the Secretary of State having to deal with it.
Baroness Lawlor (Con)
My Lords, apropos of the amendment in the name of the noble Lord, Lord Davies, it is important not to get carried away by the precautionary principle because it introduces difficult conflicts in the arrangements of our own law. The precautionary principle owes a great deal to the civil law tradition and its code-based arrangements, whereas our common-law approach is much more open and based on case law, and it is more conducive to our businesses.
Lord Johnson of Lainston (Con)
I thank everyone who attended Second Reading. It seems a very few did; I do not know where everyone has come from since then. I was there. I believe it was the noble Lord, Lord Purvis, who recommended that I read the Hansard of the Second Reading, which I thought was peculiar, since I definitely remember being there, but maybe it was an avatar or a creation. None the less, it is important that people feel that they can come into and out of these different discussions to add value where they can.
I shall try to answer these very important points in order, but please forgive me if I miss anything because I want to make sure that we have a chance to go through them. I shall begin by addressing the comments of the noble Lord, Lord Purvis, as much as the amendment itself. The noble Baroness, Lady McIntosh, raised the same point slightly earlier, which I did not cover, about our agricultural attachés and the importance of making the most of our free trade agreements. I completely agree that there is an unlimited amount that any Government can do to promote the advantages of free trade and the free trade agreements, so I am keen and open, as is the department, to hear any views or suggestions that we can deploy effectively and cost-effectively to spread the word. It is why these debates are so important.
It is also why the initiatives we have taken are very relevant. We are assessing a range of different options, including using AI to feed into information we get from HMRC on what companies are engaged in or where they are already exporting to. Where there may be overlaps, we can then contact the companies and promote the different free trade options. It is complicated, but essential because if we do not promote the free trade options, what are we doing having these lengthy debates about free trade agreements? I am happy to be pressed on that. Clearly, it is important that the department reports on the assistance it gives to exporters, and it does. For example, earlier today I was talking to one of our IT staff who was presenting to me the effects that their specific system is having on exports. He listed a very significant total which he said was growing continually. These sorts of areas are reported on, and they should be. We should be held to account on that.
When it comes to specific reports on the effect on GIs, the noble Lord is trying to approach two concepts, as I understand it. First, there will be derogative elements on GIs, so have we protected our GIs and is there a protection regime being effectively deployed on account of us joining the CPTPP? That is difficult to do because not all countries have a multilateral agreement rather than a single country-to-country free trade agreement, and not all countries—I am afraid I cannot recall which ones but Australia and New Zealand in relation to our relationship via the EU is a good example—have geographical indications regimes, so it would not count; they could not police it. However, by having these stated relationships and highlighting these principles, we already go a long way to effectively protecting our GIs in CPTPP countries because we have a forum in which we can have open and frank discussions. It is clearly not in any country’s interest to derogate another country’s trademark policies, GIs or whatever. It would be difficult to apply this piece, but I am fully aware of the importance of making sure that this is clearly monitored.
The second part goes back to my first answer, which was about how we make the most of our GIs, such as cheddar cheese or whatever. We continue to invest particularly in the area of agriculture. I think we have one dozen—it may be nine, but between nine and 12—agricultural attachés placed around the world, funded by Defra and supported by the Department for Business and Trade and the Foreign, Commonwealth and Development Office. It is a multistrand initiative, which we think is very important in order to promote these products. Scotch whisky has been mentioned. As we are aware, tariffs into Malaysia will be reduced in gradations from 80%—a rate which effectively doubles the price of a bottle of whisky—to effectively zero over the next 10 years. These are important changes. I see them as agricultural products—food, drink and agricultural products linking together to be supported.
A number of noble Peers rightly raised the point about reporting. I will not go into all the different details, but I will try to touch on them. I would be reluctant—we will have this debate in the next Committee session on 14 December—statutorily to oblige the Secretary of State to undertake significant, specific levels of reporting. Noble Lords might say that that is because I am a government Minister, and officials always tell Ministers to avoid producing statutory reports. As a civilian, before I entered this job, I asked, “Why are we not producing more reports?” Having gone into the Government, I now realise that you can produce a lot of reports, but the problem is that if they are statutory government reports, the principles behind them can often become outdated very fast, so you lose flexibility. They are also enormously costly to produce. I see how the government machine functions: it rightly respects Parliament and its writ and so wants to dot the “i”s and cross the “t”s, so you often end up producing supposedly very comprehensive reports that do not really tell us what we are looking for.
What we have agreed to and will see over the next period is much more useful. In 2024, CPTPP countries will do a review of CPTPP and how it has worked. Two years after our accession to the treaty we will produce a summary report on the effects of CPTPP, and after five years we will produce a full report. It would be more useful to clarify the sorts of areas we wish to cover in those reports. We had this debate with Australia and New Zealand, and we came to some sensible conclusions. I was very happy giving Dispatch Box commitments, as a government Minister, that these will be the so-called obvious areas that we will want to investigate. Clearly one of them will be whether we have protected our intellectual property of whatever type, and others will be the effect on the environment and on standards, if any.
On that, to go to my next point, which the noble Lord, Lord Davies, raised in association with his amendment, I think there has been some misunderstanding as to what a free trade agreement is. A free trade agreement does not change anything about UK standards. We already trade with all those countries significantly, such as with Malaysia. Perhaps I should raise my interests so they are on record: I have done a huge amount of business in the past with all those countries, and I still have interests in companies that operate in them—maybe I should have said it at the beginning, although I do not think it is relevant to this debate. However, I was doing business there when we did not have the CPTPP, so it does not make any difference to the standards employed in this country—there is no derogation from our standards.
If my officials agree, I will read from the excellent report from the Trade and Agriculture Commission, which your Lordships will all have read and which I think came out today—I am never quite sure what is in the public domain or not, but this is. I shall read out only two questions. Question 1 is:
“Does CPTPP require the UK to change its levels of statutory protection in relation to (a) animal or plant life or health, (b) animal welfare, and (c) environmental protection? Answer: No”.
Question 2 is:
“Does CPTPP reinforce the UK’s levels of statutory protection in these areas? Answer: Yes”.
That is pretty relevant for me—I hope your Lordships do not think I am being glib, because clearly the report says more than that. However, that is an important assessment—I think some noble Lords sit on the TAC, but maybe not those in the Room today. It is not about derogating our standards in any way but is particularly about making sure that our businesses can deploy their skill sets and expertise more effectively, with less friction and with lower tariffs, which is good for the consumer and for our businesses. However, it does not change our standards, or, by the way, the standards of the countries to which we are exporting.
I will roll on to the other points, which are on the rules of origin. It is perfectly normal for traders to self-certify, and in fact, that is what we want. I have visited freeports recently, another great initiative of this Government, so I have seen a number of port activities. Efficient port activities rely on ad hoc inspections, therefore risk-based approaches to customs clearances for most things, and that is absolutely right. Although the rules of origin are complicated, and there are varying channels of rules of origin, as the noble Lord, Lord Foster, so rightly pointed out, it is up to the company to choose the avenue that it uses. I believe that we have the right resources to make sure that our rules of origin processes are properly checked, and I have continued to check that. However, there is also a committee in CPTPP on the rules of origin so this can be further discussed and clarified. It met last month and we attended it as an acceding member, so we are already participating in this, which is important.
The noble Lord, Lord Kerr, rightly raised the principle around the timing of the report; I think I covered that point in the sense that certainly after 12 months it would be unhelpful to produce a report on anything, frankly. However, if we are going to produce a report after two years, which we have committed to do, I am very happy to have further discussions about what will be in that report and what will be in the five-year report.
I was delighted that the noble Lord, Lord Alton, raised the extremely close relationship that we have with Korea— rather than attend the Second Reading, he and the noble Viscount, Lord Trenchard, attended the address by President Yoon. That is a good example in that although South Korea is not a member of CPTPP, we celebrated, thanks to the good works of the investment team, over £20 billion-worth of investment in the UK. That was a significant celebration of the depth of our relationship with Korea—if I may say that as an aside and champion the investment department at the Department for Business and Trade.
I will cover two points on the precautionary principle, which the noble Viscount, Lord Trenchard, raised, which is important, and it is clearly in this amendment. The precautionary principle already exists in the Environment Act 2021, so I think the Secretary of State has to have an eye to it in her activities, as do all Secretaries of State. To add it into this free trade agreement would create unnecessary duplication and parallel obligations, which causes confusion for businesses and countries.
Lord Davies of Brixton (Lab)
The Minister is quite correct. It is in a statement associated with the Act, but it applies only to the environment. Of course, the trade under this Bill goes somewhat wider, and there is just the thought that it should apply more broadly across the potential changes in protections.
Lord Johnson of Lainston (Con)
I thank the noble Lord for that comment; I am happy to have a discussion with him and other noble Lords about this. We would resist this significantly. It would cause confusion to have parallel principles around how the Secretary of State should act in relation to this FTA and in other areas, in terms of how we manage our own economy and how we check our supply chains. The noble Lord, Lord McNicol, was right to raise the concept of supply chains; I have conversations with many noble Lords in many instances about the principles around how we protect our products in this country from supply chains that we find are either not aligned with our values—as well raised by the noble Lord, Lord Alton—or lack competitive advantage. I have great sympathy in particular with the agriculture sector, with which I have engaged significantly and which says that it is not about free trade but that we are obliged to conform to standards that are significantly higher than in other countries. It is classified as unfair, and we are very sensitive to that.
Lord Alton of Liverpool (CB)
I am grateful to the Minister for referring explicitly to the supply chain issue. It should form the basis of further discussion, perhaps outside the Committee and before we get to Report. If we look at the requirements under the 2015 modern slavery legislation—pioneered by the Minister’s right honourable friend Theresa May during her time in the Home Office—we see that it places duties on us to look at the way in which products have been manufactured. It is not just about the precautionary principle; this is asking us, every time we take decisions about things that we are going to purchase in this country, what the supply chain was. It is not just about free trade; it is about fair trade. How can manufacturing industry in the United Kingdom possibly compete if people are using slave labour in places in Xinjiang?
I take the Minister back, if I may, to the amendments that I moved during the passage of the Trade Act 2021 and the Health and Care Act 2022 and, indeed—as the noble Lord, Lord Lansley, and others will recall—the Procurement Act 2023. They all looked at our duties and obligations under the 2015 legislation. By very significant margins, cross-party amendments were added to all those pieces of legislation. I simply ask the Minister: how will we comply with the 2015 Act? Would he agree to have discussions outside the Committee before we go further on that point?
Lord Johnson of Lainston (Con)
I absolutely make myself available to have discussions outside this Committee on all points. I refer the noble Lord, Lord Alton, to my original statement that collaboration around this is very high.
I will try to make a philosophical point which I think is very important: this is a free trade agreement. It is concerned principally with tariffs, smooth movement of trade and other principles. It is very important to separate that from the important standards that we hold ourselves to in this country. It is right that we have a number of very important pieces of legislation that drive standards in supply chains. Any of us who have been involved in business know that we have to ascertain our supply chains. In other areas, particularly in relation to the environment, I believe that supply chains are covered very well by our legal processes in terms of child slavery and other abhorrent activities. That is well understood and the supply chain obligations are very clearly understood. In the environment, it is still more nuanced. It will always be a complex area, because other geographies clearly have different environmental advantages and disadvantages compared with us. We are still working on that, but it is for a separate track of legislation. I do not think that it is right to confuse the principles of the legislation around free trade agreements with legislation around our own supply chain obligations.
When given the decision, should one be in a free trade area, able to bring to bear one’s own values to make necessary changes, or not be, because you do not believe that the participant parties are aligned with your values? I would prefer always to pick the former.
Although I would not necessarily suggest that there was a significant gulf between us, Australia and New Zealand when we negotiated the Australia and New Zealand FTAs, there is absolutely no doubt in my mind that the engagement with the UK on environmental and animal welfare issues resulted in significant changes in the Australian and New Zealand domestic animal welfare and environment policies. I have no specific evidence of that, but I know full well that there were strong levels of conversation around that and, at the same time, Australia and New Zealand made significant changes in our direction in both areas. Either that was a great coincidence or it was partially supported by the fact that we were collaborating with them more effectively. This is what the CPTPP will allow us to do.
I refer back to the TAC report, which made clear our own standards for pesticides, which were raised by the noble Lord, Lord McNicol. That does not change: nothing changes in our standards the day after CPTPP comes into force—that is for our own sovereignty to control.
I ask that this amendment is withdrawn, but clearly I am here to discuss in detail how we can reassure noble Lords that the principles around the need to report on the effectiveness and concomitant effects of the FTA are properly established, as well as other key points around derogation and key values issues, which should be properly controlled and contained.
Lord Purvis of Tweed (LD)
I am grateful for the Minister’s helpful and interesting reply. My understanding is that Ministers are always advised to read Hansard: that is when they find out, the next day, what they should have said at the Dispatch Box and what officials have made sure is in print. The noble Lord, Lord McNicol, is absolutely right: nothing in the Companion required noble Lords to say that they met the President of Korea, but I guess it sounds good.
I thank all noble Lords who took part. At the start of his contribution, the Minister said that he did not see the value of the statutory reporting in many respects. I noted that he subsequently quoted from a statutory report and said that there was great value in it. Given that the TAC was the result of amendments that Parliament asked of the Government, I will take the second part of what he said as the basis of the ministerial response—there is great value in that statutory report. But, as my noble friend Lord Foster said at Second Reading at col. 700, it would have been helpful to have had that report in advance of the start of the Second Reading. Nevertheless, we will study that report now that it has been released.
The noble Viscount, Lord Trenchard, was right to make reference to the growing economies within this area. However, if we had the data on the growth of the CPTPP economies and stripped out their reliance on the growth of the Chinese economy, I wonder what those growth figures would look like vis-à-vis those in Europe. I suspect that they would be rather similar. It is hard to disaggregate the growth of the Asia-Pacific economy from that of the Chinese economy. I note that UK imports from China, for example, have grown to over £40 billion, now that we have a trade deficit in goods with China. The impact of China’s growth is disproportionate with regard to them all.
Viscount Trenchard (Con)
China is not a member of the CPTPP, so I absolutely do not understand the relevance of what the noble Lord said. My point was that, for the CPTPP 11—soon to be 12—the economic growth rate is twice that of the European Union.
Lord Purvis of Tweed (LD)
I am fully aware that China is not a member—I do not think there is any doubt about that—but surely the noble Viscount is aware that the growth levels of the Vietnam economy have been entirely, or at least very largely, dependent on the growth of the Chinese economy. Given that New Zealand has had a free trade agreement with China for more than 20 years, the growth of the Chinese economy has been a major, if not the predominant, factor in the growth of the Asia-Pacific economy, which—it is regularly cited—is the fastest-growing economy and one we need to be part of. It is the fastest growing because it has been dependent on the growth of the Chinese economy—but that is an overall debate.
On the CPTPP members, the noble Lord, Lord Lansley, is absolutely right: with some of them, such as Australia, we are still awaiting the police of the GIs—the European Union, for us—to make an agreement with it. We are still in that situation. My noble friend Lord Foster raised that where businesses have an opportunity to choose between two systems, for some businesses that is a burden because of the complexities associated with that and therefore clarity on advice about the preferential way of utilising this is important. The Minister responded very fairly.
I agree with the thrust of what the noble Lord, Lord Davies, said. I know that he will be in the Chamber for the Rwanda Statement, but in response to the point made by the noble Lord, Lord Kerr, with regard to my drafting, there are even greater powers than the Minister or others in this Committee. They are the clerks in the Public Bill Office who tell us what is or is not in scope of the Bill, so my drafting was in order to satisfy the greatest authority, the Public Bill Office, in order to put down an amendment so we could discuss it. However, I am very happy to explore further options. This issue, connected with those raised by the noble Lord, Lord Alton, that we will discuss in future, is significant.
Lord Alton of Liverpool (CB)
I am very grateful to the noble Lord, Lord Purvis. Given what the Minister said a few moments ago about Malaysia, I draw his attention to a report in today’s Daily Telegraph about Shimano, which I think is the biggest bicycle parts company in the world, which operates out of Japan. It is selling through a supplier in Malaysia products that have been made by slave labour in Nepal. That is a good illustration of the kind of problems that we will run into. Although that is not necessarily part of the treaty, it is part of our obligations under British law to ensure that such things do not enter our supply chain.
Lord Purvis of Tweed (LD)
I am grateful to my friend the noble Lord, Lord Alton, because he and I often think alike in many of these areas. He slightly pre-empted me because I was specifically mentioning Malaysia to close and to stress why it is important. With the greatest of respect to the Minister, I think it is valid to know on the record what the interest in Malaysia is since we will be debating it going forward. In 2021, in the Chamber I raised the fact that the UK had a £316 million contract with a Malaysian firm, Supermax, to supply PPE gloves through NHS Supply Chain. That company’s exports to the United States were impounded by the United States because of contraventions of ILO standards and slave labour concerns. This has still not been resolved. I raised that, and I was grateful to the Minister’s predecessor, the noble Lord, Lord Grimstone, who initiated a review within the department. As I understand it, this is still being litigated. I do not expect the Minister to have an answer today, but I would be grateful if he would write to me because this is pertinent to the next stage in Committee with regard to multi-million-pound contracts through supply chains. I know that NHS Supply Chain is a distinct part of the NHS. With regard to this Malaysian firm, the United States activated powers which we did not. Now, with regard to procurement, as the noble Lord, Lord Lansley, indicated, supply chains and the standards that we seek, there are genuine, valid concerns. I remind the Committee that the contract was worth £316 million. The United States had the equivalent impounded.
I know that we will come back to some of these general issues. I am grateful to noble Lords who have taken part and grateful to the Minister, who as always is open and accessible to discuss these aspects. I beg leave to withdraw the amendment.
Lord Lansley
“(3A) In section 206, after subsection (4) insert—“(4A) Prior to His Majesty making an order in Council under subsection (4)(b) the Secretary of State must consult those whom they consider appropriate including representatives of United Kingdom rightsholders.”(3B) In section 208 (countries enjoying reciprocal protection), after subsection (1) insert—“(1A) Prior to His Majesty making an Order in Council under this section, the Secretary of State must consult those whom they consider appropriate including representatives of United Kingdom rightsholders.””Member's explanatory statement
This amendment would require consultation to take place regarding reciprocal protection for United Kingdom performers in a qualifying country before is it designated as such.
Lord Lansley (Con)
My Lords, we come now to the question of performers’ rights. I will not dwell at length on the purposes of Clause 5 but merely focus on the processes that it puts in place in relation to the definition of a qualifying country. There is a central issue here about the availability of the protection of rights holders and performers’ rights in the United Kingdom being part of a reciprocal process for the protection of UK performers in other countries. I am just sweeping the ground ahead of the noble Lord, Lord Foster of Bath, who may explain a bit more—or he may not, it is up to him.
Lord Alton of Liverpool (CB)
Can the noble Lord clarify that he would always want that done under the affirmative procedure so that there could be a debate in the House on secondary legislation? I agree with him on the principle that we do not want bits and pieces of primary legislation, but there needs to be some ability to discuss secondary legislation, where appropriate.
Lord Lansley (Con)
Some of them are under negative procedures. It is a judgment, not least in this House as our Delegated Powers Committee will advise us on what judgments to make. I would not endorse a blanket affirmative procedure; it must be based on the relative significance of the decisions to be made. Just because something is laid under the negative procedure does not mean that it cannot be prayed against or objected to, but that must rest with the committee.
There is nothing in the current legislation requiring any consultation with the representatives of rights holders in this country before the definition of a qualifying country is extended. I think it would be right for that to be the case; I suspect the representatives of rights holders would welcome it. In giving the Government this wider power, this is a good moment to add this carefully constructed consultation requirement before they bring an order forward. I beg to move.
Lord Foster of Bath (LD)
My Lords, the noble Lord, Lord Lansley, suggests that I should go into great detail explaining the whole issue of performers’ rights. I will disappoint him and other Members of the Committee because I am sure that those with an interest in it know that, basically, it is about performers and, in some cases, record label owners and so on receiving appropriate payment for their performances that take place in another country. It seems absolute common sense that if we do a deal with country X, we arrange it so that if our performers perform there we get payment and vice versa. Reciprocity seems pretty fundamental.
I have produced an amendment which says that in this legislation we ought simply to say that the reciprocal arrangements are with CPTPP member countries. Having raised real concerns about our failure during negotiations to make any progress on a number of intellectual property issues or to provide some of the support that our creative industries were seeking, I nevertheless welcome that this is part of the treaty. However, the question remains whether what I am seeking—a simple reciprocity agreement—is happening. The truth is that it is not.
I am enormously grateful to the Minister, who, after I raised these issues in basic terms as I have just done, wrote to me to explain the situation. I hope he will not mind but, to save him repeating it in his speech, I will read a little of what he wrote to me:
“The changes the Bill makes are necessary for the UK to accede to CPTPP and will expand the basis on which foreign performers can qualify for rights in UK law. In addition to the Bill, the Government will be making accompanying secondary legislation under existing powers”
and various other things to make sure that it all happens. That is fine, but he went on:
“The changes in the Bill will apply not only to performers from CPTPP countries but also those with a connection to other countries that are party to relevant treaties relating to performers’ rights to which the UK is also party. This is necessary to comply with the UK’s national treatment and most favoured nation obligations in those treaties”.
He is saying that if we do something with CPTPP countries, we would have to take into account our other treaty obligations and the impact it would have elsewhere. He adds:
“Beyond these changes, however, the UK has some flexibility under its international obligations around how it provides certain rights to foreign nationals, in particular the right of performers to receive equitable remuneration (i.e. a share of the royalties) when their performances are broadcast or played in public”.
In other words, what we have in the legislation at the moment, as I understand it, are changes that mean that we take account of what is going to happen in relation to reciprocal arrangements with CPTPP member countries as well as a stack of other changes that will take place, affecting our relationship with other countries, with some possible variation in how we deal with them. I absolutely understand that it would make life very easy for the Government to sweep these things up all at once, but it leaves us totally in the dark on exactly who we are dealing with and what the implications are, particularly for the music industry. The music industry is extremely concerned about this. It has told me that it has had discussions with the Minister and officials, that it got the information about all this at very short notice, and that it was unable to make any progress with getting the Minister to see things differently.
Its argument, and that which I would make—it is exactly the same as that made by the noble Lord, Lord Lansley—is as follows. If consequential changes are necessary in relation to countries beyond those that are members of the CPTPP, there is plenty of time between now and accession—we debated this earlier and all accept it is nine months away or possibly more—for the IPO to consult on the other issues referred to in the Minister’s letter and for us then to have an opportunity to debate their implications before they are brought in. The legislative arrangements to do that are very clear.
I am deeply concerned that these proposals are coming from the IPO, which in many respects does very good work but sometimes runs ahead of things, as it did with its proposals for text and data mining, for example. They came as a huge shock, were massively opposed and were eventually withdrawn and have not gone ahead—I am grateful to the Government for doing that. I do not want a repetition of that, so I hope it is possible for the Minister to accept an amendment that says, “For the time being, let’s concentrate on reciprocal arrangements with CPTPP member countries but, separately, have consultation on all the other things that the Minister wants to achieve so we can have an opportunity after the consultation to know what the impact will be, and then we can make a decision”.
I want to see that information before I decide whether those changes are right. The Minister may already have seen some information, because the one bit of his letter that I did not read out suggests that the department has already come to a conclusion. It states, at the end:
“As such, we expect the direct impacts of the measures … on UK parties to be small”.
I do not know whether that is true. I do not know what the implications are—nor, I think, do other Members of the Committee. The Minister may have a response that reassures me that we can go ahead in the way that the Government propose, but, given the lack of consultation we have had to date on those other issues, it would be helpful to proceed in the ways that either I or the noble Lord, Lord Lansley, have proposed—both achieve the same end.
Lord McNicol of West Kilbride (Lab)
My Lords, I have Amendment 10 in this group. It is a short, probing amendment, and I have a few questions on it for the Minister. Again, it touches on performers’ rights. Clause 5(5) refers to
“an act done … before the commencement date”.
It is specifically about acts that have taken place in the past. My questions for the Minister are detailed, so I am more than happy for him to write to me, because I do not think this will make it through to Report.
Are there any practical impacts on the performers, and, if so, what are they? Does this date back indefinitely or is there a timeframe or time limit for when the performance act took place? Finally, is there anything that performers need to do to protect themselves with the CPTPP being put in place, or any guidance on it? Again, I am happy to support the amendments in the names of the noble Lords, Lord Lansley and Lord Foster, but I am seeking some clarification about performers’ historic acts.
Lord Johnson of Lainston (Con)
I again thank noble Lords for their input. The noble Lord, Lord Purvis, referred to my declaration of interests and asked about my interests in Malaysia. I do not have any interests in Malaysia, but I have had interests there, which serve to highlight the points I tried to make about trade. My interests are very clearly listed on the Lords’ register. I have small shares in fund management businesses but, as I said, I do not believe there is any conflict relating to this debate. I am always very cautious in that area, so I like to make everything as transparent as possible. I apologise for not making my declarations at the beginning of the debate.
I will now cover the important points. It is important to reaffirm that, as I committed to at Second Reading, the Intellectual Property Office will undergo a full consultation and report early next year on the effects these changes will have on artists and the industry itself in the United Kingdom.
Lord Foster of Bath (LD)
I am sorry, but although it will report early next year, that will be after we have concluded all our deliberations on the Bill.
Lord Johnson of Lainston (Con)
That is true of the House of Lords process, but I assume that, by then, the Bill will be in the other place, so there will be an opportunity to reference the consultation. My point is that the consultation will not have an effect on the treaty in the sense that we are able to take ameliorative action as a nation. I am grateful to the noble Lord for raising this, but it is not necessary to make amendments to the CPTPP Bill. We want to take time to decide the best course of action relating to how artists are compensated for their works being broadcast on broadcast media.
I am very comfortable with the principles around the consultation process, and I hope that noble Lords will be reassured that I have taken a significant personal interest in ensuring that we get into this debate with all the details that it presents. It is not necessarily as straightforward as it may appear. I admit to coming to this at First Reading and thinking, “This seems an extremely reasonable affair; shouldn’t all artists receive 50% of their broadcast rights?” Further investigation shows that the situation is much more complicated, with different artists having different concepts of rights, particularly in America, which has the largest market in relation to this, and certain revenues being able to be captured and retained in the UK, rather than repatriated, and so on. A very relevant point was raised to do with reciprocity.
If I may, I will explain to noble Lords, who know more about these subjects than I do, that joining CPTPP fundamentally changes an important principle in how we assess artists’ rights. The copyright Act extends rights to performers who are nationals of or who give a performance in a “qualifying country”, the principle being that you will qualify for the protections if you are a British citizen or if you perform—as I am sure the noble Lord, Lord Foster, regularly does—your musical extravaganzas in the United Kingdom or in countries that are specifically linked via the Rome convention, for example. The secondary legislation to the CPTPP will change this. It requires that we introduce a new basis of qualification which is linked to where the music is first published. To qualify, you do not have to be either a citizen of a CPTPP country or doing the performance in a CPTPP country, so long as it is first published there. There are grace periods around that too.
It is not as simple as saying that artists’ remuneration and royalty payments are extended to everyone in the world, because that is not the case. For example, a US citizen giving an original performance in the US and registering it there would not qualify if it was then broadcast on UK media. It is important to understand that there are some nuances. I give way to the noble Lord, Lord Foster, if he has a technical point.
Lord Foster of Bath (LD)
I was not going to intervene, although I was tempted. The Minister is 100% right that this is incredibly complicated. There is the issue of a UK session musician who performs on an American record that is then first performed elsewhere. The complications are enormous. The problem is that the proposed changes also have enormous potential implications, none of which we have had the opportunity to debate or fully understand the impact of on the UK music industry, which is confused about this. All I am asking the Minister to do is accept that there is something incredibly complicated, but it can and should be dealt with separately.
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord for his understanding of the complexity of this. I hope I have been able to explain to noble Lords the different principles in what we currently look to in our copyright Act and what we are signing up to in the CPTPP. It is certainly navigable. Regardless of accession to the CPTPP, it is already complicated, and there are specific agencies to make sure that these royalties are properly collected and stored.
I am reluctant to accept these amendments today and ask noble Lords who have proposed them to withdraw them, but I am very comfortable with having further discussions. It would be helpful for us to have a good discussion with the IPO so that people feel comfortable that the consultation is going in the right direction and that the right levels of input are being prescribed. The tertiary changes that we may wish to make to protect our music industry and artists would not necessarily be linked to this trade Bill, but they are important.
I am glad that I have managed to highlight and explain the new approach on who is eligible for these resale rights, because I think in the first instance it was assumed that everyone would be. That is not the case. It is important to differentiate that. We are signing up to a new approach in the CPTPP and this clearly forms part of our treaty obligations. It is very relevant that we debate that in some depth.
The noble Lord, Lord McNicol, raised a very good point in his amendment. I hope I can reassure him that this is not retrospective, but it would make sense for performances undertaken before the date to qualify. However, you would not be paid royalties for qualifying performances that were broadcast before the date. Otherwise, everyone would claim for past performances over the 70 years that IP goes back to—that would be totally impractical and inappropriate and is not what we are suggesting at all. Our legal advice is clear that the cut-off date is the day on which this comes into force. Anything following that point would qualify. Historic performances are clearly part of the IP record, but you would not receive royalties for anything from before that point. I hope that reassures noble Lords.
I hope I have covered the points raised. I am very grateful for noble Lords’ input on this important, sensitive and complex area. As is often the case in dealing with noble Lords in this Room, we are talking not about party-political or even political issues but issues of detail that have great ramifications. I see that the noble Lord, Lord Lansley, is keen to intervene as I may not have covered his points. The order of this is that the first statutory instrument gives the Secretary of State the power to make the changes, after which there is the consultation, and then the second instrument makes the changes. I hope that helps answer his initial point on the order of activity.
Lord Lansley (Con)
My noble friend has referred very well to all the issues relating to the definition of a qualifying performance, but my amendment relates narrowly and specifically not to subsection (2) but to subsection (3). It concerns the question of a qualifying country not simply in relation to the CPTPP and takes a power to make Orders in Council to extend the definition of “qualifying country” in future—not just to CPTPP countries but, potentially, beyond. My noble friend says that the Secretary of State can publish a draft and then consult on it. They can do that, but there is nothing in the legislation to say that they should. I would like to be sure. If my noble friend is saying that such a consultation must take place, I am not sure where it is clear that it must.
Lord Johnson of Lainston (Con)
We have not legislated for a consultation—there is no mention of that in the Bill—but we made such an undertaking at Second Reading. It is part of the process and we are very aware of the need to consult.
Lord Lansley (Con)
Is that an undertaking always to consult before making an order under Sections 206 or 208 of the Copyright, Designs and Patents Act?
Lord Johnson of Lainston (Con)
No, I am sorry—it is not an undertaking to consult on the artist performance rights every time changes may be made to the countries that become applicable.
Lord Lansley (Con)
Just to be clear, what my noble friend has said may satisfy the noble Lord, Lord Foster of Bath—is that “Bath” with a short or a long “a”?
Lord Lansley (Con)
Try to read that one in Hansard. However, my noble friend has not given me the assurance that I am looking for in the changes to the definition of a qualifying country.
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord. I am very happy to have conversations about this. Clearly, these FTAs make it difficult, if we are to comply with them, to have various and significant amendments to them. However, I am reassured by my officials that, in making significant changes to “qualifying countries”, we would make sure that there was an appropriate level of consultation. I am very sensitive about making great promises from the Dispatch Box because I always find myself getting into trouble later, but I hope that—
Lord Johnson of Lainston (Con)
The noble Lord, Lord McNicol, would like me to make off-the-cuff commitments on behalf of the Government. It would be only logical to assume that there would be a degree of consultation in the same way that we are effecting one in this instance but, since I cannot give a firm commitment, I am very comfortable to come back to my noble friend between now and Report.
Lord Lansley (Con)
That reassurance affords me the opportunity to beg leave to withdraw my amendment.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]
Tuesday 16th January 2024
(11 months ago)
Lords ChamberRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-R-I Marshalled list for Report - (12 Jan 2024)
17:42 - Division on Amendment 5 - Ayes: 102 / Noes: 212 - Amendment 5 disagreed.
Lord Lansley
(b) funded by an international organisation of which the United Kingdom is a member to a lesser extent, and”
Lord Lansley (Con)
My Lords, this group and the next group of amendments follow debates that took place in Committee, and I am very grateful for the Minister’s response then and for his subsequent letters that have further amplified the discussion about this. I apologise for delaying the House—not for very long, I hope—simply, in the case of both amendments, not to make any point of principle contradicting what is in the Bill, but to try to ensure that the meaning of the Bill and its intentions are as clear as we can possibly make them.
The first two amendments, Amendments 1 and 2, work together to rewrite that bit of the Bill to state that the exempt contracts would be, in this instance, where they are “wholly or mainly funded” by an international organisation, or
“funded by an international organisation of which the United Kingdom is a member to a lesser extent”—
so that funding is to a lesser extent—and is “required to be” under a procedure adopted by that international organisation. Article 15 of the CPTPP has a requirement that we want to transpose into our legislation. It states that a procurement that is not covered by individual countries’ own procurement rules would be one that 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 we are looking to do in this instance is to reproduce that, so that the exemption for contracts under our Procurement Act matches what is in the CPTPP.
The government view was that the CPTPP just says “funded”, while our general approach is to try to clarify, to a greater extent, that it should say “wholly or mainly funded”—namely, more than 50%—which is consistent with what we do in relation to the rule on the general procurement agreement. However, the point that I have now reached, which I put to my noble friend via these amendments, is that it is not necessarily the case that an organisation such as the World Bank has to be a majority funder in order for its funding—and that of others with which its funding is associated, which might be other providers of grants or loans, or the recipient country in one form or another—to be required to be conducted under its procedures. That being the case, should we reflect the CPTPP rules by saying that either a procurement is “wholly or mainly funded” by the international organisation, or, if it is funded to a lesser extent, that it is required to be subject to its procedures, and that that would give rise to an exemption under our procurement rules?
That is the point of the amendment. I am sure my noble friend will appreciate the rather fine distinctions, but I wonder whether he might agree that, at the very least, we want to be absolutely clear that, if a procurement has to be conducted under the rules of an international organisation, such as the World Bank, it should be exempt from our Procurement Act requirements. I beg to move Amendment 1.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
My Lords, I begin by declaring my interests, which are very clearly listed on the Lords’ register. I have interests in limited companies and companies that are active in CPTPP countries, but I do not believe there is any conflict.
Baroness Kennedy of The Shaws (Lab)
My Lords, we cannot really hear the Minister; could he raise his voice?
Lord Johnson of Lainston (Con)
Yes, my apologies. Before I begin, I would like to declare my interests, which are very clearly listed on the Lords’ register. I have interests in limited companies and other companies active in CPTPP countries, but I do not believe there is any conflict of interest in this process today.
I will also say how excited I am about being back here today to cover Report stage of the CPTPP Bill. This incredible collective of millions of people, representing trillions of pounds-worth of trade, coming together will give huge benefit to us, and I am very excited about the opportunity for this great nation to add our trading muscle to what I think will be a phenomenal collective.
Importantly, I give a great deal of thanks to noble Members of this House who have contributed so much to the painstaking work which goes into crafting a Bill of this type and ensuring we come to the right conclusions in the right way. I know there have been a large number of you, many of whom are present today, but I particularly note the noble Lords, Lord McNicol and Lord Purvis, from the Opposition Benches, for their extremely collaborative and constructive input into the debates. My noble friend Lord Lansley, who we have just heard from, brings a wealth of experience, particularly on procurement. I am very grateful for his input. My noble friends Lady McIntosh, Lord Holmes, Lady Lawlor and a number of others, including the noble Baroness, Lady Hayter, and the noble Lord, Lord Kerr, have engaged with me. We still have one more stage after Report and I will be delighted to continue engaging with any Members of this House, or indeed any groups that noble Lords think it would be useful for me to engage with.
I will also set the scene briefly for the debates we are going to have on many of these respective issues. My noble friend Lady McIntosh is in her usual place, and I apologise, because I have been trying to reach her over the last few hours, but we have not had a chance to have a discussion. I reference this point because what happens today in terms of how we trade, or how we manage our own standards in this country, does not change tomorrow. I think it is important to summarise at the beginning of this debate that acceding to CPTPP in no way derogates our standards or our ability to control our standards and, indeed, our destiny. We have been very careful to ensure that the processes are indeed very separate.
I know that we will have these debates later, but it is worth re-emphasising this important point, which I think is sometimes lost in the excitement of CPTPP—the argument that somehow our standards, import requirements and so on change, when they do not. All food and drink products imported into the UK will still have to meet the respective food safety and biosecurity standards for the UK. We are not having to change any of our food standards as a result of joining CPTPP, and it is important to emphasise on these well-discussed points that hormone-treated beef and chlorine-washed chicken are banned in the UK and will not be allowed to enter the UK market.
I am very grateful to various agencies such as the Food Standards Agency, the Trade and Agriculture Commission, the International Agreements Committee and other groups that have been extremely focused on ensuring that these facts are properly reported. I am grateful to them for the backing that they have given me in ensuring that those statements are clear.
It is also worth pointing out that CPTPP preserves the right to regulate to protect human, animal and plant life and health. The TAC report says that the CPTPP does not require the UK to change its levels of statutory protection in relation to animal or plant life or health, animal welfare or environmental protection. I am well aware that noble Lords wish to cover these issues later in this debate, but it is important to set that scene.
There is one area I would like to draw on now, in advance of these discussions, regarding palm oil. I reassure the House that liberalising palm oil tariffs with Malaysia does not undermine the UK’s environmental credentials. We remain committed to supporting the sustainable production of palm oil. In 2021, 72% of UK palm oil imports were certified as sustainable, up from 16% in 2010.
Lord Lansley (Con)
I am most grateful to my noble friend. He explained very well why the Government want to clarify this in this way. I hope he is right, and it is wholly consistent with CPTPP, although it is not precisely the same wording—it adds additional clarification. My noble friend made typically generous remarks about those of us who have been, as he says, painstakingly working our way through the technicalities of this Bill, and I am grateful for that. Some of our noble friends and colleagues on the International Agreements Committee are elsewhere with their committee this afternoon, but I know that they will read his remarks and want to thank him very much for that.
I take my noble friend’s point that, to the extent that procurements are brought within the scope of our procurement rules, they are in line with the general procurement agreement and best practice. In so far as we can, we want to bring as many of the recipient countries of international organisations’ funding within general procurement agreement rules, so that they are following best practice. We should aim to have more countries following those rules and to operate in ways consistent with how we do things than to leave them outside.
On that basis, I understand and accept my noble friend’s points and beg leave to withdraw the amendment.
Lord Lansley
Lord Lansley (Con)
I hope that I will be equally quick on this amendment, as there are points of more substance and principle to be debated later.
We discussed Amendment 3 in Committee. Essentially, it relates to a set of circumstances in which trademarks and GIs—geographical indications—may come into conflict and the circumstances in which the Secretary of State can make a decision that there would be confusion between the two. The point is that the GIs should be compared to existing trademarks and registered trademarks; to circumstances where, on the date which the GI is submitted, there are applications for the registration of trademarks; and, as the legislation refers to, where trademarks are “established by use”.
My problem is that nowhere in trademark legislation do the words “established by use” appear. My noble friend’s letter to me of 10 January said that “established by use” refers to unregistered trademarks. We appear to be putting into statute the concept that where a trademark has been used, it can be established but not registered, and I am not sure that that is helpful. What is more helpful would be to indicate that the Secretary of State should have a discretion to look at a GI that may come into conflict with an unregistered trademark—there are such things—and where confusion would result. My noble friend says that they may just use a trademark once, and the fact that it had been used once at some point in the past may lead to this confusion. As the legislation is drafted, the Secretary of State would actually have the discretion to judge these matters and to say whether confusion would arise. If a trademark has not been used prior to that date in any substantial way, I think the Secretary of State could ignore it and say that the GI has a meaning that people will readily understand.
I have a problem with the term “established by use” and think that “in use prior to that date” is more straight- forward and has the meaning we are looking for; “established by use” runs a risk of establishing that, in law, trademarks can be established by use. That is not something that the trademarks legislation currently admits of. I am not an expert in intellectual property matters, but I have talked to one or two who are, as we do in this place. I think there may be a problem with this, but I stand to be corrected by my noble friend. For the moment, I beg to move Amendment 3.
Lord Hope of Craighead (CB)
My Lords, I cannot claim any expertise in trademarks or their registration, but I think there is force in the point made by the noble Lord, Lord Lansley. The expression “established by use” is slightly vague, whereas the words that the noble Lord would substitute—of it being actively “in use prior to that date”—make the point rather better. I support the amendment, for what it is worth, in the interests of clarity.
Lord McNicol of West Kilbride (Lab)
My Lords, the noble Lord, Lord Lansley, is right: the Trade Marks Act 1994 at no point uses the words “established by use”. However, the Act makes specific provision for registered trademarks, whereas those established by use—as the noble Lord said—would presumably be unregistered and, therefore, subject to common law through the concept of passing off. It would be interesting to hear the Minister’s comments on passing off and whether that covers it.
I want to pick up the main point of this amendment and, specifically, geographical indications. I think this may be the only time on Report that we will be able to get some words into Hansard on that. The noble Lord, Lord Lansley, picked up the technical part, but there is a wider set of issues on geographical indications on which I am interested to hear the Minister’s response.
When this agreement was announced in October 2020, the then Trade Secretary Liz Truss MP promised that 77 specialist UK food and drink products would be guaranteed protected geographical indication status, along with the seven that were carried over from the previous EU-Japan trade deal. The former DIT Minister said that the protections would be in place by May 2021 for all 77 new products, which included many iconic British brands, such as Scottish beef, Cornish pasties and Welsh lamb—to name but a few. The DIT also boasted that, thanks to Liz Truss’s agreement, the UK would benefit from fast-track processes for securing brand protection that would not have been possible under the EU-Japan deal. It said:
“The EU must negotiate each new GI individually on a case-by-case basis”.
The EU has added 84 extra products to its protected list since October 2020, including a number in the last few months, but I understand that Kemi Badenoch’s department has not yet secured brand protection for a single one of the 77 products originally promised. The number of EU GIs with Japan now stands at 299, which offers them protection, while the UK is still stuck with only the seven protected products inherited from the EU-Japan deal. Given this, how can UK producers of geographically indicated products be confident in the measures contained within the CPTPP?
Baroness Butler-Sloss (CB)
Perhaps I might add something before the Minister speaks. Having listened with interest to my noble and learned friend Lord Hope, and with my limited intellectual property knowledge, I am concerned about the use of the words “established by use”. As far as I know, they do not appear elsewhere and are certainly not part of existing legislation. To bring them into this legislation, almost by a side wind, would be somewhat unfortunate.
Lord Johnson of Lainston (Con)
As always, I thank my noble friend Lord Lansley and all contributors to the debate on this amendment. It is very relevant, in my view; however, I am comfortable keeping the words “established by use” in the Bill as printed, rather than using
“in use prior to that date”.
My reason is simple and was pointed out by my noble friend: a single use of a name could be construed as giving the same protections as a trademark which, through an effective accumulation of good will and the establishment of its use, has been protected under these laws. We are quite comfortable with the wording.
I am aware that there is no reference to the concept of “established by use” in the Trade Marks Act 1994— I am surprised that there is no lawyer in this House jumping up to support me at this crucial moment, just when I need one. They seem not to be in their usual places but they would say, were they here, that this is an extremely well-established part of trademarks law. As I understand it—I am comfortable to be corrected, but my officials assure me of this—elsewhere, in the amended legislation relating to unregistered trademarks, is the common-law tort of passing off, which relates to good will. I am also reassured that in GI legislation—for example, Article 14(2) of the assimilated regulation 1151/ 2012—the concept of “established by use” is written and codified.
From our point of view, it is important to ensure that we protect our trademarks and that we use geographical indicators where appropriate. I will come on to the point raised by the noble Lord, Lord McNicol, in a moment. Having spent a great deal of time working on this, I ask my noble friend to withdraw his amendment because I do not believe that by changing the phraseology we will give the greater protection that we want to our trademark-using organisations, businesses and people, and allow the system to function effectively. I am very convinced of that. We have a line in our next amendment that will allow us to discuss geographical indicators in slightly more detail, so I will cover the points raised by the noble Lord, Lord McNicol, at that point if he is content with that.
Lord Lansley (Con)
I am grateful to all who took part in this very short debate, and in particular to the noble and learned Lord, Lord Hope, and the noble and learned Baroness, Lady Butler-Sloss, for their contributions on the legal aspects.
Unfortunately, I have not had an opportunity to look at the reference my noble friend refers to elsewhere in the GI regulations. That was not an aspect of this to which he referred in his letter of 10 January. He referred to the concept of the tort of passing off as a justification for it. My problem was that putting something in a statute that is justified by reference to a common-law definition seems problematic, since one might be assumed to be trying to create a statutory definition. I did not think the definition existed; I may be proved wrong about that.
I am just hopeful that it is not the case that one use of an unregistered trademark before the date of a GI means that it is established by use. It must be defined somewhere else and I hope that that is what my noble friend is suggesting—that “established by use” in relation to a GI is somewhere codified and defined. That would establish a degree of protection, and I hope we do not subsequently encounter circumstances in which the inclusion of this language causes a problem in relation to those who are responsible for distinguishing between registered and unregistered trademarks.
I remember, and my noble friend will recall from the debate we had in Committee, that we set out to secure GI recognition in the UK-Japan economic partnership agreement. We need to get on with it. Equally, in the UK-Australia deal we set out to secure protection for our GI indications. But it was made clear in the Australia deal that we would do so only in so far as, and to the extent that, the European Union secured protection for its GIs, and I am not sure that we have made the progress there that we should have.
These are very important aspects of our potential trade advantage and, if we are going to maximise our trade benefits, we need our geographical indications to be protected and we need to be using them in export markets. I should declare my registered interest as co-chair of the UK-Japan 21st Century Group. I will be in Japan at the beginning of next month and I will make it my business to ask about what progress we, and they, are making in protecting our GIs in Japan. For the moment, we thank my noble friend—
Lord Purvis of Tweed (LD)
Before the noble Lord sits down, I am unaccustomed to supporting the Minister in these areas, as he and the House are aware, but, having glanced at legislation.gov.uk, regulation 2019/787, regarding the relationship between trademarks and geographical indicators, does indeed have the definition of “established by use”. I am not a lawyer, as I very willingly admit, but if the Government have had the good sense to transpose what we had in the EU legislation into domestic legislation, then that might satisfy the noble Lord.
Lord Lansley (Con)
I am grateful to the noble Lord, and it may indeed satisfy me as long as we do not abolish it any time soon. With all those helpful comments from noble Lords, I beg leave to withdraw Amendment 3.
Amendment 3 withdrawn.
Amendment 4
Lord Johnson of Lainston
“1B. In a case where the protected designation of origin or protected geographical indication has been the subject of an application for approval of an amendment to the product specification under Article 53 which resulted in a change to the protected name, the reference in paragraph 1A to the application for registration under Article 49 is to be read as a reference to the application for approval of the amendment to the name under Article 49 as applied by Article 53(2) (or, in a case where there has been more than one such application, the latest of those).”Member's explanatory statement
This amendment clarifies the test for cancelling a protected designation of origin or geographical indication where the registered name has been the subject of a name change application; a cancellation will be possible only if the grounds for cancellation existed at the date of the name change application (rather than the date of the original application for registration).
Lord Johnson of Lainston (Con)
My Lords, Amendment 4 is a minor technical amendment that the Government have introduced. I will read out my brief to be clear, because it is quite technical. The Bill as currently drafted may lead to a degree of uncertainty for decision-makers over the date that should be used when assessing whether the new grounds for cancellation of a geographical indication apply in a case where the GI has successfully undergone a name change. Under the current drafting, it could be argued that, in such a case, the date on which the original application to register the GI was submitted under Article 49 of Regulation 1151/2012 should be the date used to carry out the assessment and not the date when the name change application under Article 53 was submitted. This amendment addresses that uncertainty by making it clear that the assessment should be carried out based on the factual position relating to the date when the name change application was submitted, rather than the date the original Article 49 application was submitted.
I will translate that a little. The provision is effectively looking at the date on which the name change is submitted, rather than the original name. If I have a GI—“Johnson’s Water” or whatever it may be—registered in 1990 and then change the name to “Lord Johnson’s Water” this year, then the reference would be made to the point at which the name change application was made, rather than the status at the time of the original GI. It is a clarification which we think is important, and I trust my officials’ view on that.
I will just answer briefly the very helpful comments raised about Japan and geographical indicators. I would be extremely grateful to my noble friend Lord Lansley for making representation to the authorities in Japan to speed the process up. We are fully committed to ensuring that our GIs are protected in Japan; it is part of the agreements we have undertaken, but these things take time to effect. We are doing everything we can to be sure that those indicators are protected. Anything that he can do to speed that process up will be gratefully received by this Government. I beg to move.
Lord Leong (Lab)
My Lords, as we have heard, this government Amendment 4 is really a relatively minor and technical amendment, so there is not much to add, except for some questions we hope the Minister will respond to. How often do the Government expect this test to be utilised, and are there any potential ramifications they will come across? What happens if the name change application is not successful—is that a possibility? Finally, if a name changes from a geographical indication into a generic term, does this amendment apply?
Lord Johnson of Lainston (Con)
I thank the noble Lord for that point. I am very comfortable having a more detailed discussion about GIs in principle. It is worth noting that many countries, including those in the CPTPP, do not have necessary GI processes. Sadly, too few do, so there is a great push on behalf of this Government to ensure that we advance the cause of geographical indicators to ensure that our rights are protected. It is correct that it is possible for a name change to be rejected; it is a process that takes time, as with any intellectual property issue. It is a detailed and thorough process to ensure that we can be comfortable that names, trademarks, GIs and so on are properly protected, and the research has been done. It can be six months or it can be a year, which is why we have built in this provision to ensure that it is the point of application rather than the point of approval that the data is referring to. That makes sense.
There have not been any cancellations of GIs undertaken by this Government, or indeed recently. I will check that, but I hope I am accurate; if I am not, I will certainly correct myself in the Library. The question from the noble Lord is about whether this is something that happens regularly, and is a constant and ongoing issue. Maybe there have been one or two exceptional examples but as far as I am aware, it is a relatively straightforward process; it seems quite uncontentious so far.
These regulations simplify the processes in respect of how we operate with the CPTPP. Often, we look at the activities that will take place in this country, which is right. How to protect our own GIs is what we are working on domestically. Really, this allows us to export the whole principle of geographical indicators—the wonderful concepts of Scottish salmon and Scottish whisky, to name just two enormously important and well-branded products. It allows us to work with our partner countries in the CPTPP to ensure that those brands and concepts are well protected, because a GI does not give us any strength unless it is domestically registered and the domestic legal system respects these principles. I therefore hope very much that the House will support me on this technical amendment and on the principle that it projects.
Lord Alton of Liverpool
“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).”Member's explanatory statement
This amendment seeks to allow for parliamentary scrutiny of the prospective accession of the People’s Republic of China to the CPTPP - the Government of which has already applied to join, and whose application is to be considered. Scrutiny of future accessions is not provided for in the bill or through the CRaG process.
Lord Alton of Liverpool (CB)
My Lords, I am grateful to your Lordships’ House for giving me the opportunity to address this issue again. It is an amendment which I laid before Committee, and it was very ably moved there by the noble Lord, Lord Leong. I was grateful to him for doing that. I also thank the Minister, who was good enough to have a meeting with me only last week to discuss the terms of the amendment to see if any agreement could be reached. I should also express my thanks to the co-sponsors of what is an all-party amendment: the noble Baroness, Lady Kennedy of The Shaws, the noble Lord, Lord Purvis, and the noble Lord, Lord Blencathra, who is on his way from Cumbria but hopes to be here before the conclusion of the debate; we shall see. I also heard from the noble Baroness, Lady Jones, that this is something that the Greens support, and I see that a letter has been sent to Conservative colleagues today by the former leader of the Conservative Party Sir Iain Duncan Smith MP. He says that the amendment remedies the problem in a proportionate way that goes with the grain of government policy.
What is the problem that we are trying to solve? That is what I want to address. When the noble Lords, Lord McNicol and Lord Purvis, made excellent interventions from their respective Front Benches in Committee, they underlined the need for parliamentary scrutiny. That is what this amendment is all about. It is straightforward and non-binding on the Government, but it enables both Houses of Parliament to debate, vote and give their advice on an issue of considerable importance involving geopolitics, strategic dependency and national security.
For the purpose of transparency, I should refer to my non-financial interest in the register that I have been sanctioned by the People’s Republic of China, along with six other parliamentarians, including the current Security Minister, a former leader of the Conservative Party, and a current Minister from the department of the noble Lord, Lord Johnson, Nusrat Ghani MP. Of course, in your Lordships’ House, my colleague the noble Baroness, Lady Kennedy of The Shaws, has been sanctioned too. In my case, it was for speaking out against the Uighur genocide, the use of Uighur slave labour in Xinjiang, the destruction of Hong Kong’s democracy and the incarceration of more than 1,700 pro-democracy supporters, including the British citizen and businessman Jimmy Lai, a case that I raised earlier today with the Foreign Secretary. Therefore, I guess that I am not agnostic about the PRC and its mendacity.
As I indicated in a recent debate, I believe that our parliamentary Intelligence and Security Committee, reflecting the work of this House’s own International Relations and Defence Select Committee and the House of Commons Foreign Affairs Select Committee, was right to warn us of the dangers posed by the People’s Republic of China. In truth, the Government have still not resolved the problem of what the noble Lord, Lord Patten of Barnes, calls “cakeism”. He used that word in evidence to our International Relations and Defence Select Committee. What he meant by that was that we wanted to deepen our trade links—something that the noble Lord, Lord Johnson, pursues with great alacrity—but simultaneously we want to identify the threats and challenges to our security, including infiltration and subversion of institutions, even CCP spies operating across Parliament. This amendment would provide parliamentarians with the opportunity to probe whether the Government have acted with due regard to questions of national security and our long-term interests.
Baroness Kennedy of The Shaws (Lab)
My Lords, I support this amendment. I should declare a number of matters. One is that I am the director of the International Bar Association’s Human Rights Institute, and we have taken quite strong positions with regard to China’s abuses of human rights, particularly in recent years with regard to the persecution of the Uighurs and in relation to its behaviour and conduct with regard to Hong Kong and its breach of the Sino- British agreement.
I declare also that I am the chancellor of Sheffield Hallam University, which is proud to have among its professors Laura Murphy, an American who lives here in Britain with her husband and who is one of the most well-recognised experts in the field of forced labour.
Professor Murphy’s work on China has been extraordinary. Others in this House who have read it will be aware of the depth of her work and the reliability of her research, which has informed the State Department in the United States and has been used by government departments here. Her work shows that forced labour is part of the problem of contemporary China. It is certainly part of the problem of the abuses of the Uighur people.
I support this amendment. Most of us in this House would agree that we have to avoid any dependence on authoritarian states. It is for that reason that some of us have deep concerns about not having the opportunity in future to scrutinise the ways in which China might be embraced in some of the multilateral—plurilateral—institutions, which it is very assiduously seeking in our contemporary world. The China of today is not the China that joined the World Trade Organization 20 years ago, as described by my friend, the noble Lord, Lord Alton.
China is displaying, under the presidency of President Xi, that it is seeking regional hegemony. The belt and road programme has shown the extent to which it has created an indebtedness among many nations which is then reflected in other things. We saw it happening recently in the motion that was placed before the United Nations General Assembly in relation to the crime of aggression committed by Russia with regard to Ukraine. We saw it in the vote that was taken on that issue, with all those countries that are indebted to China and that are in its purview because of the ways in which it has been involved in the building of infrastructure and so on across Africa and other places. I am afraid it is an example of that long arm affecting issues that should concern all of us, such as an illegal war. The extent to which China is seeking to enlarge its hegemony should be a source of concern to all of us.
I am not a hawk with regard to China. I believe that we must continue to have dialogue and that it is fruitful to have dialogue. However, we should be very cautious about being drawn into something which will give opportunities to a nation that is not respectful of that rules-based order which was being discussed earlier today. It is being very inventive and innovative in the breaking of the rules that we thought should apply to all nations.
The arguments have been very well made by the noble Lord, Lord Alton—the importance of us having the opportunity to debate, scrutinise and raise issues that are not known to everyone, particularly with regard to the abuses of human rights. We like to imagine that engagement can lead to a raising of standards. At the moment that does not seem to be happening with regard to China. We have been seeing it, as was just referred to, in what is happening with the introduction of national security laws and so on that are being used against trading people such as Jimmy Lai, a great entrepreneur himself. So I endorse and adopt the arguments that have been made by the noble Lord, Lord Alton.
I just mention that in applying to join the CPTPP there can be exceptions allowed and one of them is national security. When I see national security being referred to as a potential reason why there might be some opt-outs for some of the commitments one would expect in any agreement, it worries me because of what we have seen China doing with its national security law that it has been using in Hong Kong.
I adopt the arguments that have been made. I press the House to agree that this is a very sensible amendment. It is not asking very much; it is asking us to do what we normally do, which is to scrutinise and question some of the things that might be being done by our Government.
Lord Hamilton of Epsom (Con)
My Lords, I received the email from the noble Lord, Lord Alton, trying to persuade me to support the amendment, and I must say that I am very reluctant to do so. The fact is that all trade agreements are a compromise. That is one reason why there is no veto in Parliament over a trade agreement—you would start to unpick the whole thing if Parliament objected to some aspect of a trade agreement —and there is no reason why we should want to change that now.
The other point is that the real prize for the CPTPP would be not the membership of China but the membership of the United States. It is clear that neither country wants to join at the moment, for particular reasons, but the agreement is going to last a very long time, and there may well come a moment when things change in China and the threat of China joining might well force the United States to join in order to keep China out. So we do not want to tie any Government’s hands on this in any way. We have to bear in mind that if the United States was to join the CPTPP, it really would become a massive trading bloc, and that prize would be well worth achieving.
Lord Lansley (Con)
My Lords, while I have enormous sympathy with the purpose of the amendment moved by the noble Lord, Lord Alton, he has explained perfectly clearly that the CPTPP members would all have to agree not just that China would join the CPTPP but that a negotiation with China would be entered into. The benchmarks against which that would be measured are laid out in an annexe to the CPTPP, and there is a great distance between where China is today and the benchmarks that would have to be met, so I see no immediate process for that.
The terms of the amendment, in creating a different legal process for the accession of one potential applicant economy as compared with any other applicant economy, represent an unwelcome position for us to have taken. It might be construed as unwelcome in other countries as well; it seems to me that it would set a bad precedent. The question that would be put to the Government is what position we should take as to whether a commission should be established to look at an aspirant economy, and the United Kingdom Government could take a position on that. While I join my noble friend in resisting the amendment, it would be helpful if he could say that there was nothing to stop the Government from potentially laying a Statement under CRaG for that purpose and asking the relevant committees to comment on it.
That would not enable Parliament to veto it—indeed, a veto would be unwelcome at that stage because it would be a decision whether or not to enter into a negotiation—but, as in other cases, the Government would be well advised to take full account of what Parliament might say in relation to any such notification and any such report by the International Agreements Committee here and the Business and Trade Committee in the other place. I wonder whether my noble friend might suggest that, if there were such a potential decision to be made by the UK Government, they could go through that process and it would be perfectly reasonable for them to do so.
Baroness Lawlor (Con)
My Lords, I am sympathetic to the amendment moved by the noble Lord, Lord Alton. I approach it from a somewhat different angle, on which he himself touched, which is the use of economic tools to gain hegemony geographically. We are talking about the wide area of influence that China already commands, not just in the Indo-Pacific. Already 20% of Chinese goods are destined for CPTPP countries; 50% of them are intermediate products. Of those countries, Malaysia, Vietnam and Mexico have the highest level of imports from China. When we join, that figure will go up because 13% of our imports come from China.
Whatever the outcome of the decision on this amendment, I urge the Government to consider very carefully some arrangement so that there can be collaboration between Parliament and government on the very important business aim of the UK, which is to prevent economic tools being used against UK interests, including those to which the noble Lord, Lord Alton, referred.
Lord Purvis of Tweed (LD)
My Lords, I have added my name to the amendment in the name of the noble Lord, Lord Alton, and did so very happily. I will comment on a couple of points that have been raised in this short debate and then, without adding to what I said in Committee, highlight the reason why strategic debates about the UK’s trading relationship with China are important.
One of the reasons I was attracted to my party was that the Liberals were part of the founding movement for free trade. At that time, we traded with China and we will trade with China in the future, but this is a debate not about trading with China but about the UK’s resilience and our strategic trade interests. The noble Lord, Lord Hamilton, made the point that Parliament’s role is not to assess trade negotiations or assess whether China would meet the benchmarks for accession to the CPTPP. His argument was rejected by his noble friend Lord Lansley, who came to the conclusion that China is a long way from meeting the benchmarks. I cannot second-guess what the other members of the CPTPP will say, and nor can we hold them to account, but we can hold our Government to account for the assessments that they make. There will have to be a public process because the difference—I put it to the noble Lord, Lord Hamilton—is that China’s accession is less of a negotiation; it is an accession process, which is different from a bilateral FTA process. On that issue of substance, it is quite different.
The noble Lord, Lord Hamilton, also said that it would be wrong if we sought, by approving this amendment, somehow to provide a veto or to bind Ministers’ hands. It would not be a veto: there is nothing in the amendment that would allow it to be a veto. I refer also to the comments of his noble friend Lord Lansley, who said that there would be nothing to stop the Government bringing a report anyway. Opposing something that the noble Lord, Lord Lansley, suggested was in the Government’s interest to do is a bit of a stretch, but the Government have the ability to present a report, and this amendment says that they should. We have argued consistently for this in the Trade Act and on other trade negotiations.
The reason why China is particularly important, as was alluded to by the noble Baroness, Lady Lawlor, is not just the scale of the UK’s trade with China but how resilient we are in relation to it. It is absolutely right that the noble Lord, Lord Alton, raised the issue of Taiwan. I have just written to the President-elect, whose DPP is a sister party of ours on these Benches, to congratulate him on a remarkable victory. UK trade interests with Taiwan and shipping coming from that area are of critical importance. It is not just that British consumers enjoy the benefit of buying Chinese products, but we have the biggest trade deficit in goods with one country in our nation’s history. The trade deficit of £40 billion with China comes at a time when the whole narrative of UK government policy is that we would do trade with other countries in Asia, not China, that would offset any theoretical reduction with trade with Europe. We know that is not the case; it has proven harder to replicate the trading arrangements that we had with our European partners with those in Asia. We also know that the growth in trade in Asian economies, as the noble Baroness, Lady Lawlor, said, is because of their trading relationship with China. We cannot have it both ways.
If there is anything that suggests why we should have more of a strategic debate about how resilient the UK is when we have the biggest trade deficit of any nation on earth with China—I remind the House that Germany has a trade surplus in the export of goods to China—it is last Friday’s actions by the Royal Air Force. The shipping of goods from China, which we depend on for our consumers, comes through the very area where we have deployed military assets in the last few days, which we discussed last night in this House. It is in our geopolitical and strategic trading interests that Parliament debates our relationship with China. Given the potential for interventions in our trading and shipping through the Red Sea and through Suez, interruptions to our trading through the Taiwan Strait or other interruptions—because China can, without notice, change its national security profile and how it seeks to impact on a country such as the UK—we are uniquely vulnerable to another nation state’s decisions about its strategic position on exporting to the UK.
On the one hand, one might argue that the more that China being more of a part of the rules-based WTO mechanisms is in our interest—that is right, but it is a separate debate. Here, we are discussing how our Parliament will hold any Government to account for decisions that they may take on an assessment of whether it is in our strategic interests to support China acceding to the CPTPP. Asking for a report and for it to be debated in Parliament is the very least that could be asked for, and I hope that will not cause any big division across the House. We should all support this, and the Government should perhaps accept the need for a report and a debate in Parliament. That is what this amendment seeks to do.
Lord Rooker (Lab)
The noble Lord, Lord Alton, is to be commended for this amendment. I will briefly develop one point made by my noble friend Lady Kennedy, who referred to the work of Sheffield Hallam University on trade, which I have read in considerable detail and previously raised in this House. That work clearly shows that, while China is one of the world’s biggest growers of cotton, it is also the world’s greatest cotton launderer, hiding where its cotton products are grown by laundering them around the world. The work at Sheffield Hallam has shown this, and, as a result, the Americans stopped importing the cotton.
As I have said previously, the Government have taken no action whatever to check the source of the cotton, but it is possible to do so. A lot of the cotton in China is grown in the Uighur area—this is a slave labour issue. I say to noble Lords, and to ladies and gentlemen, that any cotton in the clothes they are wearing at the moment can be analysed to show where it was grown and whether this was in Xinjiang or in another part of China or Egypt or somewhere else. Paper-based monitoring systems are worthless simply because China is hell-bent on laundering the cotton in its products and hiding where it comes from. Therefore, although we talk about free trade, it is not free trade if you are laundering your cotton to hide where it has come from. The Government have repeatedly been asked to do something about the products they buy on behalf of the British public. Have they used any of the element-analysis processes organised by Oritain to check the source of their cotton? The answer is no.
They have never taken any steps whatever to source the cotton and see whether it was grown in Xinjiang or not. Is that because we do not care about the use of slave labour or the source of materials? Well, I think we should and the noble Lord, Lord Alton, has given the House a further opportunity for this issue to be raised.
Lord Berkeley of Knighton (CB)
My Lords, on the whole I tend to support the idea of having one’s sparring partners join the club, because there is then a way to communicate. The noble Baroness, Lady Kennedy of The Shaws, made this point. Communication is incredibly important, such as through cultural and sporting exchange.
However, the points made by my noble friend Lord Alton seem to me to rather trump that consideration. The noble Lord, Lord Hamilton, said that we would be making an exception in the case of this country. But why would we make an exception? I suggest that the answer lies in my noble friend’s point that the country has behaved exceptionally and therefore that we have to take that into account.
Finally, I say that we must learn from the Post Office affair, for example, which we will come on to, that we can never probe enough—we need to look at things in depth, especially something such as this where there are clearly areas that we could consider more thoroughly. I repeat what the noble Lord said: this is a plea to look further. It is not doing anything else at this stage. It asks the Government to allow us to look further at something that has considerable consequences.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Alton of Liverpool, for presenting this amendment calling on the Secretary of State to publish a report assessing the potential impact of China’s accession to the CPTPP on the United Kingdom and saying that both Houses of Parliament must be presented with a Motion for resolution on the said report.
As the noble Lord, Lord Lansley, indicated earlier, we on this side of the House would have preferred this amendment to cover all new accession countries—but for the purposes of this amendment I will refer just to China. Several noble Lords spoke in Committee on the case for this amendment and I do not propose to repeat what was said. However, I will make noble Lords aware of China’s non-market trade practices and its history of using economic coercion against CPTPP members, which must be considered in any valuation of its prospective accession.
First, there are aggressive military exercises and drills in the Taiwan Strait that threaten peace and stability in the South China Sea. This could be destabilising to regional trade. In addition, China has ongoing territorial disputes with other CPTPP members, including Japan, Malaysia, Brunei and Vietnam. Its willingness to use coercion against countries that disagree with it has often strained relationships with several CPTPP members. For example, it halted imports of Canadian canola and meat products in response to the arrest of a Huawei executive in Vancouver. Japan was denied access to rare earth materials in 2010 and Australian exports have suffered from Chinese import bans. Furthermore, several CPTPP member states have expressed concerns that China’s subsidies of state-owned firms and arbitrary application laws would be likely to make it hard for the country to join the trade pact.
I wanted to quote two examples, but the noble Lord, Lord Alton, mentioned the Japanese State Minister, so I will leave it at that and bring in another example of our very own British CPTPP trade negotiator, Graham Zebedee. Without commenting specifically on China’s application, if a country’s economic rules are really quite far apart from what CPTPP says, inevitably there is quite a big question about whether they could undertake really massive reforms. These concerns alone seem to provide sound justification for the commissioning of a report and Motion for resolution, as required by this amendment, so that both Houses of Parliament have the opportunity to fully consider the case for and against China’s accession to the trading bloc.
Recent newspaper reports have shown the lengths to which President Xi will go to crack down on companies when strengthening his control of the economy. Business leaders in China are under immense pressure. Last year, more than a dozen top executives from sectors including technology, finance and real estate went missing, faced detention or were accused of corruption practices. China’s national security law, as mentioned by my noble friend Lady Kennedy, is dangerously vague and broad. Virtually anything could be deemed a threat to national security under its provision and it can be applied to anyone on this planet. This law has provided little or no protection to people targeted. Lawyers, scholars, journalists, pastors and NGO workers have all been convicted of national security offences, simply for exercising their freedom of expression and defending human rights. Business leaders may face the same treatment.
China’s current policies and practices are at odds with many of the provisions and requirements of the CPTPP, and it is unlikely to be able to conform to them unless current members agree to significant concessions in the negotiations. This is why concerns about coercion are particularly relevant. Without considerable concessions, it is hard to see how China would qualify for accession. Equally, China is highly unlikely to make the changes to its laws and regulatory systems that would be required to gain the acceptance of CPTPP.
We are obviously sympathetic to the arguments made by the noble Lord, Lord Alton, and others in support of this amendment. However, there is not yet any agreement for any other country to join the partnership. It would be improper to single out any one of the possible new members at this stage, including China. At Second Reading and in Committee, we put on record our strong concern about China’s human rights record, but we believe that our human rights concerns should be universal and that one country should not be singled out. Should the noble Lord, Lord Alton, decide to divide the House on this amendment, we will abstain.
Lord Johnson of Lainston (Con)
My Lords, I am grateful for this debate and I have the greatest respect for my noble friend Lord Alton, who, over the years, has demonstrated his significant level of passion on this very important matter, as have many other noble Lords today. I do not want to deviate from the important points I wish to make relating to this CPTPP Bill, so forgive me if I do not necessarily answer all the questions that have been presented in relation to some of the topics raised. However, I would like to say, very importantly, that I clearly personally strongly reject the sanctioning of our parliamentarians. We have made it very clear before that China’s attempts to silence those highlighting human rights violations at home and abroad, including, and specifically, their targeting of MPs and Peers here in the UK, are unwarranted and unacceptable. I begin discussion on this amendment with that very important statement.
I turn to the debate around the CPTPP. As I have made clear throughout the last few stages of this Bill, in joining CPTPP, we are securing our place in a network of countries that are committed to free and rules-based trade, which has the potential to be a global standard setter. CPTPP acts as a gateway to the dynamic and fast-growing Indo-Pacific region and delivers on last year’s integrated review refresh to continue to enhance our relationships in that region. I stress this point, which was raised, I believe, by the noble Lord, Lord Purvis. Expansion of this agreement’s membership will only bring further opportunities for British businesses and consumers.
On potential new accessions, there are currently six economies with applications to join the group: China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. China’s application, alongside the applications of the other five economies, is at the outset of the application process and has certainly not been determined. As noble Lords are already aware, the CPTPP is a group of 11 parties and will become 12 when the UK accedes, and decisions must be taken by consensus of the CPTPP parties. However, it has been agreed within the group that applicant economies must also meet three important criteria: they must meet the high standards of the agreement; they have to have demonstrated a pattern of complying with their trade commitments; and they must command consensus of the CPTPP parties. These are very strong criteria, and I hope that all Peers on all sides of the House hear this very clearly.
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 give our own individual narrative on each applicant, such as through the report proposed in this amendment. My kinsman and noble friend Lord Hamilton made a very strong point in support of that. As I indicated previously, the UK is already closely involved in discussions on this topic but will have a formal power to oppose an application only post-ratification. It is therefore crucial that we ratify the agreement and become a party, so that we can work with CPTPP members decisively on each current and future application. I stress that to be drawn in on individual applicants now, ahead of the UK becoming a party to the agreement, could risk significant repercussions to our own ratification, which is why this is such a sensitive and important issue.
The UK becoming a party of the CPTPP is dependent on CPTPP parties individually choosing to ratify the UK’s accession, so it is not in our interests to step outside the group on such a sensitive issue. As I have been clear throughout our debates, we must join first so that we are on the inside judging other applications, not vice versa. It is therefore crucial that the UK ratifies the agreement, which will in turn trigger other ratifications that will allow us to become a party.
I want to be clear that our own accession working group was successful because we are demonstrably a high-standards economy with a strong track record, we made a market access offer of the highest standard, and we garnered the support of every party for our accession. Our accession process has set a strong precedent: the robust experience the UK has been through has reinforced the high standards and proved the bar is not easy to meet.
Comments were raised about state-owned enterprises. I will give noble Lords an anecdote from the negotiating team, as I understand it. We received a great degree of scrutiny over the relationship between Channel 4 and the Government, which few people, I think, would necessarily equate with the concept of a state-owned enterprise. I hope that that demonstrates the sort of inquiry that was behind our own accession.
I also reassure the noble Lord, Lord Alton, and everyone else who participated in this debate, that the accession of new parties after the UK has joined will entail a change in the rights and obligations of existing parties. Any new agreement requiring ratification by the UK would therefore be subject to the terms of the Constitutional Reform and Governance Act 2010. So, if he will allow me, I push back against the noble Lord and his suggestion—I think the noble Lord, Lord Purvis, also suggested it—that there is no track for the CRaG process to be triggered should a new party be able or about to accede to the CPTPP.
Lord Alton of Liverpool (CB)
The Minister made an important point, so I will press him on it, as I did during the meeting we had with officials. Can he confirm that the CRaG process does not provide for a vote in either House of Parliament?
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord, but, if he will allow me, I will continue with my comments on what this process will involve. As noble Lords are aware, the CRaG process requires that the treaty text and an Explanatory Memorandum be laid before Parliament for 21 sitting days before ratification can take place. Under CRaG, either House can resolve against ratification of a relevant treaty within the 21 sitting days of the treaty being laid before Parliament. The House of Commons can continue, indefinitely, to resolve against ratification, in effect giving the Commons the power to block ratification. I hope that that answers the noble Lord’s question.
These are clearly quite dramatic actions to take on behalf of both Houses in relation to the CRaG process, but the point is that the levers are available. While there is no explicit up/down vote built into the CRaG process, there are multiple ways in which a debate can be brought to the Floor of the House. Should it be the will of the House to have a substantive debate, I am sure that Parliament would ensure that it would occur. I believe that that is referred to as the Grimstone principle.
Lord Purvis of Tweed (LD)
My Lords, on a point of clarification, the Minister told us that it would be wrong for a country to comment on another country’s application and gave reasons for that to be the case, but the Government sought in our application support from other countries, and indeed welcomed Japan’s public comments that it would welcome UK accession. Why did we previously seek and welcome support from other countries for our application if the Government are now saying it would be dangerous if we made any comment about China’s potential application?
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord, Lord Purvis, but it may surprise him to know that we are not yet fully acceded or party to CPTPP. As soon as we are, it is absolutely right that we make comment on other countries, but only after the process and we have joined. To include an amendment in the Bill now would be completely inappropriate, as I hope I have made clear. I think it would cause significant issues in this overall process.
I return to the point on which it is important to reassure the House. The House is looking for reassurance about whether any country can be sneaked under the wire to join CPTPP, and the clear answer is that it cannot. We have made clear commitments to clarify the process from the Dispatch Box to ensure that we know, as Members of this House and of the other place, that there will be a robust process around any new party joining CPTPP.
Lord Alton of Liverpool (CB)
I am very grateful to the Minister, but I am trying to get clarity to see whether we need to divide the House. He has not answered the question I asked. He has said that there could be a process by which there could be a debate on the Floor of the House if the Government permitted it. All that would be welcome, if it was permitted. My question was whether such a Motion would be divisible. Would there be a chance for Members of both Houses to vote? When I asked that question during the course of our meeting, the answer I was given was no.
Lord Johnson of Lainston (Con)
I thank the noble Lord for his comment but I feel he is being slightly unfair to me. I am describing the CRaG process, and the Grimstone principle makes clear what will happen if there is a desire for a debate and parliamentary time allows—I am obliged to use those caveats, as your Lordships can imagine, but frankly it would be astonishing if there was not a significant and strong debate over any country joining CPTPP. As I said, and as the noble Lord will know from his experience, the House of Commons can continue indefinitely to resolve against ratification, in effect giving the Commons the power to block ratification. I think that is a very significant and probably quite considerable device that would enable the noble Lord to feel reassured on that point.
The question is whether a new party joining CPTPP would trigger the CRaG process. In our view, it absolutely would, which gives enormous power and scrutiny to both Houses in ensuring that there is a proper debate on that. It is important to note, as I think was mentioned by the noble Lord, Lord Berkeley, that, in the event of the CRaG process being triggered, I would expect the Business and Trade Committee or the International Agreements Committee to request a debate, and that the Government would seek to facilitate this, subject to parliamentary time, as under the Grimstone principle, which we have covered.
I would like to come to a conclusion here. I note the important contribution made by the noble Lord, Lord Kerr, in Committee. He commented that he did not believe that this amendment was “necessary or desirable”, and recognised the importance of unanimity among members. I want to bring us back to that point. We are now part of a group that has attracted interest across the world.
Baroness Hayman (CB)
My Lords, I apologise for intervening, particularly when I have not taken part in these debates before, but I want to ask a question before the Minister leaves the issue of the CRaG provisions, which are very important for some of us who have listened to the debate and have an issue. He said clearly just now that the House of Commons could resolve against ratification, but the noble Lord, Lord Alton, was asking if it could have a vote. How would the House of Commons resolve against ratification without voting on the issue? That is what I struggle to understand.
Lord Johnson of Lainston (Con)
I am grateful to the noble Baroness for her point. There is no explicit up/down vote built into the CRaG process; we are aware of that. I am talking to a House that has far more experience of the CRaG process than I do, so we know how the process works. There are multiple ways in which a debate can be brought to the Floor of the House. For reassurance, I will go through this point again. The CRaG process requires that a treaty text and an Explanatory Memorandum be laid before Parliament for 21 sitting days before ratification can take place. Under CRaG, either House can resolve against ratification of a relevant treaty within the 21 sitting days of it being laid before Parliament. The House of Commons can continue indefinitely to resolve against ratification, in effect giving the Commons the power to block ratification.
To some extent, this is important, but it may be academic. As I said, the question is whether a new party to CPTPP can be snuck under the wire. We are very clear that this is not possible. The process is automatically triggered. Aside from that, there are also the reports written by the Trade and Agriculture Commission, and there has to be an impact assessment, and there has to be a significant amount of scrutiny and debate, as there is about the CPTPP Bill today. I am very reassured on the principles and mechanics around whether we have in this House the right level of control and security to ensure that we have control over our own destiny in relation to new parties joining a plurilateral treaty, which is of course completely different from the country-to-country FTAs.
Lord Lansley (Con)
I am grateful to my noble friend. As a former Leader of the House in the other place and as a member of the International Agreements Committee, I am pretty clear that, under CRaG, the International Agreements Committee here, and potentially the Business and Trade Committee in another place, might make a report to Parliament that could lead to a debate. That debate could be subject to a take-note Motion, but that would be amendable. If it were sought to be amended in the other place to say that a treaty should not be ratified, the Government could not continue to ratify the treaty if such a vote had taken place in the other House to say that it should not. I think that gives the comfort that the noble Baroness, Lady Hayman, is looking for.
Lord Johnson of Lainston (Con)
I am very grateful to my noble friend for that comment. He is absolutely right that the Business and Trade Committee and the IAC are able to request a debate, which, as I said, according to the Grimstone principle, we would always seek to facilitate, given parliamentary time.
I should like to come to a conclusion. I ask the noble Lord to withdraw his amendment. I have made extremely clear, I hope, the rigorous standards that CPTPP applies. This is a plurilateral trading group that wants to have the highest standards of trade among them. That is my first key point. The second is that we have a number of safeguards built into our own processes to ensure that, were another country to join CPTPP—it could be any of the countries applying or future countries over the coming years—there will be a proper process, as has been defined in the CRaG process. I would ask the noble Lord, given the complexities and sensitivities that I believe this amendment would present to our ratification process, to withdraw his amendment.
Lord Alton of Liverpool (CB)
My Lords, I am very grateful to the Minister and all noble Lords who have taken part in today’s debate. I felt we were quite close to agreement, as I felt we were during the course of the meeting that I had with the Minister. It comes down to the issue of whether or not such a report and Motion, were it to be laid in the House of Commons, as the noble Lord, Lord Lansley, just said in response to my noble friend Lady Hayman, would be divisible or not. It has been made clear that under the CRaG process that is not possible. That is why it was necessary to table this amendment.
As for some of the other arguments put before your Lordships, I entirely agree with the noble Lord, Lord Hamilton of Epsom, who raised the issue of the United States of America. If the USA were to seek to join—it is not even in the queue or the list of countries to which the Minister referred earlier—all of us would be very pleased about that. However, China is in the list referred to, so this is not hypothetical—China is in the list. We are not seeking to have the debate here and now as to whether or not China should accede. That is not what this amendment would do. Chronologically, we are getting ahead of ourselves. The amendment would simply empower this House, should we then be members of the CPTPP, to have the right in both Houses to query such an application on the grounds that I laid out at length, as did the noble Baroness, Lady Kennedy of The Shaws, and the noble Lords, Lord Rooker, Lord Purvis and Lord Leong, in their remarks about the nature of the country that we are dealing with. Is China different from the others? Yes, of course it is manifestly different, not least, as the noble Lord, Lord Rooker, mentioned, because of the products that we buy from Xinjiang. The House of Commons has declared not that there are human rights violations but that there is a genocide—under the 1948 convention on the crime of genocide—taking place in Xinjiang against Uighur Muslims, who are used as slave labour.
The noble Lord, Lord Rooker, is right about that, and we have this trade deficit that the noble Lord, Lord Purvis, regularly refers to, of £40 billion, which makes us very dependent on that country and does not contribute to our resilience. Will the CPTPP help us? Yes, it will, and I am glad that we are joining it. That is why I support the Minister in that objective and support this Bill but, as others have said in the debate, we need to be in a position not only to be able to voice our opinions in both Houses but to vote on those things as well. Otherwise, how will we express our view? Will it be done through telepathy? Will it be done as a result of people getting up and saying, “We don’t agree with this”? If there cannot be a vote, it is impossible. All of us in this House or who have been in the other place know that to be the case.
As for the views that have been expressed about the desirability of China’s membership, my noble friend Lord Berkeley of Knighton said that this is exceptional because it is appalling behaviour that we have never probed enough. We must probe. That is what this amendment seeks to do, to give us rights. Look at the amendment. There are two parts to it. The first simply says:
“Before any decision is made by the Government … on the accession … to the CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report”.
That is all well and good. The Minister has accepted that principle, so why not accept the first part of the amendment? What does the second part say? It says:
“Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1)”.
This is hardly revolutionary. It seems to me perfectly reasonable. We are being invited to tilt at imaginary windmills. I know that some will be under pressure from their Whips but, as I did during the debate, I commend the remarks of the former Leader of the Conservative Party, who has written to members of his party today to say that the amendment remedies the problem in a proportionate way that goes with the grain of government policy.
I would like to seek the opinion of the House, and I hope that those on the Government Benches in particular will vote for this amendment.
“Human rights impact assessment: indigenous and forest peoplesThe Secretary of State must lay before Parliament, within 24 months of the passing of this Act, a human rights impact assessment on the impact of UK CPTPP accession on indigenous and forest peoples in the respective CPTPP parties.”Member's explanatory statement
This amendment would require the Secretary of State to perform a human rights impact assessment on the effect of UK CPTPP accession on indigenous and forest peoples.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, in moving Amendment 6, I wish also to speak to Amendment 12 in this group. Amendment 6 raises the issue of the displacement of indigenous people severely affected by deforestation resulting from the rush to clear forests for palm oil agriculture. The rainforests of the world are an essential source of carbon storage and provide homes to some of our most iconic species, which everyone is aware of. What is not so widely acknowledged is the effect that forest clearance has on the indigenous people who make their home in the forest. The CPTPP will remove tariffs on palm oil, making deforestation easier. The human cost will be devastating: nearly 1 billion people depend on the forests for their livelihood and 300 million people live in them. This displacement is enormous. An assessment of the impact on these people within 24 months of the passing of this legislation is essential. I look forward to the Minister’s comments.
The World Wide Fund for Nature has identified that two of the 11 deforestation fronts are covered by the CPTPP. These 11 fronts will account for 80% of deforestation by 2030. The Government’s proposed deforestation due diligence only covers illegal deforestation in four linked commodities. The US FOREST Act covers six, and the EU deforestation regulations cover seven, with other countries going further. The UK is lagging behind in this vital area and needs to do much more to protect this dwindling resource. There has to be a more stringent process to ensure that deforestation does not totally destroy the homes of those who are less able to speak up for themselves. A review of the effect on these people is essential.
Amendment 12 is in the name of the noble Baroness, Lady Willis of Summertown. She is unable to be present this afternoon and sends her apologies. I have added my name to this amendment, as has the noble Baroness, Lady Boycott. The noble Baroness, Lady Willis, spoke knowledgeably and passionately to this amendment in Committee. The countries which the Government are planning to begin trading with do not have the same stringent rules on the use of pesticides and chemicals as we have. This will undermine and undercut our farmers. It will also put the population at risk.
There are 119 hazardous pesticides banned in the UK which are used in the countries covered by the CPTPP. The border checks which the Government are proposing are not sufficient to be able to prevent goods containing these toxic chemicals from entering the country and the food chain. Some of these pesticides are known to kill bee populations and destroy aquatic ecosystems. The paper border checks which the Government are proposing rely just on documentation. There will be no physical check of goods which may contain pesticides. The Pesticide Action Network found that grapes from CPTPP member countries New Zealand, Chile and Peru may contain 1,000 times the amount of iprodione than their UK equivalent. This is a fungicide linked to cancer. Are the Government really going to expose the population to these toxic chemicals without proper physical checks? A review of the impact within 12 months is again essential.
I shall also speak briefly in support of Amendment 11 in the name of the noble Lord, Lord Goldsmith of Richmond Park. This again deals with adequate checks on goods containing sustainable palm oil. This is a vital amendment and I congratulate the noble Lord on bringing it forward. Had I realised early enough that he was putting down this amendment, I would have signed it. Its ethos is Liberal Democrat party policy and something we would definitely have wanted to support.
As has often been the case in the past, a new product is found to be useful worldwide and relatively cheap to produce. There is a rush to produce this product, with little thought given to the long-term consequences of its use. Such is the case with palm oil. It is a new wonder product that everyone wants; it is relatively cheap to produce and grows easily. However useful palm oil is, and however cheap its production, it must be sustainable. Wholesale deforestation in order to grow palm oil is extremely short-sighted, especially as we all recognise the value of the carbon storage capacity of trees. It is ironic that, at a time in the UK when the Government are setting ambitious targets for tree planting, they are also rushing to sign up to trade deals with countries which are destroying their forests to grow palm oil. I fully support this amendment and hope that the Minister will listen to the noble Lord, Lord Goldsmith, and agree to his amendment.
Lord Davies of Brixton (Lab)
My Lords, I support all the amendments in this group. I happily added my name to Amendment 11, but I will focus on my Amendment 9. The common theme through these amendments is of raising concerns about possible issues arising from a trade agreement. We are all free- traders now, but there is a recognition that free trade should be respectful of the limits that we and other countries set to protect labour standards, the environment, food quality and so on. There is a balance to be achieved and this series of amendments raises issues of concern.
These amendments are all limited, because the Bill is limited. It is not the treaty, but just the administrative arrangements required to implement it, so it could not achieve a lot anyway. We are asking the Government to review these issues. I hope that they are of sufficient importance that they would be studied, in any event. It is possible that we do not need these amendments, as a good Government would review these issues, but they provide us with the opportunity to point out areas of concern.
My Amendment 9 concerns investor-state dispute settlement mechanisms. The investment chapter of the CPTPP contains these arrangements and allows companies to sue Governments over decisions to implement policies that impact their corporate profits, even when these decisions were made in the public interest. We debated this in Committee, and I am sorry to say that I found the Minister’s reply to our concerns less than reassuring. Referring to these arrangements, he said that that they do not
“derogate or hinder our right to regulate in the public interest, including in areas such as the environment and labour standards”.
Referring explicitly to the CPTPP, he also said that it
“preserves states’ rights to regulate proportionately, fairly and in the public interest”.—[Official Report, 14/12/23; col. GC 375.]
That sounds fine.
The International Bar Association has a similar view, stating that,
“while investment treaties limit states’ ability to inflict arbitrary or discriminatory treatment, they do not limit (and, in fact, expressly safeguard) a state’s sovereign right to regulate in the public interest in a fair, reasonable, and non-discriminatory manner”.
The problem is that these phrases, “arbitrary or discriminatory treatment” and a
“fair, reasonable, and non-discriminatory manner”,
are doing a lot of heavy lifting. They are all subject to interpretation. There have been real concerns that, in practice, commercial interests will be elevated above those of the public. There is so much there that needs to be taken on trust. The key point is that this clearly—and, I suggest, inarguably—is an issue that needs to be kept under close review, which my amendment does.
The problem we face is that ISDS arrangements have been used to challenge health provision, labour rights and other important regulations. This is not a theoretical possibility; there have been enough examples in practice to give rise to this concern. I quoted the CBI in Committee and it is worth expressing its views again—that there is
“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”.
These are not fringe concerns but concerns of different interest groups.
In simple terms, the ISDS arrangements make it possible for firms to sue Governments for measures that harm their profits. The existence of this power has a chilling effect on regulations, particularly those designed to combat climate change.
A specific example, of which we need some account, is the attitude to the energy charter treaty, under which many cases have been brought by western companies taking action against Governments to limit their use and expansion of fossil fuels. So problematic has this become that large European countries have signalled their intention to exit from this treaty. The Government themselves have said that they are reviewing their energy charter treaty membership and
“will carefully consider the views of stakeholders”.—[Official Report, Commons, 4/9/23; col. 4WS.]
Given the dawning realisation that these sorts of clauses are an impediment to climate action and to sovereign policy-making in general, it seems wrong for us to sign up to further restrictions through this treaty. I am amazed by the modesty of the demand that this aspect of the CPTPP should be subject to a formal review so that we can see what impact it is having on government corporate relations.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to speak to Amendment 10 in my name, which is in similar terms to the amendment I tabled in Committee and requests
“an assessment of the impact of the implementation of the CPTPP Chapter on government procurement on environmental protection and animal welfare, health and hygiene”.
I am grateful to my noble friend for trying to seek me out. I missed him yesterday and he missed me today. Along with the noble Lord, Lord Alton, and a number of others, we were paying tribute at the memorial to an outstanding parliamentarian, Baroness Boothroyd. I am sorry that I missed my noble friend’s attempt to speak to me, but I am grateful for the opportunity to speak to him in the confines of these deliberations.
What has changed very clearly since Committee stage is that an announcement was made by the Environment Secretary at the Oxford Farming Conference that the Government are committing to consult on new food labelling—plans that will ensure that British produce will, as he put it,
“stand out from the crowd”.
The idea is to allow changes to food labelling entitling consumers to make better decisions at the supermarket in particular, while also highlighting high-quality British produce to the public. I quote from the press release issued by the NFU, which quotes what my right honourable friend Steve Barclay said:
“New food labelling would also make it clearer when imported products do not meet the same UK welfare standards”.
I put it to my noble friend: would it not be better if we did not import food that does not meet the high UK animal welfare and environmental standards that consumers demand and our domestic producers are honoured and delighted to meet? What is the relationship between this new labelling scheme and the Red Tractor scheme, which already demonstrates compliance with all the food requirements by domestic producers?
Is it not a fact, and does my noble friend not agree, that domestic producers meet the highest standards of animal welfare and environmental protection in their production? This means they are meeting a higher standard and it is therefore more expensive to produce. This is exactly what happened in the 1990s with the decision to unilaterally ban sow stalls and tethers in the production of pigmeat while we continued to import pork produced by sow stalls and tethers for an interim period of seven years. This meant the consumer swapped high-end, high-quality, high-animal-welfare-standard UK pig production with lower, cheaper, substandard imports. After seven years, this put our pig producers out of business.
I hope my noble friend will give me his assurance today that after six months—or 12 months in the terms of my Amendment 10—an assessment will be undertaken by his department, jointly with Defra, to ensure that the trade Bill before us this evening does not discriminate against UK domestic production, particularly of meat and dairy. In addition, can he give an assurance that the food labelling provisions that Defra is proposing to consult on, and which I support, will apply not just to supermarket labelling but will somehow translate on to the food menus for food sourced from third countries in our restaurants, bars and cafés in this country? That is the main purport lying behind Amendment 10.
Lord Goldsmith of Richmond Park (Con)
I rise to speak to the proposed new clause “Review: forest risk commodities”, which is in my name and the names of the noble Baroness, Lady Boycott, and the noble Lords, Lord Davies and Lord McNicol. The noble Lord, Lord Davies, has spoken and I thank him for his support. I also appreciated the words of the noble Baroness, Lady Bakewell, when she spoke earlier, and I strongly agree with the case she made for prioritising indigenous people. There is no cheaper or more effective solution, if we are interested in protecting nature, than backing those who have been doing that for generations. The maths and facts speak for themselves—80% of terrestrial biodiversity is in land looked after, and in some cases owned by, indigenous people, so the noble Baroness makes the point very well.
Deforestation is a major environmental crisis for so many reasons. We heard earlier from the noble Baroness that the displacement of people all over the world is causing runaway biodiversity collapse and the loss of a terrifying variety of lifeforms. Once gone, they are never going to come back. Nearly 90% of deforestation is caused by agricultural expansion. The resulting loss of habitat has caused a horrifying decline in everything from tigers and elephants to rhinos, hornbills and orangutans. Orangutans, incidentally, are relevant to this amendment because they tend to live in areas where palm oil is so prevalent; they have lost 80% of their habitat in the last 20 years.
Forest loss goes far beyond even that. The Congo basin, whose forest is disappearing at a rate of around 1 million hectares every single year, produces most of the rainfall for the entire continent of Africa. If those trends are allowed to continue, we are going to see humanitarian crisis on biblical scales. In the Amazon too—we do not fully understand the role of the Amazon in generating rainfall, but we know it generates rainfall and that that rainfall falls in the southern states of the United States, and that without the Amazon there would be huge repercussions across that entire region—it is in everyone’s interest that stopping deforestation remains a top priority.
I have not even mentioned climate change at this point. Deforestation is now the second leading cause of climate change after burning fossil fuels. There is no credible solution to climate change and no credible net-zero plan that does not include nature at its very heart. A plan that does not include nature is not, in real terms, a plan at all.
It is for these reasons I am bringing this amendment to the House today. Noble Lords have previously expressed concern that, once ratified, the CPTPP agreement will remove all tariffs on palm oil irrespective of its environmental credentials. They are right to flag this issue, which has been flagged a number of times, because in pursuing that policy we risk, at the very least, undermining the core of our COP 26 messaging on the importance of forest.
It also contradicts commitments made by the Government under Schedule 17 to the Environment Act to tackle illegal deforestation in our supply chains. Indeed, without the safeguards of the due diligence secondary legislation in place—that safeguard is not there yet and I hope the Minister will be able to provide some reassurance about when that is going to happen—it is simply irresponsible to pursue a policy of this sort.
Around 90% of the world’s palm oil is grown in Malaysia and Indonesia. It is estimated that around 1% of Malaysian palm oil smallholdings are certified by the Roundtable on Sustainable Palm Oil. That 1% makes up around 40% of all the palm oil plantations in Malaysia. The RSPO is probably the most widely recognised certification scheme. It is voluntary, and among other things it requires that palm oil is deforestation- free.
We know what is possible when a Government are serious about this issue. We have actually seen amazing efforts and results in Indonesia. It gets very little credit for the work we have seen over the last few years, but under the leadership of a number of very impressive people, not least Minister Siti Nurbaya, that country has come pretty close—it has not done it yet, but has come pretty close—to breaking the link between palm oil production and environmental destruction. I think it should get more credit for the work it is doing, because it is a model that other commodity-producing countries could learn from.
I acknowledge and welcome, very briefly, the side agreement that the UK and Malaysian Governments have signed. It commits to strengthening efforts to conserve forests and promote sustainable supply chains, in particular around palm oils. In many respects, the statement goes further than the due diligence secondary legislation that I mentioned earlier. But the agreement still relies on the Malaysian sustainable palm oil certification scheme, as opposed to the RSPO, which I mentioned earlier. The details around the Malaysian scheme are unclear and in truth it is significantly less robust than the RSPO—I do not think anyone would argue against that.
That is why it is so vital that work is done to review the impact of that agreement once it is in place. This proposed new clause is very simple, and that is what it seeks to do. It would require a review every two years that would assess the effectiveness of that agreement, alongside the impact of the CPTPP trade deal, on the sustainable production of forest risk commodities more broadly, including palm oil of course, right the way through our supply chains. The review would also look at the impact of the deal on deforestation within CPTPP nations, and the compatibility of the deal with our own due diligence regulations.
I hope that noble Lords agree that it is a reasonable amendment. It offers a practical way of reaffirming the Government’s commitment to making sure that our own supply chains are part of the solution and not the problem, as well as empowering Parliament to hold the Government to account on this issue. The new clause is supported by a number of significant environmental organisations—WWF, Chester Zoo and others—and has support from Peers for the Planet, for which I am very grateful.
Very briefly, as I finish, I will say that in my previous capacity as Minister of State, I went to Chester Zoo and saw its pioneering work on sustainable palm oil—clearing up its own supply chains but then helping businesses in the area do exactly the same. I thank it on the record for its leadership on this issue and for its work more broadly. Its Kinabatangan Orangutan Conservation Project, which has been running for a quarter of a century, involves creating magnificent nature corridors linking up those little habitats, and making it possible for distinct and previously quite cut- off orangutan populations to meet, breed and strengthen their population.
We need to ensure that the environmental safeguards we put in place, such as this UK/Malaysia agreement, are effective. That is the purpose behind this amendment. Of course, a stronger, better and easier policy would be to remove tariffs entirely on commodities from countries that have broken the link between agricultural commodities and deforestation, or conversion of important ecosystems. We know that is possible: Gabon has broken the link between logging and deforestation; Costa Rica has broken the link between agricultural commodities and deforestation, and I mentioned Indonesia earlier.
I was thrilled to see that, in the free trade agreement between the EFTA and Indonesia, there is a commitment that palm and other vegetable oils that have been produced protecting primary forests, peatlands, and related ecosystems will get preferential market access. So it is possible to build these safeguards into the primary agreement but, in their absence, we have to act now by passing something similar, at least, to this amendment. I hope that, when he responds, the Minister will be able to provide some real, meaningful reassurances that the impact of these agreements on deforestation, on our supply chain and on our role as consumers in deforestation, is properly understood and monitored, and that we are indeed part of the solution and not the problem.
Baroness Boycott (CB)
My Lords, I first declare my interests. I will come to some notes about Amendment 11, so ably spoken to just now by the noble Lord, Lord Goldsmith. Right now, I rise to speak to Amendment 12 in the name of the noble Baroness, Lady Willis of Summertown. As the noble Baroness, Lady Bakewell, just said, she is unable to be here. I would also like to say that I support Amendment 6 from the noble Baroness, Lady Bakewell.
Amendment 12 is really very straightforward, and I cannot see any reason why the Government should not let this through. It just says that our border testing regimes must be robust enough so that we are aware of the new types of products that are going to enter the UK as a result of this trade agreement. We know that many countries in the CPTPP have products that contain levels of pesticides that exceed our safety limits, or indeed are actually banned because of their risks to human health, food safety and consumer protection, and are not covered at all by any import tolerances.
As the noble Baroness, Lady Willis, described in Committee, and as the noble Baroness, Lady Bakewell, has just reaffirmed, there are 119 pesticides that we ban that are permitted for agricultural use in one or more of the countries we are aiming to enter into a trade negotiation with. UK pesticide standards are stronger than those of the other countries and there is no expectation, I hope, that we are going to change our high standards. So, a successful trade agreement—which is presumably what the Government are after—will inevitably lead to some increase in agricultural imports to the UK. Indeed, the strength and effectiveness of our border control systems is an issue of relevance to all existing FTAs, not only to new ones.
The Trade and Agriculture Commission flags the
“likely pressure that will be placed on the UK’s border control regime”
as a result of the increase in trade, in combination with the new EU border control model. Reports on the ground, including from the NFU, flag the lack of inspection of products coming into the UK, and the risk of this to our biosecurity. This amendment is simple and pragmatic. It provides an opportunity for the Government to scrutinise the existing system to ensure that it operates with maximum effectiveness.
I turn now to Amendment 11, in the name of the noble Lord, Lord Goldsmith, which is a further iteration of the one we tabled in Committee. Following on from his remarks, the purpose of the amendment is to both highlight our susceptibility to commodities linked to deforestation and to get assurances that the Government’s statutory review will consider this issue.
Since we last discussed it, the arguments have only been strengthened by the Environmental Audit Committee’s report on deforestation. It flagged that, in their first revision to the Environmental Improvement Plan, the Government committed to use their trade agreements and trading relationships
“to support the United Kingdom’s strong environmental and climate commitments”.
Despite this, in the course of the negotiations, we eliminated import tariffs on palm oil, which had been set at rates of up to 12%, from all CPTPP members, including Malaysia. So what is that going to do in terms of keeping sustainable palm oil production alive?
While it is true that we have existing agreements with many of the countries already, we do not with Malaysia and so it is of significance that this agreement will allow Malaysian palm oil—not necessarily sustainable —to enter the market with no tariff. As raised by Chester Zoo in its letter to Peers, around 90% of the world’s oil palm trees are grown on a few islands in Malaysia and Indonesia. Estimates suggest that as little as 1% of Malaysian palm oil is actually certified.
The EAC also noted that:
“While the UK is only the 15th largest contributor”
to tropical deforestation, we actually have a very intensive use. This is to do with our diet, which is so largely made up of ultra-processed food—66%, in fact—that depends on palm oil, when food products are smashed back into their original chemical state and then reconstituted to make the kinds of products that so carelessly litter our shelves. It seems to me that we therefore have a responsibility in this area.
I also want to challenge the idea that we are starting from a high point. We are not. Even if the Schedule 17 regulations were in place, they would apply only to illegal deforestation. That means that if a country decides to legalise deforestation, we have absolutely no recourse to stop those products entering our market. Legal or illegal, the damage is the same, and it should be treated as such. The EU regulations that are coming into force cover both, and I note that the EAC has recommended that legal deforestation be included within ours.
I would appreciate it if, in his winding-up speech, the Minister were able to confirm that the review that the Government will carry out in two years’ time, which he referred to in Committee, will take into account these concerns; and specifically if he can confirm that the joint statement with Malaysia to tackle deforestation and the MSPO—the Malaysian Sustainable Palm Oil Certification Scheme—have been effective. I also want to note my support for other amendments in this group.
Baroness Hayman (CB)
My Lords, I declare my interest as chair of Peers for the Planet and wish to simply record my support for the speeches that have already been made. I think all the amendments have been well argued, and I will not repeat what has already been said. The only exception to that is that I would like to say a few words on Amendment 9 from the noble Lord, Lord Davies of Brixton, on ISDS. I referred to this briefly in Committee.
The investor-state dispute settlement mechanism was brought in with those specific purposes to allow firms to bring arbitral proceedings against Governments of member states in which they had invested for actions which violate their economic rights. It did a good job at that, but I was very struck when the Minister said earlier in today’s debate that we have to look to the future, not the past. What is happening at present under ISDS provisions makes us think that perhaps the need for review is in fact urgent, and that, for the future, we need something better. My concerns are particularly around the effect that the provisions can actually have on the Government’s ability to govern, regulate and take measures of environmental protection. This is a widely held view.
Baroness Hayman (CB)
Indeed. In July 2023, the UN special rapporteur on human rights and the environment, David Boyd, talked of the “catastrophic consequences” of ISDS for climate and environment action and human rights. We should take that seriously. As a country, we do not always have a coherent approach to ISDS provisions. On this treaty, we have agreed to side letters excluding ISDS with Australia and New Zealand, but we have not asked for a similar side letter for other countries and for other exclusions. It is piecemeal, and it is a system that has been useful but now needs to be reviewed, and is not fit for purpose in 2024. In that respect, as the noble Lord, Lord Davies, mentioned, we also have to look urgently at the energy charter treaty. I was slightly encouraged by the Minister’s colleague the noble Lord, Lord Callanan, when I last asked him on this issue when we would withdraw from the energy charter treaty, as other countries have. I asked if he might be able to announce it at COP 28. Sadly, he did not, but any announcement soon on this issue would be welcome.
Lord Curry of Kirkharle (CB)
My Lords, I rise to speak to Amendment 12 tabled by my noble friend Lady Willis. I also very much support Amendment 10 tabled by the noble Baroness, Lady McIntosh of Pickering, and support her comments this evening.
As I mentioned during earlier stages of the Bill, I have been extremely concerned about the potential impact on domestic food production of the various trade deals that the Government have negotiated. Of course, it is vital that we negotiate trade deals that encourage reciprocal trade and benefit the economies of those involved. We absolutely need to do that. We in agriculture need access to global markets to have the opportunity to expand the range of excellent food products produced here in the UK. I fully respect the fact that other partners to this agreement expect access to our markets.
We are not afraid of competition. We have some of the most efficient farmers in the world, but competition must be fair. I am reassured by the Minister, in his opening statement this afternoon, that domestic standards will not change and will not be weakened. I thank him for that confirmation. However, that is not my primary concern. For those not close to the world of farming, let me explain what is currently taking place.
Farmers are about half way through a seven-year transitional period which involves the most radical shake-up of agricultural policy in over 70 years. All direct support is being removed, so that within about three years there will be no direct subsidies. Farmers will have to survive unsubsidised in the marketplace. Any future support will change to incentivise farmers to deliver public goods, mainly environmental outcomes, which is very appropriate in the light of climate change, loss of habits, et cetera. However, for farmers to survive and trade successfully in a very competitive global market, it is essential that competing businesses are able to operate under the same trading rules.
As has been stated by the noble Baroness, Lady Bakewell of Hardington Mandeville, and my noble friend Lady Boycott, within this CPTPP agreement are countries where over 100 chemicals are used that are banned here in the UK. Not only does this represent a serious commercial disadvantage for UK farmers: we have to believe that they are banned for good reason. They were harmful either to ecosystems, or to people. I am sure that exporting partner countries will give us assurances that food commodities and products sent to the UK will conform to our high standards. However, it will be impossible to audit the myriad production systems to verify that this is the case. Therefore, this amendment is necessary to protect ourselves from potentially harmful chemicals and our farmers from unfair competition. It is important not only that our standards are not diluted but that we set international standards that are applied within this important trading partnership. We have an opportunity here to demonstrate global leadership, and we should seize it. The same principle applies to animal welfare standards and to our commitment to deliver higher environmental standards. I hope that the Minister will accept the principles behind these amendments.
Lord McNicol of West Kilbride (Lab)
My Lords, this group is the meat of Report. We have eight amendments in this group, and many have been ably introduced and explained. We have had detailed debates on all these issues in Committee, so there is no need to rehash all the arguments. I have tabled two amendments in this group and added my name to two others. I thank the Minister and his officials for making themselves available for discussions both before Committee and before Report. I will concentrate on the four amendments to which I have put my name. To be clear, like others, I am seeking commitments from the Minister on the quality, detail and depth of the impact assessment that the Government have committed to. We will listen to his response. The noble Lord, Lord Goldsmith of Richmond Park, said he was seeking meaningful reassurances.
Impact assessments are a good thing. Understanding the effects of any new settlement, both the positive and the negative, is a sensible way of learning the lessons, especially as CPTPP, although small in the scale of trade, is varied in terms of the countries involved. Impact assessments on ISDS, animal welfare, pesticides, commodities, workers’ rights, forestry and public services are therefore vital tools in understanding the successes and failures, the winners and losers, of this deal. If the Minister truly believes in the CPTPP and is confident that its impact will be wholly positive, surely he will have no problem with this undertaking.
I turn to the amendments. Amendment 13 deals with labour standards. The basis for this amendment is very straightforward. Unions both here and abroad have deep concerns about the inadequacies of the labour chapters and the fact that the agreement would consider an infringement of labour rights actionable only if it is proved to have a deleterious effect on trade. The fact that many of the countries we would be joining do not comply with even the most basic ILO standards compounds this structural problem. Indeed, with regard to the eight ILO conventions, Brunei has ratified only two and Malaysia and Singapore only five each. Five of the 11 CPTPP nations have not ratified the convention on the freedom of association. In Mexico, for example, companies regularly engage in union busting and in Vietnam, union leadership is often controlled by senior management. It is important to note that no CPTPP Government have ever challenged another over labour rights violations. We are concerned that not only does lowering the barriers to trade with these countries encourage the continued abuse of workers globally but it could undermine the protections we have here for the sake of competitiveness.
The other reason for this amendment is so that we can assess the potential negative effects on UK businesses. We have heard this from a number of noble Lords. None of us wants to see the undercutting of UK manufacturers and producers by forced labour or breaches of labour standards. We are all aware of the US pausing imports of goods where forced labour was used.
Amendment 14 deals with the impact of the procurement chapter on UK public services. Many have raised the issue that the negative list approach to service listing in the CPTPP could expose the NHS to further privatisation. The ratchet clause as well as the ISDS provisions could preclude the Government taking services back under public control if it affected a private business’s profits. The Government have argued that the NHS will never be on the table, but it is hard to see how that can be true if they have made no effort to take it off the table. This amendment calls for an impact assessment to monitor progress in this area.
Amendment 9 deals with the ISDS—investor-state dispute settlement—provisions in the agreement. My noble friend Lord Davies of Brixton explained this in detail. Many other noble Lords have rightly highlighted this issue in particular. Given that the Government, by implication, agree that the ISDS provisions are outdated and dangerous by signing side-letters with Australia and New Zealand to preclude their use, it seems strange that the Secretary of State for Business and Trade would reject calls to do a similar deal with Canada, a particularly litigious member of the CPTPP, as many US businesses can testify.
It is vital, therefore, that we monitor the effect that ISDS has on our standards, and that is why an impact assessment is so important. My noble friend Lord Davies called for a close review, and he is correct. He also noted the chilling effects on government decision-making, which relates to the point made by the noble Baroness, Lady Hayman, about Governments making decisions because they are concerned about their sovereign policy-making being affected by other businesses.
Lord Johnson of Lainston (Con)
My Lords, I thank all noble Lords who have participated in this debate, particularly the noble Lord, Lord McNicol, for his engagement, his very good summary of the various amendments and the points that he raised. If the House will indulge me, I will go through the different points quite carefully because there are so many elements. I beg forgiveness if I do not cover every point. My noble friend Lady McIntosh laid down a very great number of requests, which I am happy to answer outside this debate, with the broad provisions to be raised where I can.
Let me stress again how seriously this Government take parliamentary scrutiny of our FTA agenda. With this in mind, a full impact assessment for the UK’s accession to the CPTPP was indeed published at signature in July 2023, which is important to note, alongside the accession protocol text and a draft Explanatory Memorandum. This included assessments of potential economic impact on UK GDP and environmental impacts. This is important. I will refer back to the Section 42 report where relevant to reinforce and, hopefully, reassure Members of this House of the benign impact of CPTPP membership on our environment and border controls.
I want to pick up on a point made by my noble friend Lady McIntosh of Pickering about supporting our farmers and agricultural producers in this country. It is absolutely at the core of this Government’s policy to do that. The reason I am excited about the CPTPP is because of what we will be able to achieve when it comes to promoting our dairy industry: the additional quota access that we will have, for example, for cheese into Canada; the opportunities we will have to sell chocolate into Malaysia, reducing tariffs significantly; the opportunity to sell Scotch whisky into many of the CPTPP countries with lower tariffs.
We can combine these trade agreements with the extraordinarily strong work done by my noble friend Lord Offord of Garvel, who is in his usual place today, with regard to supporting exporters, and with the muscle of the Department for Business and Trade, the work of the agricultural attachés, and all that we are doing to promote exports around the world. This is why we are here. This is a positive and powerful expression of the extraordinary economic reach of the United Kingdom, particularly in its agricultural sector. I understand that there are concerns, and I will cover them, but let us understand why we are here in the first place: to promote our agriculture—an extraordinarily powerful sector in this country—to expand its interests abroad and create more wealth for farmers in the United Kingdom.
I want to touch on the monitoring report, which we will publish after two years, as well as a comprehensive evaluation of the agreement after five years. This will include an assessment as to the environmental impacts. An inclusive and participatory process will be at the heart of the evaluation, providing structured opportunities for a wide range of stakeholders to share their views and provide evidence; that is, basically, a proper assessment and review.
I do not think it would be helpful to be specific on every single checkbox. I am keen to make any review useful. But I would be surprised—that is the language I wish to use—if the evaluation and monitoring reports did not cover information on: trade flows under CPTPP; utilisation of the agreement; ISDS cases, which will be important to many speakers today; an overview of the work of the committees under the agreement to facilitate co-operation and implementation—that is particularly relevant when it comes to labour standards, environmental standards, reduction of the risk of deforestation and many other areas. There will be information on the environment covering many of the issues discussed today and on the impact of the agreement on all parts of the United Kingdom.
This is important. I have been asked to make commitments at the Dispatch Box, and I am very comfortable doing so. It is vital to me as a proponent of free trade that we promote the benefits of this extraordinarily powerful multilateral agreement; I hope that will be shown in the impact assessments and in the reviews after two years and five years. My principal point about the amendments that have been put forward on this Bill is that they are unnecessary because we are doing this anyway.
I turn to deforestation and the issue of palm oil. I am very grateful to my noble friend Lord Goldsmith for his amendment and for the passion that he brings to this vital subject. I believe that he is to be celebrated as someone who has truly brought to bear some significant changes to the legislation of this country following on from the Environment Act and the secondary legislation around the obligations on businesses relating to deforestation, which we will be bringing in; I am reassured by my officials that we are aiming for spring of this year. I want to applaud the work of my noble friend and say how important it is, and how vital for the future of this country and the world, that trade does not lead to a degradation of our environment and natural habitats.
My son came to watch some of this debate. He has now left; I think the third hour was the final straw for an 11 year-old. We are doing this in order that our children will have a world to inherit, as well as a strong economy in the United Kingdom. At no point have we ever suggested that we should separate our obligations to the future of this planet in relation to the importance of free trade. Those who do that are mistaken. In my view, they are inextricably linked. The positives of free trade are so significant and the opportunity for dialogue allows us to solve these problems.
I want to touch on the point about palm oil, which is very powerful. The Trade and Agriculture Commission, for whose feedback I am extremely grateful, has noted that the Malaysian sustainable palm oil certification had become a mandatory condition since January 2020 for the palm oil industry, as has been raised. The new 2022 version prohibits palm oil cultivation on land cleared after December 2019. This is very important. Provided that this new standard is fully implemented by January 2025 and compliance with it is effectively enforced, there is a
“low risk that Malaysian palm oil exported to the UK would come from land that was deforested after December 2019”.
It goes on to say:
“Moreover, the UK may be able to enforce Malaysia’s implementation of the 2022 MPSO standard if failure to do so has an effect on bilateral trade”.
That is extremely relevant.
My noble friend Lord Goldsmith was right to point out that we are signatories to the Glasgow Leaders’ Declaration on Forests and Land Use, which commits both parties—clearly, we are looking at Malaysia in this instance—to halt and, indeed, reverse forest losses by 2030. This is the whole point about the CPTPP. It allows us to align our values with our partner countries, to raise their standards, to enable and facilitate, through the power of free trade and the wealth that it creates, the opportunity to improve their environment. I am grateful to my noble friend for pressing us on these points and I hope that I have answered his questions to his satisfaction.
Lord Goldsmith of Richmond Park (Con)
I rise to intervene, but I have been caught by the House with a nut in my mouth, which is terrible timing—if I could have thought of some medical excuse, I would have done so. I thank the Minister very much for his passionate call for harmonisation of trade and nature. He is right; there should be no separation between the two. I was pleased by his commitment that the diligence legislation will come in the spring. I know that it is not entirely in his hands, but I am pleased if that is the assurance that he has had from officials. It is important that it should come through. Without that legislation, the risk remains. It will be like closing the last hole in the bucket. I am grateful for his reassurances. I encourage him to continue to push the other departments responsible, but I thank him very much for his words.
Lord Johnson of Lainston (Con)
I thank my noble friend for his comments.
I turn to Amendment 12 on pesticides, which have been raised by the noble Lord, Lord McNicol, and the noble Baroness, Lady Boycott—and I had conversations with the noble Baroness, Lady Willis, as well earlier this week. It is very important for noble Lords on all sides of the House to know about the work that I have personally been putting in to ensure that we have the right and appropriate border checks and security, and that the agreements allow us to ensure that we have control over our borders. I refer to my opening comments a few hours back that this free trade agreement—on implementation day plus one, or accession day, or on becoming a party to the CPTPP—makes no difference at all with regard to our import controls and our ability to control our own destiny. This is very relevant. It is essential, again, to return to the Trade and Agriculture Commission’s report, which says that the
“CPTPP has no effect on the UK’s existing WTO rights to regulate the import of products produced using pesticides that are harmful to UK animals, plants, or the environment”.
It is crucial to remember that. We would never derogate our responsibilities to our consumers. I am very grateful for the points raised by noble Lords today to ensure that they can feel a high degree of comfort that this is simply not the case, and that we have not done so by signing up to this agreement.
I want to touch on some of the comments made about the practicalities of administering our border controls. I took the liberty ahead of this debate of visiting our Thames Gateway port system and was shown the operations there in relation to risk-based assessments. I think that is the right way to manage our borders. It would be impossible to check every single thing coming through. It is very important to reinforce the point that the CPTPP does not grant equivalence on exporting parties. We are able—indeed, it is considered that we have increased our ability—to audit exporting parties’ mechanisms for their own domestic testing to ensure that there is robustness around the testing processes before food is exported to the United Kingdom. We believe that, fundamentally, compliance is high. Our ongoing monitoring programme provides assurance that food on the UK market complies with our rules and is safe to eat.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank all noble Lords who have taken part in this debate, which has allowed us to look at the impact of a number of issues around the CPTPP. I thank everybody for doing that.
I am particularly concerned about the announcement by the Secretary of State at the Oxford Farming Conference about labelling. I find it astounding that a label might say that the goods have not been produced to the standards that are pertinent here. I agree that it would be much better if those goods were not imported in the first place rather than relabelled when they got here.
I thank the noble Lord, Lord Goldsmith, for his support. It is really important that we deal with the issue of making sure that iconic animals do not lose their habitat. An 80% loss of habitat means that we will no longer have those iconic species.
The Minister is very excited about the effects of the Bill and the opportunities it will produce for farmers. I am afraid I am not quite as enthusiastic as he is. I hope it will be exactly as he says, but I am afraid that, as far as I am concerned, the jury is out. I will have to wait to see what happens.
On pesticides, I cannot see that testing by taking at face value a form that has been filled in, and not doing any spot testing of actual products, will ensure that toxins from the other countries we will be trading with will not find their way here. The importation of goods with pesticides in will damage our farmers. I thank the noble Baroness, Lady McIntosh of Pickering, for giving us the powerful example of what happened to pig farmers when pigmeat produced in substandard conditions was imported into this country. It undercut our pig farmers, who were absolutely wiped out.
Having said all that, I think I will have to wait to see what happens. I beg leave to withdraw the amendment.
Lord Foster of Bath
“Qualifying countries(1) Section 206 of the Copyright, Designs and Patents Act 1988 (qualifying countries, individuals and persons) is amended as follows.(2) In subsection (1)(bb) for “Rome Convention” substitute “Comprehensive and Progressive Agreement for Trans-Pacific Partnership”.”Member’s explanatory statement
This amendment would remove the Rome convention (and therefore its parties) from the definition of a “qualifying country” and substitute it with the CPTPP (and therefore its parties).
Lord Foster of Bath (LD)
My Lords, I congratulate the Minister on his tour de force in responding to the large number of amendments in the last group. I hope that the mere two amendments in this group will make life a little easier for him.
I have tabled these amendments merely to enable further debate on an issue that, frankly, was not satisfactorily resolved in Committee. The Minister is well aware that the copyright provisions in the Bill, not least in relation to performers’ rights, have caused significant confusion and concern among rights holders. In Committee the Minister sought to clarify the position. I fear that some confusion remains, but I am enormously grateful to him and his officials for the meeting we had subsequently and for the letter that he sent to me afterwards. I say to him that I have noted that the IPO consultation on the matters we are debating today started yesterday.
The upshot, for those not familiar with what this is all about, is simple: the Intellectual Property Office and the Minister believe that changes to our copyright law contained in the Bill are necessary for our accession to the CPTPP while I, rights holders’ representatives and some legal experts do not believe that that is the case. For instance, the CPTPP requires member countries to ratify the WIPO Performances and Phonograms Treaty, the WPPT. The UK did that over 20 years ago and there have been no concerns about it in subsequent years; no one has suggested that in the way we have implemented it we have got it wrong. Yet the Government now belatedly seem to suggest that somehow or other our legislation does not meet WPPT standards regarding the protection granted to performers and phonogram producers, so the law has to be changed. I note that the IPO’s consultation on changes in this area specifically says that existing arrangements in some cases are not consistent with treaties on copyright, which seems to suggest that for a long period we have somehow not been doing what we should have been under treaties that we signed some years ago.
The Earl of Clancarty (CB)
My Lords, I rise briefly in support of Amendments 7 and 8 from the noble Lord, Lord Foster. I will say only one thing on the concerns about performance rights, because the noble Lord, Lord Foster, summarised the problem very comprehensively. Before I do, I wish to thank the Minister for his extremely prompt reply by letter to our concerns on the artist’s resale right in relation to the CPTPP that we discussed in Committee and for agreeing so quickly to set up a meeting on this, which I believe will take place on Monday. I look forward very much to that.
The single thing I will say about performance rights in relation to this Bill is to iterate a concern that Music Week, in response to the IPO consultation, raised yesterday. It highlights the importance and principle of reciprocity that the noble Lord, Lord Foster, mentioned. My understanding is that, until now, performance rights have been based on the principle of equitable remuneration, but this Bill potentially puts that in danger. There is a fundamental question—as the noble Lord, Lord Foster, said—to be asked about why the music and broadcasting industries are being put through the wringer on this when they are broadly happy with the status quo. If—and it is an “if”, because there are a number of options—the Government go down a particular route whereby, because of a reduction in the money going to US labels, US music is effectively free to play in the UK but UK music, particularly new UK music, is not, the concern is that, to quote Music Week,
“domestic acts might be squeezed out by UK broadcasters looking to save money”.
I hope the Minister will agree that that kind of asymmetric, or inequitable, scenario is one that needs to be avoided—although I am sure that that point and more will be made by interested parties in response to the consultation, which I hope that the Government will look at very closely.
Lord Leong (Lab)
My Lords, I am speaking to Amendments 7 and 8, and I thank all noble Lords for their contributions.
Intellectual property, particularly copyright, plays a pivotal role in the global trade in creative content, with the UK music industry serving as a prime example of its significance. It is imperative to acknowledge the substantial impact of copyright on fostering innovation and ensuring the efficient operation of markets. Additionally, it is crucial to recognise existing obligations under international copyright treaties and ensure their full and correct implementation by the signatories of the CPTPP. While the fundamental rights encompassing reproduction, broadcasting, communication to the public and distribution are addressed within CPTPP, it is disheartening to note that member states retain the option to opt out of certain obligations. Furthermore, the non-recognition of copyright protection for the utilisation of recorded music in broadcasting and public performance remains a regrettable challenge. To comply with obligations in the CPTPP, as mentioned earlier by the noble Lord, Lord Foster, changes need to be made to UK legislation with regard to rights in performance. We share some of the concerns in the noble Lord’s contribution earlier, and we would welcome an impact assessment to help us understand some of these non-compliance cases.
Will the Minister respond to the following questions, as mentioned earlier by the noble Lord, Lord Foster? Why is the extension of rights in sound recordings and performance to foreign nationals not covered under this consultation? At the same time, can the Minister share with the House when the results of this consultation will be published? Will there be a statement on collective management organisations, given their importance for the income of composers, performers and rights holders? Can the Minister also confirm that UK musicians are able to tour throughout CPTPP member states without any barriers and checks?
Lord Johnson of Lainston (Con)
I am extremely grateful to the noble Lord, Lord Foster, for bringing this amendment, for the discussions and dialogue we have had, for the correspondence I have enjoyed with the noble Earl, Lord Clancarty, and for the excellent summation by the noble Lord, Lord Leong—I was about to say “my noble friend” because he is a good friend—who asked some key questions. I am afraid I do not have the answer to the final question that the noble Lord, Lord Leong, asked about the touring rights of artists. I will write to him on that; it is a very good point, and we very much hope that clearly the additional facilities that we have, in terms of temporary business entry for CPTPP countries, may include this. I hope it will and I will confirm this.
Some good points have been raised. In response, first, I will say that the desire to treat performers equitably is the right thing to do. Currently, there are a number of performers who are excluded from receiving the 50% mandatory royalty payment, simply because they come from another country or their work has not been registered in the appropriate fashion. The consultation, which started yesterday and will report on 11 March, is not specifically a consultation on the CPTPP, because we wanted it to be a far wider consultation around the principles of broadcast rights—but clearly it will reflect on the discussion we are having now.
Lord Foster of Bath (LD)
My Lords, I am grateful to all noble Lords who took part in the debate, and of course to the Minister for his response, although I confess that I was somewhat disappointed with it. I asked a series of questions. Why were these issues not covered when we did trade deals with Australia and Japan? I got no answer to that. I asked why Australia did not change its ways of dealing with this matter when it joined CPTPP, and which countries within CPTPP are operating in the way that the Government now want the UK to. I further asked a simple question about why we were told that the consultation—which the Minister has now said is so important on this issue—specifically says that the decisions we are taking within the Bill are not part of it. He hinted that there is a possibility of further consideration of this, and I look forward to finding a way of doing that. I say to all noble Lords that my fear is that the decisions will now be made by the Government long after your Lordships’ House has had any opportunity to have further involvement in making decisions on this issue. Nevertheless, I beg leave to withdraw.
Baroness Lawlor
“Review: application in Northern IrelandWithin three years of the day on which this Act is passed and every three years thereafter the Secretary of State must lay before Parliament a review of the application of section 4 (designations of origin and geographical indications) 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 (Con)
My Lords, I am grateful to my noble friend the Minister for discussing my Amendments 15 and 16 with me. He is taking our discussion back to the department for consultation, and his letter will follow this week. For reasons of fairness and transparency, and in the interests of having better laws, I hope he will consider the question further.
This is an enabling Bill: it is to enable the UK to be compliant with the CPTPP, for which it signed the protocol of accession last July, in order to implement the arrangements for government procurement, in Clause 3, and those for technical barriers to trade, in Clause 2. These include conformity assessment bodies and, in Clause 4, intellectual property, including the designation of origin and geographical indications, as well as performers’ rights.
Although the whole Bill extends to England, Scotland, Wales and Northern Ireland—that is stated in it—it does not apply to Northern Ireland in respect of Clauses 2 and 4, on conformity assessment and geographical indications. That is not stated in the Bill, but it is noted in the Department for Business and Trade’s Explanatory Notes, published with the Bill on 8 November. They explain that it will be under the EU, given the Windsor Framework. Both my Amendments 15 and 16 deal with the consequences of this, and I will speak to them now. I am very grateful to my noble friend Lord Jackson of Peterborough for supporting and signing these amendments.
My Amendment 16 to Clause 6, on extent, seeks to make this clear in the Bill by adding that it
“extends to but does not apply in Northern Ireland”.
However, looking at it again, I think the amendment should also stipulate this in respect of Clauses 2 and 4. That would make the position under the Bill transparent, as in the Explanatory Notes of the Department for Business and Trade.
From my noble friend’s reply and letter on this point, I understand that when his officials—to whom I am grateful—looked into the drafting of Clause 6 with the Office of the Parliamentary Counsel, the advice was that the text reflected recommended drafting practice for amending retained EU law where it extends to the UK, even if its application is to GB—the convention being that the general application
“should not usually be included”.
I will pick up on the word “usually”. We are talking here about a very unusual occurrence. The law is being made by another jurisdiction for part of the UK’s own jurisdiction, to which the Bill extends but does not apply. This is not a matter of powers delegated to different Parliaments of the UK, so perhaps my noble friend the Minister will think again about including this exception in the Bill. It should be fair to the people who may see it as extending to them but cannot see where the law says it does not apply to them.
My Amendment 15, proposing a new clause after Clause 5, would require a review and assessment to be made of the impact on Northern Ireland of its being subject to different geographical indications and TBT provisions from those in England, Wales and Scotland. To do this, it would be necessary to assess the impact of EU legislation on GIs and conformity assessments of goods so affected.
I know that as matters stand there are very few PGIs in Northern Ireland—Comber new potatoes, Armagh Bramley apples, Lough Neagh eels—and one protected designation of origin: Lough Neagh pollan. However, there may be more in future. I will not revisit the argument I have made to the Minister in other debates, but we are looking at a different sort of EU law applying to businesses in Northern Ireland for these two clauses—the code-based law of the EU instead of the common-law approach, which is more business-friendly. I will not go through that here, but it is fair that the different systems should be reviewed in comparison with the UK system.
This is all the more important given the fluid nature of the Windsor Framework and the aims of the Government, which may lead to further easing of economic and trade restrictions under EU law. Indeed, the Prime Minister mentioned in his speech of 13 December that he
“stands ready to legislate to protect Northern Ireland’s integral place in the UK and the UK internal market”.
While I am grateful for the Minister’s explanation, I am not convinced that leaving this matter to other arrangements for review under other laws is fair. Given the fluid nature of the Windsor Framework and given that the Bill extends to Northern Ireland even if it does not apply to it, a special review is needed. I beg to move.
Baroness Hoey (Non-Afl)
My Lords, I congratulate the noble Baroness, Lady Lawlor, and the noble Lord, Lord Jackson, on these two amendments.
It is important that we in this House always try to be as open and transparent as possible about what is in the law but, frankly, this Bill is very confusing. It mentions none of the ways in which Northern Ireland is excluded and only on page 15 of the Explanatory Notes is there a long list of the different parts of the United Kingdom and the provision for England, Wales, Scotland and Northern Ireland. Clause 2 applies to England, Wales and Scotland, and extends to Northern Ireland—most people reading this would think, “Great, it is obviously extended to Northern Ireland as part of the United Kingdom”—but does not apply there. Again, Clause 4 applies to Scotland, England and Wales and extends to Northern Ireland, but does not apply there.
The way the noble Baroness talked about the word “usual” and how unusual this is was so apt. It goes to the heart of everything in the protocol and the Windsor Framework that we have been talking about for a long time. The Government of the United Kingdom have not been open, honest or straightforward with the people of Northern Ireland about what the Windsor Framework means. Every week or month we find something new and different from which Northern Ireland is being left out. Yesterday we found it was left out of live animal exports, so poor animals in Northern Ireland can be sent over the border into the Republic and down to the south of Ireland, on to a boat and off on a very long journey to France or Morocco. We have the current debate about the Rwanda Bill; it will probably not apply to Northern Ireland in the same way.
We cannot apply this Bill to Northern Ireland because we have delegated powers to the European Union. A foreign jurisdiction and a foreign court are running parts of our country. This House should be ashamed of what is happening. I very much support the amendment to bring this out into the open so that people understand that what the Government say the Windsor Framework and protocol are doing is not actually happening.
Lord Dodds of Duncairn (DUP)
My Lords, I too thank the noble Baroness, Lady Lawlor, and congratulate her on bringing these matters to the attention of your Lordships’ House and highlighting once again the importance of transparency and lucidity in these issues and their effects on Northern Ireland.
Despite the Prime Minister’s attempts to claim the Windsor Framework as a success for his leadership and the Tory Government, it has not accomplished its main purpose: to restore devolution in Northern Ireland. One reason for that has been not just the lack of substantive change in the Windsor Framework compared with the Northern Ireland protocol—it purports to replace it but in fact there was just a decision of the joint council to rename the Northern Ireland protocol as the Windsor Framework in British law—but the overselling, spin and hyperbole, particularly by the Prime Minister but also others, when it was published. It was sold as a wonderful transformation that would erase the Irish Sea border and so on, but has done nothing of the sort and could never do so.
That lack of transparency, honesty and frankness with people about what the Government could and could not do and what they were putting forward is at the heart of the problem. If their new proposals are published, we will no doubt hear more of this in the coming days and weeks, but this Bill lacks transparency for the reasons set out by the noble Baroness in proposing her amendment.
Paragraph 53 of the Explanatory Notes includes an amazing new concept in legislation passed by this UK Parliament: laws that extend to parts of the United Kingdom but do not apply there. This is bizarre. It is not highlighted or made explicit in the Bill, as the noble Baroness has said, but hidden in the Explanatory Notes. In over 300 areas of law governing the economy of Northern Ireland, we are governed by laws made by a foreign polity—in its interests, not ours—which are not susceptible to amendment and in the development of which we have no role. It is an incredible concept, but it is not new. It was first flagged up in the main body of the withdrawal agreement and the original protocol when the Government told us that Northern Ireland would be a member of the UK customs union but that the EU customs code would actually apply.
This is a concept that is not only bizarre but inherently undemocratic and unsustainable. It a concept that is at the root of the lack of devolution in Northern Ireland. Despite efforts to browbeat, bully and otherwise people in Northern Ireland, UK citizens living there simply want the right to be able to make laws and send representatives either to Stormont or to this place to make the laws that govern them. That is an entirely reasonable position.
The Government really should now learn the lesson that they should be open and transparent about what they have created and what they are about in relation to legislation which is restricted for Northern Ireland. They cannot legislate any more; they have given away the power to a foreign body. Who would ever have thought that we would have reached such a position in this mother of Parliaments following Brexit, which was about bringing back control?
I would like to hear the Minister give a commitment that, in future, these amendments will be taken on board by the Government, and that, for as long as this iniquitous position pertains, legislation being brought forward falling within the remit of Windsor Framework provisions will be explicit and say so in such legislation.
Lord Johnson of Lainston (Con)
I am extremely grateful to my noble friends Lady Lawlor and Lord Jackson for Amendments 15 and 16, and to my noble friend Lady Lawlor for the very useful conversations we have had on this matter. Of course, the input from the noble Baroness, Lady Hoey, and the noble Lord, Lord Dodds, is always extremely welcome.
I am very sensitive to this matter. To be honest, I see my role as bringing a powerful trade deal to the whole of the United Kingdom. I am very aware of the points being raised by noble Lords in this House, but, I am afraid, at this stage of the proceedings I must concentrate on the specifics.
To answer the amendments specifically, I assure my noble friends that we will keep this under review once an Act and stakeholders in Northern Ireland will be an important part of that. Regarding the application of EU law in Northern Ireland, I remain of the view that the people of Northern Ireland are best placed to scrutinise the legislation applicable in Northern Ireland once the Northern Ireland Executive is restored. The Windsor Framework will provide them access to the Stormont brake, as noble Lords will well know. This will enable them to block specific laws impacting Northern Ireland. Furthermore, there will be regular opportunities for the people of Northern Ireland to have a say, via the consent vote. These are all points that have been well raised.
The CPTPP takes account of the Windsor Framework, and it is specifically noted that this is the case. Amendment 16 is superfluous, because under the Windsor Framework the EU’s GI schemes continue to apply to Northern Ireland. Our accession to CPTPP does not alter this. The treaty, accession and becoming a party to CPTPP do not change any of the discussions that noble Lords have had previously about Northern Ireland.
Additionally, the text reflects the recommended drafting practice in Bills for amending an assimilated EU regulation where the extent is to the UK, even if application is only to Great Britain. I have worked with my officials to see whether or not it is appropriate to include the phrase, and the reality is that it is not considered appropriate. It is felt that it would cause complications and confusion in the drafting of the Bill.
I hope noble Lords will be assured that I have spent a great deal of time discussing these points internally. I am very comfortable, as Investment Minister—as I am sure my noble friend Lord Offord of Garvel will be in his role as Exports Minister—to continue the work that we have done to promote Northern Ireland, following on from the success of the well-supported Northern Ireland Investment Summit and the work my colleague is doing to ensure that we have a strong export market for first-class Northern Irish produce. This will benefit from our trading relationships through CPTPP.
I look upon this Bill as an enormous positive for trade in Northern Ireland. We will do everything we can at the Department for Business and Trade to make sure that traders, businesspeople, farmers and citizens of Northern Ireland can get the most benefit from it. I recommend that the technical amendments that my noble friend Lady Lawlor seeks to place in the Bill are not pressed, because I do not think they will help in the promotion of CPTPP or in the clarity of the Bill. I am very grateful for this debate at this stage of Report.
Baroness Lawlor (Con)
I am very grateful to my noble friend the Minister for his constructive approach to our discussions. Though I confess to being a bit disappointed by some of things I have heard, I am heartened by the support of your Lordships and the contribution to the debate of noble Lords today.
It is very important that we should be transparent in our laws. I welcome the CPTPP—I think it is a wonderful treaty. I would like the fact that we are moving to our own laws on business and the economy to mean that this position applies to Northern Ireland, as part of our jurisdiction and as part of the UK’s entire economic area. However, I understand that that is not the purpose of this Bill. I understand what the Minister has been advised of on the conventions. I am not happy with the conventions but I hope that we can continue to work to do what we can to make sure that Bills in this House are more transparent. On that basis, I beg leave to withdraw the amendment.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]
Monday 29th January 2024
(10 months, 3 weeks ago)
Commons ChamberRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-R-I Marshalled list for Report - (12 Jan 2024)
The Secretary of State for Business and Trade (Kemi Badenoch)
I beg to move, That the Bill be now read a Second time.
This Government are proud to champion free trade at every opportunity. We recognise the power and potential of free and fair trade to ease the cost of living, lower prices and extend consumer choice, all of which drives growth across all four nations of our United Kingdom. As exemplified by the free trade agreements that we recently brought into force with Australia and New Zealand, it is UK businesses and UK consumers who benefit when burdensome red tape is cut, greater market access is secured, and trade flows more freely. The UK’s accession to the comprehensive and progressive agreement for trans-Pacific partnership will help us to realise these benefits with 11 countries spanning the Americas and Asia.
As Members will know, this partnership covers a vast area of the globe—500 million people—which already accounts for well over £100 billion-worth in UK trade. Our accession will boost this flow of goods and services even further, leaving more than 99% of UK products eligible for zero tariffs. This matters, because we sell more to CPTPP countries than we do to France and Italy combined. As we join, the partnership will have a combined GDP of roughly £12 trillion in 2022 figures, equivalent to nearly 15% of the world’s total. It will also provide a gateway to the wider Indo-Pacific region, which is set to account for the majority of global economic growth by 2050.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Does my right hon. Friend agree that our leaving the European Union has made it possible to secure these deeper economic and diplomatic ties with some of the fastest growing economies in the world, and that it is only because of the decisions made by this Government that we are now getting on with that job?
Kemi Badenoch
My right hon. Friend is correct. We would not have been able to sign this agreement had we not left the European Union, but we are now able to enjoy the benefits of this free trade agreement as well as the one that we have with the European Union.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
Many of the figures that are sometimes cited about the future size and scope of the Indo-Pacific market include the size and growth of China. Has the Secretary of State reflected further on the evidence that she gave to the Select Committee last week, and can she tell the House whether, if China decides to try to join the CPTPP and meets the technical standards, the UK will block that or welcome it?
Kemi Badenoch
The right hon. Gentleman knows what I said to the Committee. It is important to stress the principle that these are not decisions that the UK makes in isolation, but he will hear more about the arguments relating to accession later in my speech.
One of the major benefits of our accession is the fact that for the first time we will have a trade deal with Malaysia and Brunei—economies worth over £340 billion in GDP. What does that mean for British business? It means, for example, that tariffs on British-made cars exported to Malaysia will be cut from 30% to zero, and that our whisky exporters will see tariffs cut from 80% to zero, a move that has been widely welcomed by members of the Scotch Whisky Association.
Mark Pawsey (Rugby) (Con)
The Secretary of State has spoken about the size of this deal, and she has mentioned the major players in our markets, the automotive and whisky industries, which are of course very big exporters. Will she say a little about the opportunities that may exist for small and medium-sized enterprises, and the work that is being done to open up those opportunities to them?
Kemi Badenoch
There will be a multiplicity of benefits for small businesses—for instance, the tariffs to which I have referred—but the agreement also contains a chapter that was specifically intended to help SMEs to take advantage of it.
Stella Creasy (Walthamstow) (Lab/Co-op)
The Secretary of State mentioned car exports to Malaysia. That, of course, will not make up for the millions of pounds that we now risk losing because of the suspension of the deal with Canada for the automotive industry. The Bill will do nothing to tackle that, because it is based on the accumulation of EU content that we need. Will the Secretary of State tell us what on earth she will do to fight for British car makers, given that we shall now have the worst of all worlds, and we are not even part of a “Canada-style deal” with Canada?
Kemi Badenoch
First, Canada is part of the CPTPP. Secondly, the rules of origin, to which the hon. Lady was referring, have still not been fully decided; that will come in March. We are working with our counterparts in Canada. I think the hon. Lady was confusing the discussions on rules of origin with discussions on cheese, which is an entirely different issue.
UK companies will enjoy greater market access in some of the nine countries with which we already have bilateral agreements. Let us take Mexico. Under our current bilateral agreement, chocolate producers must pay a tariff of about 25%, but on accession that will drop to zero. We also said at the outset of our negotiations that we would like our businesses to benefit from the key trade quotas that this agreement offers. I am pleased to tell the House that we have secured access to those quotas as part of our negotiations. That means, among other things, that we have secured better access for UK dairy producers selling to Canada, Japan and Mexico, and it probably explains why Minette Batters, the president of the National Farmers Union, has said that the agreement could provide
“good opportunities to get more fantastic British food on plates overseas.”
I am sure that all Members here today would warmly welcome such an outcome.
Dr Neil Hudson (Penrith and The Border) (Con)
I commend the Secretary of State and the Government for the stance that they have taken with our friends and allies in Canada, namely that the UK will not permit the import of hormone-treated beef. It is important that we can be a beacon to the rest of the world in that regard. Can the Secretary of State reaffirm to the House and the country that we will stand firm in continuing to prohibit the import of not only hormone-treated beef, but ractopamine-treated pork and chlorine-washed poultry? It is vital that we uphold animal health and welfare standards, as well as helping to protect public health.
Kemi Badenoch
I am happy to confirm that that is the case. We are now in a position to make our own decisions on what we do with trade agreements. We have said that we will never compromise on animal welfare or environmental standards, and we continue to regulate. The difference between this deal and the kind of deal that we had previously with the EU is that we did not then have complete freedom to regulate.
Another notable benefit concerns rules of origin. Joining this partnership will mean that content from any CPTPP country can be counted as qualifying when goods are exported within the trading bloc, and that has the potential to benefit our innovative British-based manufacturers, including our car industry. In the automotive sector we have an exceptionally competitive global market, especially as we make the transition to electric vehicles. Critical minerals are needed for their production, and those are inevitably difficult to source in a global supply chain. It is therefore essential to the success of our industry that more countries recognise where a component is made and accept it as part of one supply chain.
For example, say one of our big automotive manufacturers in the west midlands ships a part to Mexico for additional assembly, and that part is then sent on to another CPTPP country, such as Japan, for final manufacturing. Post accession, the parts made in the west midlands will meet the agreement’s rules of origin. That is a real incentive for CPTPP countries to purchase more British-designed, British-made products, and it is part of the reason why our future accession to this partnership has been so warmly welcomed by the sector. Mike Hawes, chief executive officer of the Society of Motor Manufacturers and Traders, has said that the agreement makes “eminent sense” and has the potential to deliver opportunities for the automotive industry.
Matt Western (Warwick and Leamington) (Lab)
It is good to hear from Mike Hawes and to learn what he thinks, but can the Secretary of State give the House some indication of what contribution the CPTPP will make to our GDP?
Kemi Badenoch
According to the models and estimates, it will be £2 billion a year, but it all depends on which countries choose to accede and how many businesses in the UK choose to take advantage of the agreement. A free trade agreement utilisation programme will therefore be critical to our gaining the greatest possible benefits from the CPTPP.
Mark Garnier (Wyre Forest) (Con)
There is a great deal of argument about where the opportunity for UK exporters is. Does my right hon. Friend agree with the prediction that the 10 nations of the Association of Southeast Asian Nations will create a bigger trading bloc and a bigger economic unit than the European Union by 2050, and does she agree that the CPTPP offers the opportunity for countries such as the Kingdom of Thailand, which is not a member, to join in the future? Surely the CPTPP is not about what it is now, but what it will be in the future.
Kemi Badenoch
My hon. Friend is absolutely right. This deal is thinking about the future. Of course we have a close trading relationship with the European Union, but the fact is that, as a share of global growth, Europe is shrinking and other parts of the world are growing. This is our opportunity to get in early and help shape the rules for this trading bloc.
Richard Graham (Gloucester) (Con)
The Business Secretary is making a powerful case on why accession to the CPTPP will be transformative for our country in so many ways. She alluded to the importance of business with Malaysia. This is not just about trade; it is also about investment. The importance of Malaysian investment over here is symbolised by Brabazon on the edge of Bristol, and by Battersea power station. Does she agree that all those investments will be much more secure under the umbrella of the first ever trade and investment agreement with Malaysia?
Kemi Badenoch
I agree with that statement. I would just like to highlight the significant contribution that our trade envoys, including my hon. Friends the Members for Wyre Forest (Mark Garnier), and for Gloucester (Richard Graham), are making to our debate on trade. They are getting out there, bringing business to the United Kingdom, selling all that is great about our country, and making a valuable contribution to trade policy in the UK, and I want to take this opportunity to thank them for all the work they are doing, travelling around the world and banging the drum for British trade.
Liam Byrne
Before the Secretary of State moves off the subject of cars, I want to make an intervention about our trade with Canada, which involves more than £745 million-worth of exports. We currently benefit from tariff-free trade because of the extended accumulation of origin rules. That tariff break will end at the end of March, and because talks have broken down, we face a situation where our car exports are about to be hit by tariffs. Can she tell the House a bit more about how she plans to avoid a tariff war hitting UK car exports at the end of March?
Kemi Badenoch
This is a good opportunity for me to state explicitly that the talks have not broken down. We are having multiple discussions with Canada on cheese, in which we have not come to an agreement. However, the quota that we have under CPTPP with Canada is 16.5 kilotonnes, which is more than the 2 kilotonnes we are selling to Canada at the moment, so we are not particularly concerned about that, although it is disappointing. We have an ongoing rules of origin discussion, and we have an FTA discussion, which I have paused, for reasons that the right hon. Gentleman will know—
Kemi Badenoch
Well, he should know them, because I believe I referred to them in the Select Committee; I hope he was listening. The point I am making to the Chair of the Select Committee is that trade is dynamic. On some issues that we are negotiating and discussing with our partners, we have differences of opinion; and others are going swimmingly. This is not a reason for us to cast aspersions on our trade relationships with the countries in question.
Joining this partnership will deliver for our manufacturers, but crucially it will also deliver for our globally renowned services sector. The UK is already the world’s second largest exporter of services, behind only the US, and services exports are at record levels. CPTPP, with its modern and ambitious rules on services and digital trade, plays to the UK’s strengths, given that almost 80% of our economy is services-based. It will reduce market access barriers, such as data localisation requirements; British businesses will not have to set up costly servers or data centres in each member country, and that will save them significant time, money and other resources. This agreement will help flagship British businesses such as Standard Chartered and BT to gain smoother access to markets in Singapore, Vietnam and Malaysia, strengthening our trade with those nations for years to come.
We also have a ratchet mechanism for the first time with Malaysia, Chile, Mexico, Peru, Singapore, Brunei and Vietnam, meaning that if those countries relax rules for a particular service, restrictions cannot then be reintroduced in future. That is another clear example of how this agreement will unlock smoother, simpler trade. The director general of the Institute of Export and International Trade, Marco Forgione, has rightly said:
“This is all good news for UK businesses, giving them greater access to one of the fastest growing regions in the world”.
The issue is not just the benefits that joining this partnership will bring over the short term. This is a growing agreement, designed to expand and bring in more markets and more opportunities for UK businesses in the long run. As the first acceding country, we will be ideally placed to take advantage of that future growth.
Martin Vickers (Cleethorpes) (Con)
I welcome our accession to CPTPP, which I think will be of great national benefit, but understandably Members across the House will look to businesses in their constituency. The Secretary of State is well aware that many businesses in my constituency in the Humber region are focused on the energy sector, particularly renewable energy. Does she see any great advantages for them?
Kemi Badenoch
There are multiple advantages that will accrue to my hon. Friend’s constituency. I do not specifically have figures for the energy sector, but I do have good news relating to Yorkshire and the Humber: 465 businesses are already exporting to Malaysia from Yorkshire and the Humber, and CPTPP will help to boost that region’s economy by around £210 million in the long run. In 2022, Yorkshire and the Humber exported £1.3 billion-worth of goods to CPTPP. Within five years, tariffs of up to 30% will be eliminated on UK exports of machinery to Malaysia, cutting costs for businesses in Yorkshire and the Humber. We will reduce tariffs and non-tariff barriers, which could mean many more companies—such as the jukebox manufacturer Sound Leisure, which already exports to five CPTPP countries—being able to enter more dynamic markets.
The Chair of the Select Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), raised questions about China, and I promised to address them. On China’s application to accede to the agreement, which I know many hon. Members are interested in, let me first say that there are six economies with applications to join the group—China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine—and more may apply. Members have not yet made any decisions on which economies will accede in future.
Every applicant must fulfil three essential criteria, called the Auckland principles, to join the group. First, they must be able to meet the high standards of the agreement. Secondly, they must have a track record of compliance with existing trade commitments. Thirdly, and crucially, they must command a consensus of the whole group. These are strong criteria, and they make it clear that working as a bloc is vital. The purpose of this partnership is to be a growing trade bloc, and we share that ambition. We want this agreement to grow, but our accession has set a clear precedent for those that follow. The robust process that the UK has been through has only reinforced the high standards that the partnership seeks to promote, and it has proved that the bar is not easy to meet.
Mr Jayawardena
Does that not prove that by being positive and seeking to engage with partners around the world, we can shape this trade area in line with our geostrategic and trade interests?
Kemi Badenoch
Yes, it absolutely does. That is one of the ways that we are able to increase UK influence across the world, not just in Europe or near neighbouring countries. My right hon. Friend is absolutely right on that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State talks about free and fair trade and about high standards, but there is nothing on labour rights in this CPTPP deal. Is that because she does not care about labour rights? Does she not think it matters whether UK businesses and workers have to compete with those producing products and services in circumstances where there are no trade union rights and no health and safety rights, for example? Is it because she does not care about labour rights, or because she was unable to negotiate anything?
Kemi Badenoch
I think the hon. Lady might be confusing the contents of the Bill with the text of the agreement. The text of the agreement is on gov.uk, and she will find a chapter there that covers labour rights.
I turn briefly to the Bill. It is technical in nature, but in enabling us to comply with the provisions of the deal, it is crucial to unlocking the benefits I have described. First, the Bill will ensure that the UK’s domestic procurement regime is compliant with the partnership’s rules, and it will give effect to the UK’s market access commitments to CPTPP suppliers. This small change will deliver big benefits for British businesses, allowing them to compete for contracts in Canada, Japan and Peru that go beyond our existing agreements. It will also mark the UK’s first ever trade agreement with Malaysia and Brunei that contains Government procurement provisions, and will create entirely new access opportunities for UK businesses. The Bill will also allow conformity assessment bodies established in parties’ territories to apply for approval in the UK. This will mirror the treatment that UK conformity assessment bodies will receive from CPTPP parties, which would reduce costs for UK businesses.
The Bill will amend domestic law so that, in relation to agrifoods only, an application to register a geographical indicator can be opposed on the ground that it is likely to cause confusion with a pre-existing trademark or application for a trademark. The Bill will also introduce the ability to cancel a registered agrifood GI on the ground that, at the time the GI was applied for, it was likely to cause confusion with a pre-existing trademark or application for a trademark, or because it is a generic term.
Finally, the Bill brings our approach to copyright in line with the CPTPP by amending the basis on which foreign performers, such as musicians, can qualify for rights in the UK.
In sum, the implementation of the Bill is essential for the UK to meet its obligations upon accession to the comprehensive and progressive agreement for trans-Pacific partnership. The agreement offers significant benefits to UK businesses and consumers, by lowering tariffs, driving up trade and giving us access to the markets that will be front and centre of the global economy for the next quarter century. It is right that we seize the many opportunities that the partnership will bring, which is why I commend this Bill to the House.
Gareth Thomas (Harrow West) (Lab/Co-op)
We support accession to the comprehensive and progressive agreement for trans-Pacific partnership. We have concerns about the Bill and will be seeking additional safeguards, but we will not seek to divide the House this evening.
As my hon. Friend the Member for Walthamstow (Stella Creasy) and my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), the Chair of the Business and Trade Committee, have said, the Bill is overshadowed by the apparent collapse of bilateral FTA negotiations with Canada, one of CPTPP’s most important members. There has been no statement to the House, and I read the transcript of the Secretary of State’s evidence to the Business and Trade Committee and saw no reference to the collapse of those negotiations. As I understand it, there has not even been a written statement to the House. This is one further sign of the Government’s cavalier approach to trade.
Stella Creasy
I thank my hon. Friend for giving way, because this really matters. With £750 million-worth of British car exports at stake, the Canadian Trade Minister, Mary Ng, has said on the record that she is “disappointed” the talks have fallen apart. The Ministers shouting “fake news” need to be clear and honest with the British workers whose jobs are at stake. Does my hon. Friend agree that we need some honesty from the Government? If they think the talks have not fallen apart, can they tell us when they will start again?
Gareth Thomas
I welcome my hon. Friend’s call for clarity from the Secretary of State, because the collapse of these talks leaves our exporters to Canada worse off than when we were in Europe. There has been no deal with the US, no deal by Diwali with India, no courage to do a veterinary agreement with the EU, and now this failure by Ministers.
The Minister for Trade Policy (Greg Hands)
I welcome the hon. Gentleman’s enthusiasm for the Canada agreement, but can he explain why, on 8 February 2017, he voted against the UK doing a deal with Canada in the first place?
Gareth Thomas
The right hon. Gentleman has some gall asking that question, bearing in mind that, during parliamentary consideration of the Trade Act 2021, he promised to negotiate a better agreement with the EU. Now we find ourselves having worse terms of trade with Canada than we had when we were in the EU.
It is striking, too, that one issue that bedevilled those discussions on the EU-Canada deal is now supported by Conservative Members. The Secretary of State specifically sought to avoid investor-state dispute settlement provisions in the bilateral deal with Canada that has now collapsed. We raised those concerns at the time.
This Bill and our accession to CPTPP will not make up for the tens of millions of pounds of extra costs that manufacturers and the car industry will face when exporting to Canada due to the loss of EU cumulation rights and the higher tariffs that will result from April. This Bill will also not be much help for dairy businesses that export to Canada. Cheese exporters are now facing tariffs of 245%, because Ministers were too late to try to stop the loss of a vital quota for tariff rate reductions. Ministers had to be woken up to this issue by questions from the Opposition.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
I was a guest on the Business and Trade Committee last week, and I specifically raised the issue of cheese. If the hon. Gentleman had been paying attention, he would have heard that our tariff rate quota does not exceed the amount we previously exported. Cheese producers, particularly those in Wensleydale, can therefore sleep well at night.
Gareth Thomas
I do not know what happens in Wensleydale, but I have seen the comments and worries of other cheese exporters. During that Select Committee hearing, the right hon. Gentleman shared the concern of many Opposition Members about ISDS provisions.
The Secretary of State said that negotiations on the loss of EU cumulation rights for our exports of cars and other manufactured goods have not come to an end, but it is difficult to see how her pulling the plug on bilateral discussions with Canada on a new FTA will help to secure those cumulation rights. A trade deal should work for all parts of the country, including farmers, but evidence to the Select Committee made it clear that accession to CPTPP will mean further losses to the agriculture sector and the semi-processed agricultural food sector.
Ministers have been sending signals for some time that they are willing to ignore farmers. The deal with Europe put up huge barriers to trade for British farmers. On the deal with Australia, one of Britain’s own negotiating team said that we
“gave away far too much for far too little”.—[Official Report, 14 November 2022; Vol. 722, c. 424.]
Now, we have further losses through CPTPP.
Anthony Mangnall (Totnes) (Con)
The hon. Gentleman is being extremely selective about the evidence given to the Business and Trade Committee last week. When the Trade and Agriculture Commission—the statutory body that reviews the trade deals we sign—came before us, it said that membership of CPTPP will have no overall impact on UK farming. Would the hon. Gentleman like to correct the record?
Gareth Thomas
As the hon. Gentleman knows, other evidence was given to the Select Committee that underlined the likely loss to farmers and the agriculture sector in general. I will be happy to send him the note from that Select Committee.
There are questions about the intellectual property section of the Bill. There are wider concerns that Britain has been forced to be a rule-taker on the use of secret courts, that there are poor environmental and labour rights provisions and, crucially, that Ministers have no plan to help British business capitalise on this deal. Given the Government’s woeful performance on economic growth, the recent huge increases in barriers to trade and the cuts in support for exporters, we are pleased about any measures that help our exporters even a fraction.
The Secretary of State did not own up to it but, for the foreseeable future, this trade deal will have, at best, a minor impact on our terms of trade. There are trade benefits to membership, notably in the rules of origin provisions and in trade with Malaysia and Brunei, and there is longer-term potential if CPTPP becomes a deeper or more extensive trade bloc. In geopolitical terms, the closer ties with allies in the Indo-Pacific that CPTPP ushers in are welcome in these increasingly uncertain times.
Unfortunately, rational debate about these opportunities and trade-offs has been hampered by some of the more extravagant and exaggerated claims made by Conservative Members for the benefits of CPTPP membership. It was set to offer “unparalleled opportunities” for the UK. It was going to be a “glittering post-Brexit prize”. The Secretary of State has even done her own bit for such boosterism, with her Department claiming last year that all that is needed is for the US and half the rest of the world to join, and then there would be an extra £21 billion for the UK. I enjoyed “Wonka”, but I did not expect to find that level of fantasy preparing for this debate.
According to the Government’s own figures, this trade treaty was only ever going to deliver a 0.08% increase in economic growth over 10 years. It is nice to have, particularly given the mess that the Government are making of the economy, but now even the limited trade benefits they promised us have been cut in half.
Kemi Badenoch
The hon. Gentleman references my Department’s trade figures. These are modelling forecasts based on old figures that did not count the dynamic effects of trade agreements. They are completely out of date. They were done well before the agreement had even been negotiated, so they should not be used as a basis for deciding how this agreement will do.
Gareth Thomas
One set of figures the Secretary of State’s Department definitely did not put together were those that the Office for Budget Responsibility produced. It now expects only a 0.04% increase in our economic growth, after a decade, from joining CPTPP. As we already have free trade agreements in place with nine of the other 11 CPTPP members, formally joining CPTPP feels rather thin compensation for Ministers’ many other failures on trade.
Liam Byrne
In the light of the news that the figures that have been tabled by the Department are not accurate—I can barely believe it—would my hon. Friend, like me, have expected there to be a new impact assessment alongside the Bill, with the latest departmental assessments set out clearly therein?
Gareth Thomas
It would have been an excellent idea if the Secretary of State had published those. Perhaps she might be willing to publish them at the same time as giving us a statement about what exactly is going on in the negotiations with Canada. We will have to use the review of CPTPP in 2026 to try to increase more markedly the benefits of membership for British jobs, British consumers and growth.
Richard Graham
Interestingly, the shadow Minister is trying to have his cake and eat it. He is saying that the Government have made extravagant claims for the importance of CPTPP, while recognising that it will have a useful, modest role. As for the statistics that the Department might produce, does he agree that it would be difficult for the Department to project accurately what might happen over the next 10 years, because a cluster of nations, at least three of them within the Association of Southeast Asian Nations, might well apply to join, but we cannot speculate on that in advance? Surely he would agree that the potential of this opportunity represents a decent-sized prize for the UK.
Gareth Thomas
All I say to the hon. Gentleman is that I have recognised that there are benefits to accession, which is why we are not seeking to divide the House tonight, and that I will come on to the issue of potential new countries joining CPTPP in a bit.
The temptation for Ministers to exaggerate the significance of what this Bill ushers in—
Mr Jayawardena
Given that the hon. Gentleman recognises that there are opportunities from this deal and that, thanks to the success of our continuity agreement programme, we have trade deals with many countries there already, does he not accept that the diagonal cumulation that is part of CPTPP is a huge boost to British businesses, in terms of supply chains?
Gareth Thomas
As I think the right hon. Gentleman may have heard—perhaps he was not listening—I did acknowledge that one of the benefits that will come from CPTPP accession is better rules of origin. However, I gently say to him that we should not exaggerate the benefits of those, because the benefits are not likely to be that huge. They are important to have, of course, given the economic mess he and other former Ministers helped to create, but those benefits are, none the less, modest.
As I said, the temptation for Ministers to exaggerate the significance of what this Bill ushers in is understandable, given that over the past 10 years Britain has had the worst export record of any member of the G7 apart from Japan. That partly explains why the British people have lower living standards now than they did when Labour left office. It is one reason why the British people have become, on average, £10,000 worse off since 2010 and it is key to why the UK is forecast to have the lowest growth in the G7 this year.
Ministers have published no trade strategy and provided no clarity about how the Bill fits in with wider trade ambitions. They have axed support for businesses to get to trade shows and cut funding for business groups to lead trade missions. There is little obvious planning to help businesses use the limited extra opportunities opened up through this Bill and other trade deals. Sensible policies to improve trade with Europe and cut red tape have been vetoed. Sadly, it is therefore not surprising that the independent OBR now expects our trade to grow by just 0.1% this year and in the next two years—that is a shameful record.
Matt Western
When, in a former life, I served on the Select Committee on International Trade, one thing we talked about was giving Parliament greater ability to scrutinise trade deals before they were validated. Does my hon. Friend think that we, in this place, should have more opportunity to scrutinise these deals? As he is describing it, what is being presented today is negligible in its contribution to UK growth, as has been explained.
Gareth Thomas
I share my hon. Friend’s opinion. He aired it during consideration of the Trade Bill a couple of years ago and I hope he might be willing to air it in this Bill’s Committee.
There is little sign either of a plan to ensure that this Bill helps CPTPP accession boost trade in the nations and regions of the UK. The Resolution Foundation published analysis last week showing that, despite all the promises of levelling up, more than 50% of services exports are concentrated in just one region of the UK. Ministers have never been interested in tackling those huge imbalances. Labour Members all remember the broken promises on trade: the “oven ready” Brexit deal; levelling up through trade; and 80% of the world being covered by new trade agreements. One by one, each of those promises that the Conservative party made to the British people have been broken.
No one outside Conservative circles will be surprised that this Bill is not going to lead to a huge boost to economic growth any time soon. The negotiations to join CPTPP were led by the same people who gave Australian farmers everything they wanted, by the same Ministers who boasted about a trade deal with Japan that will help their exporters four times more than ours and which has been championed by the very same Ministers who negotiated a trade treaty with Europe that has hiked up trade barriers, increased the cost of food and generated huge bureaucracy for business.
On the arrangements for scrutiny of this Bill, one would have hoped that Ministers would have learned lessons from previous trade Bills this House has considered, and that scrutiny arrangements before and after negotiations might have improved. We have, at least, not had the spectacle of Trade Ministers at war for a little while or of their failing to turn up to a Select Committee to answer basic questions about trade agreements. I appreciate that Lord Frost is not quite so popular any longer, but when even he can lament, when debating this very Bill in the other place, that scrutiny of trade agreements was better when we were in the European Union, there is clearly some way to go.
That is all the more the case because Ministers appear to be using this Bill to solve an apparent problem with intellectual property treaty rules, which may or may not be linked to CPTPP—the Minister in the Lords did not seem too clear on that; a mere two weeks ago, and only after pressure in the other place, Ministers rushed out a consultation document on this provision of the Bill, which is contained in clause 5 and potentially gives American and other overseas businesses huge sums that would otherwise have helped emerging British artistic talent. That consultation will not be finished until 11 March, and there is absolutely no clue as to when Ministers might have finished considering the responses and deigned to let us all have their thoughts on the way forward.
During bilateral trade negotiations, the Government were widely accused of giving in to the demands of Australian negotiators far too easily, creating dangerous precedents for those wanting to get access to our agricultural markets through other trade deals. It appears that Ministers are in danger of doing something similar with the copyright provisions in this Bill: giving away, when there appears to be no reason to do so, extra rights to receive payments to foreign performers—for example, those in America, which is cited in the consultation document and is not currently a member of CPTPP. That would reduce the earnings of our artists and our businesses here, which could hold back the development of the next generation of British musicians and artists.
Industry figures argue that there is nothing in CPTPP to justify the need to give foreign rights holders and performers payments where they do not currently receive them. If Ministers think those industry voices are wrong, I look forward to the Minister for Trade Policy spelling out, when he winds up, what specifically in CPTPP requires the change. Nothing in the trade deals with Australia or Japan, despite both of them being CPTPP members, required such a legal change then, so why do we need this now? It looks like Ministers are trying to sneak through changes to rules that are, at best, only loosely related to CPTPP by using this legislation instead of a separate and proper process and debate about why such changes are needed.
In winding up the debate, will the Minister explain to the House why changes to the way in which foreign record labels and recording artists qualify for payment rights—changes which, let us be clear, could cost British artists more than £100 million over the next decade, according to the Government’s own figures—are necessary now?
In Committee, we will also want to explore why Ministers have not sought exemptions to the ISDS provisions in the CPTPP as our allies in Australia and New Zealand have done, and as Canada did with the US during the United States-Mexico-Canada agreement negotiations. It is all the more surprising as Ministers were specifically trying to avoid ISDS provisions in the now collapsed UK-Canada FTA negotiations.
There has been a significant increase in legal disputes using ISDS provisions, and a series of cases have had a chilling impact on a range of progressive public policies on environmental issues, labour standards and public services We are yet to hear a convincing explanation from Ministers as to why ISDS is still needed—a point that the hon. Member for Totnes (Anthony Mangnall) referenced in relation to the Select Committee meeting next week.
Sir Robert Goodwill
I may have misheard but did the hon. Gentleman just say that the Australia deal was a bad deal for farmers and that it is increasing the cost of food? Australian wine is now certainly cheaper on our shelves, and our biggest food or drink export is Scotch whisky, which always benefits from free trade deals.
Gareth Thomas
I remember the comments made by the National Farmers Union about the Australia deal, so the right hon. Gentleman may want to look back at those before he rushes to make such an intervention again.
In Committee, we will also explore the further threat to Britain’s steel industry from the possibility of cheap imports of iron and steel from Vietnam, which may actually be produced in China. There has been growing debate about China’s interest in acceding to the CPTPP and its record on human rights. As my noble Friend Lord Collins pointed out, there are no meaningful, enforceable human rights provisions in the treaty. Nothing in law at the moment requires Ministers to allow debate in the House if there is agreement among CPTPP members to support China’s—or any other country’s—accession to the CPTPP. Will Ministers set out how they will ensure transparency over their consideration of new country applications once we are members of the CPTPP?
There continue to be a series of concerns about how environmental issues, such as deforestation, climate change and pesticide use are dealt with through the CPTPP. The Government’s record does not encourage confidence that those issues were close to the forefront of Ministers’ minds during negotiations.
Matt Rodda (Reading East) (Lab)
My hon. Friend makes an excellent point. Does he agree that there is a huge amount of public concern about the way that the Government have been managing environmental issues in their trade negotiations—both in the Australia deal and this one?
Gareth Thomas
My hon. Friend is right and we hope to pursue those issues in Committee. He would be very welcome to join us in so doing. There are benefits to joining the CPTPP and we support doing so, but there are real concerns as to whether Ministers have got us the best deal possible, which we will revisit in Committee.
Anthony Mangnall (Totnes) (Con)
I would say that it is pleasure to follow the hon. Member for Harrow West (Gareth Thomas), but he is so pessimistic and full of doom and gloom that he makes me think that he is the Goldilocks of international trade. We are always in the same place when we debate these issues with Labour Members, because we cannot sign trade agreements quick enough for them or perhaps we take too long. In fact, we sign trade agreements when they are good for our businesses, our producers and consumers—that is exactly where we must be.
The hon. Gentleman talks about membership of the CPTPP and says that there are no parameters to stop new members, but in her opening remarks the Secretary of State made the point about the Auckland principles and the fact that there has to be a consensual approach to new membership. The Opposition criticise our record on international trade and the agreements we have signed, discounting the fact that we have: an agreement with Australia and New Zealand; three memorandums of understanding with American states; 75 roll-over deals; discussions under way with the Gulf Co-operation Council, Israel and India; and now accession to the CPTPP, if we pass the Bill. The purpose of the Bill is to change our legislative programme to ensure that ratification can take place; that is why we are here and what we are debating.
I am delighted to be a member of the Business and Trade Committee. I welcome that the CPTPP is our accession to the fastest growing region in the world, and that it will give huge geopolitical value to the UK and what we do with our friends and allies around the world. If anyone wants something to send them to sleep, they can read my report, “Looking East”, for the Centre for Policy Studies. We are joining the leading comprehensive free trade agreement, with every forecast pointing to the value that this body will play not just in the next 10 years, but in the next five; we have to recognise those benefits.
As has been said, in nearly every case, forecasts undervalue free trade agreements, not least because of the modelling but also because, as free trade agreements are signed and accessions completed, businesses start to take advantage of the agreements and grow as a result.
Mark Garnier
My hon. Friend makes a good point. Does he agree that when a previous Committee—of which we were both members—looked at free trade deals, it found that the very fact of doing a trade deal creates an interest that is not otherwise there? It means that everybody talks about the trade opportunity that presents itself.
Anthony Mangnall
I could not agree with my hon. Friend more. That is exactly the reason that we have trade envoys—in his case, he goes to Thailand to enhance the relationship between Thai and UK businesses. It is also for that exact reason that the first line of the gov.uk webpage on CPTPP says: “We will help businesses take advantage of CPTPP. Please keep logging on so you can see how we can help you to take advantage.” Far from stepping back and not helping businesses, we are on the front foot in ensuring that we can support them.
I want to make a couple of points about what I have learned, first on the International Trade Committee and now on the Business and Trade Committee. It is always important for the House to have a say, and to have a debate on the full terms of our free trade agreements. Under the Constitutional Reform and Governance Act 2010, we have 21 sitting days to be able to debate the CPTPP. The Secretary of State appeared before the Business and Trade Committee last week. I hope that we can have a debate, because it is important for all Members of the House to be able to look at the many benefits that the CPTPP will bring them, and their constituents, producers and consumers, and for those benefits to be highlighted on the Floor of the House. CRaG also provides for a voteable motion, which has not been used since its introduction; and it would be useful to have vocal support for our trade agreements, not least to show our friends and allies, with whom we do these deals, that we are behind them.
Within the Bill, I note the changes to the procurement legislative framework. I commend the fact that it is already building on the excellent work in the Procurement Act 2023, which specifically helps small businesses to take advantage of the agreements we have signed; again, the shadow Minister, the hon. Member for Harrow West, could have made reference to that legislation or to the Electronic Trade Documents Act 2023—the list goes on and I could go on to, if he would like me to. Of course, there is also the value placed on intellectual property—setting a minimum standard of protections across patents, geographical indictors, copyrights, trade secrets, trademarks and designs, including enforcement mechanisms. Above all, there is a focus not only on how to remove tariffs, but on how to remove non-tariff and technical barriers to trade. The creation of conformity assessment procedures also ensures that we can help businesses from every walk of life to take advantage of the CPTPP—this fastest growing region.
Richard Graham
My hon. Friend has made a number of absolutely correct statements about the benefits of the agreement. To bring it alive in the specific context of our first ever trade and investment agreement, with Malaysia: because we will be working closely with their ministries, we will see opportunities for joint marketing in ways that we have not often seen around the world. It is worth remembering that our investments over there, which are considerable, generate dividends back to this country. That is as important as attracting inward investment here, which, of course, give them dividends back there. Does my hon. Friend agree that the opportunities in the Bill are there for everyone to recognise; that it is helpful that the Labour party finally agrees that free trade agreements, and this particular agreement, are a positive step forward for the country; and that we should all recognise the opportunities that come after the agreement, and mobilise our chambers of commerce and our small and medium-sized enterprises to take advantage of them?
Anthony Mangnall
I thank my hon. Friend for allowing me to get my breath back and for the points that he made. I hope SNP Members are listening, because they could make it a hat-trick and support their first international free trade agreement while they are at it. Of course, my hon. Friend is absolutely right: we must recognise both the export value and the import impact. We must also recognise, as was shown clearly through the pandemic, that businesses that have international markets are more resilient to shocks and can take further advantages of the deals that we are putting in front of them. The more that we can get trade deals in front of small businesses, encouraging them to seek out new markets, the more we can safeguard them for a long-term future.
Mark Pawsey
I have heard my hon. Friend talk about goods, but I want to hear more about services. We see this purely through the prism of goods going backwards and forwards, but our great strength is services. Where are the service opportunities in this deal?
Anthony Mangnall
As ever, my colleague on the Business and Trade Committee has steered me back on to the right path. Of course there is enormous value within the legal and financial sectors—the service economy—in which 80% of our economy is based. We must make sure that we are taking full advantage of the deal. We need to get those businesses out there, to look at where we can change international regulation, and to see that there is more mutual co-operation. My hon. Friend is right and has been a strong advocate of those points over the past few months on the Select Committee.
Richard Graham
On service exports, my hon. Friend will know, as do many colleagues on the Conservative Benches, that education is one of our major service exports. We have five universities operating in Malaysia. We have a number of schools operating around south-east Asia and in all the other nations involved in the trans-Pacific partnership. All those will benefit from this agreement. Does he see that, as perhaps other nations in ASEAN pick up the opportunity of TPP, there will be further education opportunities?
Anthony Mangnall
Education is one of the jewels in our crown of export opportunities. When we look at what has been created by UK schools in the far east, along with universities that are now exploring those routes, we see that there is an enormous amount of ground to cover and opportunity for those businesses to take advantage of. We are looking to access a region that is worth about £12 trillion, and which is closing in on well over 50% of world trade. This vibrant economic region offers us not just the opportunity, but the ability to create new industries and to be at the forefront of advanced manufacturing—of pharmaceuticals, genomics, quantum and photonics. Whatever we might think, we can take advantage of these deals. Furthermore, the removal of tariffs and technical boundaries will only benefit those services, businesses and advanced manufacturing areas.
Dr Hudson
My hon. Friend is making a powerful speech about the benefits of this accession agreement. We have talked about goods, services, education, and science and technology, which are all part of Britain’s global soft power. We will be able to export some of our technology, education and values, not least in food production and farming and in how we regard animal health. A major benefit of our joining this partnership is to spread the good work that the UK does.
Anthony Mangnall
I am delighted that my hon. Friend has made that point and I thank him for all the work that he does on the Environment, Food and Rural Affairs Committee. He is right to raise the fact that we have such high standards, and that by joining organisations such as this, we will not only serve as an example to others, but show how it is possible to create productive and profitable markets.
Stella Creasy
I thank the hon. Member for giving way and appreciate that he feels very strongly about this issue. Will he clarify this for those listening—that the animal welfare standards that we abided by as part of the European Union are not those we are going to see in Canada, Australia or New Zealand? Indeed, we are allowing those goods to be imported tariff-free as part of deals such as this, but we are about to put a whacking great tariff on consignments and import safety checks on food coming in from Europe. Does he recognise that we are sending different messages about the value of animal standards?
Anthony Mangnall
I refer the hon. Lady to my previous remarks on the TAC report on CPTPP. She has made a point about Australia, and it is fair to give an answer on that. None the less, the point is that we are still safeguarding ourselves against hormone-injected beef and chlorinated chicken. Yes, there are variable standards around the world; we have to recognise that not all trade deals are Christmas trees on which to hang baubles and everything else. We can lead by example. Our standards are the highest in the world, and there is nothing to say that they are not a key persuader for other countries to follow suit in showing how there can be successful markets on that front.
Mark Garnier
I would like to follow on from the point about beef and meat from Australia. We imported it for years and years when we were part of the European Union. This is not brand new; we have been doing it for a long, long time.
Anthony Mangnall
That is exactly why we put things such as the Trade and Agriculture Commission on to a statutory footing, so that it could report on these trade agreements. Its opinion is fully weighted with the Government response and comes in during the Constitutional Reform and Governance Act process and allows us in this House to consider it. If the hon. Member for Walthamstow (Stella Creasy) wants to debate this point in a general debate on CPTPP, I would look forward to doing it all over again. Of course, the whole purpose of the process is to give us the chance to take full consideration of the agricultural community’s view.
I have gone on for far too long, Mr Deputy Speaker—[Hon. Members: “Hear, hear!”] Thank you very much! [Hon. Members: “More!”] I believe that that is the first time that anyone in the House has ever told me to carry on, but I am very grateful for it none the less.
We have huge opportunities in the UK to strike new trade agreements to encourage our economy to boom. It is striking that, in his opening remarks, the shadow Minister on the Labour Front Bench did not recognise that, since 2010, the UK’s economy has outperformed that of Portugal, Italy, Spain, Germany and France, to name but a few. This trade agreement signals not just an intent to sign more trade deals in the future, but an approach that we can take if we work together with businesses, financial services, legal services and all industry across this country to bring value to London and to all regions of the United Kingdom. I look forward to seeing its ratification and to this Bill being passed unamended.
Mr Deputy Speaker (Mr Nigel Evans)
In saying that you had gone on for far too long, you managed to unite both sides of the House, Mr Mangnall, so congratulations.
Richard Thomson (Gordon) (SNP)
First, let me say that we on the SNP Benches are also not looking to divide the House. I thought that I might get the opportunity to pre-empt the jibe that is often made about how my party is against trade deals, but the hon. Member for Totnes (Anthony Mangnall) got there first. I saw that those on the Labour Front Bench also took a sideswipe with their rather nonsensical jibe. I freely admit that we have yet to find a deal signed by this Government that we are happy to support. Fundamentally—I say this again—we are in favour of good trade deals and we are not in favour of poor trade deals. [Interruption.] The hon. Member for Totnes is very, very excitable. For the purposes of Hansard, he is asking me to name one, but the sad fact is that I cannot name one that has been signed by this Government. Trying to help those on the Treasury Bench and Back Benchers understand the difference feels a bit like Father Ted trying to explain to Father Dougal the difference between cows that are small and cows that are far away.
In common with the shadow Minister, we are not saying that there cannot be some advantages of the CPTPP deal, but what we could not be clearer about is that, taken in their totality, all the trade deals signed to date—or even those that could have been signed had negotiations not failed to get off the starting block, or those that have hit the buffers in recent days—are a very poor substitute for the trade deals that we have left behind. In the manner in which it chose to leave the European Union, the UK managed not only to create trade borders with 27 other countries, but, unfathomably, to create one with itself, when it created a trade border down the middle of the Irish sea between Great Britain and Northern Ireland.
In the CPTPP, we have essentially swapped the four freedoms in Europe of goods, capital, services and people, in a market of half a billion people with a GDP of over £15 trillion, which was right on our doorstep and which already took over 40% of our exports, with a much lesser deal, with a combined economy of almost half the size, on the opposite side of the world, which currently takes only 8% of our exports. A great deal of growth would need to happen in that market—somewhat implausibly I have to say—even to come close to matching what has been left behind.
The economic benefits of joining the CPTPP are pretty small. I know the Government do not like these figures being repeated—which seems as good a reason as any to go on and repeat them—but the UK Government’s own impact assessment indicated the long-run increase in GDP would be £2 billion, or 0.06% of GDP. The OBR even had it as 0.04% in the long run. As John Maynard Keynes said:
“In the long run we are all dead.”
In a written answer to me dated 11 September last year, the then Minister of State for International Trade, the hon. Member for Mid Worcestershire (Nigel Huddleston), said that the impact assessment, where the £2 billion figure had come from, had
“been independently scrutinised by the Regulatory Policy Committee”.
I went and had a look at what the Regulatory Policy Committee had to say in order to get an idea of what “the long run” might actually mean. The Committee’s document said:
“When compared to projected levels of GDP or trade in 2040 without the agreement, the FTA’s main impacts (based on central estimates and in 2021 prices) are that…UK Gross Domestic Product (GDP) is expected to increase by £2.0 billion.”
What the Minister said in his reply will therefore be correct, just not for a further 16 years or so. In the meantime, we have a real, immediate drop of 4% in GDP resulting from Brexit, leaving our economy permanently driving with the handbrake on.
I understand that the Government intend to adhere to the Sewel convention on this occasion and will seek the legislative consent of the devolved Parliaments and Assemblies for the Bill. The Government should do that for every piece of legislation that comes through this place, not just performatively whenever they are confident of getting a positive response. While the benefits of free trade are obvious, there is also an obvious benefit to having tariffs in place. Tariffs serve a purpose; they are not just about protectionism, as some would have it.
I was encouraged to hear the Secretary of State say that we would never compromise on animal welfare standards, but one sector where that is in real danger of happening is the egg production sector. I see the Minister for Trade Policy wrinkling his brow. He and I have had an exchange on this before. The sector is worth over £1 billion to the UK economy. Tariffs exist currently to protect the industry from imports from mass-producing jurisdictions such as India and Mexico, which have lower standards than we insist on for our domestic producers, and that our consumers rightly demand.
The Minister responded, again not inaccurately, that the UK does not import many eggs. Well, eggs are quite fragile. It is difficult enough sometimes to transport them from the shops back to our kitchens intact, let alone right around the world—but of course the egg products that we are talking about are liquefied or even powdered egg products, which once put into a shipping container can be transported around the world at comparatively very low cost. It would not require a huge amount of displacement in the market to get a foothold if those products were allowed in under the terms of the CPTPP. Let us be under no illusions: for all that it is a £1 billion domestic industry, once egg producers are gone, they are gone and they are not coming back, so there is a real risk of harm and of our standards being undermined whatever level we choose to set them at domestically, because the tariff that was there to maintain a block on imports that did not meet those standards will effectively have been taken away.
Stella Creasy
I am not sure that the hon. Member for Wyre Forest (Mark Garnier) quite understands what is about to happen with the border target operating model that fits alongside the legislation. A health check certificate and a consignment charge will be required for eggs and egg products imported from Europe, with no equivalent health check or standard required for eggs imported from CPTPP countries, thus creating an imbalance and making the scenario that the hon. Member for Gordon (Richard Thomson) is talking about more likely, because of the way in which eggs are produced in this country in collaboration with Europe.
Richard Thomson
The hon. Lady makes an excellent point. One of the ironies here is that because our borders will no longer be protected by food import checks at Rotterdam, there has basically been a free-for-all in terms of the standard of products that can come in. I welcome the fact that there will be checks in order to protect our biosphere, but that comes at a financial cost that will hit consumers hard at a time when food inflation remains high and we are in the middle of a cost of living crisis. That is just one example of the red tape that we were told would be cut by Brexit not being cut sideways; it has been cut lengthways, creating far more of the stuff.
Richard Graham
Moving away from eggs, which I do not think will be the major export from Malaysia or other far-eastern members of the trans-Pacific partnership, let us look at the opportunities for Scotland. In the last year or so there have been bumper sales of Scottish whisky. Whisky sales in Singapore are up by some £90 million, and in Malaysia they are up over £30 million. The opportunities arising from being able to export tariff-free to Malaysia will mean a substantial increase in our single most important food and beverage export. Does the hon. Member agree that we should not underestimate the opportunities for Scotland in all this?
Richard Thomson
My point about eggs—I will stay on this subject for a bit—related to India and Mexico, which are major producers. Of course Scottish MPs are interested in good trade outcomes for Scotland, but we look to trade more than just whisky. While any increase in our share of the international spirits market is welcome, it would have done us much more good if the Government with control over domestic duties had not whacked an 11.1% increase in duty on that product last year. I say as gently as I can to the hon. Member that it is not just tariffs that are significant; many jurisdictions take their cue for the taxes levied on a product from the duty set in this country. I contend that we set a very bad example—I hope that he might agree—when whisky is taxed so highly in comparison with other alcohol products in the UK domestic market. [Interruption.] I am sorry; I did not quite catch that. I invite the hon. Member to intervene on me, if he wishes to make a point.
Richard Graham
I was just making the point that taxation raised here is spent on important issues in the United Kingdom. That of course includes, under the Barnett formula, significant subsidies by the English of Scotland.
Richard Thomson
What a load of absolute codswallop. It may have escaped the hon. Member’s notice that every part of the UK is in deficit. I do not think that a single part of the UK, perhaps not even London or the south-east, raises more in taxation than it receives in public expenditure, so can he please park the patronising trope about England subsidising everywhere else? Scotland creates one of the highest levels of gross value added of any part of the UK outside the vortex of London and the south-east, which suck in every aspect of capital and talent.
Mark Garnier
In the spirit of trying to bring the debate back to the fantastic opportunities for Scotland, as the Prime Minister’s trade envoy to Brunei, I was delighted to go to Aberdeen to meet a number of Scottish companies in the incredibly important business of decommissioning and renewal in the oil and gas industry. Brunei has signed a deal worth, I think, £350 million with Scottish business. That is not subject to any controversy.
May I also say that the hon. Member’s contribution to this place is incredibly useful? It is a very good symbol of why members of the SNP and Scottish Members of Parliament are so valuable to the Union, and to debates such as this in the British Parliament. Long may you be welcome here in Britain.
Richard Thomson
We seemed to be being pulled back to the topic, but now I am being tempted to go off down another rabbit hole. While I thank the hon. Member for his generous comments, I know exactly what side my bread is buttered on. I am a long-standing supporter of Scottish independence because I have a simple belief that the best people to run Scotland and make decisions about Scotland are those who have chosen to make their life there. With all due respect to this place and its traditions, I think that we could do a far better job from the Parliament in Edinburgh.
I will get back to the purpose of the debate, as entertaining as that no doubt was for all concerned. The SNP retains concerns about the ability to apply investor-state dispute settlements under the CPTPP. A deal for Canada has, for now at least, hit the buffers, but it was concerning that there was no indication from the Government of any side letters about investor-state dispute settlements similar to those applied in respect of the FTAs with Australia and New Zealand. There is real concern that investor-state dispute settlements could have an impact on standards and decisions taken here.
We firmly believe that trade deals done right can channel and create potential to support decent jobs and raise standards, not just domestically but globally. It is therefore worrying that the ethos of the CPTPP means effectively abandoning the precautionary principle, which places the burden of proof on the producer to show that a product is safe. Instead, the burden will be on the regulator to prove that something is a danger before action can be taken. That can only act as a downward pressure on standards. The committee on regulatory coherence will no doubt also become a focus for this issue, whether we are talking about antibiotics in agriculture, the impact of decisions on deforestation, or something as iconic as palm oil; we have already agreed a 12% tariff on imports from Malaysia, irrespective of the impact that that would have.
We have further concerns about the impact on workers’ rights and domestic conditions. There is the risk of being undermined by lower costs elsewhere, resulting from lower standards on labour rights and obligations, or lower regulatory standards more broadly. We are concerned about the impact that that could have on our public services, and our ability to set domestic laws and regulations could come under challenge, either from the economic forces that are unleashed or through the ISDS mechanism.
All things considered, the Government have made a blustery and boosterish contribution, while being very blasé about and dismissive of the concerns raised. As I said earlier, the SNP will not seek to divide the House on the Bill this evening, but we certainly look forward to exploring all those issues further in Committee.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I suppose I should start by declaring an interest, because nearly 10 years ago I wrote a book called “Turning to Face the East: How Britain can prosper in the Asian century”, which was an encouragement for exactly this kind of initiative. I am a supporter of CPTPP and I am grateful to the Secretary of State, who is no longer in her place, for joining us at the Business and Trade Committee last week, along with others, to provide evidence on the treaty. The Committee hopes, if its members are amenable, to publish a report on CPTPP over the next couple of weeks, and certainly before Committee stage of this Bill, to try to maximise opportunities to build cross-party consensus on something very important to all our futures.
I want briefly to say a word about size, a word about standards, and a word about settlement of investor disputes, but it behoves us all in this House to recognise the point we start from: trade and export growth is not where it needs to be, or where Members on both sides of the House want it to be. We know the old joke: not all fairytales start with “Once upon a time”; some of them begin with “When I am elected”. Looking back at the Conservative manifesto for the last election, we might be tempted to label it a bit of a fairy story, because it said very clearly that the goal was to set out free trade agreements covering about 80% of British trade, and we are nowhere near that. We are in fact much closer to 60%.
The Secretary of State put most of the onus for that on a change of Administration in America, but the truth is that apart from the cut-and-paste, roll-over trade deals that we have had since leaving the European Union, we have only signed three new free trade deals. I am glad to hear that what would have been the fourth new one, which we hoped to sign with Canada, is not dead, but it certainly appeared to be running into trouble last week. I am sad that the Secretary of State did not come to the House to make a statement about that news today. That would have been appropriate. However, I am grateful that she has made some reassuring noises about it in this debate.
When the Select Committee put the point about the lack of FTAs to the Secretary of State last week, she said that she had “pivoted away” from FTAs. That is not necessarily a good thing, because she went on to say that she, like many economists, thought that FTAs do promote trade. The bottom line is that our export performance is way off target. The Government have set an export target of about £1 trillion by 2030, which interestingly has not been adjusted up for inflation as arguably it should have been, but the Institute of Directors last year said that we need export growth to be getting on for about 3.5%. As the shadow Minister, my hon. Friend the Member for Harrow West (Gareth Thomas), said, we are nowhere near achieving that performance. We have an export growth forecast of roughly 0.1%, 0.2%, or 0.3%.
The Secretary of State very kindly agreed not to have a public argument with the Office for Budget Responsibility last week, and I think we were all grateful for that, but she said there were different models—not alternative facts, but alternative models—in her Department. I have written to her today to ask for the publication of those models so that the Select Committee can scrutinise them before the Bill goes into Committee. Scale is important because our trade performance is off track. Generally speaking, economies that trade more, grow faster, and we want our economy to grow faster, because we all share an interest in raising the living standards of our constituents. That is why my the first point, about the scale of CPTPP in the future, is so important.
The Secretary of State has stacked up a lot of her argument on our needing to go in future to where the growth is. She said that if we cannot do trade deals where the growth is today—for example, with our partners in America—we should go to where the growth will be tomorrow. That is a reasonable argument, and Asia-Pacific countries accounted for over 70% of global GDP growth in the decade up to 2023. However, China accounted for about one third of global GDP growth. That is why I pushed the Secretary of State again, as I did last week, to at least show us how we will have a conversation about how this country will make a rational decision with partners on whether to agree to ratify China, if it met the technical standards. We have similar questions to resolve on Taiwan, but in his public pronouncements, President Xi has made it very clear that he is ambitious for China to meet the technical standards. The question is therefore whether, if China met the technical standards, we would stand in the way of ratification, or whether other important geopolitical considerations would inspire us to block it.
Looking beyond China to the CPTPP’s future more generally, given that we have set such store by this treaty, what is our vision for its future? Where is the road map? The Department published a document a year or two ago on the strategic benefits, but the Secretary of State resiled from all the numbers in that report last week. I do not think that is a good way to make public policy, but let me put it this way: our debate about trade policy and strategy ahead of the election would be much stronger if we had good figures on the table about the options and choices confronting our country. We will certainly do our bit in the Business and Trade Committee to supply those figures, but it would be fantastic if the Secretary of State could commit to doing something similar.
The question that follows on from size is about standards. There were controversial topics that we took evidence on last week, and we will capture what we learned in the report that we publish. There were questions about environmental and climate impacts; there are general provisions about those in the treaty, but they are not enforceable and there is not much mention of net zero. If we think about the treaty as something that is fairly marginal for trade today—it represents about a 0.09% GDP uplift over nine years—but is geopolitically important, we need to think about how it becomes a load-bearing structure for more of our ambitions in the world, such as the race to net zero. Maybe when the Minister is winding up he could say a bit more about how we can freight this treaty with some of our other national interests.
The point about food production standards has already come up. No changes to UK standards are entailed in the treaty, but there were concerns about sanitary and phytosanitary rules, based on the precautionary principle. The evidence we heard said that they could be challenged. It is a legally murky area and, on balance, the challenges seem unlikely to succeed, but that is none the less something to explore in the Bill Committee. It could well be that that Committee wants to ensure that further safeguards are written into the Bill over the course of its passage.
There will be an increase in imports of agrifood goods produced to lower standards than UK standards. That is true when it comes to pesticides, genetically modified organisms and animal welfare, but not to antimicrobials. On pesticides, the Trade and Agriculture Commission found some basis for weaker standards; on GMOs it found some basis for concern. On environmental laws and policies, palm oil imports are obviously controversial, particularly when it comes to deforestation in Malaysia, but the TAC found that the concerns were, if not non-present—there are concerns to be had—then perhaps slightly overstated.
The final point is about investor-state dispute settlements. Again, the treaty extends the application of ISDS to Canada, Japan and Brunei. One way in which that has become such a big issue is that organisations such as the Canadian teachers’ pension funds are some of the biggest investors in the world, with significant investments in the UK water industry. There have been 1,300 or 1,500 of those cases around the world. The evidence we heard suggested that the UK was likely to be able to successfully defend such cases. One consideration about which we should hear a little more is whether the presence of those clauses in the Bill creates a chilling effect on the way in which we regulate our markets here. If we wanted to regulate the water industry differently in future, would we not bring forward those regulations because of fear about what would happen and how we might be challenged?
The gains from the treaty, as drafted, are modest. They generally come from the fact that we have a new FTA, as part of the treaty, with Malaysia and Brunei. That is good for whisky, for cars and for chocolate, such as that made in Bournville. A single set of rules of origin and a single cumulation zone are good things. Access to some of the agrifood quotas, such as Canadian dairy, is a good thing. Some of the progress made in the digital chapter, about which the Secretary of State did not talk much, could be quite useful and can be built on more generally.
We have to conclude that the trade benefits as of now are no substitute for ironing out the difficulties that bedevil trade between the UK and our close neighbour, the EU. Across the House, we should collectively ensure that we are doing what we can to advance the prospect of a UK-US trade deal. These are modest trade benefits but an important geostrategic step forward.
It is good to have this Second Reading debate, which I welcome. Like the hon. Member for Totnes (Anthony Mangnall), I very much hope that the Government will make time for us to have a debate under the CRaG principles about whether the treaty as a whole goes forward. We would welcome the opportunity to have an amendable motion on that, as the other place did recently on the Safety of Rwanda (Asylum and Immigration) Bill. The Public Administration and Constitutional Affairs Committee has published an excellent report today about how we can better consider treaties. In this new world, Parliament as a whole must get a lot better at studying these kinds of trade agreements and ensuring that they dovetail with other aspects of our economic and national security. I look forward to the debate in the Bill Committee, which I hope will benefit from the report that our Select Committee will supply.
Sarah Green (Chesham and Amersham) (LD)
I rise to broadly welcome the UK’s accession to the CPTPP. The Liberal Democrats support efforts that create opportunities for British firms around the world, not just in the here and now, but in years to come. However, the reality is that the immediate benefits of the CPTPP will be a drop in the ocean. Given that the UK has, or is about to have, trade agreements with all but two countries that are currently part of the CPTPP, it is perhaps not surprising that analysis suggests that the immediate benefits will be limited and that the Government’s own projections show that the economic impact will be minimal.
I will address three particular areas. The first relates to the fears of our farming community, which have been mentioned. The National Farmers Union is concerned about the lack of core standards for food imports. As colleagues in the other place have noted, when it comes to the CPTPP, those concerns are not so much about the protection of UK standards but about the standards in other countries, which could undermine and undercut UK businesses through imports. In particular, UK farmers producing eggs, pork and beef are potentially vulnerable to imports produced using practices that are banned in the UK. I can therefore understand the concern of the farming community, which is proud of the UK’s high animal welfare standards in food production and worries about being undercut by lower-standard imports from elsewhere. I also understand why consumers will be worried about food produced to lower standards reaching their local supermarket. My Liberal Democrat colleagues and I are keen to avoid a race to the bottom, and to ensure that our animal welfare standards are not diminished as part of any trade agreement.
The second issue relates to our creative industries, which are worried about proposed changes to copyright law. The UK has one of the best intellectual property regimes in the world. It is therefore understandable that the businesses and creators that depend on strong IP rights, and that play a vital role in our economy, want assurances from the Government that the UK’s accession to the CPTPP will not have an adverse impact on them. Like others, the Alliance for Intellectual Property has raised a number of concerns, noting the lack of reciprocity in the Bill in relation to copyright law, particularly on performers’ rights. If I have understood correctly, the Bill would extend payment rights, or equitable remuneration, to foreign artists who perform in the UK, without ensuring reciprocal arrangements for UK artists who perform in those countries. That seems perverse. It would be good to know what impact assessment, if any, has been done on that area. I would welcome clarification from the Minister in his closing remarks.
The third area relates to the accession of other countries. The benefits of the CPTPP may in fact come as other countries with which we do not currently enjoy trade agreements join. However, it would be remiss of me not to mention concerns, which we have already heard, about the potential accession of China. My noble Friend Lord Purvis outlined in the other place the reason a debate about China is so important. He said that it is
“not just the scale of the UK’s trade with China but how resilient we are in relation to it.”
Our trade in goods with China is currently at a £40 billion deficit. That is the largest deficit with a single country in our nation’s history. As Lord Purvis pointed out:
“The shipping of goods from China, which we depend on for our consumers, comes through the very area where we have deployed military assets”—[Official Report, House of Lords, 16 January 2024; Vol. 835, c. 337-38.]
in recent weeks. It is in our geopolitical and strategic trading interests that Parliament devotes time to debating our relationship with China. I hope that the Government will make the most of the UK’s place in the CPTPP to protect the interests of our allies in the region, and human rights, from China’s actions.
I will finish by reiterating a plea that I have made previously, and which other hon. Members have made in the debate, about the need for greater parliamentary scrutiny of all free trade agreements. We are debating the Bill because primary legislation is required for the UK to be compliant with the CPTPP when it enters into force. In the past, the Government have committed to giving Parliament greater scrutiny of free trade agreements but then reneged on it. They broke their commitment to giving Parliament a vote on the Australia trade deal, for example, which had terrible consequences for British farmers. The fact that we are having this debate today is welcome, but I leave Ministers with the message that it should not be the exception to the rule.
John McDonnell (Hayes and Harlington) (Lab)
I will raise three issues: the scrutiny process, ISDS and my ongoing concerns about the impact of the measures.
I am a member of the Public Administration and Constitutional Affairs Committee. I am the sole Committee member present in the Chamber because the others are on a delegation to Berlin at the moment—I am sure that they are working hard at this time of night, and not having a dinner. As has been mentioned, we published our report today; it is a comprehensive report, agreed by all parties. We have been looking at the overall parliamentary scrutiny process for treaties and free trade agreements and, to be frank, we have unanimously found that the current process is unfit for purpose.
At the moment, Parliament—I do not disparage the Government for this; it has happened consistently in the past—is treated as an afterthought in trade policy. We have not been able to find any meaningful mechanism by which Parliament can influence the negotiating objectives at the beginning of the overall process or oversee negotiations as they proceed, and we are never guaranteed a vote on the final agreement at the end of the process—a point that has been made on a number of occasions by Members across the House.
That contrasts with what happens in other legislatures, particularly the US Congress, where legislators play an incredibly proactive role. I do not think the Government should see the parliamentary process as an imposition with regard to future treaties, but as a method of improving the trade negotiations by allowing Members of Parliament to have an early and ongoing voice in those discussions. It is interesting that other Members—including the former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Camborne and Redruth (George Eustice)—made exactly the same point during a debate in this House on the Australia free trade agreement, way back in November 2022. The right hon. Gentleman set out how during talks with Japan, the Japanese negotiators used parliamentary motions that their Government could not breach to protect their country’s interests.
People will see from the report that we have put forward a fairly comprehensive process by which the House can efficiently and effectively engage itself in such negotiations, with a sifting committee and a scrutiny committee. The House would always have the right to a vote at the end of the day, but more importantly, it would have an influence at the beginning of the negotiations when the overall objectives are set. The proposed process is part of an overall attempt to create greater transparency and, indeed, greater interest within the House in trade negotiations. I hope that the Government will take the Select Committee report away and come back with a positive response, because it contains some very constructive recommendations.
I now turn to the much discussed investor-state dispute settlement procedure. In debates in recent years, Members from across the House have expressed concern about the investor-state dispute mechanism, and those concerns have moved into the mainstream—not just in this country, but in other countries that are moving away from that system. As we have heard, Australia and New Zealand have committed to exclude the ISDS procedure from future trade agreements on the basis that in many instances, that procedure is not in the public interest. I cite the energy charter treaty. That has been the biggest vehicle for ISDS claims, and it is collapsing, with France, Germany, the Netherlands, Spain and others withdrawing. President Biden has now come out and criticised the ISDS procedures, and has basically excluded them from any future US trade agreements.
As the Minister knows, I have raised this matter in the House a number of times. I am sometimes perplexed: we are told that the Government are committed to the ISDS process, but on the other hand, they have acceded to both Australia and New Zealand exempting themselves from that process with regard to the UK. The last time I raised this issue, the Minister responded by saying—exactly as the Chair of the Business and Trade Select Committee, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), noted—that the UK has never been successfully challenged under ISDS. That is true, but there is an element of hubris in that position.
Liam Byrne
My right hon. Friend is making an excellent speech, and he is absolutely right to flag this issue. The UK Government have not hitherto been successfully challenged under ISDS, but for the first time, countries with very significant foreign direct investment into the UK are involved in this treaty. The figure for Canada alone is $56 billion. When it came to Japan—the other big investor—ISDS was excluded from the UK-Japan bilateral investment treaty. We need an awful lot more reassurance from the Government on this point, given the scale of investment from countries such as Canada in our country in general, but in sectors such as the water industry in particular.
John McDonnell
I do not know how excellent my speech is—I will just ramble on as usual, I think.
The argument that was put to me by the Minister responding today, the right hon. Member for Chelsea and Fulham (Greg Hands), was that if we cannot trust Canada in these deals, who can we trust? That is precisely the point, though: Canada will now have a parallel system, and Canadian firms will be able to take legal action in their own country. As a result of that statement by the Minister, I went away and had a look at the figures for Canadian firms under this process, and those firms stand out as being particularly litigious. They have brought over 65 ISDS cases in recent years. I therefore think that there is a chilling effect, exactly as the Chair of the Select Committee said, which at the end of the day can have implications for the UK’s right to regulate. If a number of cases are waged against the UK, that may undermine our ability to act more freely when it comes to regulation of the water sector, and also policy development, particularly on issues around water and future public ownership.
Again, I have previously raised this matter with the Secretary of State. What I cannot completely understand is that at the same time that the UK Government are defending the ISDS process with regard to the CPTPP, in the negotiating process for the bilateral free trade agreement they set out a specific objective to exclude the provisions of the ISDS system. That is a contradiction, and the Government’s thinking on that matter has not yet been explained to me. As the Minister will also know, there is a remarkably broad range of concern about the ISDS: in October 2023, a letter was submitted to the Government—supported by 30 non-governmental organisations and trade unions and over 50 academics and legal professionals from both the UK and Canada—calling for the immediate negotiation of a side letter between the UK and Canada to disapply the ISDS provisions between the two countries. That is exactly what happened with regard to New Zealand and Australia, and for the life of me, I cannot understand why the Government have not gone down that path for this particular negotiation.
I also want to express some concerns that have been raised about environmental issues and about labour standards. The CPTPP includes a number of countries where abuses of labour rights are widespread. To give a few examples, independent trade unions are banned in Brunei and Vietnam, while forced labour has been widely documented in Malaysia in various pieces of research, and a number of CPTPP member states have not ratified some of the core International Labour Organisation conventions.
The protections for labour rights within the CPTPP are particularly weak: a member state can only challenge another member state over a failure to uphold labour rights if it can be demonstrated that such a failure affected trade, which is notoriously difficult to prove in such cases. The ineffectual nature of that chapter is demonstrated by the fact that since the agreement’s conclusion in 2018, no Government have challenged another for abusing rights. The TUC has described the risk of CPTPP making it
“easier for unethical companies and investors to do business with countries where it’s easier to exploit workers”—
a risk that it considers to be significant. I do not think we have addressed that issue sufficiently.
There are also concerns regarding standards in partner countries. For example, as has already been said, pesticide standards could be undermined. Some 119 pesticides that are banned in the UK are allowed for use in one or more CPTPP member states. Although accession to the CPTPP does not necessitate any lowering of UK standards in this regard, when the peers debated this issue, there were really practical questions about the sufficiency of the UK’s border testing regime in keeping banned substances out. Again, it is an issue that needs further consideration in more detail as we go through the whole process.
The issue has been raised—and I know that the Chair of the Select Committee said that this may well have been exaggerated or overestimated in some of the debates—that the UK has acceded to Malaysia’s demand to lower tariffs on palm oil to zero. I have to say that the evidence I have seen and the representations I have received from the Trade Justice Movement and others is that this is highly likely to increase palm oil exports and, with that, the risk of deforestation, which will serve to undermine indigenous and local community land rights and threaten natural habitats for species such as orangutans. We have seen the various research and the range of evidence mounting on this particular issue. Again, it was debated in the Lords in the context of the potential protections afforded by the UK forest risk commodities legislation, under section 17 of the Environment Act 2021, but it is unclear when these regulations will actually come into effect, and therefore many believe that the protections are not in place at this stage.
There is also a view that accession to the CPTPP will bring risks of the erosion of preferences, under which current preferential trade agreements afforded to exporters in one country will bring negative development impacts on others. One example cited by the Trade Justice Movement is that Afruibana, the association representing banana exporters across Africa, has set out concerns regarding the potential impacts of tariff liberalisation in South and central America for those they represent.
Finally, one of the reports sent to me was a health impact assessment produced by Public Health Wales. It identified a range of diverse potential impacts, including the worsening of global air pollution due to transport distances for goods, the loss of employment for some population groups and, of course, the risk of ISDS cases being brought against regulations that seek to support public health outcomes. It is an important impact assessment that needs further scrutiny and examination. It leaves me with the impression overall that there has been a lack of impact assessments, so I look forward to the Select Committee report, which will go into further depths on this.
I come to the conclusion that, with all the risks involved and with such doubt surrounding the CPTPP, it will achieve what we could not even describe as a marginal economic gain over the length of time it will be in place, and I fear to tread on treaties and agreements of this sort. I just think that, although there is not going to be a vote tonight, I might be tempted at a later date to vote against the Bill—so I had better let the Labour Whips know that.
Sarah Dyke (Somerton and Frome) (LD)
The CPTPP poses a serious public health risk, makes us complicit in untold environmental harm and is
“another nail in the coffin”
for UK farmers, as one constituent put it to me last week. I am deeply concerned about the livelihoods of farmers, who will be exposed to increased competition from lower standard farm inputs, meaning that many domestic farmers may struggle to compete.
Anthony Mangnall
Further to the point I made earlier, does the hon. Lady not recognise that the report on the CPTPP by the Trade and Agriculture Commission, which was set up all those years ago because people were worried about what was going to be in the Australia agreement—it is set up on a constitutional or statutory footing, is there to review all our trade agreements, and includes people such as Nick von Westenholz from the NFU and a number of other members from the agriculture community—did not find that it was damaging to farmers across this country? If that report is to be believed, would she not have done well to tell her constituent that this is not the case, rather than allowing that fear to run wild?
Sarah Dyke
I thank the hon. Member for those interesting points.
I am concerned about the negative impact that this Bill has on modern innovative and sustainable agribusiness. I am concerned about the worsening of the UK’s environmental impact, and the fading net zero commitments that this Government are shying away from. I am concerned about the human rights implications that my constituents, as consumers, may be made to stomach. I have many constituents working in the agrifood industry who feel they have been misled by this Tory Administration. One farmer told me last week that
“this Government says one thing with its many mouths and then does something completely different”.
We ask our farmers to maintain high welfare and environmental standards—and rightly so—but some signatories, such as Mexico, have almost none. Food security expert Professor Chris Elliott told me:
“It’s absolutely not a level playing field in any stretch of the imagination”.
We Liberal Democrats agree with the NFU and the World Wildlife Fund in demanding core production standards for agrifood imports, which would uphold the ban on hormone treatment for cattle and prevent the import of food containing any of the 119 pesticides banned in the UK—to give just two examples. Which? surveys show that 84% of the country agrees with us, and I urge the Government to adopt this measure.
Anthony Mangnall
I am sorry, but I just feel that this matter should be hammered home. The opening summary of the Trade and Agriculture Commission report on the CPTPP states:
“Question 1: Does CPTPP require the UK to change its levels of statutory protection in relation to (a) animal or plant life or health, (b) animal welfare, and (c) environmental protection?”
The answer from the Trade and Agriculture Commission is:
“No. CPTPP does not require the UK to change its levels of statutory protection in relation to (a) animal or plant life or health, (b) animal welfare, or (c) environmental protection.”
This is not going to damage them, so the hon. Member must go back to her constituents and reassure them, rather than allow this mistruth to run wild across the countryside.
Sarah Dyke
The hon. Member makes an interesting point, but my view is about what the future will bring.
I have spoken in this place about the concerns I have regarding the mental health of farmers and farm workers, and the situation that farmers face is stark. In 2021, over a third of farmers surveyed by the Royal Agricultural Benevolent Institution were “probably or possibly depressed”. Trade deals implemented since the Tory Brexit arrangement are causing significant financial stress and uncertainty to many agrifood businesses. Dairy, beef and poultry producers have approached me for help, fearing that they may not be in business by the summer. One farmer in Castle Cary told me last week that
“we farmers are the ones who stump up the cost”.
I am proud to have some of the country’s oldest cheddar producers in my constituency, such as Wyke Farms near Bruton, and many new artisan cheese producers, like Feltham’s Farm in Horsington, but even award-winning cheeseries are not safe from the toxic tendrils of this deal. The effects will be felt by businesses in the supply chain as well, such as Sycamore Process Engineering, a growing local business based in Sparkford, where 67 local people work; and if those businesses’ customers go bust, so will they. Losing agrifood businesses would irrecoverably alter our rural way of life.
The farmer in Castle Cary also spoke of the
“hidden cost of cheap food”,
and one of those costs is welfare, both human and animal. I echo the words of my noble Friend Baroness Bakewell about the threats to indigenous peoples in palm oil producing forests, which the right hon. Member for Hayes and Harlington (John McDonnell) has mentioned. International Labour Organisation standards are not incumbent on signatories to this deal. We should have grave concerns about suspiciously under-priced food landing in our market, when the average Vietnamese harvest worker gets £5.50 per hour, according to the Economic Research Institute.
How can we know whether the people producing this food have been paid at all? The egg producers in Mexico, who will undercut my constituents by about a third, are subjecting their chickens to horrendous living conditions, and are themselves at the mercy of powerful cartels. They live in “slavery-like conditions”, according to El País this month, where cartels have
“taken over all links of the supply chain”,
and
“violence and extortion add to the ravages of climate change”.
Is this the sort of modern trade we want to support?
Sarah Dyke
I will not.
I want to end with a stark and urgent warning. Last month, the Food Standards Agency had to issue a health warning after a rise in salmonella cases from Polish eggs and poultry meat, with 200 cases reported in 2023. That risk only grows when we open the floodgates to eggs and poultry produced to lower standards. Professor Elliott warned me about antibiotics deployed en masse without veterinary approval, Government control, or knowledge of the antibiotics’ provenance. Such use and abuse of antibiotics is part of a frightening health picture. Professor Elliott cautioned that
“most countries do not have the infrastructure, regulations or oversight of drugs or pathogens—we could be opening up Pandora’s box.”
Batch-testing imports just will not work. Antibiotic resistance will spread from plate to platelet, and we would have a hard time swallowing that unpalatable morsel.
My constituents have record low trust in the Government. Removing water from the egg of an imprisoned chicken, drugged up on antibiotics that it did not need, and shipping that egg 5,000 miles to put into pancake mix and insipid sandwiches, is what my constituents have come to expect from this Tory Administration. Many of my constituents will not stomach toxic Tory trade deals, and we must urgently renegotiate them and have more mandatory parliamentary powers for future deals. We cannot afford the health cost to our population, the carbon cost to the planet, and the financial cost to our farmers. We have the chance to be world leaders in modern, world-beating, innovative, sustainable agriculture, and to proudly keep our high standards and improve our food security. Let us not lose that opportunity.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is an honour and privilege to close today’s enthralling debate on behalf of His Majesty’s official Opposition. Tonight, as we consider Second Reading of this important Bill, it is essential to balance our support for it with a critical eye. Labour supports CPTPP accession, albeit with reservations, and this Government are known to promise “oven-ready” deals that often break more ground in rhetoric than in reality. The Labour party recognises the UK’s untapped trade potential, and is committed to harnessing it. However, we must acknowledge the Government’s over-estimation of the CPTPP benefits. Initially they suggested a 0.08% GDP boost over 10 years, but recent forecasts have downgraded that to a mere 0.04% in the long run. To ensure that trade is a force for good, we must subject such deals to rigorous scrutiny, and commit to progress on climate change, human rights, and labour conditions globally.
As hon. Members have stated, the devil is indeed in the detail. The failure to deliver on manifesto commitments, including agreements with India and the US, highlights the need for a realistic evaluation of CPTPP’s benefits. As illustrated by the hon. Member for Totnes (Anthony Mangnall), there is no denying the importance of closer ties with Indo-Pacific allies, especially in these uncertain times. However, although CPTPP offers trade advantages such as rules of origin provisions and potential for improved terms, grand Government claims of “unparalleled opportunities” and “glittering” post-Brexit prizes must be substantiated and grounded. It is my duty to ensure not just that the skeleton of the deal accedes, but that British business thrives as a result.
In his excellent speech, my hon. Friend the Member for Harrow West (Gareth Thomas) highlighted the concerns of our creative industries, and the hon. Members for Chesham and Amersham (Sarah Green) and for Somerton and Frome (Sarah Dyke) explained concerns surrounding farming and China. Considering that we already have free trade agreements with nine CPTPP members, the immediate benefits of formally joining the CPTPP might seem limited. The Government’s projection of a mere 0.06% boost to the UK’s GDP from CPTPP calls for a measured evaluation of its actual economic impact. This deal puts us at the heart of a dynamic group of economies, but it is crucial that we do not stop pushing for more ambitious growth. We do not have that privilege after 14 long years of Conservative rule.
Our stagnated economy needs a much needed boost. Indeed, in the last 10 years, Britain has had the second worst export record in the G7. That is why change is necessary.
Having spoken to British exporters in my constituency and across our country, I know that the challenges they face post Brexit are substantial, and increased barriers, red tape and bureaucracy have been a significant hindrance. The Bill must be part of a larger strategy to revitalise our global trade presence, yet Labour sees untapped potential here.
For example, we recognise the immense contribution that small and medium-sized businesses make to our economy, with a £2.4 trillion contribution and employment for 16.7 million people. However, the Government’s approach to supporting those enterprises in expanding their export potential lacks clear strategic direction and coherence. Labour’s plan for small businesses aims to address those gaps, ensuring that SMEs have the necessary support and framework to flourish in international markets. The CPTPP symbolises international co-operation and unlocks untapped SME potential, with around 375,000 UK SMEs not currently engaged in international trade representing a £290 billion export opportunity. There is indeed untapped potential waiting to be harnessed. The Bill also highlights the regulatory burdens faced by businesses, and we must reduce the complex web of regulations. It further lowers tariffs to enhance market access and choice for businesses sourcing from CPTPP countries, potentially benefiting consumers. However, it is important to note that that may expose some UK businesses to increased competition from CPTPP exporters.
Let us look more closely at the impact than at the wording of this deal. As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) eloquently explained, the inclusion of investor state dispute settlement mechanisms in the CPTPP raises grave concerns about the influence of foreign investors. We must scrutinise those provisions to protect our sovereignty and democratic principles.
Our commitment to environmental stewardship is critical. The World Wildlife Fund has expressed concerns about the CPTPP’s impact on deforestation, particularly palm oil, which could conflict with our commitments in the Environment Act 2021. We must ensure that our trade policies align with robust environmental protection. It is essential that our trade deals do not undermine our efforts to combat the climate crisis. The Government’s optimistic portrayal of the CPTPP must be balanced against a history of over-promising and under-delivering in trade deals. Figures from the respected independent Office for Budget Responsibility suggest that the CPTPP might contribute only a marginal 0.04% to our GDP.
The Government hail the CPTPP as a transformative deal and a potential panacea for our post-Brexit trade woes, but let us be clear that while they paint a rosy picture of economic prosperity, the empirical evidence suggests otherwise, as was excellently elaborated on by the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne). We were promised sunlit uplands post Brexit, yet here we are squinting to see the benefits through a fog of uncertainty.
Anthony Mangnall
That is not empirical evidence. A forecast is not empirical fact—it is a forecast—and these are modelling exercises by their very nature. I challenge the hon. Member to give me proof from any trade agreement, with the value at the beginning versus what it was at the five-year mark and the 10-year mark. Nearly every trade agreement, whether signed by the European Union, the UK or the Americans, has always been undervalued because the emphasis is on businesses and communities taking advantage of it.
Mr Dhesi
I thank the hon. Member for that intervention. Just as the Government’s aspirations go by those figures, we must likewise respect the figures of the Office for Budget Responsibility, as it is a lot more rigorous in its exercise. We cannot discard its figures; indeed, we must dwell on them as the wider British industry and the economy look closely at those figures. They are the best figures we have, rather than anything that the Government or anybody else have put on the table.
It crucial to acknowledge the broader context of the UK’s export performance. In recent years, we have seen a concerning decline in our export capabilities, raising questions about how effectively the CPTPP can reverse the trend. The Bill must be part of a larger strategy to revitalise our global trade presence and not be just a stand-alone solution. The deal was negotiated by the party that has hiked trade barriers, crashed our economy, driven up food prices, engaged in damaging megaphone diplomacy, increased bureaucracy for our businesses trading internationally, and much worse besides. In contrast, Labour’s objective is to increase trade and international co-operation, and we will be closely watching the execution of this deal.
The Government have repeatedly failed on their promises on the international stage. We support international trade and global co-operation, but that must translate into tangible benefits for British jobs, consumers and our overall global economic prosperity. That trade also cannot come at the cost of our moral and ethical commitment to, for example, human rights, labour rights, food standards and the environment. Labour’s approach to the CPTPP will be one of cautious optimism, balanced by a realistic assessment of its potential impact on our national interests.
As we edge closer to a much awaited election that will help to put the British public out of their misery, the Labour party stands as the true party of business and trade, advocating for agreements that genuinely benefit the UK’s economy. We support the CPTPP but remain vigilant about ensuring that it aligns with our vision of a thriving, globally competitive Britain. We are committed to a future where Great Britain not only engages with the world but leads in a fair, equitable and profitable trade relationship with our partners around the world.
The Minister for Trade Policy (Greg Hands)
It is a pleasure to reply to what has been a wide-ranging and often well-informed debate. The Bill’s passage will enable the UK to meet international obligations on accession to the CPTPP, thereby unlocking the next chapter in the country’s proud tradition of trading freely with the world. Acting as a gateway to growth, the agreement will place the UK at the centre of a vast free trade area currently comprising 11 sovereign countries. For UK consumers, reductions in tariffs could lead to cheaper imports, better choice and higher quality products, all while protections in critical areas are maintained. With more than 99% of current goods exports to CPTPP parties being eligible for zero tariffs, businesses in every corner of the UK stand to benefit.
Dan Carden (Liverpool, Walton) (Lab)
I will lightly sidestep the party political debate. As the Minister knows, my interest is in Mexico—I have chaired the all-party parliamentary group on Mexico for five years, and am now proudly the Prime Minister’s trade envoy to Mexico—which is the world’s 16th largest economy and will be the ninth largest by 2030. That offers great opportunities, not least for my region, the north-west, which trades more with Mexico than any other region. Plenty of labour rights are included in the CPTPP; the question is how they will be enforced. For instance, every party to the CPTPP holds obligations under the International Labour Organisation. The question is how we trade more as well as raise protections through the CPTPP.
Greg Hands
I thought for a moment that the hon. Member was going to verge off into football. I was going to congratulate him on his constituency team, Liverpool, beating Fulham last week. In any case, I thank him. He was recently appointed the Prime Minister’s trade envoy to Mexico, which is a really important position. In general, Mexico presents a great opportunity. Our rolled-over trade deal with Mexico dates from a long time ago—about 2002-03.
The hon. Member will know that the CPTPP includes a comprehensive chapter on labour, with binding provisions on fundamental labour rights, minimum wage, hours of work and health and safety. All parties to the CPTPP are members of the ILO, and they are not allowed to derogate from their domestic labour laws to give them an unfair trade advantage. That is how the labour chapter in the CPTPP works. I look forward to discussions with him, and to doing everything we can to work together to boost trade with Mexico.
Before I extoll the benefits of the agreement still further, I will say that it is a pleasure to be back at the Department, and to see the further progress being made tonight towards the UK being the 12th party to the CPTPP. This is a tremendously exciting moment for both the UK and global trade policy—one that the Department and I personally have been building towards for many years. Back in about 2017, one of the earliest decisions in the Department under the then Secretary of State, my right hon. Friend the Member for North Somerset (Sir Liam Fox), was to explore accession to the trans-Pacific partnership, as the CPTPP was then known.
Richard Graham
May I pay tribute to my right hon. Friend for the work that he has done, both on this arrangement in general, and more specifically in promoting our mutual trade and investment agreements with nations in Asia? It is the 67th year of Malaysian independence; this is the first trade and investment agreement that we have ever had with that very encouraging far-eastern nation, with which we can develop a great and stronger relationship. Does he agree?
Greg Hands
My hon. Friend is quite right. Of course, successive Secretaries of State have pursued that relationship, including the current Secretary of State, who is personally obviously very committed. I think that I have made two visits to Malaysia in my time as Trade Minister, and we are really excited about having a better trade relationship with Malaysia.
It seemed a logical move to join the CPTPP, as it included many of our global free trading cohort, including Japan, Australia and New Zealand, but it did not have the controversial aspects of free trade zones in Europe, such as free movement, financial contributions and dynamic alignment of rules. As the Secretary of State said, the agreement will grow. Joining the CPTPP will be great news for the UK as an independent trading nation, and for UK goods and services exporters. They include beverage producers in Scotland—I did not hear the SNP extolling that virtue—machinery manufacturers in Wales, and car manufacturers in Northern Ireland and the west midlands.
According to 2022 data, the UK is the world’s second largest services exporter—a point also raised by my hon. Friends on the Government Benches. Joining the CPTPP will help minimise unnecessary data flow barriers, empower UK services exporters and encourage inward financial investment—a point made by my hon. Friend the Member for Rugby (Mark Pawsey). Overall, it will provide us with a new presence in the wider Indo-Pacific region—a region of paramount geopolitical and economic importance, and one that is expected to account for 54% of global economic growth by 2050.
I warmly welcome the constructive comments made and the support from sectors across the country. In her opening speech, the Secretary of State quoted the president of the National Farmers Union and the director-general of the Institute of Export and International Trade. I would like to add just one more quote, from the Federation of Small Businesses. We had an intervention earlier about SMEs; the FSB said that it is
“very pleased to see the UK officially join”.
In FSB research, 45% of small exporters said that access to this market will be important for future growth.
Today we have heard a number of important points raised, and I will try to answer as many as possible in the time available. I remind the House of the specific purpose of the Bill: to enable the implementation of aspects of the CPTPP when the UK accedes, specifically relating to chapters on intellectual property, Government procurement and technical barriers to trade.
First of all, we heard from the hon. Member for Harrow West (Gareth Thomas), who gave us his familiar explication of how we are not doing enough trade deals, even though he has voted against every single one of the deals that we have done. We heard about his attitude to Canada, and his faux outrage about the idea that there might be a weakening in the existing trade deal with Canada. We heard that from the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and the hon. Member for Walthamstow (Stella Creasy). They also said that the Government are letting down people by not having an effective continuation of the Canada trade deal. We can differ on that, but the difference in the case of the hon. Member for Harrow West is that he voted against the Canada trade deal in the first place. He is now taking time to complain about the weakening of an agreement that he did not support from the very off.
On China, the hon. Member for Harrow West has been reminded about the Auckland principles, and that all countries acceding to the CPTPP must accede to the high standards of the agreement, have a history of conforming with trade agreements and command the consensus of the parties. The investor-state dispute settlement, which was also raised by the right hon. Member for Hayes and Harlington (John McDonnell), is in the agreement, but I remind the House that the UK has never lost a case. The right hon. Member for Hayes and Harlington called it hubristic to mention that, but it is a fact, and the agreement never prevents the right to regulate. On performers’ rights, raised by the hon. Member for Chesham and Amersham (Sarah Green), the CPTPP is an existing agreement, and changes will have to be made.
John McDonnell
I have made this point on previous occasions, but I just want to understand the logic of the Government’s position of allowing the ISDS in this particular deal, but trying to avoid it in the free trade agreement with Canada.
Greg Hands
These are all matters for negotiation. What happens in one negotiation will not always be the same as what happens in another; it is impossible to compare them. I can say that we already have ISDS provisions with seven of the 11 CPTPP members.
Greg Hands
I will not, because I am trying to respond to the right hon. Gentleman’s earlier points. On performers’ rights, raised by the hon. Member for Chesham and Amersham, we expect the practical impact to be small. The Intellectual Property Office is carrying out a consultation on how the provisions will be implemented.
My hon. Friend the Member for Totnes (Anthony Mangnall) made a characteristically upbeat and excellent speech, pointing out that the region has £12 trillion in GDP, how the UK will be—and is—at the forefront of global trade, and how the deal will make no alteration to our standards.
From the SNP spokesperson, the hon. Member for Gordon (Richard Thomson), we heard a familiar tale of woe. He failed to stick up for Scotland and to point out all the trade benefits for Scotland. He said that he has been against every single UK trade deal, and that is correct, but he failed to mention that he has also been against every single EU trade deal that has ever been negotiated. He wishes to rejoin the EU and be subject to those very trade deals that he spent years campaigning against. He was against the Canada deal, the South Africa deal, the Japan deal, the Singapore deal and the Korea deal.
The hon. Member failed to mention the particular benefits to Scotland. He was wrong when he said that the GDP increase is £2 billion—it is £2 billion per annum. Then, he went down an extraordinary road of talking about eggs. Ninety per cent. of our egg consumption comes from domestic production. All eggs are subject to sanitary and phytosanitary checks, and from Wednesday, EU eggs will be, too, under the border target operating model. We have imported hardly any eggs at all from CPTPP countries since 2015. I think he mentioned eggs from Mexico, but there has been not a single import of an egg from Mexico since 2005. This is the most extraordinary scaremongering. The Trade and Agriculture Commission said:
“we found it was unlikely that eggs from CPTPP parties…would be imported into the UK”.
The hon. Member is sacrificing the interests of those selling Scotch whisky and other high-quality Scottish produce by starting scare stories about the importation of eggs, which are not coming to this country. He mentioned workers’ rights; I have already said that there is a comprehensive labour chapter.
The right hon. Member for Birmingham, Hodge Hill, made a constructive speech. He said that the deal was good for farmers, good for whisky and had a good digital chapter. He is right that we are doing more trade deals— we are going further with Switzerland, Turkey, South Korea and others. He is right on the scale of the CPTPP and growth. On pesticides, there is no change to our right to regulate or to our import standards. We set the maximum limits on pesticides—there is no change to that.
The hon. Member for Chesham and Amersham said that we already have deals with nine of the 11 members. Well, it depends on what is in the deal. As I pointed out in response to the intervention from the hon. Member for Liverpool, Walton (Dan Carden), the existing deal with Mexico is very old—it goes back more than 20 years. The CPTPP is a very modern deal. We can get a lot more done with a very modern deal than with a deal that is many decades old. She complained about the lack of parliamentary scrutiny. There have been two oral statements, 16 written ministerial statements, and Ministers and officials have appeared before five Select Committees to give evidence on the CPTPP. That is a lot of parliamentary scrutiny over the years. On palm oil, the TAC said that it is unlikely that the CPTPP will lead to an increase in palm oil being grown on deforested land. We have had impact assessments galore, but I am happy to look at the public health assessment mentioned by the right hon. Member for Hayes and Harlington.
Finally, we heard a speech from the hon. Member for Somerton and Frome (Sarah Dyke), which was alarmist in its impact on farmers. The NFU supports the agreement. She described the “toxic tendrils” of the deal, and even blamed “insipid sandwiches” on this Tory Government. There are many things that I am not quite sure can be blamed on any Government, and the quality of sandwiches is going too far. She started verging into what sounded a little like conspiracy theories.
The Bill is the next step in the creation of the outward-looking and internationalist UK that we envisage for our country’s future. Through the UK’s accession to the CPTPP, the Government will place the UK at the centre of a modern, progressive and values-based partnership that spans the Americas and Asia, and which other economies are queueing up to join. It is the gateway to new business opportunities and greater consumer choice benefits that will be felt in every corner of the UK. While the legislation may be narrow, it is crucial to the UK’s ability to accede to the CPTPP. I therefore commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords] (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 22 February 2024.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Robert Largan.)
Question agreed to.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [ Lords ] (First sitting)
Tuesday 20th February 2024
(10 months ago)
Public Bill CommitteesRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 February 2024 - (20 Feb 2024)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
I have a few preliminary announcements. Members should send their speaking notes by email to hansardnotes@parliament.uk; please switch electronic devices to silent; and tea and coffee are not allowed during sittings. We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication. I hope that we may take those matters formally, without debate. I call the Minister to move the programme motion standing in his name, which was discussed yesterday by the Programming Sub-Committee for the Bill.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 20 February) meet—
(a) at 2.00 pm on Tuesday 20 February;
(b) at 11.30 am and 2.00 pm on Thursday 22 February;
2. the proceedings shall be taken in the following order: Clauses 1 to 3; Schedule; Clauses 4 to 8; new Clauses; new Schedules; remaining proceedings on the Bill;
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 22 February. —(Greg Hands.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Greg Hands.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated to Members by email.
We will now begin line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment and on whether each clause should stand part of the Bill are taken when we come to the relevant clause.
A Member who has put their name to the leading amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group by standing in the normal fashion. A Member may speak more than once in a single debate. At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know in advance.
Clause 1
Meaning of the “CPTPP”
Question proposed, That the clause stand part of the Bill.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies.
As we commence examination of the comprehensive and progressive agreement for trans-Pacific partnership, or CPTPP, the Labour party is sharply focused on its wide-ranging implications for the United Kingdom. Our commitment transcends merely increasing trade volumes; it extends to enhancing the welfare of our industries and to improving the wellbeing of our citizens, pivotal to safeguarding our nation’s interests.
Despite the insights provided during previous debates in the Chamber by Government Members, who championed the agreement as a gateway to market access and economic prosperity, we observe a disconnect in our approaches towards trade, in particular regarding its broader societal and economic repercussions. The CPTPP introduces extensive modifications in key areas such as procurement, intellectual property and the regulation of conformity assessment bodies. However, the Government’s depiction seems to gloss over the profound and complex impacts of those provisions. Our steadfast dedication to promoting trade development is matched by our resolve to maintain high environmental standards, to protect workers’ rights and to uphold the sovereignty of our legal and regulatory frameworks.
In addressing clause 1, it is pivotal to reference the discourse from the Minister for Trade Policy and the Secretary of State for Business and Trade, the right hon. Member for Saffron Walden (Kemi Badenoch), who in the Chamber espoused the agreement as a beacon for market access and economic opportunity. However, that optimistic portrayal does not encapsulate the nuanced and potentially adverse socioeconomic and environmental consequences. The Office for Budget Responsibility’s adjustment of the GDP boost projection to a mere 0.06% necessitates an exhaustive assessment of its tangible benefits, directly conflicting with the Government’s depiction of substantial gain. That projection is a stark downgrade from the initial Government claim of a 0.08% GDP boost over 10 years, now halved to a mere 0.04% in the long run. The Trades Union Congress emphasises that CPTPP could
“significantly threatens workers’ rights, regulatory standards…and democratic decision making”,
providing a stark contrast to the Government’s optimistic economic forecast.
Gareth Thomas (Harrow West) (Lab/Co-op)
As members of this Committee, we have been lucky enough to have had the Business and Trade Committee publish its report on the UK’s accession to CPTPP. In that, one of the explicit recommendations—it would be good to hear from the Minister whether he will accept it—is that the Government should
“provide a revised impact assessment, setting out its current expectations of the gains from CPTPP”.
The report goes on to say that the Department should
“explain what steps it is going to take to help ensure that UK business exploits the treaty to the full.”
My hon. Friend is right to say that the Secretary of State was trying to run away from the estimates of the little, albeit important none the less, benefits that might accrue from CPTPP, so why should we not have that revised impact assessment now if Ministers think that it will lead to a huge increase in benefits for the UK?
Mr Dhesi
I thank my hon. Friend the shadow Minister, who speaks with a great deal of knowledge and experience of the issue, having been involved in various meetings. I fully agree with him: we need transparency. We need that impact assessment, and I do not understand why the Government are stepping back from that. Indeed, the clause compels us to dissect the real economic benefit of joining the CPTPP, challenging the buoyant economic forecast.
Clause 2 looks at parliamentary approval and democratic oversight. The proposed Labour amendments carve a pathway towards safeguarding our national interest. In advocating for parliamentary approval of regulations under the clause, we underscore our dedication—
The Chair
Order. We are not yet discussing clause 2; there will be time enough to come on to that. We are discussing clause 1, which is about the definition and the meaning.
Gareth Thomas
This is probably one of those rare occasions when we are actually fortunate to have the hon. Member for Totnes on the Committee with us, because he is a member of the Business and Trade Committee, which brought out the report this week. As I understand it, he was one of those who supported the idea that the Government should provide a revised impact assessment. One can only hope that he will have the courage of his convictions to speak in this stand part debate to underline why he thinks that the Government should provide the revised impact assessment. I hope that my hon. Friend the Member for Slough will join me in encouraging him to have the courage of his convictions and speak.
Mr Dhesi
I thank my hon. Friend the shadow Minister again for his intervention. Indeed, my hon. Friend the Member for Totnes was kind enough to intervene on me in the Chamber on Second Reading, and no doubt he will be contributing on the need for an impact assessment and requesting that the Minister and the Government follow that course of action.
As I was saying on clauses 1 and 2, there are certain intertwined aspects of what we are discussing today that must be brought out, including the fact that we must ensure that Parliament remains committed to rigorous scrutiny and transparency when it comes to regulatory changes. Our concerns on this clause extend to intellectual property rights under the CPTPP and the controversial investor-state dispute settlement—ISDS —mechanism.
We remain particularly concerned about the inclusion of provisions for ISDS and its implications for the NHS, the environment and workers’ rights. We are concerned about how this provision in particular could increase the risks that this association brings to jobs, workers’ rights and sovereignty. Transform Trade, for example, has highlighted that restrictions on farmers’ rights to seeds under the CPTPP could severely impact biodiversity and the livelihoods of small-scale farmers, contradicting the UK’s commitments under international agreements such as the Paris climate agreement and the sustainable development goals.
Gareth Thomas
My hon. Friend is setting out nicely the series of concerns that we in the Opposition have, which it would be good to hear the Minister address when he winds up the debate. One of the particular questions related to ISDS, which it would be good to hear the Minister deal with early in his response, is why Ministers, on the one hand, have supported ISDS staying in the CPTPP treaty, but were actively trying to have it excluded from the bilateral free trade agreement with Canada, before those negotiations were collapsed by the Secretary of State.
Mr Dhesi
My hon. Friend the shadow Minister makes an excellent point. It is these anomalies that are of concern, and the more we delve into the inclusion of ISDS in the agreement, the more we recognise the fact that it poses a formidable challenge to our national sovereignty and regulatory autonomy, enabling corporations to sue Governments over policies designed to protect public health, the environment and social welfare.
My hon. Friend the shadow Minister highlighted the issues around Canada, and indeed, in our recent meeting with the Minister and the lead negotiator for Canada, we looked at various aspects. I know that the trade deal with Canada has itself now arrived at a very rocky and bumpy interval, given the fact that we have now stopped—or paused, as the Minister would like to convince us— those negotiations, but these aspects, such as why it is one rule regarding the CPTPP and another regarding our negotiations with Canada, are things that need to be clarified during the deliberations today in Committee.
That is why, while I know that we will be discussing ISDS in full detail later on, it is important that the Minister provides the answers on that. Market analysis has shown instances where corporations have leveraged ISDS to challenge essential socioeconomic reforms, which underscores the mechanism’s potential to undermine democratic governance and public policy. Therefore, this particular amendment is pivotal, embodying our commitment to transparency and ensuring that regulatory changes introduced by the CPTPP are subject to rigorous parliamentary scrutiny.
Gareth Thomas
I am grateful to my hon. Friend for giving way—again; it is early in the morning. One of the concerns, surely, about the Government’s insistence that ISDS should stay part of the CPTPP treaty that we are acceding to, is the inconsistency with the approach taken to ISDS by other parts of Government, such as by Ministers in the Department for Energy Security and Net Zero. The Minister will remember his experience there and the energy charter treaty in particular. Britain has paused its use of the energy charter treaty, because of widespread concerns internationally about the use of ISDS provisions. As I understand it, Ministers have also acknowledged the risk of ISDS to the Paris agreement objectives. That therefore begs the question posed by my hon. Friend even more so: why are Ministers so adamant that we as a country should support ISDS—
Mr Dhesi
I thank my hon. Friend for his intervention, because it seems as if we are in almost telepathic agreement: that was the very thing that I was coming on to in a short while. He firmly and eloquently made various points about the anomalies to which I hope the Minister will provide answers. Our concerns extend to intellectual property rights under the CPTPP and the controversial ISDS mechanism.
Transform Trade has highlighted the CPTPP’s adherence to the 1991 international convention for the protection of new varieties of plants. The agreement severely restricts farmers’ rights to save, exchange and use seeds, potentially impacting on biodiversity and the livelihoods of small-scale farmers. That restriction stands in stark contrast to the UK’s obligations under the Paris climate agreement, referenced by my hon. Friend the Member for Harrow West—the shadow Minister—and the sustainable development goals that are aimed at promoting sustainable agriculture and protecting biodiversity.
Furthermore, the inclusion of ISDS in the CPTPP poses a significant challenge to our national sovereignty and regulatory autonomy. The mechanism allows corporations to sue Governments for enacting policies intended to safeguard public health, the environment and social welfare. The Trade Justice Movement has pointed out cases in which corporations have used ISDS to contest socioeconomic reforms vital to public wellbeing, thereby threatening democratic governance and public policy-making processes.
Additionally, the CPTPP’s potential to remove tariffs on palm oil without regard to the environmental consequences of the palm oil trade exacerbates concerns about deforestation and its cascading effects on climate change and wildlife. Nearly 90% of global palm oil production occurs in Malaysia and Indonesia, where deforestation attributed to agricultural expansion is a pressing environmental crisis. The deforestation contributes significantly to global carbon emissions, threatens indigenous wildlife such as orangutans and Sumatran tigers, and undermines the UK’s commitment to combating climate change and preserving biodiversity.
Anthony Mangnall (Totnes) (Con)
I am sorry for interrupting the hon. Gentleman, but this debate is about the clause and the meaning of “CPTPP”. Will he tell us whether he is going to agree or disagree with that meaning, so that we may move on to other clauses?
Mr Dhesi
I thank the hon. Gentleman, my hon. friend from Totnes, but patience is a virtue. As I said in my introduction, during our deliberations it is important that we look at the multifaceted nature of what is going on, including with regard to the definition. However, I am glad that he has come to life, and I look forward to hearing from him very soon about the impact assessment nature of the Bill.
Gareth Thomas
As my hon. Friend was talking about deforestation, I was almost excited to see the hon. Member for Totnes leap to his feet: in the Select Committee report, which I understand the hon. Gentleman fully supports, is a significant reference to deforestation linked to palm oil, as my hon. Friend was rightly pointing out. Professor Bartels, the chair of the Trade and Agriculture Commission, noted that one reason why it appears that a high proportion of current UK imports of palm oil from Malaysia meet a voluntary standard higher than the current Malaysian national standard may be the impact of the EU’s deforestation regulations, which are much tougher than the UK’s certification requirements.
I gently suggest that the Select Committee, and perhaps Professor Bartels, had a nagging concern that the provisions of CPTPP may actually lead, in the long run, to more deforestation than we might as a country be comfortable with.
The Chair
Order. Before the hon. Member for Slough resumes, I should say that I have given him a great deal of latitude so far, but he is in danger of covering all his new clauses and amendments in his opening speech. I do not know whether that is what he is planning—not to speak to any of the amendments but just to cover them off at the beginning—but I am not prepared to let that happen. The amendments and new clauses are down in a specific order, and the hon. Gentleman or his colleague will be able to speak to them at the relevant time. We do not need to rehearse what will be debated later on.
I also do not want to get into a rehash of a Second Reading debate. I have given the hon. Gentleman a lot of latitude, but I urge him to stick to clause 1, rather than giving us advance notice of all the future amendments and new clauses that he might wish to move at a later date.
Mr Dhesi
Mr Davies, I thank your good self for your sage advice. This is all important, as I am setting the scene with regard to clause 1 and the Labour party’s perspective on what is happening under the Bill. That is why I was setting the scene. Later in the debate, I will delve into great detail; I do intend to speak, with your permission, on subsequent clauses. I will be contributing in detail, but I think that it was important for me to set out the scene at the very beginning.
Another reason is that the Trade Justice Movement and Transform Trade have urged careful consideration of the environmental implications, advocating for trade policies that align with the UK’s international commitments to environmental conservation and sustainable development. Labour’s amendments—in due course, Mr Davies—are a vision for equitable trade.
In conclusion, it is important to note that the Labour party’s stance on the CPTPP is founded on a principled approach to trade policy that prioritises collective wellbeing over narrow economic interests. Our amendments, which we will debate, reflect a comprehensive strategy to ensure that trade serves as a force for good, enhancing our national and global standing without sacrificing our core values and commitments.
As we contemplate the future of UK trade policy, let us be guided by the vision of fairness, sustainability and inclusivity. The Labour party calls for a cautious and considered approach to the CPTPP, and advocates for trade policies that benefit the many. In doing so, we champion a future where the UK not only engages with the world but leads by example in establishing fair, equitable and sustainable trade relations.
Gareth Thomas
I am grateful to you, Mr Davies, for calling me, and for the opportunity to serve again under your chairmanship. I have noted your advice—or instruction —not to go into the detail of the amendments, but I do wish to ask a number of questions of the Minister to help to guide the points that I will make on some of those measures further down the selection list.
One concern raised on Second Reading was about the collapse of the bilateral talks with Canada. That specific issue is perhaps not directly germane to this Bill, but it raises the question of whether relations with the Canadians have been affected by the collapse of those talks such that Canada may not want to ratify Britain’s accession to CPTPP. It would be good to hear from the Minister how he sees the progress among other countries of accepting that accession. I say in passing that we have still not had a clear explanation of the timing of the decision by the Secretary of State to collapse talks with Canada, given that we are still some two months away from the deadline to negotiate a rollover of the EU cumulation rules of origin that were so important for British manufacturing, notably cars.
Also on Second Reading, we heard the Secretary of State querying her own Department’s figures about the 0.08% lift to economic growth after 10 years, which was downgraded to just 0.04% by the Office for Budget Responsibility. I take the opportunity again to underline the recommendation of the Business and Trade Committee in its report this week for the Department to bring out a revised impact assessment. It also called for an urgent debate on the benefits—or not—of acceding to CPTPP. If Ministers were willing to support such a debate, it would be good to have that impact assessment brought out urgently. As I said, I hope that the hon. Member for Totnes, who is a member of the Committee, does not resile from those recommendations.
Given that, sadly, our country is now in recession after mismanagement by the Conservative party, and given that exports are set to rise by just 0.1% on average over the next three years, any increase in the modest gains that CPTPP is currently set to offer will be very welcome. However, as part of the discussion about our accession to CPTPP, I want to take the Minister back to debates we had some three years ago on the Trade Act 2021, when he was adamant that there should be no improvement in the scrutiny processes available for the discussion of trade treaties. He will be aware of the concerns raised by a series of organisations—from trade unions all the way through to the slightly less left-wing, one would suggest, noble Lord Frost—about the lack of scrutiny for trade treaties, notably CPTPP. It would be good to hear how the Minister thinks scrutiny of the impact of CPTPP could be improved even a little.
Mr Dhesi
As my hon. Friend is delving into the issue of workers’ rights, does he share my concern that the Trades Union Congress has voiced significant anxieties regarding the impact of the CPTPP on workers’ rights, particularly in sectors vulnerable to increased exports from countries where labour standards may be compromised to lower production costs? Does he agree that that could potentially threaten the livelihoods of British workers and undercut our domestic industries?
Gareth Thomas
My hon. Friend is absolutely right. I hope that we will get on to some of the concerns that the TUC has raised about labour standards, which I think would be in order during a later debate on clause 3. It would be good to hear whether the Minister shares any of the concerns of the TUC, which has often struggled somewhat to get a hearing with Ministers. I believe that the situation has improved a little recently, but it was certainly pretty grim when the right hon. Member for South West Norfolk (Elizabeth Truss) was Secretary of State for International Trade.
In his opening remarks, my hon. Friend the Member for Slough rightly drew attention to concerns about ISDS, and I will touch on those a little. Concerns were also raised about issues to do with performers’ rights. I accept that there is an opportunity to go into detail about some of those concerns during debates on clause 5, but I wish to ask the Minister a couple of questions, which I hope will inform better the debate on performers’ rights in clause 5.
Concerns were raised on Second Reading about environmental and animal welfare issues. Again, there will be an opportunity to talk about some of those a little later. One issue that there might not be such a good opportunity to discuss later, which I gently suggest is appropriate for this clause 1 stand part debate, is the question of future membership of CPTPP. One of my excellent staff discovered an article that the Minister wrote on 24 November 2022, where he hints at the United States rejoining CPTPP. That could have huge implications for the use of ISDS and animal welfare and environmental concerns, and would probably make a nonsense of the current impact assessment, so that is all the more reason for a revised impact assessment to be made.
Matt Rodda (Reading East) (Lab)
My hon. Friend is making an excellent speech and doing a very good job of highlighting the issues that sit within this area of policy. Is he going to come on to the more detailed concerns around the environment and animal welfare in relation to the United States should it become a member of the CPTPP? Many British consumers have significant concerns about hormone-treated beef, standards of animal welfare and a range of other consumer and environmental issues.
Gareth Thomas
I am grateful to my hon. Friend, who is absolutely right to raise those concerns. I hope to touch on them in this clause 1 stand part debate, but I do not want to upset the Chair by delving into too much detail. But the RSPCA has raised concerns about the lack of explicit language on animal welfare in CPTPP. It has drawn the Committee’s attention to that and has raised a series of concerns around eggs, pig meat, chickens, animal health and genetically-engineered products. Will the Minister respond to the concerns of the RSPCA, which is in order in these debates? It would be good to hear the Minister respond to the concerns of an organisation as reputable as the RSPCA.
Mr Dhesi
My hon. Friend the shadow Minister has spoken up about the USA, but does he agree with me that during the previous debate we did not get clarification from the Government regarding the potential membership of China? We need to determine, within our definitions, the Government’s stance on the potential membership of China.
Gareth Thomas
I am grateful to my hon. Friend for raising that issue. I explored whether there was any way to table an amendment that might allow us to probe the Minister about not just China but any new country acceding to CPTPP. Unfortunately, it did not appear to be appropriate or in order to table such an amendment in Committee, but I hope to revisit the issue on Report—indeed, I understand that it was discussed on Report in the Lords.
The Chair
Order. I should say to the hon. Gentleman that clause 5 is specifically entitled “Performers’ rights”. There will be a debate on whether or not clause 5 should stand part of the Bill. He said that he did not want to upset me too much; I advise him to try not to upset me at all. I gently suggest to him that a debate on “Performers’ rights” would perhaps be better suited to when we are considering clause 5.
Gareth Thomas
I hear the Chair’s sage advice; I think my hon. Friend the Member for Slough used that term. I will attempt to pick up all my concerns about the Minister’s letter and about performers’ rights more generally during a later debate.
I will briefly touch on ISDS, which my hon. Friend referred to in some detail. The Minister has previously claimed that Britain has never lost an ISDS case and that that explains the determination of Ministers to keep ISDS within the CPTPP. My understanding is that that is not entirely accurate and that we lost a case involving Eurotunnel some years ago and had to pay out significant costs. It would be good to have clarity from the Minister about that when he winds up on this clause, to help to inform our later debates around ISDS. It would also be useful to hear whether Britain has ever been threatened with an ISDS claim by other organisations—again, that would help us understand just how much of a threat ISDS being within the CPTTP is at the moment.
The concern is that Britain is, in general, a net exporter of capital at the moment, which is perhaps why we have not been hit with so many ISDS claims as a series of other countries have been. Obviously, however, with Canada a significant player in the CPTTP, and with the US, as the Minister said, potentially rejoining the CPTTP, that would not necessarily be the case. The question is this: would we not be more vulnerable in those circumstances? I gently suggest that that is a material concern, so it would be useful to hear at this stage from the Minister about it before we address the other concerns later. On that note, I look forward to hearing the Minister’s response.
The Minister for Trade Policy (Greg Hands)
May I welcome you to the Chair, Mr Davies, and welcome all members to this Committee for line-by-line consideration of this important Bill? Over 40 extraordinary minutes, we have heard an attempt by the Labour Front Bench to reopen the Second Reading debate, but I will try to answer the questions put to me.
Clause 1 is a non-controversial clause that defines the terms used in the Bill. “The CPTPP” means the comprehensive and progressive agreement for trans-Pacific partnership signed at Santiago on 8 March 2018, including the UK accession protocol as it has effect in the United Kingdom from time to time. “The UK accession protocol” means the protocol on the accession of the United Kingdom of Great Britain and Northern Ireland to the CPTPP, signed at Auckland and Bandar Seri Begawan on 16 July 2023.
We heard on Second Reading that the official Labour party position is to support the accession of the United Kingdom to the CPTPP, but over the past 40 minutes we have heard a series of speeches that give the opposite impression. That is often the case in today’s Labour party: there is a diktat from the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) up above, but below him something different is done, particularly by Members who were active when the right hon. Member for Islington North (Jeremy Corbyn) was the party leader. The hon. Member for Harrow West reminded us of his time on the Trade Bill Committee, when he was opposed to all UK trade agreements. Without myself embarking on a Second Reading speech, I wonder how much of that dichotomy is still there in today’s Labour party.
Mr Dhesi
I caution the Minister that there is no dichotomy here. As we said in the Chamber on Second Reading, although we are in favour of acceding to the CPTPP, the job of His Majesty’s Opposition is to go through the Bill line by line and point out the various anomalies, issues and concerns—not just our own, but those of movements including the Trades Union Congress and other voluntary and civil society organisations. Otherwise, we would be heading towards another car crash. Given that the governing party has managed to crash the economy, does the Minister agree that we need safeguards from the Opposition?
Greg Hands
I thank the hon. Gentleman for drawing attention to the fact that this is all about line-by-line scrutiny. I certainly welcome that, if it is indeed the approach that he will be taking. None the less, I feel that I should answer the questions that he and the hon. Member for Harrow West have raised.
Having been an Opposition Front-Bench spokesperson myself, I should point out that the way a Bill Committee generally works is that Members table amendments about things they wish to speak about, rather than seeking on clause 1 to shoehorn in all kinds of additional questions and issues on which they have not tabled amendments. The Labour party has been in opposition for some time now—close to 14 years—and one might have thought that it would have learned some lessons about how to be a more effective Opposition. None the less, I will respond to the questions in the spirit in which they were asked.
The first question was about Canada. Of course, the hon. Member for Harrow West was a frequent rebel when it came to the UK and EU trade agreement with Canada, so he has a bit of form here. He said that there is an important roll-over of the rules of origin, and he is absolutely right, but what he did not tell us is that he opposed those rules of origin in the first place when the comprehensive economic and trade agreement was passed in this very Committee Room seven years ago. It is a bit rich for him now to say that something is important today when he was one of a small minority of Labour Front Benchers who opposed it.
Greg Hands
Of course, if the hon. Gentleman is going to explain whether he has changed his mind. Is he still opposed to CETA? I am sure he is going to tell us.
Gareth Thomas
First, I thank the Minister for describing me as a frequent rebel. I am hugely grateful to him for that characterisation: it will appear on my election leaflets for years to come. He has raised my vote on CETA many times, and I suspect he will do so many times in future; I do hope so. I gently make the point that he promised us he would help to negotiate a better deal with Canada, but he has not done so. In fact, we have worse terms of trade with Canada than when we were in the EU .
Greg Hands
I do not think that this is the time to discuss the whole future and present of our overall trading relations with Canada, but I gently remind the hon. Gentleman that he has form on this. We remain open to restarting the bilateral talks; of course, that rolled-over agreement remains in place and nothing has been undone by the pause on the bilateral talks. We continue to work with Canada on its CPTPP ratification.
The hon. Member for Harrow West called for an urgent debate—we support having one, if parliamentary time can be found—under the CRaG process. I think he has grown to dislike the CRaG process, but I point out that he is one of the few members of this Committee who voted in favour of the process back in 2010.
Gareth Thomas
I well understand the Minister wanting to reach for a piece of Labour legislation for comfort in the difficult circumstances of this particular Bill. I gently point out to him, however, that we have now left the European Union, which the CRaG process, when put into legislation, assumed we would continue to be a part of. I therefore gently suggest that we need to update the scrutiny processes. The Minister appears to be one of the last people on the Government Benches who is opposed to improving parliamentary scrutiny. With an election coming, given that he might be sitting on the Opposition Benches—if he survives—he should appreciate better scrutiny arrangements. Perhaps he is willing to seek the advice of the hon. Member for Totnes on how scrutiny arrangements might be improved.
Greg Hands
The hon. Gentleman and I were in Parliament—as you were, Mr Davies—when CRaG was passed, and it was not dependent on or linked to the UK’s membership of the European Union. It was a process for the parliamentary ratification of all international treaties. I gently remind the hon. Gentleman of that.
I am glad that the hon. Gentleman mentions parliamentary scrutiny, because I have looked back through the annals of time. As the Committee may know, I have been closely involved with CPTPP for a long time—since I first became Minister of State with responsibility for international trade back in 2016. I checked back on the parliamentary scrutiny that we have had over the years, as I was specifically asked to.
In June 2021, we published our negotiation objectives. We have provided regular updates to Parliament on CPTPP: two oral statements and, extraordinarily, 16 written ministerial statements. I do not think that there has been a lack of parliamentary scrutiny. Ministers and the chief negotiator have appeared before five separate Select Committees to discuss CPTPP and to answer questions about it. We had the Trade and Agriculture Commission’s report in December 2023 and the section 42 report in January 2024, and the CRaG process has now started. There has been no shortage of parliamentary scrutiny.
The hon. Member for Harrow West asked about future membership. I will not be drawn on that subject, but I refer him to the Auckland principles; he can check out what those are all about. Had he really wanted to talk about future membership, he could have tabled an amendment. I will certainly look at the RSPCA concerns, but, again, he has not tabled an amendment on them.
As for the Select Committee, the hon. Gentleman has been trying to get it to do his job for him. He cited a recommendation from the Select Committee that we have a fresh impact assessment, but I note that that is not a recommendation on which he himself has tabled an amendment. Had he done his homework over the past couple of weeks, he need not have made a speech today covering all kinds of new areas on which he has failed to table an amendment.
As for ISDS and palm oil, we will come on to debate them with new clauses 5 and 1. I think the hon. Gentleman floated something about a Eurotunnel case from many years ago; if he wants to give some detail on that, he can write to me as to what that may have all been about. Of course, it may well have been in his own time as Trade Minister under the last Labour Government.
Gareth Thomas
On the Eurotunnel question, the Minister might like to check with Lord Johnson, because he seemed to know a little bit more about the case than the Minister appears to. Perhaps when the Minister goes back to his Department he might seek out his noble Friend and get some background from him.
The problem with ISDS, particularly in the Eurotunnel case, is that War on Want had to table a freedom of information request to find out what had happened. That level of secrecy is one of the problems with ISDS. As the Minister has access to those records, it would be useful if he published or made clear what happened in that case. That would help us, as a country, to learn how we might avoid such claims in future.
Greg Hands
Again, if the hon. Gentleman had wished to debate that, he might have tabled an amendment on it. Maybe he will do so later in the Bill’s passage.
Gareth Thomas
On a point of order, Mr Davies. I gently ask whether you might draw the Minister’s attention to new clause 5, which is specifically about ISDS.
The Chair
As the hon. Gentleman knows, that was not a point of order. I should say that he was leading with his chin by pointing that out, because his remarks should have been confined to our debate on new clause 5.
Greg Hands
In conclusion, I urge that this short, technical and non-controversial clause stand part of the Bill.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Treatment of conformity assessment bodies etc
Gareth Thomas
I beg to move amendment 1, in clause 2, page 1, line 19, leave out from “subject to” to the end of the subsection and insert
“approval by resolution of each House of Parliament”.
The Chair
With this it will be convenient to discuss the following:
Amendment 2, in clause 2, page 2, line 2, at end insert—
“(5) Regulations under subsection (1) may not be made before completion of such public consultation as the appropriate authority considers appropriate with the relevant—
(a) Scottish ministers,
(b) Welsh ministers,
(c) department of the Northern Ireland Executive, and
(d) representatives of the English Regions.”
Clause stand part.
Gareth Thomas
Clause 2 is about the treatment of conformity assessment bodies, and who certificates or provides assurance that products meet necessary regulatory requirements. Testing, certification and inspection are all conformity assessment procedures, usually carried out by third-party organisations called conformity assessment bodies. At the moment, our legislation requires there to be based in Great Britain, or in a country with whom the UK has a mutual recognition agreement, conformity assessment bodies that carry out those processes for goods and services sold in the UK. Under article 8.6 of the CPTPP treaty, conformity assessment bodies established in the territories of CPTPP parties are to be treated no less favourably than conformity assessment bodies located domestically.
The Opposition accept that the UK will have to amend its legislation to allow conformity assessment bodies established in other CPTPP countries to apply for approval and accreditation for the Great Britain market. That is clearly not the case in Northern Ireland, where, under the Windsor framework, EU rules around conformity assessment bodies still apply. It would be good to hear from the Minister how the approval and accreditation process for conformity assessment bodies established, for example, in Canada, Malaysia, Japan or Brunei for the British market might work in practice.
Many conformity assessment bodies are very well established, particularly those in the UK. None the less, I gently suggest that there is a need for better consultation about future approval of conformity assessment bodies that might operate in other CPTPP countries, but want to operate within our markets. There is also a need for a stronger role for Parliament in general, specifically around conformity assessment of new technologies such as artificial intelligence.
Amendment 1 would make the negative procedure a positive one, to make a debate more likely. Amendment 2 would require more consultation with Scottish and Welsh Ministers, with Northern Ireland and with representatives of the English regions, before regulations are introduced. Let me explain why the amendments could usefully be made to the Bill; I will give an example from another regime that demonstrates why conformity assessment bodies are likely to be needed for artificial intelligence and why, therefore, my amendments on such bodies from CPTPP countries being registered here in the UK are appropriate.
Current EU rules appear to require conformity assessments for high-risk artificial intelligence systems that cover machinery, radio equipment, toys, civil aviation, medical devices, cars, railway applications and appliances burning gaseous earth fuels. Surely we would want to know that conformity assessment bodies approving high-risk artificial intelligence systems know what they are doing when they operate in the UK. To ensure that they do—certainly until the technology is well established and its risks and benefits are well understood—there ought to be wide consultation and significant parliamentary debate whenever a new artificial intelligence conformity assessment body seeks accreditation in the UK, given the potential security issues around artificial intelligence. That seems even more important given the potential for new applicant countries to join the CPTPP. As I understand it, China is well advanced in artificial intelligence development, as is the US. Can the Minister set out what discussions Ministers have had about the possibility of new artificial intelligence conformity assessment bodies emerging from other CPTPP countries wanting accreditation to operate in Great Britain?
I certainly would not want to hold back the development of artificial intelligence in any way, given its exciting potential to transform our country and others for the better. It enables the simulation of human-like intelligence to make decisions, solve problems and analyse information, among other things. It allows various applications such as voice recognition, image creation and autonomous vehicles. As I hope I have hinted at, it has the potential to revolutionise industries from healthcare to finance by automating tasks, imparting efficiency and enabling all sorts of new capabilities. It is quite clear that more and more businesses are looking at artificial intelligence options to see whether there is potential for their operations to improve their products and services and help with cost reduction, revenue growth and so on.
At the moment, artificial intelligence regulation is relatively limited, but there is an active and growing debate about how and when to regulate artificial intelligence and how to go about that process. There are active debates in the EU and China, as I hinted at, as well as in Canada and Brazil, along with the other example I gave earlier in the US. In the EU, for example, conformity assessments of AI products or services are defined as the process of verifying and/or demonstrating that a high-risk system complies with certain requirements, such as good risk management, good data governance, good technical documentation, proper human oversight, accuracy, robustness, good cyber-security and good record keeping. CPTPP evolves, so it is surely possible that artificial intelligence conformity assessment bodies will be established in other CPTPP member states, and will want approval and accreditation to operate in our markets.
Lawyers are beginning to look at these issues in detail. For example, one anticipated that the focus will be on testing such systems for bias and discriminatory or disparate impacts. The conformity assessments might in some cases just mean an internal assessment, but in other cases might require an assessment conducted by an independent third party, which would then issue a certificate to confirm the artificial intelligence system’s compliance. In short, that third party would be a conformity assessment body.
As artificial intelligence is such a new and innovative product or service, the way in which particularly high- risk forms of artificial intelligence are regulated may vary from one country to the next. Therefore, the way that conformity assessment bodies operate—what they expect of artificial intelligence firms—may differ widely too. There is surely a more active role for Parliament than the Bill currently envisages to consider directly whether each artificial intelligence conformity assessment body meets the standards that we and our constituents would expect.
Mr Dhesi
My hon. Friend the shadow Minister is making a very important point. Given the profound impact that artificial intelligence will have on all our lives, it is important that we are a beacon for its regulation around the world. Does he agree that we cannot merely leave it to Ministers to administer AI regulation? There must be a comprehensive role for Parliament, which is why amendment 1, which seeks to insert
“approval by resolution of each House of Parliament”,
is so incredibly important.
Gareth Thomas
I am grateful to my hon. Friend for his support. I am sure that in the years to come there will be a considerable amount of debate in Parliament on both the potential for artificial intelligence, and where and when regulation of AI is required. To be fair to the Minister, the negative resolution process currently in the Bill does give Parliament some role, but I think a more active role for Parliament is required, particularly as this exciting and new—but potentially risky in some circumstances—technology is developed.
Given the important role that conformity assessment bodies for other products and services play in keeping us safe, conformity assessment bodies for artificial intelligence are likely to have a very important role in the future. We need to ensure that the way in which CPTPP is affected by artificial intelligence, in terms of its impact on the UK, is fit for purpose going forward. I know that the Minister is an enthusiast for not having much scrutiny of trade treaties, so there are likely to be relatively few opportunities to return to this CPTPP legislation and the conformity assessment bodies section within. Let us take the opportunity in this Committee to look to the future and recognise both the benefits and the risks of artificial intelligence. Let us also recognise that one way to ensure additional safety is by ensuring more parliamentary scrutiny of new conformity assessment bodies from CPTPP member countries that might operate here in the UK.
Mr Dhesi
I want to dwell on this point, because the Labour party believes firmly in devolution. Amendment 2 would require consultation with other, devolved Governments and with our Metro Mayors, because we need to harness the talent and potential from across our United Kingdom—whether in regulation or conformity, particularly with respect to artificial intelligence—rather than being more Whitehall-centric. Does my hon. Friend therefore agree that amendment 2 is particularly important?
Gareth Thomas
I am grateful to my hon. Friend for his intervention, and he is absolutely right. It is striking that the Scottish Government and the Welsh Government’s submissions on CPTPP raised concerns about scrutiny and consultation. For example, the Scottish Government’s written evidence noted
“the continued lack of data disaggregation for Scotland”
in the Government’s assessment of the benefits of CPTPP. They noted that
“an estimate of long-run changes to Scotland’s Gross-Value Added was provided,”
but that
“specific impacts according to sector, region and protected group within Scotland were not included in the assessments and so potentially significant impacts could have been missed.”
I would not want to suggest that our amendments will solve all those problems, but if they begin to embed better consultation with the Scottish Government, the Welsh Government, Northern Ireland and the English regions even a little bit, then I gently suggest that that can only be to the good.
Anna McMorrin (Cardiff North) (Lab)
I want to re-emphasise my hon. Friend’s point about consulting and working closely with the Welsh and Scottish Governments and the devolved regions to ensure that the next steps are taken in collaboration. As we know, this Government are renowned for not working closely with the devolved nations and not having those conversations with devolved Governments. That has been my experience of working in the devolved regions and the Welsh Government. The amendment is vital to ensure that consultation is put in statute.
Gareth Thomas
I welcome my hon. Friend’s intervention and the experience of working in the Welsh Government that she brings to our considerations. It is striking that the Welsh Government raised a series of concerns, which they felt the Government had not addressed properly. For example, they noted that consultation with the Government had been mixed; at various times, it had been quite poor and had got better. In the last few weeks, before accession was announced, it had deteriorated again. I suspect that is about Ministers not wanting to hear different points of view and challenges to their ideological standpoint. For the benefit of the country, we need to ensure that we move forward together. Surely we are stronger together if we have better consultation and parliamentary scrutiny. On that basis, I look forward to hearing the Minister’s response.
Greg Hands
I thank the hon. Members for Harrow West, for Slough and for City of Chester for tabling the amendments in the group. Again, I noticed that the greater part of the speech by the hon. Member for Harrow West was about things that were not actually in the amendment. I gently remind Members that he perhaps used AI to help him to table his amendments in the first place—in which case he shows some of the limitations of following a slavish approach when it comes to artificial intelligence. None the less, I will speak to the amendments before us.
First, I will briefly outline clause 2 and conformity assessment bodies. To comply with the requirement on our accession, we need to change some of the UK’s subordinate legislation, which requires conformity assessment bodies to be established in this country or in countries with which the UK has a mutual recognition agreement. The legislative changes do not alter the regulatory requirements for products entering this country—that is really important to understand. Any overseas conformity assessment bodies approved by the UK will carry out assessment against regulations that apply in this country, not those regulations applying in the CPTPP party in which they are established.
The changes do not mean that conformity assessment bodies established in other CPTPP parties’ territories will gain automatic approval. Instead, all CPTPP-based conformity assessment bodies will need to demonstrate that they meet the relevant UK requirements, such as being accredited by the UK’s national accreditation body, UKAS—not as familiar a UKAS as UCAS. The obligation also applies to other parties to the agreement. It is obviously a treaty with multiple countries, which means that UK conformity assessment bodies will be able to apply for approval from CPTPP parties to carry out conformity assessment against their regulations.
Before I mention the term “CPTPP parties” again, I should explain that they are countries that have acceded to the CPTPP. That would allow UK manufacturers exporting to CPTPP parties to have their products tested in the UK rather than overseas, which could save our exporters considerable time and money. It also means that UK conformity assessment bodies could enter lucrative new markets with their services, as approximately £10 billion in UK exports to CPTPP parties were covered by conformity assessment procedures in 2021. This clause is necessary to allow the UK to comply with the technical barriers to trade, or TBT, chapter of CPTPP, to meet our international obligations upon accession and to accede to CPTPP.
I will turn first to amendment 1, which concerns the scrutiny of secondary legislation made under the Bill, before speaking to amendment 2, which concerns the devolved Administrations and what it calls “regional government”. Let me emphasise how seriously the Government take their commitment to keep Parliament and the public apprised of the Government’s negotiations for new free trade agreements. I read out a whole series of consultative interactions with Parliament that have happened during our commitment for the UK to accede to CPTPP. Let me be clear that amendment 1 would mean a vote not on the agreement—which we worked hard to keep Parliament informed of through various debates, ministerial statements and Select Committee appearances—but on the secondary legislation regarding the implementation of the trade agreement. Parliament now has the opportunity to formally scrutinise the UK’s accession protocol to the CPTPP through the usual procedure under the Constitutional Reform and Governance Act, or CRaG. The Secretary of State has also written to the Leader of the House to request a general debate during the sitting days of CRaG. CRaG, which commenced yesterday, is the main avenue for scrutiny of this deal, not specific secondary legislation made under the power in this Bill.
Anthony Mangnall
I apologise for interrupting the Minister, but I think it is important, as a member of the Business and Trade Committee, to say how far we have come in the scrutiny of trade agreements. When the Secretary of State came in front of the Business and Trade Committee recently, she made it clear that we would have the debate that he alluded to during the CRaG’s 21 days and that the House would have a chance to properly scrutinise the trade agreement. I hope that will be the form for all future agreements.
Greg Hands
I welcome my hon. Friend’s intervention. Of course, it is not entirely within my gift to ensure that that debate takes place. That will be down to the business managers and the usual channels, as is usual for scheduling parliamentary business. However, I welcome his recognition of how much extra effort the Government have put into ensuring parliamentary scrutiny—earlier I mentioned the 16 written ministerial statements and appearances between before five different Select Committees.
On the secondary legislation in question, the power in clause 2 would ensure that conformity assessment bodies established in CPTPP party territories will be treated no less favourably than ones located in the UK in relation to conformity assessments for products supplied in this country, pursuant to article 8.6 of CPTPP. This is a narrow power that is designed to make minor technical amendments to existing secondary legislation and some assimilated law.
The negative procedure is reasonable and appropriate for such amendments. That is a position supported by the Delegated Powers and Regulatory Reform Committee, or DPRRC—the experts in this area, at least from a parliamentary perspective. It indicated that there was nothing in the Bill to which it wished to draw the House’s attention. The powers in the Trade (Australia and New Zealand) Act 2023 were similarly subject to the negative procedure, and the DPRRC raised no concerns in relation to the delegated powers in that Act either.
Amendment 2 deals with consultation on the treatment of conformity assessment bodies under clause 2. I am grateful to hon. Members for the opportunity to discuss the important issues raised by this amendment. The breadth of modern free trade agreements means that some policy issues will fall within the competence of devolved Administrations. It has been clear from the inception of the UK’s independent trade policy—as indeed it was when we were members of the European Union—that aspects of trade policy would impinge on areas that were within the devolved competence of the nations, agriculture being the most obvious example. That is why my Department has established a significant programme of engagement with the devolved Administrations. I meet quarterly with the Ministers in a ministerial forum for trade, for example, and our officials speak all the time.
However, it is vital for the UK’s ability to meet its commitments under CPTPP that CPTPP and protocol obligations should be implemented in the UK. Adding a consultation requirement before secondary legislation can be made pursuant to clause 2 could delay ratification of the agreement. Going back to earlier comments, I am never entirely sure whether Opposition Front Benchers are in favour of this agreement. They keep trying to introduce new ways to delay ratification, which makes me suspect that, when it comes to it, rather a lot of them do not. If implementing legislation is not in place, the UK would be in breach of CPTPP on day one of entry into force of the accession protocol, as the UK would not be in compliance with the terms of CPTPP.
Gareth Thomas
I am grateful to the Minister for his characteristically bombastic assessment of our amendments. I also enjoyed the intervention from the hon. Member for Totnes. I think the gist of his remarks was that we have come a long way on scrutiny. I recognise that he has come a long way back into the Government fold, but I am not sure that we have come a long way on scrutiny of trade agreements. Perhaps he was still a little bit traumatised by a previous Secretary of State failing to turn up to a Select Committee to answer questions on eight occasions, and therefore grateful that the current Secretary of State did actually manage to turn up to answer questions on trade. While he might think that we have come a long way on scrutiny of trade agreements, the Select Committee on Public Administration and Constitutional Affairs does not. I was struck by the lack of any reference to the Government’s response to that Committee in his comments.
Let me be clear again at the outset: we support accession to the CPTPP. However, it is our role as a responsible Opposition to raise the concerns of all sorts of stakeholders and to require those representing the Executive and the Treasury Bench to respond to those concerns. If the scrutiny arrangements for trade treaties were better, Opposition Members would perhaps have slightly less work to do to raise all the concerns.
Matt Rodda
My hon. Friend is making an excellent speech. Would he like to comment on some of the stakeholders the Minister brushed off somewhat, particularly the RSPCA, which is a hugely respected body raising concerns about animal welfare? I wondered whether my hon. Friend wanted to address that.
Gareth Thomas
I am afraid that it is rather characteristic of the tired Government we have that they are not always particularly interested in addressing seriously the concerns of organisations with such a long and cross-party track record as the RSPCA.
Anthony Mangnall
I intervene just because I feel that the hon. Gentleman might be trying to bait me at this point. Does he not pay any attention to the Trade and Agriculture Commission and its membership? It deals in full in its report with the issue of animal welfare and animal health and the sanitary and phytosanitary rules that have been alluded to by Opposition colleagues. Indeed, there is also the section 42 report that the Government have published in response to the Trade and Agriculture Commission, so this is not a tired Government; this is a Government who are addressing the concerns and are alive and well within our trade negotiations.
Gareth Thomas
I would never dare to try to bait any Member of this House. I gently say to the hon. Member for Totnes that the Trade and Agriculture Commission’s report is an example of how scrutiny arrangements could improve. If he tracks back to when the report was published by the Trade and Agriculture Commission, he will be aware that it was published after Second Reading in the House of Lords. Again, I am gently suggesting that we still have some way to go to get scrutiny arrangements much better than they are. I hope to come on to some of the specific concerns and issues that the Trade and Agriculture Commission raised in debates on other amendments.
I am sure that the Minister, if he tracks back to the debates that he and I had during the passage of, I think, the 2021 Trade Bill, will remember that the Opposition pressed for better consultation with Scottish and Welsh Ministers, with Northern Ireland, and with representatives of the English regions. I gently say to him that he might wish to start a whole series of scare stories running, which has been his wont in various guises, I have noticed, down the years, but I do not think it is beyond the wit of Government to speak to local representatives in the English regions in a way that is not bureaucratic but which ensures that all the views across our great country are heard.
Lastly, on the Minister’s point about the apparently wonderful meetings that he has with the devolved Administrations, I gently draw his attention to the ministerial foreword to the Welsh Government’s comments on CPTPP accession. Vaughan Gething, Minister for Economy, said:
“The engagement with UK government has varied throughout the accession process. Whilst there was a lack of engagement at the beginning of the process,”
engagement did begin to “improve over time”. However, he says at the end of the foreword:
“However, the engagement in the period between the announcement of the agreement in principle through to signature was less positive, particularly when it came to discussions around the UK government analysis on the impact of the deal.”
The Scottish Government echoed some of those concerns in their remarks. Therefore it is clear that we could improve the scrutiny process for trade deals.
I would like to be convinced by the Minister’s response. Sadly, I am not, so I therefore seek your permission, Mr Davies, to divide the Committee on both amendment 1 and on amendment 2.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
The schedule.
New clause 1—Assessment of the impact of the CPTPP Chapter on government procurement–environment—
“The Secretary of State must, within three years of Royal Assent to this Act, lay before Parliament assessments of the impact of the implementation of the CPTPP Chapter on government procurement on—
(a) the Government’s plans to tackle climate change;
(b) the sustainable production of forest risk commodities, including palm oil, within UK supply chains,
(c) deforestation, and
(d) the Government’s environmental targets and environmental improvement plans established under the Environment Act 2021.”
New clause 2—Assessment of the impact of the CPTPP Chapter on government procurement–employment and industry—
“The Secretary of State must, within three years of Royal Assent to this Act, lay before Parliament assessments of the impact of the implementation of the CPTPP Chapter on government procurement on—
(a) manufacturing in the United Kingdom;
(b) the job market in the United Kingdom, including but not limited to gender inequality therein;
(c) the level of procurement by local authorities from businesses in their local authority area;
(d) the delivery of public services in the United Kingdom; and
(e) the Government's commitments to the conventions of the International Labour Organisation.”
New clause 7—Impact assessment of implementation of the CPTPP Chapter on Government Procurement on developing country trading partners—
“(1) The Secretary of State must, within 12 months of the passing of this Act and every 12 months thereafter, publish a report on the impact of the implementation of the Government Procurement chapter of the CPTPP on developing country trading partners of the United Kingdom.
(2) The impact assessment under subsection (1) must include an assessment of—
(a) social, environmental, and economic impact on countries with high levels of dependence on the UK market;
(b) steps that have been taken to consult with affected trading partners;
(c) proposed remediation measures for potential economic damage;
(d) how the experience and impact of implementation might inform negotiation of future trade agreements.”
Greg Hands
Clause 3 is vital to ensure that we bring procurement legislation into compliance with the Government procurement chapter of CPTPP to ensure that the UK is ready to accede. Clause 3 and, accordingly, the schedule amend domestic procurement legislation, namely the existing procurement regulations that regulate procurement and the Procurement Act 2023, which will regulate procurement for England, Wales and Northern Ireland when that Act substantively commences in October 2024. Those amendments extend the UK’s market access obligations to suppliers from CPTPP parties and introduce two minor technical measures, which will ensure full implementation of the requirements of the Government procurement chapter of CPTPP. Joining CPTPP will build on the existing comprehensive agreements that the UK has with most parties by providing UK businesses with even greater legally guaranteed access to opportunities in their Government procurement markets in several areas.
Samantha Dixon (City of Chester) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I ask for your indulgence and that of hon. Members as this is my first Bill Committee since my election in December 2022.
New clause 1 focuses on the environmental impact of the Bill and aims to keep the Government accountable for their plans to tackle climate change—something we should all be mindful of at this time. It is important to seek further clarification on the environmental impact of the CPTPP agreement and how the Government intend to mitigate detrimental environmental impacts of the UK’s accession to the bloc.
Around 90% of the world’s oil palm trees are grown on a few islands in Malaysia and Indonesia, and just 1% of Malaysian palm oil smallholdings are certified by the Roundtable on Sustainable Palm Oil. That 1% constitutes around 40% of all palm oil plantations in Malaysia. When it comes to palm oil, education is key. We continue to see ongoing misconceptions around sustainable palm oil. Despite 60% of people in the UK knowing about palm oil, a recent Kantar report found that more than 85% did not know about sustainable palm oil, which is an efficient crop with significantly less environmental impact on the land than other vegetable oils. Replacing it with another oil would mean using up to eight times more land for oils such as rapeseed or sunflower. Sustainable palm oil can be beneficial for biodiversity and to protect, conserve and enhance ecosystems. There is still widespread concern about the effect of reduced tariffs, for example, on expanding palm oil imports leading to deforestation. This is a major environmental crisis and it is the second largest contributor to climate change globally after burning fossil fuels.
Nearly 90% of deforestation is attributed to agricultural expansion. The impact of that is not only having an effect on our climate but has resulted in a sharp decline in precious native wildlife such as orangutans, rhinoceroses, hornbills, tigers and elephants, pushing them to the brink of extinction. Indeed, there are now more MPs in Westminster than there are Sumatran tigers on the planet, and deforestation has played a major role in that dreadful statistic.
Mr Dhesi
My hon. Friend makes a powerful point about deforestation and environmental consequences. She might also be aware of Transform Trade’s analysis of the restriction of farmers’ rights to seeds, which underlines the CPTPP’s potential to come into conflict with the UK’s environmental and sustainability goals. There are fears, for example, that the mandatory adoption of the international convention for the protection of new varieties of plants 1991 by CPTPP signatories could severely affect biodiversity and undermine small-scale farming, contradicting commitments under international agreements such as the Paris agreement and the sustainable development goals. Does my hon. Friend agree that it is important both to protect farmers’ rights and to promote agricultural biodiversity?
Samantha Dixon
Absolutely. I thank my hon. Friend for his intervention. He makes an important point, which underlines why the review needs to be timely. Lord Johnson said in the other place that he would be surprised if the evaluation and monitoring reports did not cover information on environmental standards, reduction of the risk of deforestation and many other areas. However, we need more clarity on that point. Specifically, what will the Government include in the reviews?
The review should consider how CPTPP membership has affected the sustainable production of forest risk commodities, including palm oil, within the UK supply chain. Further, the review specifically needs to investigate the impact of membership on deforestation. The Government have yet to outline the details of how they will progress. They have promised to involve conservation experts, but how will that work?
I hope that the Government will engage with expert environmentalists, such as Chester zoo in my constituency, which has been at the forefront of championing sustainable palm oil, both in the UK and in Malaysia, throughout the environmental impact evaluation process from its planning stages to giving evidence. I will take the opportunity to thank Chester zoo for all its work on conservation, biodiversity and environmental issues. Indeed, it is thanks to its hard work, along with Ferrero, that Chester became the first sustainable palm oil city in the UK in 2019, sourcing its palm oil entirely from sustainable sources.
Working with Chester zoo, the international company Ferrero, which for 70 years has made products such as Nutella, Kinder chocolate and Thorntons—as well as what is believed to be the ambassadorial favourite, Ferrero Rocher—was one of the first global companies to source 100% responsible, sustainable, certified and segregated palm oil, and has been recognised by the WWF as the No. 1 manufacturer for sustainable palm oil. Ferrero not only uses sustainable palm oil itself but encourages its use by others. In partnership with Chester zoo through its sustainable palm oil communities project and the SPO education programme, Ferrero helps to educate communities and schools on the role of sustainable palm oil. I thank Ferrero for all it does to raise awareness and bring others along the sustainable palm oil journey.
The Government have not set out what they expect to happen once the review has been completed. Will they commit to a regular review of the environmental impact of the trade deal to ensure that it aligns with our global obligations, such as the targets set under the global biodiversity framework, long into the future? Finally, and more widely on the review, it is important that the Government commit to parliamentary oversight of its findings. Where will the review be published and what level of scrutiny will be enabled? Those details are all missing from the Government’s reassurances so far; clarifications are much needed, hence our new clause.
Looking forward, I know that Chester zoo and others would like to see the Government working to link preferential trade tariffs to sustainable practices. A good example is the free trade agreement between the European Free Trade Association and Indonesia signed in 2021, which included a commitment that palm and other vegetable oils that have been produced protecting primary forests, peatlands and related ecosystems will get preferential market access. This initiative is clearly possible, and something that future trade deals should consider within the primary agreement.
The CPTPP is a great opportunity for the UK to take a position on actively promoting the use of sustainable palm oil and other environmental issues. The agreement will increase UK influence in the region, so we must ensure that we bring it to bear on all these vital issues. I commend the new clause to the Committee.
Anna McMorrin
As it stands, this trade agreement makes a mockery of the Government’s own environmental commitments. On the impact of the CPTPP on the environment, environmental provisions in trade agreements are given significant importance these days. Australia, Malaysia, Mexico and Peru are incredibly diverse; they are defined as mega-diverse regions for supporting more than 70% of biological diversity on the planet. However, we know that the carbon footprint within trade can be significant and deforestation can be exacerbated.
At COP26, held in Glasgow and chaired by the UK, the UK Government spearheaded a global forest initiative aimed at halting deforestation. I am not sure how this agreement, as it stands without this new clause, meets this Government’s own objectives and initiatives. Could the Minister clarify that?
The Trade Secretary previously said,
“you have to make trade-offs”
in signing trade deals, and that palm oil was “a great product”. However, we know that reducing tariffs on palm oil could cause huge problems—that product is directly linked to deforestation and damage to habitats, such as that of the orangutan. As it stands, the risks of this trade deal’s rewarding environmental destruction are huge. That is why it is so important to include safeguards, and this new clause.
This trade deal encourages trading products made with pesticides that are banned in the UK, it encourages trade in deforestation-linked palm oil and it rewards environmentally-destructive practices that harm our farmers here at home. Therefore, we need safeguards in the form of impact assessments. We need safeguards on climate—the biggest challenge facing this planet—on deforestation, and on the sustainable production of forest-risk commodities, including palm oil, in UK supply chains.
Gareth Thomas
My hon. Friend is making a very interesting speech. One of the environmental concerns that has been raised with me and others on the Committee by a whole series of green groups is around the use of the investor-state dispute settlement. Thus far, the Minister has ducked answering questions around ISDS. One hopes that in responding to my hon. Friend he might take the opportunity to explain why Ministers are so supportive of ISDS in this context, given the damage it could potentially do in setting back our climate change aspirations under the Paris agreement, and why they were so determined to try and stop ISDS being included in the bilateral free trade agreement with Canada.
Anna McMorrin
My hon. Friend makes some very important points, and I hope the Minister will directly address them.
We need to ensure there are safeguards, and that environmental targets and improvement plans are there to be looked at and addressed. We need those safeguards in the form of impact assessments. We need to make sure that environmental standards are there for the produce that we import within this CPTPP agreement, and that rewards and incentives to encourage destructive practices are not there. We need a level playing field for British farmers, organisations and companies—that are already producing to higher standards, and that are on the path to much more sustainable farming. We need to make sure those practices are not undermined.
I hope the Minister will respond to those points, and that he will vote for this new clause to make sure those standards are upheld and that this trade deal is in line with COP26 and the Government’s very own objectives and initiatives.
Mr Dhesi
As we unpack the CPTPP, a nuanced landscape emerges—especially when considering its impact on the Government’s procurement, employment and industry sectors. Our amendments aim to safeguard issues raised by the likes of the TUC and the NFU, ensuring a balanced approach to procurement that benefits our local economies and upholds sustainability.
Reflecting on the Government’s ambitious projections, compared to the stark realities presented by recent analyses, the anticipated benefits of the CPTPP for the UK might not be as significant as initially claimed. It was initially touted as delivering a substantial boost to our economy, but revised forecasts have tempered those expectations significantly, as I set out at the outset, underscoring the need for a more grounded and critical examination of the agreement. Government procurement is pivotal, as it may alter fundamentally the UK’s procurement landscape, possibly exposing local markets to increased international competition.
Gareth Thomas
Does my hon. Friend remember that once upon a time, one of the Prime Ministers not so long ago—I think his name was Boris Johnson—backed the idea that we should buy British? However, we have not heard anything recently about that concept. Certainly, the approach in the CPTPP—the lack of an enforceable labour standards provision, for example—suggests that Ministers have given up on the noble ambition of encouraging state bodies to buy British.
Mr Dhesi
My hon. Friend makes the point more eloquently than I would have done. It is pertinent to note the contributions of previous Conservative Prime Ministers that have not materialised. That is why the CPTPP must serve as a catalyst for positive economic contribution, reflecting a steadfast commitment to the values of fairness and sustainability.
The potential of the agreement to reshape the competitive landscape, particularly highlighted earlier by the implications of clause 2 for conformity assessment bodies, warrants meticulous scrutiny. The demand for detailed impact assessments on employment and industry underscores our deep comprehension of the stakes involved. Our policies must safeguard critical sectors, such as automotive manufacturing, and maintain job security and fair labour practices to foster a resilient economy ready for future challenges.
The automotive sector, which is a cornerstone of British manufacturing, faces potential challenges from the increased market access and competition brought about by the CPTPP. The Society of Motor Manufacturers and Traders has highlighted the significant contribution of the automotive industry to the UK economy, emphasising the need for trade agreements to support the growth and stability of the sector. Ensuring that the CPTPP does not disadvantage the sector is paramount in preserving the livelihoods that it supports.
Gareth Thomas
My hon. Friend is surely right to raise the concerns of the automotive sector. In particular, Ministers have failed to protect it from the loss of EU cumulation rights and rules of origin in access to Canada from 1 April. That potentially puts at risk some of the £750 million market for British cars, such has been the failure of the Secretary of State and the Minister present.
Mr Dhesi
My hon. Friend makes an excellent point. The British people were promised bright sunlit uplands. We were promised lots of things but, whether it is the automotive industries, our fishermen or our farmers, there are complaints galore because people feel heavily let down by this Government’s performance. That is why the emphasis on fair labour practices within the context of CPTPP is crucial. The UK’s commitment to upholding high labour standards should not be compromised by international trade agreements.
Labour rights and protections are fundamental to ensuring that the economic benefits of trade are equitably distributed, and that workers are not left vulnerable to the pressures of global competition, which is in line with Labour’s new deal for working people. We advocate for a trade environment that prioritises the protection and enhancement of workers’ rights across all sectors. That initiative aims to ensure that the prosperity derived from international trade agreements, like the CPTPP, directly contributes to improving the working conditions, pay and security of British workers, embodying the principle that fair trade must also mean fair work. In essence, as we navigate the implications of the CPTPP for employment and industry, a balanced approach that protects British jobs and industries, while embracing the opportunities of global trade, is essential.
Anna McMorrin
My hon. Friend is making excellent points. Does he agree that this trade agreement is essential in transitioning to a green economy and in working with partner countries to make that transition in the automotive sector, for example? In order to do that in the right way, we need to ensure that those environmental safeguards are put in place, otherwise we risk the destruction of our automotive workforce in this country.
Mr Dhesi
My hon. Friend makes that point powerfully, and it is essential that those considerations are put forward by the Minister in his response. Those issues around procurement and the impact on our British industries are extremely important. The broad reach of the CPTPP, encompassing countries with diverse labour practices, demands a firm commitment to enforceable labour protections. We cannot leave the door open for a race to the bottom in labour rights. The absence of a dedicated clause on labour rights is a glaring omission, reflecting the Conservatives’ faltering commitment to protecting labour rights in international treaties and highlighting the urgent need for the CPTPP to embody our shared values of fairness and ethical trade practices.
Matt Rodda
I congratulate my hon. Friend on an excellent speech in which he is highlighting a number of weaknesses in the Government’s approach. Does he agree that his points are particularly relevant, given that we have just entered a recession, and that many working people and small businesses are under increasing pressure from not just the cost of living crisis but wider economic pressure as the economy contracts? I have a number of small businesses and working people in my constituency who have raised deep concerns with me recently. Does my hon. Friend agree that the Government need to be doing more at this critical time?
Mr Dhesi
I thank my hon. Friend for that excellent intervention. The Opposition are extremely concerned, whether it is about our economy going into recession, or the cost of living crisis or the various other forms of malaise that affect our society. We do not want any arrangement with the CPTPP, particularly regarding procurement, that impacts more negatively than what is already going on.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [ Lords ] (Second sitting)
Tuesday 20th February 2024
(10 months ago)
Public Bill CommitteesRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 February 2024 - (20 Feb 2024)
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Dr Huq. It is great to have you in the Chair this afternoon—it is always good to have a Member of Parliament from a neighbouring borough in the Chair.
I am raising a point of order because, in a slightly uncharacteristically shifty moment, the Minister appeared not to know anything about an investor-state dispute settlement case involving Eurotunnel that was successfully pursued against the UK Government. I used our lunch suspension productively to find the newspaper coverage of that case, which dates back to 2 February 2016. I appreciate that the Minister may not have seen the coverage at the time—he was then the Chief Secretary to the Treasury, overseeing cuts to support for getting small businesses to trade shows, among other cuts—but I have the extract with me. I wonder whether the Minister might like to see it; he could then give us an assurance that he will answer the concerns about ISDS. So far, he has been notably reluctant to do so.
The Minister for Trade Policy (Greg Hands)
Further to that point of order, Dr Huq. I welcome you to the Chair. I do not wish to be outdone by the hon. Member for Harrow West: I, too, represent a borough neighbouring yours. I am happy to go head to head with the hon. Gentleman at any time.
In answer to the hon. Gentleman’s point of order, I am happy for him to send me any evidence that he has. He said that the case was in 2016. He has been shadowing Trade and Business for most of the past eight years now, and it would appear to have taken him eight years to find the details of the case, which makes me think that it might not be the smoking gun that he thinks it is. However, I am happy for him to write to me with any details, and I will certainly have a look.
The Chair
I understand that the word “shifty” applies to the point, not to the Minister. That is correct, is it not?
The Chair
I am just checking, because otherwise the Clerks will be on me like a ton of hot bricks for allowing unparliamentary language about another Member.
Anyway, these are all points of information rather than points of order for the Chair. If the two Members are happy to swap information, let us leave it at that.
Clause 3
Procurement
Question (this day) again proposed, That the clause stand part of the Bill.
The Chair
I remind the Committee that with this it will be convenient to discuss the following:
The schedule.
New clause 1—Assessment of the impact of the CPTPP Chapter on government procurement—environment—
“The Secretary of State must, within three years of Royal Assent to this Act, lay before Parliament assessments of the impact of the implementation of the CPTPP Chapter on government procurement on—
(a) the Government’s plans to tackle climate change;
(b) the sustainable production of forest risk commodities, including palm oil, within UK supply chains,
(c) deforestation, and
(d) the Government’s environmental targets and environmental improvement plans established under the Environment Act 2021.”
New clause 2—Assessment of the impact of the CPTPP Chapter on government procurement—employment and industry—
“The Secretary of State must, within three years of Royal Assent to this Act, lay before Parliament assessments of the impact of the implementation of the CPTPP Chapter on government procurement on—
(a) manufacturing in the United Kingdom;
(b) the job market in the United Kingdom, including but not limited to gender inequality therein;
(c) the level of procurement by local authorities from businesses in their local authority area;
(d) the delivery of public services in the United Kingdom; and
(e) the Government’s commitments to the conventions of the International Labour Organisation.”
New clause 7—Impact assessment of implementation of the CPTPP Chapter on Government Procurement on developing country trading partners—
“(1) The Secretary of State must, within 12 months of the passing of this Act and every 12 months thereafter, publish a report on the impact of the implementation of the Government Procurement chapter of the CPTPP on developing country trading partners of the United Kingdom.
(2) The impact assessment under subsection (1) must include an assessment of—
(a) social, environmental, and economic impact on countries with high levels of dependence on the UK market;
(b) steps that have been taken to consult with affected trading partners;
(c) proposed remediation measures for potential economic damage;
(d) how the experience and impact of implementation might inform negotiation of future trade agreements.”
I call Tan Dhesi, who was speaking when we were rudely interrupted by lunch.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Thank you, Dr Huq. I know it was a great disappointment to you not to be here for the opening of my speech, but at least you can be comforted by hearing its conclusion. I will carry on where I left off this morning.
The absence of specific commitments to uphold International Labour Organisation conventions in the comprehensive and progressive agreement for trans-Pacific partnership framework further exacerbates the risk to labour standards. Historically, the UK has been a proponent of international labour standards, advocating for decent work and fair wages across the globe. The CPTPP, as it stands, offers little assurance that those principles will be protected, let alone advanced, in the context of increased trade liberalisation.
In the light of those challenges, it is imperative for any engagement with the CPTPP to include robust safeguards to protect labour rights and ensure that trade does not come at the expense of workers’ welfare. That includes advocating for the integration of binding labour standards in trade agreements and ensuring that all member countries commit to upholding basic rights such as freedom of association, the right to collective bargaining and the elimination of forced and child labour.
The commitment to labour standards within the context of the CPTPP must reflect a balance between facilitating trade and protecting the rights of workers. Without explicit provisions to safeguard labour rights, there is a real risk that the benefits of trade will be unevenly distributed, with workers bearing the brunt of increased competition and deregulation. Ensuring that the CPTPP promotes fair and ethical trade practices is not just a matter of economic policy, but a reflection of our values as a society committed to fairness, equity and respect for human rights.
With the right amendments and considerations, the CPTPP can offer a pathway to achieving those goals. However, it requires a concerted effort to ensure that it enhances rather than undermines the economic and social fabric of our nation. It is about creating a future in which trade contributes not only to economic prosperity but to a fairer, greener and more equitable world. The requirement for amendments stems from a recognition that the current formulation of the CPTPP may not sufficiently safeguard against potential negative impacts on local industries, workers’ rights and environmental standards. Labour’s amendments signal our dedication to a trade policy that respects our commitments under international agreements, including those aimed at combating climate change, protecting biodiversity and upholding labour rights.
Gareth Thomas
I rise to support new clauses 1, 2 and 7 and clause 3 stand part. In support of new clause 1, I will add some remarks to the excellent contributions from my hon. Friends the Members for City of Chester and for Cardiff North.
I seek further clarification from the Minister on the environmental impact of the CPTPP, to better understand how the Government intend to mitigate the detrimental environmental effects of the UK’s accession to the bloc. I understand that about 90% of the world’s oil palm trees are grown on a few islands in Malaysia and Indonesia, and just 1% of Malaysian palm oil smallholdings are certified by the Roundtable on Sustainable Palm Oil. That 1% constitutes approximately 40% of all palm oil plantations in Malaysia.
As I think all Members—even Government Members—recognise, deforestation is a major environmental crisis. It is now the second largest contributor to climate change globally, after burning fossil fuels. Nearly 90% of deforestation is attributed to agricultural expansion. The impact has not only affected our climate, but resulted in a sharp decline in native wildlife, as my hon. Friend the Member for City of Chester set out.
Crucially, once ratified, the CPTPP will remove import tariffs on palm oil, irrespective of environmental credentials. As my hon. Friend noted, that risks contradicting commitments made by the Government under schedule 17 to the Environment Act 2021 to tackle illegal deforestation in UK supply chains. It is potentially irresponsible without the safeguards of due diligence secondary legislation, which is still due. In the other place, the Government said that they would bring forward that urgent secondary legislation some time in the spring of this year, but it remains somewhat vague. Any further clarification of the timeline from the Minister would be helpful.
Matt Rodda (Reading East) (Lab)
I hope that my hon. Friend will also press the Minister on the wider context. My hon. Friend highlights the important point made by my hon. Friends the Members for City of Chester and for Cardiff North, which is that the Government seem to be neglecting their responsibilities. There appears to be a contradiction in Government policy between what we have heard today and other aspects of UK domestic legislation, such as the commitment to support the conference of the parties process. Will my hon. Friend press Ministers on that?
Gareth Thomas
I certainly want to press the Minister further on those issues.
To be fair to Lord Johnson, he committed to a monitoring report after two years. He said:
“I would be surprised…if the evaluation and monitoring reports did not cover information on…environmental standards, reduction of the risk of deforestation and many other areas.”—[Official Report, House of Lords, 16 January 2024; Vol. 835, c. 363.]
Although I take his commitment at face value, it would be sensible to put on the face of the Bill a requirement for such a report within three years, not least because we have not seen the secondary legislation, which is urgently needed.
Perhaps the Minister can give us additional clarity about what the review to which Lord Johnson committed would include. Will it include the way in which CPTPP membership affects the sustainable production of forest risk commodities, such as palm oil, in the UK supply chain? Will it specifically investigate the impact of CPTPP membership on deforestation? Those are key questions from stakeholder groups such as the World Wide Fund for Nature and Chester zoo. It would be helpful to have additional clarity from the Minister about the review to which Lord Johnson committed and, crucially, about the secondary legislation that is due.
Has any further thought been given to the commodities that the secondary legislation will cover? The Government initially confirmed that they would look at six agricultural commodities, but now I understand that the secondary legislation will cover only non-dairy cattle, cocoa, palm oil and soy; coffee and rubber are missing. It would be helpful to know why.
I understand that the threshold for a company being required to comply is quite high: only businesses with a global annual turnover of £50 million will have to comply. It would be good to hear from the Minister why that particular figure has been set.
In the context of new clause 1, I want to raise some concerns from Pesticide Action Network UK. The hon. Member for Totnes, who sadly is not in his place, was keen to mention the Trade and Agriculture Commission report, in which Professor Bartels and his colleagues outlined their concern that more goods using pesticides that are not currently allowed in the UK will be imported as a result of CPTPP. Indeed, PAN UK has made clear its belief that membership of CPTPP is likely to increase food imports from CPTPP member countries, all of which have weaker pesticide standards than the UK’s. There are genuine concerns that there will not be sufficient controls on food imports to the UK, and consequently that weaker pesticide standards will develop here. I am sure that the Minister recognises that that will worry many people.
Greg Hands
I will try to be as convincing as possible. I thank the hon. Members for Slough and for City of Chester for tabling new clauses 1, 2 and 7, which would necessitate further assessments and reviews across various areas related to our accession to CPTPP. However, let me deal first, in a little more detail, with the point of order from the hon. Member for Harrow West, which related to the Eurotunnel case, because I think it needs to be clarified.
The UK was subject to a contractual dispute regarding the specific terms of a concession agreement—this was under the last Labour Government—under a specific treaty between France and the UK on the construction and operation of a channel link. This contractual dispute is different from more traditional ISDS claims, such as the ones that can potentially be brought under CPTPP, which are open to the more general category of investors under an investment treaty. The UK has investment agreements containing ISDS provisions with about 90 trading partners. I reiterate that it has never been subject to a successful claim under these agreements.
However, I note the hon. Gentleman’s enthusiasm for talking about ISDS. He has been a Member for some 27 years, so I thought I would go back and see where his enthusiasm for speaking about this came from. He has spoken about ISDS six times in his 27 years, but the first mention of his concern about ISDS came on 18 June 2020. It took him some 23 years here to first voice his concern about this issue, so I am not entirely sure about his enthusiasm for raising it.
Greg Hands
I ask the hon. Gentleman to let me finish, because it does not end there. He was Trade Minister for two years, between 2007 and 2009. I thought that when he was Trade Minister he might have said something about ISDS, which he is so passionately against. He actually had the opportunity to do something about it then, but he did not mention ISDS in that time. Perhaps he can explain his silence for some 23 years on this issue about which he feels so passionately.
Gareth Thomas
I am grateful to the Minister for finally giving us some answers about the Eurotunnel tribunal case and about ISDS in that context. One of the other questions I asked him about ISDS and, particularly in the context of new clause 1, about its potential impact on the environment was why he supports ISDS in the context of CPTPP but not in the context of negotiations with Canada over a bilateral free trade agreement. He has yet to give an answer to that question. Perhaps he can do so now.
Greg Hands
I thank the hon. Gentleman for that intervention, but we have a debate on ISDS coming up under new clause 5, so I will be happy to talk further about it then. We are also having a debate on where CPTPP interacts with other trade agreements, but quite often, if a different trade agreement has ISDS provisions, it may or may not be desirable to include ISDS provisions in a further trade agreement. It would be worth looking at how ISDS works in each of the trade agreements.
The Government have demonstrated that we take parliamentary scrutiny of our FTA agenda seriously. A full impact assessment for the UK’s accession to CPTPP was published at signature in July 2023, alongside the accession protocol text and a draft explanatory memorandum. That included assessments of the potential economic impact on UK GDP and, indeed, the environmental impacts. As has been mentioned by my hon. Friend the Member for Totnes, the independent Trade and Agriculture Commission was commissioned to scrutinise the accession protocol and to produce a report on whether the measures are consistent with the maintenance of UK statutory protections in relation to animal and plant health and life, animal welfare and the environment. The TAC concluded in its advice published on 7 December 2023 that
“CPTPP does not require the UK to change its levels of statutory protection in relation to (a) animal or plant life or health, (b) animal welfare, or (c) environmental protection”
and even that it
“strengthens the UK’s ability to maintain its levels of statutory environmental protection.”
I think the hon. Member for Slough claimed that farmers were against it or are sceptical. I can give him a quote because , on this occasion at least, the president of the National Farmers Union, Minette Batters, was supportive of CPTPP, saying that the
“government continues to maintain its commitment to our food safety standards.”
She further stated that the UK achieved a
“balanced outcome, particularly with respect to managing market access in our most vulnerable sectors.”
Mr Dhesi
To clarify, I did not say that farmers are against CPTPP, just as the Labour party is not against the CPTPP agreement. However, there were significant concerns around seeds, plants and the wider agricultural industry. It is those concerns that we are bringing to the table. It is up to the Minister to address those concerns.
Greg Hands
I thank the hon. Gentleman for that intervention, but the NFU is not shy in coming forward to criticise free trade agreements from time to time—I think the NFU would agree with that. Here the NFU has given a clear endorsement of CPTPP, partly because it offers the opportunity for UK agriculture to sell their fantastic products abroad. That is part of the point of doing this: so that UK agriculture can access these fast-growing markets around the Asia-Pacific and the Pacific rim and sell high-quality British produce to those markets. That is why the support overall from the farming community is there for the UK joining CPTPP.
Looking to the future, the Government intend to produce a biennial monitoring report and publish a comprehensive ex post evaluation for the agreement within five years of the UK’s accession. I confirm to the hon. Member for City of Chester that the evaluation will include an assessment of the environmental impact. An inclusive and participatory process will be at the heart of the evaluation, providing structured opportunities for a wide range of stakeholders to share their views and provide evidence. However, those impacts cannot be disaggregated by individual chapters. That goes to the heart of many of the Opposition’s amendments. They want to have an impact assessment for different factors within CPTPP, but the Government already have a firm process in place to consider the agreement, its impact and its effects as a whole. That is the right thing for us to do. Additional impact assessments of the type being proposed would cost the taxpayer without showing the effects of the agreement as a whole.
On new clause 1 on deforestation and the environment, I can provide assurance that the UK will continue to uphold our very high environmental standards in all our trade agreements. CPTPP does not affect the UK’s ability to take social value or environmental considerations into account in procurements where they are relevant and do not discriminate. The procurement chapter of CPTPP includes a provision also found in the World Trade Organisation agreement on Government procurement, the GPA, and in our other free trade agreements that exempts measures necessary to protect human, animal or plant life or health, understood to include environmental measures as well.
Anna McMorrin (Cardiff North) (Lab)
The Minister made the point that the NFU supports the agreement and that its president Minette Batters said that joining the CPTPP provides “some good opportunities”. However, she also said:
“It is an absolute red line for us that food produced using practices that are illegal here—for instance, the use of hormones in beef and pork production and chemical washes for carcases—should not be allowed on our market”,
and that
“domestic policies are aimed at improving the competitiveness of British farming”—
that is what I said in my speech this morning—
“and strengthening our domestic food security.”
How can the Minister ensure that that happens without the proper impact assessments? I have no idea, nor, it seems, does the NFU.
Greg Hands
The impact assessment was published last July. We have been absolutely clear, right the way through since 2016 with the inception of the Department for International Trade, that nothing in free trade agreements has an impact on our right to regulate domestically and our domestic food and animal welfare standards, which must also apply to imported products. We have been through this many times in different Trade Bills and different free trade agreements. Each time, I have to remind hon. Members that nothing in an FTA changes our domestic right to regulate.
Dr Neil Hudson (Penrith and The Border) (Con)
The Minister has answered the point made by the hon. Member for Cardiff North on many occasions when I have raised this question. The Secretary of State did so the other day, on Second Reading. The UK Government reserve the right to maintain the ban on the importation of products that do not meet our standards such as hormone-treated beef, ractopamine-treated pork and chlorine-washed poultry. The Secretary of State was clear at the end of January that that ban remains in place and the Minister has confirmed that. The UK Government are standing firm and that should reassure the Opposition and the NFU that we will uphold our animal welfare standards.
Greg Hands
I thank my hon. Friend for that excellent intervention. His point goes back to the pause in the Canada negotiation. If one wants to understand the seriousness with which the UK Government treat those obligations and our domestic standards, that was one of the reasons for pausing the Canada negotiation. Many Opposition Members never agreed with being part of the agreement in the first place precisely because Canada was becoming a demandeur, particularly when it came to things such as hormone-treated beef. That was one of the reasons for pausing that negotiation.
Mr Dhesi
The Minister is being generous with his time. We had a similar fanfare when the Australia trade deal was announced. However, the former Environment Secretary no less, the right hon. Member for Camborne and Redruth (George Eustice), said that Britain gave away too much for too little in return in the Australia deal negotiations. That is why we have such protestations and complaints from various farmers and farming unions. What protections have Ministers put in place to ensure that farmers and other agricultural producers are better protected in the CPTPP agreement?
Greg Hands
If I may say so, I think that is a slight mischaracterisation of the former Environment Secretary’s critique of the Australia and New Zealand free trade agreement. I was in the main Chamber when this was debated in, I think, the early part of 2023. I think his critique was directed more at the tariff reduction and the tariff schedule than any reference to standards on animal welfare and food production. My impression was that, in his view, the tariff reduction was too rapid on Australian produce coming in.
I will say to the hon. Member for Slough that CPTPP also includes an extensive environment chapter, which recognises parties’ sovereign right to establish their own levels of domestic environment protection and priorities. This includes measures in the pursuit of reaching net zero and other environmental goals. The parties also affirm their commitment to implement multilateral environment agreements to which they are party. All the CPTPP members are signatories to the Paris agreement, as well as multilateral environment agreements covering wider environmental areas such as biodiversity, ozone-layer protection and pollution. The parties further recognise the importance of trade in environmental goods and services in the environment chapter. Parties are committed to endeavour to address any barriers to trade raised in this context. For example, under the CPTPP there will be no tariffs on UK exports of new electric vehicles and wind turbine towers, which support the UK and the CPTPP parties’ transition to low-carbon economies.
Gareth Thomas
I will endeavour to be brief and to the point. Given his reference to all the parties being signatories to the Paris agreement, I will gently bring the Minister back to the question of ISDS, on which I know he is always enthusiastic to answer questions. Can he be absolutely clear today with the Committee that no ISDS claim is likely to be successful where environmental considerations have been a factor in a Government taking a particular decision?
Greg Hands
The hon. Gentleman invites me to go down a hypothetical road where possible court cases may or may not be successful. I reiterate that the UK has never lost an ISDS case, and CPTPP does not prevent a domestic right to regulate, so I am confident in our position on that. I do not think speculating on future court cases would be appropriate for any of us in this Committee Room.
We remain committed to our environmental and sustainability goals, including forest protection. We will continue to work domestically and with partners internationally to pursue our ambitions for nature, climate and sustainable development, including in CPTPP and multilateral fora such as the WTO, climate and biodiversity COPs—I was proud to represent the UK at COP26 as an environment and climate Minister—and through the forest, agriculture and commodity trade dialogue. The hon. Member for City of Chester asked specifically about this, as did the hon. Member for Cardiff North. I can answer that in spring of this year, the Government will be laying our forest risk commodities legislation under the Environment Act. It will make it illegal for larger businesses operating in the UK to use key forest risk commodities produced on land occupied or used illegally.
The Government have confirmed that palm oil products would be included under the regulated commodities. Do not just judge us on our words; judge us on our deeds. It is encouraging that 86% of UK imports of palm oil were certified as sustainable in 2022. That is up from 16% in 2010 under the last Labour Government, when the hon. Member for Harrow West was the Minister for International Development. He might have had more concern with these issues than perhaps he showed at the time; he is saying that he does now. Deforestation related to palm oil in Malaysia has fallen by 60% since 2012, in the latest available figures, which were in 2018. We would like to see more recent figures, but none the less we are seeing a really encouraging trend. The UK in particular has gone from 16% under the last Labour Government to 86% being certified as sustainable. We will keep working with countries such as Malaysia, which is a party to CPTPP, to build on that work.
The CPTPP environment chapter strengthens co-operation on addressing deforestation and forest degradation and allows parties to co-operate through the FTA’s dedicated environment committee. We have also agreed a joint statement with Malaysia setting out our shared commitment to work together to promote the sustainable production of commodities and to protect forests. Moreover, the UK and Malaysia are signatories to the Glasgow leaders’ declaration on forests and land use, and we are committed to halting and reversing deforestation by 2030. I refer once again to the report of the independent Trade and Agriculture Commission, which concluded that
“it is unlikely that CPTPP will lead to an increase in palm oil being grown on deforested land.”
I remind Opposition Members that they are continually having to tell us that they are in favour of joining CPTPP, yet at every single moment available they make speeches against the UK joining it. The hon. Member for Cardiff North said that it “makes a mockery” of the UK's environment commitments. If she thinks that it makes a mockery of our commitments, why on earth is she in favour of it? I welcome her being in favour and voting for or not voting against it on Second Reading, but if she thinks that something is making a mockery of this country, why on earth is she in favour of it? Perhaps she can explain that dichotomy.
Anna McMorrin
I thank the Minister for giving me the opportunity to explain. I am saying that as it stands, it is making a mockery of environmental commitments that were agreed at COP26 in Glasgow. Without new clause 1, there is no environmental climate impact assessment. The sustainability of this puts into question all our trade agreements in CPTPP. That is why the impact assessments are so important and why the Government should support the new clauses and vote for them.
Greg Hands
I thank the hon. Lady for that intervention, but, as I have already made clear regarding new clauses and previous amendments, we already have a comprehensive impact assessment process in place. I confirmed earlier in my speech that the environment will be part of that. Additional subject impact assessments would be duplicative, unnecessary and expensive, and it might prevent the good operation of the UK’s accession to CPTPP.
Anna McMorrin
Actually, it might be the reverse: spending money on the impact assessments, which would be a relatively small amount, would save money in terms of our marketability, trade and business right across the UK and internationally.
Greg Hands
I accept the hon. Lady’s intervention but, as I have pointed out, the impact assessment is already being made as part of the biennial monitoring and the comprehensive evaluation in that period. It is in the UK’s overall impact assessment, which, as I have already outlined, will of course include the environment.
I will turn to the issue of pesticides, which was raised. The UK has not lowered its standards to accede to CPTPP. All food and drink products imported to the UK, irrespective of the purpose for which they will be used, must comply with our import requirements and regulatory standards for food safety. That point has been made continually in trade debates for the last eight years, and that includes the maximum residue levels of pesticides. As the Trade and Agriculture Commission report confirms, all food and drink products imported to the UK must still meet our existing import requirements. A range of Government Departments, agencies and bodies continue to ensure that standards are met, including the Food Standards Agency, the Animal and Plant Health Agency, the Veterinary Medicines Directorate and the Health and Safety Executive. There is a comprehensive Government programme of monitoring pesticide residues in food to determine whether food available to UK consumers complies with the statutory residue levels and is safe. The results of the monitoring are published following consideration by the Department for Environment, Food and Rural Affairs expert committee on pesticide residues in food.
On new clause 2, on employment and industry, the Government want UK businesses to be successful in competing for public contracts, both in the UK and in other countries around the world, and UK businesses can and do—of course—achieve success in winning domestic contracts. The reciprocal guaranteeing of market access through CPTPP means treating each other’s suppliers in the same way that we treat domestic suppliers. The UK’s international commitments have never affected our ability to deliver public services effectively, and encouraging greater competition in public sector procurement can and does drive down prices for the taxpayer and improve value for money for the UK public sector.
Matt Rodda
The Minister is very confident in his marshalling of evidence this afternoon. The Opposition remain deeply sceptical; would he like to give us—and the public—a reassurance, regarding the NHS and other key public services, that the new agreement will not lead to foreign providers undermining standards of care and replacing domestic or indeed NHS suppliers?
Greg Hands
Well, absolutely. We have given that commitment time and again, regarding not just this trade agreement, but previous trade agreements and our overall commitments to the NHS and to public sector procurement.
On the question of buying British, which I think the hon. Member for Harrow West raised, the UK Government’s policy, as reflected in our current international obligations and domestic law, is that Government procurement should be non-discriminatory, as this provides the best value for money for the taxpayer. Public sector contracting authorities across the UK, including in devolved Administrations, will continue to comply with the UK’s international commitments. Fair and open competition between suppliers, including those of our trade partners, delivers the best value for money for UK taxpayers.
I think that the hon. Member for Harrow West asked about the general review, which is different from the UK Government’s review. CPTPP was, of course, conceived as a living agreement designed to evolve to maintain its high standards, and the CPTPP text states that there should be a general review of the agreement at least every five years. The first general review will begin in 2024, and the hon. Gentleman could even make a submission to that general review. It closes tomorrow, so perhaps he may be able to put forward his submission just in time to get it in. I am sure that my officials will be waiting with great trepidation about what he may have to say, including perhaps on some of his favourite recent topics, such as ISDS.
On new clause 7, Members have raised an important point regarding the impacts of trade agreements on developing countries. We know that free trade agreements have the potential to contribute to preference erosion. When negotiating trade agreements, the Government analyse the impacts of preference erosion as part of a balanced approach to the negotiations. The impact assessment for CPTPP estimated a minimal impact of the UK’s accession on the GDP of a selection of neighbouring countries and least-developed countries.
The UK continues to monitor the third-party impacts of trade policy, and will continue to promote trade with developing countries through our new developing countries trading scheme—the DCTS—which was launched last summer, and economic partnership agreements, or EPAs. Our trade-related technical assistance, funded by our official development assistance—or ODA—helps developing countries to take advantage of trading opportunities.
The Government recognise the need to closely consider potential impacts on developing countries as we continue to evolve our trade policies and take forward FTA negotiations. We continue to balance the domestic interests of UK consumers and businesses with delivering on our FTA agenda, while maintaining a strong commitment to supporting developing countries and reducing poverty through trade.
To conclude, new clauses 1, 2 and 7 cover important topics such as labour, the environment and developing countries, but the impacts cannot be disaggregated by individual chapters. Additional impact assessments of the type being proposed would be duplicative of the overall assessment of the agreement, to which the Government are already committed. I therefore ask the hon. Members not to press new clauses 1, 2 and 7.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Schedule agreed to.
Clause 4
Designations of origin and geographical indications
Gareth Thomas
I beg to move amendment 3, in clause 4, page 3, line 24, at end insert—
“1AA. The Secretary of State may only cancel the registration of a protected designation of origin or a protected geographical indication under paragraph 1A after—
(a) an impact assessment has been published, and
(b) a three month consultation process has been undertaken.”.
The Chair
With this it will be convenient to discuss the following:
Amendment 4, in clause 4, page 4, line 36, at end insert—
“(11A) The Secretary of State must, within three years of Royal Assent to this Act, publish an assessment of the impact of the CPTPP on the operation of Geographical Indications in the United Kingdom.”.
Clause stand part.
Gareth Thomas
The Opposition support clause 4 standing part of the Bill, but we wish to probe the Minister a little, hence amendments 3 and 4.
The intellectual property chapter in CPTPP includes provisions for the protection and enforcement of geographical indicators. We have had the privilege of an intervention from the hon. Member for Penrith and The Border. He might be particularly interested to know that two particular very interesting products from the north-west have secured GI status in the UK. The first is traditional Cumberland sausage; the second is Beacon Fell Lancashire cheese. I will come back to those a little later on.
The intellectual property chapter builds on present international intellectual property agreements in relation to rules on transparent and fair administrative systems for the protection of GIs, including rules for opposing GI status being granted to a particular product and the cancellation of GI status. I understand that the NFU thinks that the scope of the provisions for GIs in the CPTPP intellectual property chapter is fairly limited, and that a number of CPTPP countries are fundamentally opposed to food GIs. The only GI protections currently administered within CPTPP have been agreed on through bilateral side letters and ascribed to spirits and wines. It would be helpful to hear whether the Minister shares that somewhat bleak assessment.
Clause 4 seeks to amend specified pieces of retained EU law, as I understand it, so that an application to register a GI case can be opposed on the grounds that it is likely to cause confusion with a pre-existing trademark or the application for such a trademark. I understand the clause also expands the grounds on which the registration of an agrifood GI can be cancelled. Could the Minister give us an example of where such a decision might be made? What consultation would take place before such a decision were taken?
GIs are proven to boost export returns to primary producers—our farmers—and the UK has more than 80 products with some form of protected GI status. It would be interesting to hear from the Minister when a UK Minister last spoke to the UK Protected Food Names Association, the trade body for products with GI status. Beyond Scotch whisky, I cannot find any obvious sign that promoting GIs is a significant part of the Minister’s departmental work plan. I would be delighted to be proved wrong.
What plans do Ministers have to use the CPTPP review to try to break down opposition in other CPTPP countries to British GIs? Clearly, promoting British products with a geographical indicator could help to secure greater export returns for the UK agrifood industry and, specifically, for our hard-pressed farmers.
Will accession to CPTPP help to secure GI status in countries such as Japan? I ask because the then Secretary of State for Trade, the right hon. Member for South West Norfolk (Elizabeth Truss), as a result of what she called a “historic” trade deal with Japan, promised that some 70 iconic British foods, from Cornish pasties, Welsh lamb, Melton Mowbray pork pies, to the traditional Cumberland sausage and the Beacon Fell Lancashire cheese, would secure GI status, unless there were exceptional circumstances, within five months in Japan. That was more than three and a half years ago. When I wrote to the current Secretary of State to remind her of that commitment back in late November, the Minister who replied said that he was unable to provide an exact timeframe for products such as Whitstable oysters, Scottish wild salmon, Carmarthen ham and Yorkshire forced rhubarb to secure protected status.
Can the Minister explain why there was such a great fanfare and promise of GI status in Japan within five months for those great, iconic British products from across the United Kingdom, and yet here we are, three and a half years on, and I can find no clarity as to whether any of the 70 UK GIs have now secured protected status in Japan? Our amendments are probing amendments, but the issues I raise are serious. I look forward to a considered reply from the Minister.
Greg Hands
Clause 4 relates to designations of origin and geographical indicators. As with other clauses in the Bill, it is necessary to ensure that the UK can comply with the CPTPP when it accedes. The clause amends the domestic legislative framework that regulates agrifood geographical indications.
Let me start by assuring all members of the Committee that the Government are committed to transparency. On amendment 3, the Secretary of State already has a duty under existing GI legislation to publish a list of names for which a cancellation application has been received and to publish applications in cases where, following scrutiny, the Secretary of State is satisfied that the conditions for cancelling the GI have been met. Applications are published on gov.uk and a three-month period is allowed for those with a legitimate interest to lodge a notice of opposition. Those arrangements will continue to apply to cancellation applications in the future, including cancellation applications made under the new cancellation grounds created by the changes the Government are making through the Bill.
I also point out to the Committee that the process of publishing a list of applications received and publishing applications to cancel a GI following successful scrutiny is the same as when an application to register a new GI is submitted. It seems to me that those equivalent processes should be subject to equivalent levels of scrutiny. In other words, the registering of a GI should have the same scrutiny as a proposal to cancel a GI. Undertaking an impact assessment, as the Opposition propose yet again, and a new three-month consultation process on top, in addition to the existing opposition process for the cancellation of GIs, which already includes a three-month period for opposition from those with a legitimate interest, would duplicate and unbalance these processes.
In summary, amendment 3 is unnecessary and would cause unwarranted delays given that transparent and public procedures already exist under domestic GI legislation. Those with a legitimate interest are already given the opportunity to oppose the cancellation of a GI, and that will not be changed by the Bill.
Turning to amendment 4 on impact assessments, I would like to reassure hon. and right hon. Members that the Government take parliamentary scrutiny of their FTA agenda and domestic implementation seriously. With that in mind, a full impact assessment for the UK’s accession to CPTPP was published at signature in July 2023 alongside the accession protocol text and a draft explanatory memorandum. As has already been said, the Government also intend to publish a biennial monitoring report and a comprehensive evaluation report for the whole agreement within five years of the UK’s accession that will include, in addition to an assessment related to environmental impacts, under which GIs are covered, an assessment relating to intellectual property. An inclusive and participatory process will be at the heart of that evaluation, providing structured opportunities for a wide range of stakeholders to share their views and provide evidence. Therefore, additional impact assessments of the type being proposed would cost the taxpayer and entirely duplicate the existing impact assessments without showing the effects of the agreement as a whole.
The hon. Member for Harrow West asked about countries taking different approaches to GI protection. That is indeed correct. Not all parties around the world have the same approach to geographical indicators, trademarks, intellectual property and so on. Crucially, the CPTPP will not have an impact on the UK’s domestic scheme of geographical indicators. The Government’s objective in any trade negotiations will be to support the best possible outcome for the UK’s geographical indicators and the UK economy as a whole. The aim in trade negotiations is to ensure the high standards of our domestic GI schemes continue to be upheld. CPTPP enables new dialogue on standards of GI protection with parties, which we will use to further the protection of our GIs abroad.
GIs are included in many of our new free trade agreements, and the hon. Member for Harrow West already mentioned the ones with Japan, Australia and New Zealand. When I go around the world, I am always keeping an eye out for products such as Cumberland sausages, Melton Mowbray pork pies, even Stornoway black pudding, English sparkling wine, Scotch whisky and Irish whiskey. It is great to see such fantastic British food and drink produce being available on plates right the way around the world, including in Totnes. I know my hon. Friend the Member for Totnes particularly enjoys something with a fine geographical indicator attached to it; indeed, he may have just returned from enjoying such produce.
Greg Hands
I will give way because I know the hon. Member for Harrow West had a tough lunch break researching a Eurotunnel case from under the last Labour Government. I doubt if he had any chance to eat anything with a geographical indicator attached to it, so of course I will give way to a final point from him.
Gareth Thomas
I am grateful to the Minister for allowing me to intervene. Can he give us an update on what happened to all the products that were promised GI status in Japan? Has there been any progress on securing those since his letter to me in November, whether for traditional Cumberland sausage, Beacon Fell Lancashire cheese, Gloucestershire cider or Gloucestershire perry, which might appeal to the hon. Member for Totnes? The last Trade Secretary but one promised they would have GI status in Japan and yet not much progress seems to have been made.
Greg Hands
There is a process domestically in Japan, which the hon. Member will be aware of from our debates on that free trade agreement. I would be happy to have a look again at the letter I wrote to him in November and see what progress has been made. This is a work in progress to make sure that our fine food and drink continues to arrive on dinner tables in Japan, where I know that it will be eagerly devoured by our allies and friends in the Pacific.
On the impact of CPTPP on the operation of geographical indicators in the United Kingdom, the Bill relates only to the Government’s agrifood scheme in Britain, where the high standards of our domestic GI scheme will continue to be upheld. For all the reasons I have outlined, I ask the hon. Member for Harrow West to withdraw his amendment.
Gareth Thomas
As I indicated in my initial remarks, amendments 3 and 4 were tabled as probing amendments. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Performers’ rights
Gareth Thomas
I beg to move amendment 5, in clause 5, page 5, line 23, after “country” insert
“which is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership”.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 6, in clause 7, page 7, line 17, leave out sub-subsection (c).
Amendment 7, in clause 7, page 7, line 28, at end insert—
“(5) Section 5 comes into force twelve months after the day on which this Bill is passed.”
Gareth Thomas
I am grateful for the opportunity to move amendments 5, 6 and 7, which go to the heart of the controversy that has developed around clause 5 and the issue of performers’ rights.
The Minister has attempted to bounce through the House of Lords and appears to be attempting to bounce through the House of Commons, using the Bill, changes to the way that those who make music are paid from broadcasting and the public playing of music. Pressure in the other place on Second Reading forced the Minister there to agree to publish a consultation document on the issue. That document was released on 15 January. The consultation is due to close on 11 March this year.
Who at this stage knows when Ministers will be able to tell the House what policy conclusions the Ministers have reached from that consultation? What is clear is that neither the House of Commons nor the House of Lords will have been given a clear steer on which way the Government want to go on how recording labels and artists are paid when their work is broadcast before the passage of this legislation is completed and Royal Assent granted. I gently suggest to the Minister and the hon. Member for Totnes that this is a further example of the scrutiny of this trade treaty being less than optimal.
Given that the issue could have significant consequences for one of the most significant parts of our economy, the creative industries, why did Ministers not at least publish a consultation document in good time and publish their conclusions before the start of the Bill’s passage through the House of Lords?
Ministers have also claimed that the provisions are an integral part of CPTPP. I confess to being a little sceptical about that, despite the Minister’s letter to me after the Second Reading debate in which he again made that claim. Many industry groups certainly do not believe that any of the text in CPTPP requires the Government to make the changes to increase the rights of foreign performers that the Bill provides for. I gently suggest that the truth is that the Intellectual Property Office has convinced Ministers that, putting CPTPP accession to one side, Britain is not currently compliant with the Rome convention for the protection of performers, producers of phonograms and broadcasting organisations and/or the World Intellectual Property Organisation’s performances and phonograms treaty. Again, it would be good to hear the Minister’s assessment of that.
The industry clearly believes that what Ministers want to do, via the clause and the very late associated consultation, would turn down the tap of investment that has supported recently the likes of new British music stars Olivia Dean, Dave, and The Last Dinner Party in launching their careers, in favour of foreign artists such as those who were up for the Grammys at the beginning of this month. Talented winners there were aplenty at the Grammys, but Ministers appear to want to disadvantage our homegrown talent and support their global competitors instead.
As I have alluded to, Ministers have implied that they have to make these changes to be compliant with CPTPP, but it is interesting that there is no reference to CPTPP in the impact assessment that I have here. I am looking at the policy objectives on page 1 that the impact assessment seeks to cover. It seeks to
“ensure UK copyright law is consistent with the requirements of the Rome Convention and WIPO (World Intellectual Property Organization) Performances and Phonograms Treaty”,
to
“reduce costs to UK users of foreign music”
and to
“increase revenues for the UK creative industries where this can be done without significant costs to UK users or consumers”.
There is no mention at all of compliance with CPTPP. Indeed, the talk in the impact assessment is of US labels and US artists and not CPTPP countries.
On the amendment specifically, which seeks to limit the rights under clause 5 to CPTPP countries, business groups do not believe that any of the text in the CPTPP requires the Government to make such changes to increase the rights of foreign performers that the Bill provides for. The Minister claimed exactly that in his letter, but he added a crucial phrase—“and the performance also meets further eligibility criteria set out in the treaties on performers’ rights”—so it would appear that, in essence, no new rights are granted by the CPTPP. It is just that the Intellectual Property Office and Ministers now believe that the Rome convention, one of those crucial treaties on performance rights, has been implemented wrongly in the UK.
I understand, too, that the European Court has found on a case in Europe that may have some bearing on the attitude of Ministers and the Intellectual Property Office: the so-called RAAP—Recorded Artists, Actors, Performers —decision. Again, however, it would appear odd if the RAAP decision were motivating the change, given that we are no longer in the European Union and that UK courts are now free to deviate from EU law. It will be useful to hear from the Minister the real reason behind the clause.
Let me ask as well, why are we giving all international performers those rights? Malaysia, for example, a member of the CPTPP, has not even signed the Rome convention, which provides for those rights. It would be interesting to know which page or part of CPTPP means that these legal changes have to be to be made. I ask that because when we signed bilateral free trade agreements with Japan and Australia, both of which are signatories to CPTPP and have signed the Rome convention and the WPP treaty, changes such as those set out in clause 5 were not required. Will the Minister state, too, whether any of those changes were asked for by CPTPP countries?
On amendments 6 and 7, it would be helpful to understand whether the Minister accepts that it is unhelpful that the Government’s decision following the consultation will occur only after the passage of the Bill. In his letter to me, the Minister appeared to deny that some of the options in the impact assessment could lead to a £100 million impact on British performers. Others predict a lower impact. One of the options appears to suggest that there would be no impact, but at this stage it is difficult for any member of the Committee to be certain exactly what the impact will be, because the consultation has not been completed and we have no idea how Ministers intend to move forward on the changes.
The Minister is asking all in Committee and indeed those outside the House to take it on considerable trust that the Government will consider their views properly and make the right decisions on behalf of the British music industry and all those new potential artists that might emerge in the shadow of the Stormzys and the Dua Lipas, and be central to the UK creative industry going forward. Amendments 5 and 6 are probing amendments. Amendment 7 might be a probing amendment, but I think it could be reasonable to delay the implementation of this particular part of the Bill in order that we may understand fully the direction that Ministers want to take once the consultation has been completed.
Greg Hands
I turn to amendments 5 to 7 to the provisions on performers’ rights. As we have heard, the amendments would do several things. I will deal them in turn, but I first reiterate the purpose and necessity of clause 5. The intellectual property chapter of CPTPP sets the minimum standards of protection that parties must provide in their law and specifies who they must extend the protections to. The requirements are not unique to CPTPP: they are based on the standards in multilateral treaties on copyright and performers’ rights. UK law already exceeds the minimum standards of CPTPP and generally makes rights available to foreign nationals. However, the basis on which performers qualify for rights in UK law is not fully consistent with CPTPP or some of the treaties on which the IP chapter of CPTPP builds. The measures in the Bill, along with the secondary legislation that will be laid at the end of this month, will fix that. They will ensure that every creator who is entitled to rights in CPTPP will enjoy them in UK law. That is a necessary part of our accession to CPTPP.
Gareth Thomas
The Minister says that our rights are not compliant with the Rome treaty. However, that treaty has been in place for more than 40 years, and there has never been any suggestion until now that we as a country are not compliant with the rules set out in it. Why are we now suddenly not compliant?
Greg Hands
The reasons are that the Bill implements some of the provisions in CPTPP. For example, clause 5 implements articles 18.8 and 18.62 of CPTPP. The provisions require parties to provide the rights in CPTPP to performers if they are a national of another CPTPP party and the performance meets further eligibility criteria set out in the treaties on performers’ rights or is first published or recorded in another CPTPP party, regardless of whether the performer is a national of a CPTPP party. This is all about being able to accede to CPTPP. Existing UK law does not provide for all the eligibility criteria in the treaties on performers’ rights and does not take account of where a performance is published.
Greg Hands
Let me finish. This is about ensuring that our regime is aligned and consistent with CPTPP—the international treaty to which we are acceding. The Bill amends UK law to implement the additional criteria. I think the hon. Gentleman is going to ask if the Government can confirm that they are making only the changes necessary for the UK to comply with CPTPP. The UK’s accession to CPTPP requires that we expand the criteria by which foreign performers can qualify for rights in UK law, and that is what the Bill does. The changes in the Bill will also apply to performers from other countries that are a party to a relevant treaty on performers’ rights for consistency with the UK’s obligations under those treaties.
Gareth Thomas
I draw the Minister back to the impact assessment, which makes no mention of CPTPP. All the talk in the impact assessment that came out with the consultation document is of US performers and businesses. If the consultation is so much required by clause 5 and our accession to CPTPP, one would surely expect the impact assessment to make some reference to artists and their rights from CPTPP countries, but it does not: it references just US performers.
Greg Hands
I thank the hon. Gentleman for that intervention. He raises a good point, but if I am not mistaken he is referring to the IPO consultation, rather than the CPTPP consultation. The IPO consultation was already planned and is not directly or exclusively about our accession to CPTPP. The IPO consultation is fundamentally different from the CPTPP accession process, although they treat of a similar issue. He asked whether the amendments were asked for by CPTPP parties. The answer is no—they are necessary for the UK to join CPTPP. One of the most important things to understand in reference to CPTPP is that it is a pre-existing agreement; it is not negotiating new text. This needs to be done for the UK to join CPTPP.
Greg Hands
The hon. Gentleman is misunderstanding how the process works. The comprehensive and progressive agreement for trans-Pacific partnership is an existing treaty, signed in 2018. The UK is acceding to the existing text. Nobody would be sitting down with us negotiating whether we might do something or not do something, because we are acceding to a pre-existing text. It would not necessarily have been appropriate for all 11 of the CPTPP parties to sit down at negotiations saying, “Are you agreeing to this? Are you not agreeing to this?” We are agreeing to accede to the deal as it stands. UK law already exceeds the minimum standards in CPTPP, and generally makes rights available to foreign nationals. This is a necessary part of our accession to CPTPP.
Amendment 5 would limit the application of some parts of clause 5 only to CPTPP parties. It would mean ceasing to provide protection to some other foreign performers. This would conflict with the requirements of those treaties on performers’ rights I have already mentioned, and would put the UK in breach of its international obligations. The Government therefore cannot support amendment 5, as it would put the UK in breach of our international obligations.
Amendment 6 would delay the amendments that this Bill makes to existing powers in the Copyright, Designs and Patents Act 1988. Those existing powers allow the making of secondary legislation to extend or restrict the protections to particular countries—for example, to restrict the rights extended to a country that fails to provide equivalent protection to British performers. The amendments that the Government are making to this power are merely about ensuring that its scope is not inadvertently eroded by the other changes in clause 5 —that the power can continue to be exercised to the same effect as under the status quo. It is not about introducing new powers.
Under clause 7, the amendments to that power take effect as soon as the Bill comes into force. That is the commencement clause of the CPTPP Bill and ensures that the power can be used in preparation for the other provisions of clause 5 coming into effect, avoiding the unnecessary disruption that might otherwise arise if we could only modify the impacts of the Bill after it had already taken effect. It effectively prevents there being, shall we say, a two-stage process in terms of how we ensure that we are compliant.
Mr Dhesi
Can the Minister confirm how the Government are considering the Intellectual Property Office consultation on the right to be paid from broad-casting and public playing of music, which is not due to close until March? Will that allow sufficient time for the Government to adapt the IP provisions in this Bill to ensure that there is a positive impact on Britain’s creative industries?
Greg Hands
We are all looking for a positive impact on Britain’s creative industries. It is one of our key asks, and one of the key things that we market abroad as a whole Government, ensuring that our creative industries get marketed well—especially in CPTPP countries. The fast-growing markets of the Asia-Pacific and the Pacific rim are exactly the sort of places we want to reach. I will come on to describe in a moment the interaction with the IPO consultation and where that might take the provisions we are talking about today.
I return to amendment 6, which would prevent the avoidance of unnecessary disruption and the multi-stage process that I was talking about. It would make disruptive, successive changes to the law on this area much more likely. It would introduce risks to the creative industries, which we all wish to support. I am sure the Opposition would not wish to do anything that created additional risks to the creative industries and to consumers, with no upside.
Amendment 7 would apply even more widely. It would delay the commencement of all the performers’ rights provisions until
“twelve months after the day on which this Bill is passed.”
We cannot accede to CPTPP until our law meets its requirements. That requires that we make the changes in the Bill. Delaying those measures means delaying our accession and delaying its benefits to UK businesses, including in the creative industry sectors, and to consumers.
For the reasons that I have set out, the Government cannot support the amendments. However, I understand that they reflect concerns about the scope of clause 5 and the possible impact on creative industries. Although we must make these changes, there is a possibility of modifying the impact of the Bill in one important area: the right of performers to be paid royalties when their performances are broadcast or played in public. I understand that that issue has been of most concern to some in the creative sectors. For that right and the equivalent right for producers of sound recordings, we have some flexibility under CPTPP and other treaties to modify our approach. Powers in the Copyright, Designs and Patents Act 1988 will allow us to do so through secondary legislation.
As has been mentioned, the Intellectual Property Office is consulting publicly on the question of how we provide those rights to foreign nationals. The consultation is ongoing until 11 March, and we aim to implement its outcome in parallel with the Bill coming into effect. The consultation process will ensure that there is sufficient opportunity for stakeholders to consider, prepare for and influence the outcome in that area.
There is no benefit to delaying the changes to the law, as the amendments seek to do; as I have set out, there are clear risks in doing so. I hope I have made it clear why we cannot support the amendments, which are unnecessary and in some cases damaging. I ask the hon. Member for Harrow West to withdraw his amendment.
Gareth Thomas
I am grateful for the Minister’s reply. As I indicated, amendments 5 and 6 are probing amendments reflecting the concerns in the industry; I am grateful to hear that he recognises them.
On amendment 7, I struggle to be entirely convinced that a slight delay so that we could understand the results of the IPO consultation and the policy direction that will flow from it would frustrate the whole CPTPP accession process. I will not press amendment 7 to a vote for now, but we will certainly return to the matter on Report.
I beg to ask leave to withdraw amendment 5.
Amendment, by leave, withdrawn.
Clause 5 ordered to stand part of the Bill.
Clauses 6 to 8 ordered to stand part of the Bill.
New Clause 1
Assessment of the impact of the CPTPP Chapter on government procurement—environment
“The Secretary of State must, within three years of Royal Assent to this Act, lay before Parliament assessments of the impact of the implementation of the CPTPP Chapter on government procurement on—
(a) the Government’s plans to tackle climate change;
(b) the sustainable production of forest risk commodities, including palm oil, within UK supply chains,
(c) deforestation, and
(d) the Government’s environmental targets and environmental improvement plans established under the Environment Act 2021.”—(Gareth Thomas.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 4—Review of negotiation and implementation of Intellectual Property Chapter—
“Within one year of the day on which this Act is passed, the Secretary of State must publish—
(a) a review of the lessons learned from the negotiation and implementation of the CPTPP Chapter on intellectual property, and
(b) an assessment of how this experience might inform negotiation and implementation of future free trade agreements.”
Gareth Thomas
New clauses 3 and 4 are both probing amendments. On new clause 3, I refer the Minister to the evidence that Albert Sanchez-Graells, professor of economic law at the University of Bristol, gave to the Trade (Australia and New Zealand) Bill Committee some 16 months ago. He raised concerns about the potential implications of the differences between the procurement rules under CPTPP and those to which Britain was already committed under the WTO agreement on Government procurement, the GPA. His evidence was also accepted by the International Trade Committee as a significant concern.
Professor Sanchez-Graells also argued that seeking to improve procurement opportunities for British businesses via the CPTPP to get a GPA-plus arrangement would mean legal uncertainty about the remedies available to British businesses if they ran into problems, because the CPTPP procurement chapter seeks to incorporate the current WTO GPA and then amend its provisions. In comparison, our trade deal with Europe incorporates the GPA in full and then builds upwards from it.
Professor Sanchez-Graells argued that there were
“two main areas of problem: one is the national treatment rules on access to markets, which applies in particular to suppliers in different jurisdictions, and the other is access to remedies.”—[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 41, Q51.]
It was access to remedies that particularly concerned him. At column 41 of his evidence to the Bill Committee, he noted that among the provisions of the procurement chapter in the Australia FTA—he confirmed at column 43 that this is replicated in the CPTPP procurement chapter—is a clause allowing the exclusion of legal remedies completely on the basis of public interest. He made it clear that, for a high-profile project, that could mean that the courts might set aside any claims for suspension of the procedure or even for the compensation for damages, if it were believed to be in the national interest of the country in question.
Gareth Thomas
At first glance, UPOV 91 appears to require relatively tight and inflexible national intellectual property regimes, which in some cases can lead to heavy fines or even the imprisonment of farmers who violate them, often unknowingly. In countries such as Malaysia and Chile, UPOV 91 has been controversial, with often decades of resistance from civil society, farmers and environmental groups that feel that a much tighter patent regime on seeds will lead to the loss of indigenous knowledge and biodiversity. We should surely tread carefully when trade agreements place obligations on member states that could damage livelihoods and/or the environment and consider, if necessary, how to mitigate those impacts as much as possible.
Is the Minister willing to say now, or via a letter to the Committee, what assessment he has made of the UK’s commitment to UPOV 91 and its impacts on our Paris agreement, our climate, the sustainable development goals and other UN treaty commitments? What assessment has been made of the impact of CPTPP on small farmers, who are so vital to the world’s food and environment? Did he consider a side letter, following the example of New Zealand, which disapplies the UPOV 91 requirements between the UK and other member states? It would be interesting to hear his views on those questions. As I made clear, new clauses 3 and 4 are probing amendments, but none the less the issues raised are serious concerns that have been put to us. It would be good to hear the Minister’s response.
Greg Hands
I thank the hon. Members for tabling the amendments, which regard reviews of the Government procurement and intellectual property chapters of the CPTPP. I confess that I will not spend long on this, as once again the amendments are all about impact assessments.
Once again, I assure the Committee that the Government intend to publish a biennial monitoring report and a comprehensive evaluation report of the agreement within five years of our accession. As I mentioned, the impacts cannot be disaggregated by individual chapters, and doing so through additional impact assessments would cost the taxpayer, be unnecessarily duplicative and not show the effects of the agreement as a whole. The CPTPP was of course conceived as a living agreement designed to evolve to maintain its high standards. Its text states that there should be a general review of the agreement periodically; the first general review is expected to begin shortly, in spring 2024. As I mentioned earlier, there is a UK consultation on this, and we will engage with each issue raised in the review in a way that seeks to promote and protect UK interests.
To be frank, the two specific points raised by the hon. Gentleman do not seem particularly close to the wording of the amendments. However, I have had a chance to look at his references to Professor Sanchez Graells. I understand that the hon. Gentleman has already received correspondence on the points that he raised—I think he mentioned that—as part of the passage of the Trade (Australia and New Zealand) Act 2023. That is a rarity: it was passed while I was not a Minister in the Department. That is a rare event, but I will look at it. The Government continue to disagree with Professor Graells, and I refer the hon. Gentleman to the correspondence he has already received on the matter. However, if he thinks that anything arises from that correspondence and wishes to write to me, I will have a look at it.
Similarly, I feel that the passage of the regime on seeds, UPOV 91, is fairly deeply in the scope of the Department for Environment, Food and Rural Affairs. I will undertake to write to the Committee about UPOV 91 and the patent regime on seeds. None the less, my point remains that the impact assessments we have already done—the biennial monitoring report and the comprehensive evaluation report of the agreement—are still the right approach to working out and assessing the impact of CPTPP. I therefore ask the hon. Member to withdraw his new clause.
Gareth Thomas
I am grateful to the Minister for those replies. I will reflect on the points he has made, and may return to these on Report. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 5
Review: Investor-State Dispute Settlement
“The 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.” —(Mr Tanmanjeet Singh Dhesi.)
Brought up, and read the First time.
Mr Dhesi
I beg to move, That the clause be read a Second time. [Interruption.] I am most grateful to my hon. Friend the Member for Harrow West for his remarks from a sedentary position. Were he speaking to this new clause, I am sure he would do a much better job. As we delve deeper into the considerations of the CPTPP, our focus now shifts to the investor-state dispute settlement mechanisms. We must pay close attention to the safeguarding of national sovereignty, public welfare and environmental integrity. We in the Labour party have listened to the voices of numerous stakeholders, including the Trades Union Congress, the Trade Justice Movement and Greenpeace, which all express concern at the impact of the ISDS mechanism, particularly highlighting its disproportionate impact on democratic governance and policy autonomy.
As hon. Members will know, the ISDS mechanisms allow private investors to sue Governments for alleged discriminatory practices. I wish to flag concerns about ISDS’s potential to challenge environmental regulations. A poignant example is the 2021 case of Eco Oro Minerals Corp. v. Republic of Colombia, which illustrates the tension between corporate interests and environmental conservation. Colombia’s efforts to protect the páramos—a crucial ecosystem supplying 70% of the nation’s water—were countered by Eco Oro with a substantial legal claim of $696 million in damages due to a mining ban. This case highlights the potential for ISDS mechanisms to be wielded against Government actions aimed at preserving the environment, thereby urging the UK to tread cautiously as we navigate the intricacies of international trade agreements like the CPTPP.
We are particularly wary of how these mechanisms might impede our nation’s progress towards meeting climate targets. Furthermore, the potential jeopardy ISDS poses to public services cannot be overstated. The TUC has raised concerns that the prospect of foreign investors suing over the nationalisation of services, or the introduction of new public health regulations threatens our capacity to govern in the public interest, potentially having dire consequences for essential services such as the NHS and education.
For example, the case of Veolia v. Egypt, which concluded in 2018 after six years of litigation, where Veolia sued over wage increase policies, underscores the risk of ISDS mechanisms being used to challenge policies aimed at improving public welfare, with legal proceedings that can last years and entail substantial financial costs for Governments. Although Veolia eventually lost that case, it is still the case that Governments lose even if they win, because the Egyptian Government had to spend six years defending the case and pay millions of dollars in arbitration and legal costs. Although the costs of that case have not been made public, studies from the OECD show that average costs are $8 million to $10 million, and they can be as high as $30 million. That case serves as a reminder of the potential for ISDS to prioritise profits over the wellbeing of citizens, making it imperative to reform those mechanisms to enhance transparency and fairness in the dispute resolution process.
Historical precedents starkly illustrate the contentious nature of ISDS mechanisms. The shadow Minister for international trade, my hon. Friend the Member for Wigan (Lisa Nandy), proposed amendments, inspired by real world cases like Philip Morris’s challenge against Australia, that highlight the pressing need for stringent scrutiny and limitations on ISDS provisions to prevent corporate interests from unduly influencing national policy. Those instances demonstrate a pattern where ISDS is utilised to contest national policies and regulations, emphasising the need for enhanced parliamentary oversight and public consultation, as proposed in our amendments. Such cases vividly underscore the threat that ISDS poses to environmental policies and actions crucial for combating climate change and protecting biodiversity. Those examples highlight the pressing need for that scrutiny, which is why that enhanced parliamentary oversight is important.
I also want to delve into data from the United Nations Conference on Trade and Development, which indicates that disputes involving environmental regulations are on the rise, emphasising the vulnerability of environmental policies under ISDS. It is imperative to note that, between 1993 and 2020, UNCTAD reported a staggering 1,104 known ISDS cases globally, with a significant number of challenging environmental regulations. That necessitates implementing safeguards in the CPTPP Bill to prevent challenges to measures protecting biodiversity or reducing carbon emissions. That trend once again underscores the urgency of implementing safeguards within the CPTPP Bill to protect against ISDS overreach, ensuring that measures taken to protect biodiversity or reduce carbon emissions are not contested, thus preserving our commitments under international agreements, like the Paris climate agreement.
I also want to discuss public services at risk. A study by the European Federation of Public Service Unions highlights that ISDS mechanisms have been used to challenge public interest measures, such as environmental regulations, health and safety standards, showing a clear conflict with public service provision. The ability for foreign investors to sue over the nationalisation of services or the introduction of new regulations to protect public health poses a threat to our ability to govern in the public interest. That could have dire consequences for the NHS, education and other critical public services, restricting our ability to implement policies without the spectre of costly legal challenges.
None the less, it is also crucial to acknowledge the perspective that ISDS provisions, when applied judiciously, can offer a level of legal protection to investors against genuine cases of expropriation or unfair treatment by host states, thereby contributing to a stable investment environment. The challenge lies in ensuring that those mechanisms do not infringe upon the legitimate policy space of Governments to enact regulations in the public interest.
Considering the critical examination of the ISDS provisions within the CPTPP, it is essential to underscore that ISDS mechanisms can significantly impact the regulatory sovereignty of nations, allowing private corporations to challenge public policies and regulations designed to protect public health, the environment and welfare. I am sure the Minister is aware that we have had several debates over the last few years, and especially over the seven years that I have been in Parliament, around sovereignty and the need to protect national sovereignty, so I hope he will address these concerns.
Our proposed amendments, such as that to clause 2 for enhanced parliamentary oversight, and the requirement for public consultation on ISDS provisions, are informed by the analysis of cases like Veolia v. Egypt and Philip Morris v. Australia, which demonstrate the tangible risks ISDS poses to public welfare and environmental protection. Our amendment to clause 2 for enhanced parliamentary oversight proposes mandating parliamentary approval for regulations relating to ISDS mechanisms by resolution of each House of Parliament, reflecting our commitment to democratic oversight. This step ensures that the ISDS mechanism within the CPTPP undergoes thorough scrutiny, reflecting our dedication to maintaining the integrity of our legislative process.
With regard to public consultation requirements on ISDS provisions, in alignment with our principles of transparency and public engagement we propose adding a requirement for comprehensive public consultations specifically on the ISDS provisions within the CPTPP. This amendment ensures that the diverse viewpoints and concerns of our society, including those from trade unions, environmental groups and sectors potentially affected by our ISDS claims, are duly recognised and addressed.
In relation to safeguard amendments against ISDS overreach, inspired by the consolidated list of amendments by my hon. Friend the Member for Harrow West, the shadow Minister for Business and Trade—he has done a great deal of hard work on this—we advocate for safeguards within the CPTPP Bill to protect against the overreach of ISDS mechanisms. That includes stipulations that prevent ISDS claims from undermining the UK’s legislative autonomy in areas such as public health, environmental protection and labour rights, thereby preserving the UK’s regulatory autonomy and ensuring that ISDS mechanisms cannot be used to challenge legislative and regulatory actions taken in the public interest in our Parliament.
By proposing these focused amendments to the CPTPP Bill, we aim to address the legitimate concerns surrounding ISDS mechanisms and their potential implications for our country. These proposals are founded on our unwavering commitment to upholding the principles of fairness, environmental stewardship and social justice in our trade policy. This ensures that our trade agreements not only pursue economic objectives, but safeguard the broader interests of our society and the protection of our democratic processes.
Matt Rodda
I commend my hon. Friend’s speech. He is making an excellent point. This issue has been raised with me a number of times in my time as an MP, by both charities and other civil society groups. There is a great deal of concern about ISDS in the community, particularly, in my experience, from charities involved in development. My hon. Friend is making an excellent point in trying to address some of those legitimate concerns about the nature of trade policy.
Mr Dhesi
The contributions of my hon. Friend the Member for Reading East and other hon. Members in the Chamber on Second Reading underlined serious, legitimate concerns around ISDS and how it has been utilised around the world. I fear that the Government have not fully addressed those concerns. That is why I have gone to great lengths to delineate the problem. I hope that the Minister will address those points in his concluding remarks.
In conclusion, while recognising the potential economic benefits of the CPTPP, the Labour party remains steadfast in its commitment to protecting the UK’s sovereignty, public welfare and environmental integrity. Our call for a balanced approach to the ISDS mechanism is underpinned by substantial evidence of its potential misuse in challenging public interest measures, necessitating reforms to ensure that trade agreements such as the CPTPP do not undermine democratic governance or the ability of Government to regulate in the public interest. As we proceed in Committee, let us ensure that our trade policies reflect our collective aspirations for a fairer, more sustainable future.
Greg Hands
On new clause 5 on ISDS, I can provide assurance to the Committee that the UK already has investment agreements retaining ISDS provisions with about 90 trading partners, including seven of the 11 CPTPP parties. The UK provides a welcoming investment environment, with a non-discriminatory regime, strong rule of law and good governance. I remind members of the Committee that we have never been a recipient of a successful ISDS case—we have already disposed of the Eurotunnel red herring—from any investors from CPTPP parties or investors from any other country with which the UK has ISDS commitments through its investment agreements.
We are also clear that where we do negotiate investment protection and ISDS provisions in FTAs, we will not hinder our inherent right to regulate in the public interest, including in areas such as the environment, climate and labour standards. The right to regulate is recognised in international law, and CPTPP expressly reaffirms states’ rights to regulate proportionately, fairly and in the public interest.
May I take issue with the hon. Member for Slough and his very unbalanced views on ISDS, which reflect an old-fashioned view in the Labour party, perhaps from a few years ago, that business is always bad? Whatever the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) or the right hon. Member for Leeds West (Rachel Reeves) might say now, I think that today we are still seeing that attitude that business is always bad.
Greg Hands
Let me finish my argument. ISDS can be of great benefit to British companies abroad, and it protects jobs and livelihoods at home at the same time. It can make the UK a more attractive market to invest in—we are the Europe’s No. 1 destination for foreign direct investment—and it is important that the atmosphere for foreign investors remains strong. It generates jobs and prosperity here in the UK. And yet I hear increasingly in Committee rather the opposite. Contrary to the Labour party centrally saying that it is a pro-business party, I am hearing a very anti-business attitude and that business is always wrong.
Greg Hands
I am not going to give way. We have a balanced approach. ISDS does not prevent a right to regulate. It cannot force a change in domestic regulation, but it does prevent arbitrary discrimination against foreign companies, which in the case of CPTPP means—
Mr Dhesi
On a point of order, Dr Huq. I seek your advice about when a Minister of the Crown mischaracterises what has been said by someone, especially with regards to business. As someone who started and ran my own small business, I do not need lectures from Conservative Ministers about how to operate in business. The mischaracterisation also relates not only to whether our party is pro-business, but to the fact that I gave very balanced pros and cons of ISDS. May I seek your advice as to how that can be remedied in the record?
The Chair
The hon. Member has made his point. To be fair, it is not compulsory for anyone to take any interventions, but as the Member who moved the new clause, you will give a response in a moment, when the Minister has concluded.
Greg Hands
I thank you, Dr Huq, and the hon. Member for Slough for his point of order. None the less, we have to be clear that ISDS can prevent arbitrary discrimination against foreign companies. In the case of CPTPP, that can mean the same for British companies operating in those 11 existing parties. I just say to the Opposition Front Benchers that if they want Labour to pose as a pro-business party, they should take great care while parroting the arguments of groups like—
Gareth Thomas
On a point of order, Dr Huq. Again I seek your advice. Have you had any indication as to whether the Minister will answer the question why Britain is not seeking to have ISDS provisions in the Canada FTA but is seeking to have them in the CPTPP?
The Chair
I am being informed by my learned Clerks that that is a point of information, not a point of order for the Chair to adjudicate. The Minister was concluding, I believe.
Greg Hands
Thank you, Dr Huq. I will answer the hon Gentleman’s point about Canada in due course, but let me finish my point about Labour posing as the party of business when its Front Benchers are parroting the arguments of far-left bodies such as the Rosa-Luxemburg Stiftung and the Trade Justice Movement, which have railed against ISDS for years.
When it comes to why we did not agree an aside with Canada to disapply ISDS in CPTPP, upon the UK’s accession to CPTPP, British investments in Canada, which totalled £40.6 billion in 2021—investments worth protecting by the pro-business party that we are—will now be covered by these protections for the first time. In the light of our CPTPP accession, our bilateral negotiations with Canada will focus on stakeholder priorities, including in market access. That is very important for us.
I understand that there are concerns over the use of ISDS, but I want to be clear to the Committee that when we negotiate investment protection, and ISDS provisions within FTAs, we will not hinder our right to regulate in the public interest, including in areas such as the environment and labour standards. That right to regulate is recognised in international law. The CPTPP protects member states’ rights to regulate proportionately, fairly and in the public interest. That is done in a number of ways, including expressly reaffirming member states’ rights to regulate, as outlined in article 9.16.
Additionally, the UK has investment agreements containing ISDS provisions with seven of the 11 CPTPP countries and 90 countries worldwide. This is not a new issue. The UK has never received a successful claim from any investors of CPTPP countries or of any other country that it has ISDS commitments with. None the less, it protects British businesses abroad and makes Britain a more attractive environment for foreign companies to invest in.
That is why the UK will take a pragmatic approach to ISDS provisions, not the condemnatory, anti-business approach that we hear from the Labour party. I assure members of the Committee that the Government intend to publish an impact assessment in any case, and a comprehensive evaluation report of the agreement within five years of our accession. I therefore ask the hon. Members to withdraw their new clause.
Mr Dhesi
Thank you, Dr Huq. I would have thought that new clause 5 was sensible, and something that the Government should accept. All we are asking is that, no more than 18 months after the date on which the Act is passed, we have a review of the financial risk. However, if the Government are not willing to cede on that, we will seek to divide on the new clause.
For the record, I want to state that Labour is not only the party of business, but the party of working people. The Minister gesticulates from a sedentary position, but I think it is incredible that the Labour party’s business conference was sold out within four hours, which is more than I can say for the lacklustre performance from the governing party in terms of its abilities to woo the business community. We cannot dismiss at hand, as the Minister has done, the legitimate concerns of working people, as illustrated by the TUC and other organisations. It is important that those concerns are addressed.
I also note that the Minister did not answer the intervention from my hon. Friend the Member for Harrow West about why the Government are not seeking to have ISDS provisions within the Canada agreement. Perhaps the Minister would like to rise now. He said that he would address that point in due course. That due course has not unfortunately arrived, but it is for those reasons that we believe new clause 5 is important.
Greg Hands
I think the hon. Gentleman was perhaps distracted, but I did actually go into some detail about Canada and listed the fact that £40.6 billion-worth of British investments in Canada should now be covered by these protections for the first time. I did actually give quite a comprehensive answer when it came to Canada, the UK and ISDS.
Mr Dhesi
That still does not deflect from the point that, with respect to ISDS, it is one rule for one nation and another for the rest. That is why it is important that those ISDS provisions are looked at, because they are of serious concern when we are embarking upon this agreement. New clause 5 is very important and I therefore wish to push it to a vote.
Question put, That the clause be read a Second time.
Greg Hands
On a point of order, Dr Huq. I just wanted to take this opportunity to say a few words of thanks here on the Committee. I extend my appreciation to the Clerks of the House for their invaluable advice, and to the Doorkeepers who, as always, ensure order is maintained well throughout proceedings. My thanks also go to my departmental officials and my private office, all of whom provide me with a tremendous amount of support behind the scenes. The piece of legislation is narrow yet significant, as it will help ensure the UK can successfully accede to the CPTPP and access all the benefits associated with membership.
I would like to thank His Majesty’s loyal Opposition for their active participation in this debate. It has been interesting, and testy at times, but always worth while. I was surprised not to hear a contribution from the SNP during the course of this Committee debate, but perhaps they will reflect on that when it comes to Report stage later on. As we await Report stage and Third Reading, I am sure hon. Members will continue to raise any concerns they may have, and I strongly encourage them to do so. I thank you, Dr Huq, and Mr Davies, for chairing the Committee so capably and ably. My door is always open, and I look forward to continuing to engage with Members from across the House to help ensure that the Bill is passed in a timely manner, so that all our constituents can begin to benefit from the impact of the UK’s acceding to the comprehensive and progressive trans-Pacific partnership.
Question put and agreed to.
Bill accordingly to be reported, without amendment.
Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]
Tuesday 19th March 2024
(9 months ago)
Commons ChamberRead Full debate Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 19 March 2024 - large print - (19 Mar 2024)
16:56 - The House divided: - Ayes: 224 / Noes: 301 - Question accordingly negatived.
17:09 - The House divided: - Ayes: 217 / Noes: 305 - Question accordingly negatived.
17:21 - The House divided: - Ayes: 218 / Noes: 305 - Question accordingly negatived.
17:33 - The House divided: - Ayes: 219 / Noes: 306 - Question accordingly negatived.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
New clause 2—Assessment of impact of CPTPP on deforestation and import of certain products—
“(1) The Secretary of State must lay before Parliament a report containing an assessment of the impact of the implementation of the CPTPP on—
(a) the volume of UK imports of palm oil;
(b) the volume of UK imports of tropical wood;
(c) the rate of deforestation in Asia;
(d) the UK’s ability to fulfil its obligations under—
(i) the United Nations Framework Convention on Climate Change; and
(ii) the United Nations Convention on Biological Diversity.
(2) A report under subsection (1) must be published no earlier than a year and no later than 18 months after the passing of this Act.”
New clause 3—Report on the impact and use of the Investor-State Dispute Settlement procedure—
“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament a report on the impact of the implementation of the Investor-State Dispute Settlement aspect of the Investment Chapter of the CPTPP on the UK.
(2) A report prepared under subsection (1) must include—
(a) analysis of the likely use of the Investor-State Dispute Settlement procedure in relation to the UK, and the likely impact of such on the UK;
(b) details of discussions held with other signatories to the CPTPP regarding the use of the Investor-State Dispute Settlement procedure in relation to the UK; and
(c) discussions held with, or agreements made with, other signatories to the CPTPP regarding the exclusion or exemption of the UK from any use of the Investor-State Dispute Settlement procedure.”
New clause 4—Report: accession of new states to the CPTPP—
“(1) Before any decision is made by the Government on the accession of a new state to CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the potential benefits and impact of the accession of that candidate state on the United Kingdom.
(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”
New clause 5—Review: Investor-State Dispute Settlement—
“The 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.”
New clause 6—Impact assessment: environmental standards etc—
“(1) The Secretary of State must lay before each House of Parliament an assessment of the impact of the implementation of the procurement Chapters of the CPTPP on—
(a) environmental standards,
(b) food standards, and
(c) animal welfare standards.
(2) An impact assessment under subsection (1) must be published not less than two years, but not more than three years, after the day on which this Act is passed and every two years thereafter.”
New clause 7—Report on business impact of CPTPP—
“The Secretary of State must, within six months of the passing of this Act, publish a plan outlining the steps being taken to—
(a) measure the impact on UK businesses of the implementation of the CPTPP; and
(b) support UK businesses to benefit from the UK's membership of the CPTPP.”
New clause 8—Impact assessment: labour standards—
“(1) The Secretary of State must lay before Parliament an assessment of the impact of the implementation of the CPTPP Labour Chapter not more than eighteen months after the day on which this Act is passed and every 18 months thereafter.
(2) The impact assessment under subsection (1) must include an assessment of—
(a) the impact on the Government’s commitments to the conventions of the International Labour Organisation;
(b) steps that have been taken to ensure adherence to the conventions of the International Labour Organisation in CPTPP partner countries; and
(c) how the experience and impact of implementation might inform negotiation of future trade agreements.”
New clause 9—Comparative analysis of impact on UK businesses—
“(1) Within three months of the passing of this Act, the Secretary of State must lay before each House of Parliament a report on the impact of the implementation of the CPTPP on the matters listed in subsection (3).
(2) The report must include an analysis comparing the respective situation for each of the matters listed in subsection (3) prior to the implementation of the CPTPP with the situation post the implementation of the CPTPP.
(3) The issues which must be included in the comparative analysis contained in the report laid under subsection (1) are—
(a) tariffs paid by UK businesses to bring in or remove items from the UK;
(b) costs of non-tariff border control measures paid by UK businesses to bring in or remove items from the UK;
(c) inflation in the UK;
(d) the extent of alignment of regulations relevant to UK businesses;
(e) the ability of UK businesses to trade with the EU;
(f) the implications for UK businesses of introducing new trade and climate regulations, including for carbon pricing;
(g) tariff and non-tariff costs facing businesses trading with the EU; and
(h) trade volumes for UK businesses trading with the EU.
(4) Within 10 days of a report being laid under subsection (1) the Government must schedule a debate on the findings of the report in each House.”
New clause 10—Report on economic impact of implementation of CPTPP—
“(1) The Secretary of State must, within six months of the passing of this Act, publish a report on the economic impact of the implementation of the CPTPP.
(2) A report published under subsection (1) must include an analysis comparing the respective situation for each of the matters listed in subsection (3) prior to the implementation of the CPTPP with the situation post the implementation of the CPTPP.
(3) The matters which must be included in the comparative analysis contained in the report laid under subsection (1) are—
(a) the UK’s trade in goods;
(b) the UK’s trade in services; and
(c) UK GDP.”
This new clause would require the Government to publish a comparative analysis of the impact of the implementation of the CPTPP on UK trade and GDP.
New clause 11—Impact assessment: new states acceding to the CPTPP—
“(1) The Secretary of State must prepare and publish a report assessing the impact of the accession of new states to the CPTPP on the United Kingdom.
(2) In respect of states that have submitted a request to the Depositary of the CPTPP to join the CPTPP since 2019, the Secretary of State must lay a report before both Houses of Parliament within three months of this Act coming into force.
(3) In respect of states submitting a request to the Depository of the CPTPP to join the CPTPP following the enactment of this Act, the Secretary of State must lay a report before both Houses of Parliament within three months of a request being made.”
This new clause would require the Secretary of State to provide an impact assessment on the accession of countries that have made and will make a formal request to join the CPTPP.
New clause 12—Impact assessment: UK performers’ rights—
“(1) The Secretary of State must publish an assessment of the impact of the implementation of performers' rights provisions in the CPTPP.
(2) The impact assessment under subsection (1) must include—
(a) consideration of the impact of performers' rights provisions on qualifying individuals in the UK;
(b) an assessment of the reciprocity of rights across qualifying countries;
(c) consultation with such persons as the Secretary of State considers appropriate.”
This new clause would mean the Government must publish an assessment of the impact the performers’ rights provisions in the CPTPP will have on qualifying individuals in the UK.
New clause 13—Review of regulatory impact of implementation of the CPTPP treaty on UK businesses—
“(1) The Secretary of State must, within one year of the passing of this Act, lay before Parliament a report on the regulatory impact of the implementation of the CPTPP treaty on costs to exporting and importing businesses in the UK.
(2) A report under subsection (1) must take account of the existing levels of costs to exporting and importing businesses arising from trade regulations.”
This new clause would require the Government to report on the impact of implementation of the CPTPP treaty on the costs to businesses in the UK. The report would need to take the existing trade costs facing such businesses into account.
Amendment 2, in clause 2, page 2, line 2, at end insert—
“(5) Regulations under subsection (1) may not be made before Government has moved a substantive motion to resolve that the UK Accession Protocol should not be ratified.”
Amendment 1, in clause 5, page 6, line 36, at end insert—
“(7A) The Secretary of State must, after a period of three years from the passing of this Act, lay a report before Parliament containing an assessment of the impact of changes made in this section.”
Sir Iain Duncan Smith
It is a pleasure to speak to new clause 1, which is signed by a cross-party group of MPs who all believe that Parliament should have the right to scrutinise trade deals. It seeks to ensure appropriate parliamentary scrutiny of the UK’s position toward the accession of economies that are designated—that word is very specific—as “threats” or “systemic challenges”. It would achieve two things. First, the Government would be required to produce a report assessing the impact of the economy’s accession on the UK, and both Houses of Parliament would have a non-binding vote on the UK’s position regarding the accession of the economy in question. In other words, we would take the temperature of Parliament’s view, even if it disagreed with the Government. That is important, because the public need to know about it, so we should not be frightened of this.
Anthony Mangnall (Totnes) (Con)
I thank my right hon. Friend for introducing the new clause. Some of us have been arguing for parliamentary scrutiny of trade deals for the last four years. There is a mechanism in the form of the Constitutional Reform and Governance Act 2010. Is that not the better vehicle, because it has already passed? It also offers a vote, theoretically, for us to be able to scrutinise our trade deals.
Sir Iain Duncan Smith
I will come to that in a minute, because it does not, and that is the whole point of the new clause. In the 2023 integrated review refresh, the countries defined as threats were Russia, Iran and North Korea, while China was designated a systemic challenge. The new clause does not directly mention China, but of the eligible countries under the current integrated review, China is the only economy that has applied to join. In fact it is theoretically next on the list to go into the comprehensive and progressive agreement for trans-pacific partnership.
Mark Garnier (Wyre Forest) (Con)
I completely understand the point my right hon. Friend is trying to make, but one of the interesting things about being a member of CPTPP is that countries then have a power of veto. That gives us quite a lot of strength to potentially prevent China from joining.
Sir Iain Duncan Smith
I enjoy the idea that my hon. Friend puts such trust in Government never to take other arrangements into consideration. We know how that works. It will be fine today with my right hon. Friend the Minister here, but there may be others in charge in future, and I am not sure I would always want to rest my defence in Ministers.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am grateful to the right hon. Gentleman for giving way and for this new clause. Was he as surprised as I was that when we asked the Secretary of State whether she would block China’s accession to CPTPP she was unable to give us an unequivocal answer?
Sir Iain Duncan Smith
I think the right hon. Gentleman makes my point. I sat in Government and all I can say to him is that one cannot always say that Ministers will necessarily do the right thing; rather, they will do the right thing by the Government, which is sometimes not the same. I do not mean to cast aspersions on my party’s Government by any means, but that has happened in the past. I simply want to make the point that China’s potential accession has huge implications for all sorts of things, including because of its immense economic and political influence in the region and the pressures on the UK if we were almost isolated in our observations.
China is not a likeminded party—there may be other countries that are rather similar. It openly seeks to revise the liberal, open and rules-based order and establish itself as a regional hegemon. If admitted, it would be the largest economy and dominant economic and trading partner in the CPTPP, with unrivalled political influence. It could block a future US entry. As we join it is important for us to make way for the US and bring it in, which will help in a whole range of areas. China’s accession would help to cement Beijing’s desired leadership in global trade. I will remind the House that China is next up for the CPTPP, so this is not something conjured up.
China’s entry also risks further increasing economic dependence on it, which is already too high, and building resilience into the Chinese economy to weather sanctioning should tensions over Taiwan escalate, which they almost certainly will. That would run counter to the UK’s strategic efforts to de-risk and maintain the status quo in the region. Serious human rights abuses are and continue to be embedded within Chinese supply chains. China is the most egregious offender in this regard, with its actions on religion in Xinjiang and in Tibet, where slave labour is also practised. Slave labour undercuts the World Trade Organisation and normal trade. Those are good commercial reasons why the membership of any country with the views China happens to have would have a real impact.
China’s accession is unlikely to drive economic reform in the country. There is no political ability to drive such reform under President Xi, who has moved China further away from the spirit of the CPTPP on labour rights protections.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I have just returned from leading a parliamentary delegation to Lithuania, where my right hon. Friend was talked about by many Lithuanian politicians. They mentioned the leading role he is taking in warning western democracies about the conduct of the Chinese Communist Government. Does my right hon. Friend agree that Lithuania is a very interesting case for us to study, so that we can perhaps learn from how a European country confronts and takes on the increasingly nefarious conduct of the Chinese Communist party?
Sir Iain Duncan Smith
It is always kind to be referred to in another country, which leads me to wonder whether I should stand there. [Interruption.] I need no encouragement from those on the Opposition Benches, thank you very much. My hon. Friend is quite right; Lithuania is a tiny country, but rather bravely it has recognised Taiwan and it has come under the cosh from China as a result. I thank him for that intervention.
As I said, this is not a pipe dream. China applied to join the CPTPP on 16 September 2021, and is next in line. It is widely reported that Beijing is already lobbying hard for membership, and that countries previously opposed have softened their line. Australia has done so because it has had trade problems, as we know. All that is required for Chinese accession is for other members to permit it. The current labour regulations would seem to preclude China’s accession, but the risk is there and we should not take it.
An actor-agnostic approach—linking to the integrated review rather than naming any specific actor—would also enable the Government to create a threshold that is reflexive to developments rather than static. That would means that a report, debate and vote would be required only where the integrated review had designated specific economies as threats or systematic challenges. The language in the review is weak in its own right, but none the less it is there.
I want to deal with the CRaG process quickly. The new clause is in line with the Government policy, but exposes a loophole in the CRaG process. There is currently no provision for a debate and non-binding vote on future accession to plurilateral trade agreements. The process would not require the Government to produce an impact report on China’s accession to the CPTPP, nor would it provide for a parliamentary debate or vote. Given the long-term significance to the UK of being in a plurilateral trade agreement where the biggest partner is China, it is appropriate for Parliament to be furnished with an up-to-date, accurate report, and to have the opportunity to consider the matter—after all, there is no other reason why we are here if not to discuss such important matters.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The right hon. Gentleman makes a good point about some of the weaknesses of CRaG and the need to strengthen it, particularly when there are accessions or other material changes to a treaty to which we are a member. The Public Administration and Constitutional Affairs Committee, which I sit on, has published a report that outlines some of the changes to the way that the Government operate under CRaG. Does the right hon. Gentleman agree that we need to change it so that significant changes to treaties and accessions should always automatically be subject to a report and potential vote in this House? Otherwise, we will sign ourselves up to things without knowing what will happen further along the line.
Sir Iain Duncan Smith
I agree. I was not so certain about this, so I looked at what Lord Lisvane, the one-time chief Clerk in the House, said about it. He produced a note on it, which I quote:
“The issue, as I recall, was whether a Motion to approve the PRC’s accession could be amended. Commons S.O. No 24B says that when a Motion in neutral terms (in the judgement of the Chair) is tabled, no amendments to it may be tabled. I think this would probably rule out seeking to amend a simple ‘take note’ or ‘has considered’ Motion.”
I want to emphasise that it is not true that a motion to take note can be amended—that was used in the other place as a defence. The CRaG process does not provide for a vote; it does not even guarantee a debate. That is why the new clause is needed.
Under UK trade policy, it is not unusual for bilateral trade agreements to be subject to parliamentary approval—free trade agreements are routinely subject to it. In response to criticism of the CRaG process in 2021, the Grimstone rule was established, whereby the Government agreed in principle to allow time to debate prospective FTAs where the International Agreements Committee has published a report. I happen to believe that there are Ministers who are keen and happy to have debates—I mention no names, but that is the case. However, I know that the Foreign, Commonwealth and Development Office absolutely opposes them, because it hates to have any serious debates about its prerogative.
John McDonnell (Hayes and Harlington) (Lab)
I am pleased that the right hon. Gentleman is keen on debates. On that basis, I invite him to sign my prayer against this treaty, to urge the Government to give us a debate on the treaty as a whole.
Sir Iain Duncan Smith
I ask the right hon. Gentleman not to tempt me beyond my new clause. I always happy to look at this issue, and I believe in debate. It is vital, otherwise Governments are never held to account.
Daniel Kawczynski
My right hon. Friend is highlighting the various concerns about China’s conduct and why it should not join the CPTPP. Does he agree that the conduct of the Chinese Government in the South China sea—a waterway through which 60% of the world’s trade passes—where it has stolen hundreds of atolls from Vietnam, Philippines, Malaysia, Indonesia and others, is also a cause for concern?
Sir Iain Duncan Smith
It is, although I cannot follow my hon. Friend through Lithuania and the atolls of the far east, because I would be ruled out of order by the Chair. I hope he will forgive me, but he makes a strong point.
I say gently to the Opposition spokesperson, the hon. Member for Harrow West (Gareth Thomas), that it was a Labour Member, Lord Leong, who tabled the amendment in Committee in the Lords. Labour said that it would whip for the amendment if it were reworked to not mention China. Strangely, the new clause does not mention China, so I would have hoped that Labour would support it, but it does not. I understand that Labour has tabled its own new clause.
Parliament should be able to make its voice heard on a matter of such national significance. The new clause does not overturn constitutional conventions by a long way. Having a report, a debate and a non-binding vote would not determine Government policy, but it would determine the House’s view on the elements of this particular trade deal. I note that Opposition new clause 4 also seeks to look at this, but there are other issues that I will not bring up now.
There are elements in the Government who believe that debate is not a bad thing, because it allows them to make their case for why such a trade deal is important. I urge the Government to be positive about this, because being positive about debate in the House of Commons is a restatement of democracy. It allows people to decide whether they agree. More importantly, this is about accession. If those who follow us in seeking to join the treaty are defined as a threat, as they are in the review, that will at least inform the Government. It will also allow the House to pressure the Government over its real concern about what they might be doing. In future, a Government from either side of the House or of whatever form may choose, under pressure from China over economic issues, to let it accede to the treaty. Who knows? I do not say that that is the mood, but it is for Back Benchers to make their point about what the Government should do and for them to take note. In that regard, I commend my new clause to the House.
Liam Byrne
It is a pleasure to follow the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). I will speak in support of new clause 1, which he tabled, as well as the new clauses tabled in the names of my right hon. and hon. Friends.
I welcome this debate and the new clauses and amendments that have been tabled, but I lament the fact that we have not been permitted a full debate on the treaty—something the right hon. Gentleman argued for very eloquently. We needed a debate today not merely on the three chapters of the CPTPP covered by the Bill, but on the full 30 chapters of the treaty, with all the associated annexes and bits of analysis and argument.
I do not want to detain the House for very long, because the Business and Trade Committee went to the length of writing and publishing a report earlier this year. However, I want to underline the point about the lack of scrutiny. Of course, it was the Government themselves, in the Grimstone rule, who said that no new free trade agreements would be ratified by His Majesty’s Government without a full debate on whether we should agree to them. When I asked the Secretary of State on 23 January whether she would agree to a debate under the terms of the CRaG process, she said she would be “happy to support” such a debate. Her officials then wrote to the Clerks on the Select Committee to say that such a debate had been requested, only to be told by the Leader of the House that no time was available. The Leader of the House confirmed that in writing to me last week in a letter in which she said:
“it has not been possible to find time for a debate in Government time.”
The House of Lords is having a debate on the treaty today on the recommendation of the International Agreements Committee, so why can’t we? Are we second-class representatives in this House? Are we unqualified to have a debate on all 30 chapters of the treaty? Are we not qualified to speak, on behalf of the people we came into public life to represent, about how the treaty will affect their future? I think we are. I think we should have a debate on the full treaty.
And I cannot believe that we are out of time. Members will have seen the report in the Financial Times last week, which said that the working day in this Chamber
“has been shorter on average this parliamentary session than in any other in the past quarter century”.
Are we seriously saying that we have not been able to find time for a debate, which it is the Government’s policy to support, on one of the only free trade agreements that His Majesty’s Government have been able to bring forward since we left the European Union?
On Twitter, the Minister—I am a keen follower of the Minister on Twitter, he will be pleased to hear—said last week that there have been four parliamentary debates on the treaty, but I wonder if he is sure about that. When I asked the Clerks on the Select Committee to check that, they were left scratching their heads a little bit. They could not find all four that the Minister referred to. We have to accept that there is no shortage of controversy in the Bill, not least because the Secretary of State herself resiled from the figures that describe the benefits of the treaty to the country.
Anthony Mangnall
I thank the Chair of the Select Committee for giving way. It is a pleasure to serve on the Committee with him. I thought I might just throw a bone in the form of cross-party support on this point. Having a debate is not just about pointing out controversies; it is about having the opportunity to justify and debate things about which our constituents care. These trade deals make a difference not only to the businesses, but to the services and agriculture sectors in our respective constituencies. That is why it is damaging not to have a debate: it fails to allow us the opportunity to persuade people that trade deals can be a force for good.
Liam Byrne
The hon. Gentleman is absolutely right and I commend his contribution both to the Committee and to the report that we published on the CPTPP earlier this year.
There are a number of important new clauses and amendments not only about the future expansion plans of the CPTPP and what our policy on those might look like, but also, in the names of my right hon. and hon. Friends, about investor-state dispute settlement. This is important because in all the fanfare, arguments and passionate bits of literature and speeches offered by the Government about the virtues of the treaty, it was always positioned as a gateway to the fastest-growing economy on Earth that will represent a significant fraction of economic growth in the future. Of course, what was often missing from those eloquent descriptions was a recognition that the countries in the CPTPP represent only about a fifth, at best, of the Indo-Pacific region.
We are surely right to worry that there could well be a Government drive to expand the orbit of the treaty to a much wider group of nations. If the Government really want to take aim at the biggest economies on Earth, they may well encourage China to join. However, when I asked the Secretary of State whether it was her policy to agree to or block China’s accession, she said that that was not something we could discuss on the Floor of the House or in the Select Committee. That is why safeguards are needed. We might even be so bold as to merely ask for a little bit of clarity on the Government’s future strategy. That is why the amendments on the future pathway of the treaty are so important and why I hope we will have a vote on some aspect of that today, even if it is not on the new clause tabled by the right hon. Member for Chingford and Woodford Green.
I will talk briefly about new clause 3, which relates to ISDS. It is important, because His Majesty’s Government have agreed side letters with a number of countries to take us out of the ISDS process. That is not an exemption or safeguard that we saw when it came to agreeing to the treaty, yet the treaty includes countries such as Canada—I think we are just about on fraternal terms with Canada at the moment; we may have failed to agree an FTA with it, but quite why is a matter of some dispute between the Canadian Government and the Secretary of State. Canada is home to some of the biggest pension fund investors on the planet and we know that those funds are especially litigious. Although the Minister was right, when he answered these questions in earlier conversations, to say we have never lost an ISDS case, the reality is that many fear there will be a chilling effect on the regulations we bring forward because of a fear of the peril of ISDS procedures.
Lloyd Russell-Moyle
My right hon. Friend is speaking very well on some of the new clauses I have tabled on ISDS. It is of course true that getting the side letters for all member states was good enough for New Zealand, so it was protected more—not fully protected, I grant him. If it was good enough for New Zealand, it should have been good enough for us. Is it not a sign that Ministers have lacked ambition, or is it a sign of complacency?
Liam Byrne
My hon. Friend is absolutely right. Perhaps it is because we did not want to overly annoy the Canadians, but the truth is that the talks with the Canadians have broken down—at a cost, by the way, to the UK automotive industry. In fact, UK cars will be hit on average by a £3,000 tariff in about a month or two, because of the breakdown of those talks. It is important for us to have a vote on why we do not have those procedures, why we do not have those safeguards and why we do not have those side letters.
Finally, I want to underline the point made by the right hon. Member for Chingford and Woodford Green. As a House, we must become far more skilled, far more ready and far more adroit at debating the kinds of treaties we will be asked to sign. Once upon a time, when the Berlin wall came down, we promised ourselves that we could look forward to a new world of free trade, and we hoped that that free trade could bring political progress and a democratic process—Wandel durch Handel, as the Germans liked to say.
However, that reality is now smashed; that era ended with the second invasion of Ukraine. We are now in new times, when we have to debate not just military security but economic security, and economic security questions are always freighted with dilemmas. We are a small nation and our adversaries are big, so we must always act with our allies, but not all our allies are good, and many of our friends would prefer not to pick a side. Our adversaries plan for self-sufficiency, but we cannot. We prefer open, free trade, but global supply chains are risky. We like markets to decide, but security always requires state action. We know that we need to work proactively to shape the long term, but democracies frequently entail a short-term change of Government, and too often our politics is reactive.
Sir Liam Fox (North Somerset) (Con)
It is always a pleasure to follow the right hon. Member for Birmingham, Hodge Hill (Liam Byrne).
I rise to echo the comments made so eloquently and clearly by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), and to add just a few comments of my own. I have always been in favour of the CPTPP, and, as I said from the Front Bench in 2019,
“It is absolutely essential, particularly given the rise of protectionism globally, that we commit ourselves to a rules-based system based on the WTO. Of course, we have abilities to augment that by other regional relationships, which is why we have had the public consultation and the debate in Parliament about the potential accession to the CPTPP”.—[Official Report, 6 June 2019; Vol. 661, c. 250.]
I have also always believed that the benefits of the CPTPP have been at least as much about geopolitics as about simple import and export numbers. As the Royal United Services Institute put it,
“Joining the CPTPP provides the UK with not just economic benefits, but the means to help define and defend a rules-based order in the face of China’s diplomatic and economic heft.”
At a time of tense relations between China and the United States, the United Kingdom has joined a trade agreement in which neither is present, although the United States was instrumental in its creation—a point to which I shall return later.
The March 2023 integrated review refresh describes the Indo-Pacific as
“critical to the UK’s economy, security and our interest in an open and stable international order. Developments there will have disproportionate influence on the global economy, supply chains”
—that was mentioned by the right hon. Member for Birmingham, Hodge Hill—
“strategic stability and norms of state behaviour.”
The CPTPP, in turn, is about a contribution to the stability of the global trade and investment system.
Within that debate, what do we perceive China’s security threat to the UK to be? In their reply to a report from the Intelligence and Security Committee, in a section entitled “The Strategic Context”, the Government stated:
“China almost certainly maintains the largest state intelligence apparatus in the world. The nature and scale of the Chinese Intelligence Services are—like many aspects of China’s government—hard to grasp for the outsider, due to the size of the bureaucracy, the blurring of lines of accountability between party and state officials, a partially decentralised system, and a lack of verifiable information.”
They also stated:
“The Chinese Intelligence Services target the UK and its overseas interests prolifically and aggressively. While they seek to obtain classified information, they are willing to utilise intelligence officers and agents to collect open source information indiscriminately—given the vast resources at their disposal…To compound the problem, it is not just the Chinese Intelligence Services: the Chinese Communist Party co-opts every state institution, company and citizen. This ‘whole-of-state’ approach means China can aggressively target the UK”
—and UK interests, wherever those interests are globally. Sadly, we have discovered that to our cost in many of our governmental institutions here.
The question, given all that, is this: could China actually be admitted to the CPTPP, and if it is theoretically possible, how likely is it? I think it instructive to look first at the experience of the World Trade Organisation, a brief that my right hon. Friend the Minister and I shared over several years of my extremely enjoyable time working with him at the Department for International Trade. When China acceded to the WTO in 2001, the west saw it as promising and promoting economic and political reform. It was a time of great optimism that the Chinese communist system could be pulled in a direction that would be advantageous to, and in the interests of, the west. However, Jiang Zemin, the Chinese leader at the time, claimed that the motive of the United States in all this was to
“westernise and divide socialist countries”.
Thus the WTO itself was heading for a stalemate in its direction of travel almost from the point at which China acceded to it.
This has added to other WTO problems—and I mention that because we need to look at the CPTPP within the wider trading framework. The WTO’s problems have been compounded by its adoption of the concept of unanimity, while its rules talk about consensus. If consensus and unanimity meant the same thing, there would not be two different words for it in the founding documents. This has meant that virtually any country in the WTO now exercises a right of veto, which has prevented us from moving forward in what we perceived to be a process of genuine liberalisation of global trade.
Sir Iain Duncan Smith
I apologise for interrupting my right hon. Friend’s excellent speech. The key was, we were told at the time, that the move would change China, and that persuaded the Government, but what we have found is that China is now changing the terms of the debate, because it has not changed at all—it has got worse. Is that not a very good reason why we need to debate these issues whenever we can?
Sir Liam Fox
My right hon. Friend is entirely right. As I observed at the time, President Clinton took the view that the treaty was the best hope that the west had of pulling China into a much more market-orientated, rules-based economy, where we could gain the benefits of a more liberal, global economy, but that is not how it turned out. We have had only one multilateral treaty since the WTO was created, the 2017 trade facilitation agreement.
There is a hierarchy of agreements that we can secure in terms of liberalisation. A multilateral agreement is the best, but given the effective veto that countries have, that is unlikely, and it is very unlikely to give us the benefits that we would like to see, especially the liberalisation of trade in services. The next best is a plurilateral agreement, the next best after that is a regional agreement, and then we are down to what some people would unkindly describe as the bargain basement of bilateral FTAs. All those are useful in creating a more liberal global trading environment. However, if China were to seek to join the CPTPP, it would need to commit itself to liberalisation in line with CPTPP requirements, which would require a reduced role for the Chinese state. If anyone who keeps an eye on current affairs thinks that the Chinese state is tending in the direction of a smaller influence, they are watching different news outlets from the ones that I am watching.
China could, of course, seek a bespoke agreement to join the CPTPP, but the UK has already set the precedent by joining on current terms. Even if China could join the CPTPP, could it be trusted to meet any of the conditions of accession? Although Chinese leaders have declared their willingness to meet the conditions, many countries are extremely sceptical, given China’s behaviour as a WTO member. China has a poor record when it comes to complying with WTO rules and observing the fundamental principles of non-discrimination, openness, reciprocity, fairness and transparency on which the WTO agreements are based. China’s subsidies over capacity, intellectual property theft and protectionist non-market policies exacerbate distortions in the global economy, and—even more worryingly—China’s use of trade as a tool of coercive diplomacy has raised concerns further, especially given its behaviour towards Australia and Japan. This is not the sort of partner we should be wishing to join us in the CPTPP, unless there are previously unimagined changes in behaviour.
Finally, a word, if I may, beyond this Chamber to our US colleagues: I believe that the decision to leave the CPTPP by the United States was a mistake. It removed from United States policymakers a tool in its strategic ability to shape events in the region. UK accession provides an opportunity for the United States to seek to join this new grouping and gain greater direct influence over China trade relations with the fastest growing economic zone in the world. These are all reasons why we must keep a very close eye on what happens with China and our new membership of the CPTPP. We have gained a great deal; we cannot afford to have it thrown away, by ourselves or by others.
Damien Egan (Kingswood) (Lab)
It is with great pleasure that I rise to give my maiden speech as we speak to this Bill, which aims to boost international trade and economic growth. Stimulating growth and trade is vital to my constituents in Kingswood, as it creates new jobs and is ultimately about how we fund our public services.
As is traditional in a maiden speech, I would like to pay tribute to my predecessor, Chris Skidmore. I learnt during the campaign that there was a reason why Chris’s votes would go up every time he stood for election. Throughout the by-election campaign, people talked very warmly about Chris; he was described as being “a good man” and someone driven by values—a double-edged sword, some might say—but perhaps most importantly as someone who cared. I heard about some really complicated pieces of casework, where Chris had personally given a lot of his time to get people the help they needed, so I would like to place on record my thanks to Chris for his 14 years of service to the people of Kingswood.
Kingswood had four MPs before Chris. Roger Berry was a tireless campaigner—in fact, he still is—for disability rights. He brought forward the Civil Rights (Disabled Persons) Bill in 1993, which galvanised support for future legislation that made discrimination against disabled people illegal. Kingswood’s three other MPs were Rob Hayward, Jack Aspinwall and Terry Walker. On my second day here, when I got into my office, the first letter I received was from Terry Walker. If you are listening, Terry, thank you.
I have been asked by some Members, “So where exactly is Kingswood?” Kingswood lies on the eastern side of Bristol, and I would say that more people than not would say that they live in Bristol. It is a suburban collection of towns and villages that stretches from the edge of the city and extends into beautiful countryside.
Kingswood has an interesting story. In medieval times it served as a royal hunting ground: quite literally, the King’s wood. In the 18th century it was a thriving home for workers from nearby coalmines, and it was at that time that John Wesley was encouraged to deliver his very first outdoor sermons—in Kingswood. I must be one of thousands of children over the years who at primary school was taken to the site of those sermons, Hanham Mount, where today a spiring green beacon illuminates the spot where Wesley once preached.
In the early 20th century, Kingswood hosted the largest motorbike factory in the world, the Douglas motorbike factory, where 25,000 motorbikes were made to support the military in world war one. In one of those quirky bits of history—this did catch me out in a radio interview—legend has it that Kingswood hosted an elephant burial when Nancy, who was part of a travelling menagerie, died of yew leaf poisoning. I am told that archaeologists are investigating.
Being elected in a by-election towards the end of a Parliament does focus the mind; you have to think about making your moments count. Indeed, Rishi could still call a surprise election tomorrow! So I thought, Mr Speaker, that as well as giving you a little bit of information about Kingswood itself, I would also share what the people of Kingswood told me during the campaign, which I hope includes issues that are pertinent to all Members, whichever party in this Chamber they represent.
Several hon. Members rose—
Anthony Mangnall
It is a privilege to follow the hon. Member for Kingswood (Damien Egan), and may I congratulate him on his maiden speech? It is somewhat frustrating, as one of the younger Members on the Conservative side of the House, to find new Members turning up who look fresher, healthier and readier for the fight. He also managed to unify the House when talking about potholes; I do not think he will find any disagreement on that subject. He comes to this place with a huge amount of experience, not just from fighting other seats, but having been Mayor of Lewisham, where he did extraordinary work on community land trusts that Members from across the House have commented on and would like to follow in our constituencies. I am sure that his family are somewhere in the Gallery and will be proud of his maiden speech. He has done very well.
I would like to make a few remarks about CPTPP, the tongue-twister that seems to have made many Members of this place fall sideways. We should start by recognising what the United Kingdom has managed to do over the last four years. We have recognised the global ambition of fulfilling our trade objectives. We have succeeded in joining CPTTP, but we have also secured deals with Japan, Australia, New Zealand, Norway, Iceland and Liechtenstein, as well as joining the Singapore digital partnership. I spend my life repeating the fact that we have made those deals; it is important that we recognise their true value, not just to GDP, but to businesses, the economy, the environment and business people across the United Kingdom and, indeed, the world. It shows that we are determined to fulfil our promise and commitment to sign deals to bolster our position in the world. Of course, negotiations are also under way with the Gulf Co-operation Council, Israel and others.
In joining CPTTP, we are signing a deal with the fastest-growing region in the world. Now that we have tariff-free trade relations, the UK is set to increase trade with the countries in CPTTP by £37 billion by 2030. It is a market worth £110 billion to UK trade. With growth at 8% between 2016 and 2019, UK membership is only expected to boost that figure. Conservative figures—I say “conservative” because I feel that they are underestimates—suggest that there will be a £1.8 billion increase to GDP and an £800 million boost to take-home pay for workers. Additionally, estimates are that trade with the 11 members will increase by an average of 65%, with the west midlands, Scotland and Northern Ireland benefiting most, so I look forward to hearing the SNP’s point of view, and whether it will support the Bill.
As has already been mentioned, the point of this deal is that it allows us to have tariff-free trade in goods. CPTPP has new product regulations, expands our role and opportunities for services, and ensures mobility for business people. Digital trade will be enhanced and intellectual property enshrined, with benchmarks created by the United Kingdom, and the CPTPP has sustainability at its core. However, I would like to focus my remarks on new clauses 1 and 4.
It has been my cause, war or campaign—however one wants to phrase it—over the last four years that Parliament should do better on our trade agreements. We should spend more time scrutinising and debating them. It is always a source of frustration that when we have debates on trade, so few people show up. The ability of this House to explain the value of a trade deal to our constituents, to justify its economic value and to talk about the potential security risk is diminished when we do not have opportunities on the Floor of the House to discuss the merits or demerits of any trade agreement.
I disagree with new clauses 1 and 4 not because I am being belligerent, or because the Whips have me under the cosh, but because we need to focus on reforming the Constitutional Reform and Governance Act 2010. Parliament cannot opine on every single international treaty. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) made a point about whether accession to CPTTP should be debated on the Floor of the House. There could be no limit to that, but he did not explain—I will let him intervene if he wants to—how he would get around the royal prerogative issue; international trade agreements are not in the hands of Parliament, but in the hands of Government Ministers. That was not considered in his remarks.
Sir Iain Duncan Smith
I agree. I could have taken this even further, but my point is that the Foreign Office dislikes any idea of debate and discussion. However, we have a Trade Department, which needs to be imbued with the power to ensure that debate happens. I am completely in favour of just punching through the nonsense and the poor use of the prerogative.
Anthony Mangnall
I understand that, but I feel that punching through on this occasion would be the wrong approach. I agree with my right hon. Friend that the Foreign Office’s appetite for us debating these issues in this place should not matter one jot, because it is our right as parliamentarians to discuss free trade agreements and whether they work. Respectfully, I say that the mechanism for ensuring that we get better trade agreements, and can be reassured about their economic value and benefits to the British people and our national security, has to be achieved by upgrading the Constitutional Reform and Governance Act.
The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) made an excellent point when he referred to the Public Administration and Constitutional Affairs Committee report’s recommendation on enshrining a methodology to ensure that CRaG operates within 21 sitting days, and that a meaningful vote is held at the end of that period. If that were ever to take place, it would be meaningful, because it would delay the signing of any free trade agreement by 21 days.
Lloyd Russell-Moyle
The hon. Gentleman makes a very good point about the need to change CRaG; we mentioned that need in our report. Our report made it clear that a lot of changes do not necessarily need legislation, but they do need a change of approach from the Government. There should be a clear commitment made at the Dispatch Box that debates will always be called when there is significant interest in a subject, and particularly when there are commitments around new accession. If the Government made those commitments, it would be enough, but they are still not forthcoming. Does the hon. Gentleman agree that the Minister should stand at the Dispatch Box today and give those commitments, so that we can move forward with some certainty?
Anthony Mangnall
The hon. Gentleman and I served for a long time on the International Trade Committee, as it was previously known, and I should start my response to him by paying enormous credit to the Secretary of State, who came in front of the Committee a number of times, and who wrote to the Leader of the House to ask for time to debate CPTTP within the CRaG period. I am afraid that my ire and irritation at our not having secured that time must now be focused on the Leader of the House, but the hon. Gentleman is right to say there are simple steps that we can take to make sure that this House is properly briefed on these issues. One of them—I absolutely declare my interest—would be to give Privy Counsellor status to members of the Business and Trade Committee. I do not think anyone would disagree with that suggestion. It would certainly be a very popular move, and when it has been mentioned in the Committee, it has been welcomed with open arms. I am glad that it has the approval of the House. But, in all seriousness, there has to be a set process and the CRaG mechanism allows us that opportunity if done properly. It is there and it must be reformed, regardless of who is in government. It is in the interests of the entire House to amend and implement CRaG.
Sir Iain Duncan Smith
I fully agree with my hon. Friend’s wider purpose, but I come back to the point that Lord Lisvane made very clearly, which is that we still do not have the ability to debate the entry of a security risk country. He pointed out that CRaG does not do that because of its nature. I agree with my hon. Friend’s wider point that CRaG must be reformed, but we have a Bill going through the House at the moment and this is a better time to at least get a foothold in that debate rather than say that we will do it another time.
Anthony Mangnall
I really do accept the point that my right hon. Friend makes—how could I disagree when he is making that absolutely essential argument on national security. But what he is asking for might be viewed in very different terms by the other 11 members of the CPTPP. There are standards to join the CPTPP in the first place that would prevent China from joining unless it improved its act. He has talked about the lessening of appetites in places such as Australia for China to join. I am not sure whether that is the case, but there is a standard within the CPTPP that would prevent China from joining, and as my hon. Friend the Member for Wyre Forest (Mark Garnier) has already remarked, we have a veto in this instance. I think this is more about ensuring that we have a debate and a vote in this place on the values of a trade agreement. If we are worried about a new accession to the CPTPP, it is for us to make that case to the Secretaries of State in the Foreign Office and the Department for Business and Trade, and for them to go back to the other 11 countries and make the case in that way.
Lloyd Russell-Moyle
I welcome almost everything that the hon. Gentleman—my hon. Friend—is saying, he and I having worked together a lot on this issue, but the reality is that other countries in the CPTPP have arrangements that allow their Parliaments to have deliberations on significant treaty changes and on the incoming of new members. We are talking not about the CPTPP arrangements but about our arrangements for authorising our Government to go ahead and agree. Surely he must agree that it would not undermine the CPTPP if we were to make our own arrangements on how we were to instruct our Government.
Anthony Mangnall
Forgive me if it sounds trite to say that I worry about mission creep, but if we did that on this, might we not also do it for the World Health Organisation, or for any other body that might be under suspicion of having some adverse state actor involved in it? I worry about how we go about this. I worry about Parliament always trying to have a say and slowing the process of how our trade agreements are signed and ratified. We need to be efficient and quick in the way we do it, but we must also ensure that we have the opportunity for debate, as we have today in this debate on the merits of the three chapters in the Bill.
I want to end with a parting shot. As has been mentioned by the Chair of the Business and Trade Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), we were told that we would have the opportunity to debate the full 30 chapters of the CPTPP within CRaG, and it is disappointing that we do not have that. The Government—the Secretary of State and the Minister—have done an amazing job in engaging with the Committee, but this is a serious disappointment. It lessens the progress that has been made to date on signing new trade agreements and ensuring that this place has a say on our future.
Sarah Green (Chesham and Amersham) (LD)
I stand to speak to new clause 12, which stands in my name, and also to new clauses 11 and 13. I would like to begin by stating once again that the Liberal Democrats want to see an ambitious trade policy aimed at creating opportunities for British firms around the world and new jobs here in our country. The Bill and our accession to the CPTPP are a step in that direction. The point has been well made, in this House and in the other place, that the projections in the Government’s own impact assessment are for GDP growth of just 0.06% by 2040, so although the UK’s accession to the trading bloc can and should be welcomed, the cause for celebration is limited.
I would like to speak to three new clauses that aim to address some key issues with the Bill and the UK’s accession. New clause 12 would require the Government to publish an assessment of the impact of the CPTPP’s performers’ rights provisions. We know the worries of our creative industries surrounding the Bill. The lack of reciprocal agreements for UK artists in CPTPP countries leaves our creatives exposed. The UK is rightly proud of our world-leading creative industries and we should also be proud of a world-leading intellectual property regime. We must be sure that this Bill and this trade deal do nothing to jeopardise that. There is a need for clarity and certainty in this area, and that is why I tabled new clause 12, which I hope Members will support.
New clause 13 would require the Government to conduct a review examining how the implementation of the treaty affects the costs faced by exporting and importing businesses in the UK. That report would have to consider the existing costs that those businesses were already facing as a result of trade regulations. We know that the stated ambition of the Government is that the deal will minimise red tape and trade regulations when trading with other CPTPP countries, which is a welcome goal. However, the British Chambers of Commerce has found that almost two fifths of businesses list regulations and red tape as a significant barrier to exporting. We need to be assured that our businesses will be supported to trade and flourish. With that in mind, it will be worth while, after our accession, to take the time to assess how the deal and the wider trade regulation landscape are affecting British businesses. That is the purpose of new clause 13.
It is clear that the CPTPP will likely grow over time as new countries join and accede to the deal, which will bring new opportunities but may also pose risks. The potential accession of China is one example, and the concerns regarding that possibility have been well discussed by colleagues in this Chamber and the other place. New clause 11 would require the Government to provide an impact assessment on the accession of countries that have made, and will make, a formal request to join the CPTPP. This will allow us to have a clear and informed vision of what the accession of each new country would mean for the UK. I believe this would be a reasonable and common-sense measure.
I finish by echoing what has already been said about parliamentary scrutiny. It is welcome that we are having this debate today but, in reality, we are debating a very limited and narrow Bill. We need proper parliamentary scrutiny of trade deals, and I ask the Government to ensure that it happens in future.
John McDonnell
I congratulate my hon. Friend the Member for Kingswood (Damien Egan) on his excellent speech. He mentioned that he has been elected at the tail-end of a Government and that an election is coming soon. I reassure him that the diligence he has already demonstrated in this House and his constituency should secure his re-election. It is wonderful to hear a Member speaking for a constituency with its accent.
I will address amendment 2 and new clause 8, although I support virtually every amendment that has been tabled, which shows the weakness of the process by which we have examined this treaty. I have been involved in discussions with the Secretary of State and the Minister over a number of months on ISDS, and I am concerned about the contradiction between their refusal to secure a side letter with regard to this treaty and what happened with regard to Australia and New Zealand. The negotiating brief for the Canadian free trade agreement also had a specific remit to prevent an ISDS process. I have never got to the bottom of that contradiction.
Amendment 2 follows our lengthy debate about the scrutiny of treaties. I have not given notice to the hon. Member for Hazel Grove (Mr Wragg) that I will be referring to him in the Chamber, although I am not sure that we have to give notice ahead of praising, rather than criticising, another Member. I am a member of the Public Administration and Constitutional Affairs Committee, which he chairs, and he has become the 21st-century Walter Bagehot, with a solid mixture of Trollope. He steered our discussions on the formal process for examining treaties with immense skill, drawing on a range of evidence that led to consensus—there is almost consensus in the Chamber at the moment—and this is what our report says:
“CRAG has been an insufficient legislative tool to facilitate meaningful Parliamentary scrutiny of treaties… the current legislation provides only a passive role for Parliament and as such there is no opportunity for Parliament to express its explicit approval or disapproval of a treaty.”
That is a common theme of all the debates. We have to do better than this.
Having read the report, the worry is that the Government have not responded positively by trying to get some order, particularly on the early negotiating processes and the debates that should take place. The Committee’s general view on this treaty, like the others, is that Parliament has been largely bypassed. We were offered no say on the Government’s negotiating objectives at the earliest stage, which is important, and no oversight of the negotiations as they progressed. Now we are refused a vote on the final terms of accession. This is not acceptable as a democratic process. The formal CRaG period, under which we can nominally have a say on the agreement, concludes this Friday, after a 21-day period. We are offered no vote or even a debate on the substantive terms of the CPTPP during this period, and accession is likely to receive our consent without any of us being given a single vote.
As I mentioned to the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), I have tabled a prayer to try to secure a time extension to enable the Government to bring forward time for a debate. My view is exactly the same as his: we are debating a narrow, technical, implementing Bill and that is no substitute for a confirmatory debate and vote on the accession itself. I agree with the Chair of the Business and Trade Committee, who has raised this issue with the Government in correspondence over the past two weeks. It is preposterous for the Government then to say with a straight face that there is not parliamentary time to have such a debate, given our current sitting arrangements. Those who have been here for as long as me, or perhaps even longer, will know that there has not been a problem on parliamentary time in the past, as we have simply found the time and sat and gone through the business when it is so important.
My amendment 2 seeks to address that wrong by formalising a requirement for the Government to ask for Parliament’s consent for the UK’s accession to the CPTPP. That is a basic democratic point of principle. If the Government do not accept that, I come back to the urgings of Members from across the House and say that I hope the Government will take seriously the recommendations of the PACAC report for reform of the process overall. We are dealing with an undemocratic structure. The PACAC report’s incredibly practical proposals are for a sifting process, a sifting Committee, the identification of treaties that require longer consideration and giving the House itself a proper process of democratic scrutiny and democratic decision.
I shall deal briefly with new clause 8, which stands in my name and deals with the labour chapter of the CPTPP. I have raised this issue before, and the point has been made by a number of colleagues, the TUC, in particular, and various other campaigning organisations throughout this ratification process. The labour provisions of the CPTPP are outdated and inadequate. This treaty will include a number of countries, some of which have been mentioned, with the prospect of others joining, where abuses of labour rights are widespread. Putting in place effective labour provisions is therefore vital in any treaty we undertake.
That view has been expressed across the House for a number of years now, but let me give some examples. In Brunei and Vietnam, independent trade unions are banned—they are not allowed legally to operate. In Malaysia, which has been mentioned in our previous debates, forced labour has been documented extensively. That issue has been raised in this House time and again.
In that context, it is crucial that the CPTPP’s labour provisions are readily enforceable and are linked to the removal of trade preferences, to ensure that membership does not lead to a race to the bottom on labour standards, exactly as the right hon. Gentleman said. I agree with him on the fear about China, because union colleagues of mine from Hong Kong, whom I have worked with for decades, are in prison at the moment purely and simply because they are trade unionists and have stood up for democratic rights.
Sir Iain Duncan Smith
The point I was trying to make is that there is also an economic issue here. If China practises slave or forced labour, as it does on a wide scale, it undercuts all the reasonable labour. One good example is that the UK is desperately trying to get more solar arrays, but the polysilicon that is critical to those is mined in Xinjiang under slave labour conditions. No wonder everybody else is undercut, but we still pay for this.
John McDonnell
It is a point of economic principle that such things will occur if we do not have proper rights or regulations installed, or the appropriate sanctions when anything takes place. At the moment, those are not contained in the treaty. One member state can challenge another for failing to uphold labour rights, but, as we have seen time and again across various treaties, it is notoriously difficult to prove that such failure has affected trade. To challenge those labour practices, we have to demonstrate the effect on trade, but, under current provisions, that is almost impossible to do.
The International Trade Union Confederation has rightly pointed to the ability of states to buy their way out of issues via dispute settlement, as the amount of compensation has been calculated time and again as a fraction of the violation’s impact on trade. So the sanctions do not work, and they will not work under this treaty.
Lloyd Russell-Moyle
It is a pleasure to follow the maiden speech of my hon. Friend the Member for Kingswood (Damien Egan). What a great way of upstaging his sister a week after her wedding—after a by-election is forced, he goes on to win it. But I suspect that it was a happy moment for all the family, and it is a delight to have him here.
I have tabled two new clauses. I have sat on the Public Administration and Constitutional Affairs Committee and, in its previous iteration, the International Trade Committee, when we scrutinised the Bill almost, I felt, to death. The problem with scrutiny without any teeth is that words produced in Parliament all the time are lost in the ether. The reality is that, unless there is debate in the main Chamber, there is not the right body of weight behind those words and those concerns.
It is clear to me that we need to change constitutional make-up of how we do trade deals. I support everything that PACAC has said, of course, but personally I would go further. I think we do need legislative changes to CRaG, despite the fact that we could make some changes through trust—that would be a good start. The reality is that, since we left the European Union—I know we are not meant to go on about that—this House has had less scrutiny over trade deals than we did before. It used to be that consent was required, which would go via the European Scrutiny Committee. That consent was required to be sent to the European Union before a trade deal could be signed off.
We know that in other places around Europe, legislators did hold back inappropriate trade deals. The EU-Canada free trade deal, for example, was held back by the Wallonian Parliament because it failed to address things such as workers’ rights, which my right hon. Friend the Member for Hayes and Harlington (John McDonnell) mentioned. The deal was renegotiated and the Europeans got a better deal. We could have done that at any step of the way when we were in Europe, but now we are out of the EU, we are less able to do so and less able to hold our negotiating person to account. Our negotiating person at that point was the European Commission. Our negotiating people now are our Ministers and civil servants, but we are less able to hold them to account. We cannot set their negotiating mandate or stop a trade deal, as we were able to do before. Yes, we can delay it, and yes, this Minister is fantastic in coming to be held to account through questioning, but the hard stop that means that people listen to you rather than just having a nice debating club with you has now been lost. We need to reflect that changing world.
Mark Garnier
I thank the hon. Gentleman for giving way. He and I have discussed this at great length in two Committees that we have both sat on. I am hugely sympathetic to every point that he is making, but there is one counter-argument that has not yet been put forward. The position of our negotiators in striking these deals in the first place could be slightly weakened by the fact that they would then have to check back with the legislature on whether or not it will ratify. Were we to take the final decision away from our negotiators, they would not be able to negotiate such a strong deal. I put that forward not necessarily as a definitive answer, but as a counter-argument.
Lloyd Russell-Moyle
The hon. Gentleman is quite right. Some people claim that that would happen, but others claim that it would strengthen our position. When the EU says, “This is our backstop,” we know that it is not bluffing because the backstop has been set by the EU Parliament. Now, negotiators can say, “Well, we know that that is not really the backstop, because you can go away and cajole your Back Benchers to vote this through anyway,” whereas in other systems, they can say, “I’m sorry, but the Senate will not approve this because the committee is holding my feet to the fire.”
However, there are other ways of doing it. As other Members have mentioned, we could allow the matter to have Privy Council status and meet in camera, to allow involvement in negotiations. In multilateral processes, other Governments embed parliamentarians in their negotiating teams. The Norwegians, for example, embed parliamentarians in their WTO negotiating teams in the day-to-day back and forth. Of course, in Norway, the WTO is dealt with by a different department from bilateral treaties, so there is a slightly different way of negotiating different kinds of deals. We can determine what kind of deal it is from the level of negotiation and whether Parliament is involved. If Norway were dealing with the CPTPP, parliamentarians would be embedded in that process, but if it were dealing with the Japan deal, they would not.
There are granularities of parliamentary overview and scrutiny, but almost all systems have developed them over the past 50 years as trade deals have basically become international lawmaking processes rather than dealing just with trade—they deal with all aspects of our life. However, we effectively paused our processes when we joined the European Union, and we have now reverted to where we were before joining. Although I accept that our process are now in the CRaG law, they have not evolved properly.
Let me address my new clause 2. Around 90% of the world’s oil palm trees are grown in just a few islands in Malaysia and Indonesia. Currently, less than 20% of that palm oil has received certification for sustainable palm oil forestry. The CPTPP will remove tariffs from palm oil. Of course, the aim of removing tariffs is to increase trade, so it seems implausible to say that we do not think it will increase the amount of palm oil in the UK that comes from unsustainable forests. The same could be true of tropical woods. Two of the 11 forests that supply our tropical woods and are identified as in danger are in the CPTPP region, but they have no additional protection.
Anthony Mangnall
First, Indonesia is not part of CPTPP. It is also important to note that the Malaysians have introduced a certification and standard for more sustainable palm oil plantation. I am not saying that that is perfection—it certainly is not, there is a lot further to go—but it is a good example of how, by forming a trade agreement through CPTPP, we can raise standards, not lower them.
Lloyd Russell-Moyle
The hon. Gentleman makes a perfectly sound point. That is why my amendment does not say that we should not join the CPTPP, or that we should disallow it for those purposes. It would require the Secretary of State to lay before Parliament a monitoring report on the level of unsustainable palm oil and forest products that are entering this country before we join the CPTPP, and to report regularly on those imports. If and when this House, or Ministers themselves, believe that action is needed, the data will be there to prove it. If we do not collect that data, we will not know, and we will be blind to the problem.
The same is true of our obligations on climate change and biodiversity. Personally, I would prefer a stronger environmental section in the Bill, but it is what it is. However, it should be noted that 119 pesticides that are permitted in CPTPP countries are not permitted in this country, 56 of which are considered to be highly harmful to human beings. Yes, we have standards for food, but there are no production standards, and there are no standards for pesticides that are not food-based. The problems with some of those pesticides—the killing of bees and other wildlife—are not just about human consumption: sometimes, those pesticides are banned not because they harm human beings, but because they harm the fauna and flora around us. When we import goods that contain them, they can enter the food chain; even worse, they can enter the animal food chain, which is not regulated by the same food standards and therefore causes huge problems. We need Government oversight of those points to ensure that we do not end up damaging some of our crops through pesticides that we ourselves have banned.
Turning to new clause 3, I am particularly concerned about ISDS. At long last, the Government have agreed that we should withdraw from the energy charter treaty, primarily because in a changing world, we need to make changes to our energy policy to make it more green. Our continual inclusion in the energy charter treaty would bind us to ISDS agreements, which we have seen targeted at a number of European states that have made moves to increase their environmentally friendly sources of energy. That is now a danger to us: even though we have not lost an ISDS case, it is a danger to our future and to policymaking. If we have made that case for energy, I think the same case could be made for almost all our arrangements.
It is useful to note that our agreements with Australia, New Zealand and Japan—all of which are part of the CPTPP—did not include ISDS. In fact, the agreement with Japan included a clause to say that we would not enact ISDS unless we signed or entered into another agreement that includes it, so the very fact that this agreement includes ISDS triggers a number of ISDS courts in other agreements that we have signed, which I think is risky and dangerous. We need a report on the risks that ISDS poses to the UK, because we could have rogue investors who end up taking us to court even if it is against the national interest of the two respective states. Of course, citizens cannot access ISDS—it is not a global court where citizens who have been harmed can seek redress from a Government. Only corporations that have invested in a particular country can do so.
ISDS actually means that corporations that invest into Britain from outside have higher protections than a British corporation that invests in plants here. I think it is totally wrong that a British corporation is more vulnerable to changing policy than a foreign one. It should be a level playing field, but at the moment, a British corporation that has invested here has no recourse to ISDS if policy changes in Britain, but corporations from outside do—the Minister is frowning a bit, so I was just trying to explain the difference. There is also a well recorded chilling effect from ISDS that we must be particularly aware of.
Fundamentally—again, I go back to the thing that we are not meant to mention—under the European Union, at least there were open courts to which we appointed judges. ISDS means secret tribunals that do not always have British judges, so there is a problem there. If we are meant to be taking back control, surely we should be taking power away from secret courts and allowing sunlight to be the justice that we seek.
Apart from the matters covered by the two new clauses I have tabled, I think this treaty is a step in the right direction. We should support it, but I wish the Government had negotiated as well as New Zealand and other countries that sought and won protections that, I am afraid, our Ministers failed to even bother seeking.
Stella Creasy (Walthamstow) (Lab/Co-op)
Like everybody else, let me start with a moment of consensus. It was a privilege to be present for the maiden speech of my hon. Friend the Member for Kingswood (Damien Egan). On my visit to his constituency, I did not get to see the beacon that he mentioned, but that is clearly an oversight on my part and I hope to rectify it at some point. May I be the first to congratulate his sister on her wedding? Brothers who usurp their sisters are brave men, and only being elected to this place is a justifiable reason for doing so.
I am going to contradict my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) in that I think we have to talk about Brexit in this debate, not least because the Government have talked about Brexit in promoting the benefits of the CPTPP, and the people of the UK deserve better. They need to understand what is being offered to them and what is being done to reflect their growing recognition of the severe damage that this Tory hard Brexit has done to the British economy and to British businesses.
I rise to support not only the amendments tabled by my Front-Bench colleagues, but the concerns that have been raised about democratic oversight and scrutiny of those who might join the CPTPP. I will also speak to new clause 9, which I have tabled. I am pleased to say that it has support from across the House, including among people who disagree on whether Brexit has been a good idea. When so much fantasy has dominated the debate, it is about time we had some facts.
New clause 9 refers to the very real experience of British business right now of the damage that Brexit has done. Research suggests that £140 billion has already been drained from the economy; those trading opportunities and business opportunities have gone. The average Briton is £2,000 worse off, and in my London constituency people are £3,500 worse off. British businesses are crying out for support and help with trade. Research from the University of Sussex last year showed that only 6% were positive about Brexit, and seven in 10 manufacturers reported problems with their supply chain. That is why it matters that we look at the CPTPP.
For the avoidance of doubt, I am here not to oppose joining the CPTPP, but to hold the Government to account. It is Government Ministers, as well as their chums and various right-wing think-tanks, who promoted the idea that we should not worry about the damage that Brexit under their watch has done to our economy, because programmes such as the CPTPP were going to replace all those trading opportunities and be the hallowed ground that British business could look to.
The Trade Secretary herself said:
“Our accession to CPTPP sends a powerful signal that the UK is open for business and using our post-Brexit freedoms to reach out to new markets around the world”.
She is one of the milder advocates for the idea that not only has Brexit been a roaring success, but that the CPTPP will add to those trading opportunities.
“It’s no exaggeration to say that CPTPP+UK is an equivalent economic power to the EU-28”,
said Shanker Singham of the Institute of Economic Affairs. Goodness me, what a claim to be making. I tabled new clause 9 because I think British business and this place deserve to know the truth about the relative merits of such partnerships and the challenges to our businesses and communities, particularly small and medium-sized businesses struggling with the impact of Brexit, as well as whether help is indeed coming.
The honest truth is that nobody wants to name consistently the impact of this partnership deal, not even the Secretary of State herself. Mark Littlewood, who is also from the Institute of Economic Affairs, has claimed:
“The benefits to Britain will likely be significantly greater than some official estimates driven by static economic models.”
The challenge to that argument is that, when we ask anybody who promotes it what the actual data might be—where the evidence is that this will be the help needed by British businesses that are being clobbered by Brexit, with all the rules, regulations and tariffs they are now facing—we get the Facebook setting response of “It’s complicated”. That is not good enough for British business.
Even the Secretary of State tried that model with the Business and Trade Committee, telling it that she disputed the idea that the results or the benefits to British businesses of joining the CPTPP would be small, but she could not give an alternative model or an alternative number to give people some crumb of hope that they might actually solve the problems in their supply chain.
All we are left with are the claims of greatness—claims that disintegrate on hard contact with the here and now about what is actually being proposed and what actual damage has been done by Brexit. Here and now, British businesses find that Brexit border taxes are increasing, although I note that today in a written ministerial statement the Government have decided to rewrite some of those Brexit border taxes, which are due to come in at the end of April. So that is great for British businesses! That is stability and planning, when even the Government do not know how much they are going to charge people. The CPTPP is supposed to reduce the tariffs and non-tariff barriers we now face as a direct result of having left the European Union, because after all it is about reducing tariff barriers.
Let us look at the data we have to hand and whether we can really judge this partnership as offering that salvation. It has been claimed again, this time by The Daily Telegraph, that the bloc will represent 16% of global GDP, “leap-frogging the combined EU.” It is currently 10% of global GDP—but you know the Telegraph and figures—compared with 14% for the European Union. It is said that the CPTPP member countries have a combined population of 500 million and a GDP of £9 trillion. That is fantastic; we can be part of trading with them—nobody would dispute that that would be helpful to British businesses. There is a small reference point to take into account, however. Although the EU is of a similar size with a GDP of £11 trillion, the total value of our trade with the EU is £557 billion. That is 45% of our total trade, but that trade is falling as a direct result of Brexit, because it used to account for 55% of UK exports.
That is because, for all the smoke and mirrors and all the bluster about the CPTPP, there is a simple fact: geography matters. We can fight many things in life but air miles and transportation costs are not among them. Our ability to trade with our nearest neighbours easily and freely matters to British business far more than anything we could do with those further away. That is why the Government’s own impact assessment tells us that the CPTPP might only make 0.06% of difference to our GDP, or £2 billion. That is in part because we already have trade deals with most of the countries from when we had them as part of the EU. So only a further 0.33%—not 33%—of total UK trade will come under the new trade agreements.
The reality in all this and the conundrum we face is that this trade partnership will only really be a big deal if more countries join. I am sorry the right hon. Member for North Somerset (Sir Liam Fox) is no longer in his place. He was disappointed that the United States of America were not part of the CPTPP. It will only be the game changer that people talk it up to be if more countries join. Then we would be looking at the Indo-Pacific region. Right here, right now, that is not what we are signing up to and that is not what is being offered to British business. That is why scrutiny and looking at who else might join matters, but it is also why new clause 9 matters. It is not fair to British business to suggest that help is coming when help there is none.
Membership of the CPTPP bears no comparison to EU membership. The sum it will generate is just one fiftieth of what the Office for Budget Responsibility estimates Brexit has already cost the UK economy. Indeed, it estimates that leaving the single market means that our GDP will be 4% less over the next 15 years, and some have estimated that GDP has already reduced by 5% as a result.
In 2022, the UK exported £340 billion-worth of goods and services to the EU. By way of comparison, we exported £64 billion-worth of goods and services to the CPTPP countries. New clause 9 is about being honest with British businesses about where those markets lie and where they should invest their time. It is also about understanding that free trade is not just about tariffs; it is also about regulations and the non-tariff changes we face. It is about understanding that this deal could lead to a lowering of food standards and problems with our food supply chain. It could affect our ability to sign a sanitary and phytosanitary deal with Europe that might help remove those silly Brexit border taxes which mean that in a couple of weeks our constituents are going to be asking us why there are food shortages and food inflation and loads of lorries queued up at Dover trying to get to Sevington. It could lead to challenges for our environment, too: my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) rightly raised questions about palm oil and deforestation. There is an absolute irony in those who championed Brexit and who now champion the CPTPP not seeming to understand what the investor-state dispute settlement provisions are and the lack of democratic accountability and lack of control we might have. I do not know who is taking back control under those circumstances, because it is behind closed doors.
Clearly, we could have been working on other deals as a country that would have made a bigger difference to British business. That is why the amendments and new clause are so important. Our constituents demand that we ask those questions and get those answers from Government about the tariffs that are being retained and the impact that they will have, such as for British cheese producers. After all, Canada’s dairy industry is being protected—no Wensleydale for Winnipeg. The Trade and Agriculture Commission has warned of the potential increased costs of products due to tariff reductions, because UK producers will be held legally to higher sustainable standards. It is also about the rules of origin and details around what content is allowed.
Nobody is disputing that it is helpful to have content accumulation, because it helps with those difficulties within supply chains. Ministers have made much about that, but the reality is that had they spent as much time on the pan-Euro-Mediterranean convention, we would have far greater benefits for British business. That convention binds together more than 60 bilateral trade agreements within the Euro-Mediterranean area. It is not just the EU; it is much broader than that. There are 23 contracting parties, each with free trade agreements between them and a single rules-based origin protocol.
British businesses and those struggling supply chains could have got much more help, had we looked at what would really benefit them and just admitted the geography at stake in all this. We have short-changed ourselves and we are short-changing the British public if we try to claim that the CPTPP is in any way compensation for the damage that Brexit is doing.
In challenging those on the right who claim that the benefits of CPTPP will far outweigh the problems of Brexit—their hope and intention is that UK accession will kill off any likelihood that we will ever be part of the EU customs union or single market, as in that article in The Daily Telegraph—and that we could not have dynamic alignment, we have to recognise that that is just not true. There is plenty of evidence that whatever we did, we could rethink, and thank goodness for that. When things are at stake for British business, it is only right that we ask those questions. There is a process for changing regulations as we join the CPTPP that can be reversed if we can do a deal with Europe and work out what is in the best interests of British business. The only way we can do that is if we have the facts, and that is what new clause 9 is about.
Whether Members agreed with Brexit or opposed it, they should support new clause 9 and that ethos of having the data. If I am wrong and the CPTPP is the light at the end of the tunnel for British business, let us prove it, stand behind it and celebrate it. Nobody wants to see British business struggling as a result of Brexit with no help in sight. Every Member in this House should get behind the idea that we need good economic modelling. We should understand the extent of alignment, what new trade regulations on carbon pricing might do for British business and what is happening to trade volumes as a result of these partnerships. Without the new clause, we will not get that data. We will still get the Facebook answer of, “It’s complicated. We cannot really tell you.” All the while, global Britain is going-broke Britain—it is gutted Britain, with businesses across the country facing reams and reams of paperwork because of Brexit, with no end in sight, because this Government will not put British business first and renegotiate with Europe for a closer deal.
I am sorry that new clause 9 has not been selected for decision. I understand why, but I hope that Members will join me in demanding better for British business when it comes not just to trade deals, but to our relationship with Europe, because every manager of a small business in this country right now will be looking at all the paperwork, all the complications, all the further regulations and excessive costs and frankly the fact that the Government cannot even tell them what they will charge them on the Brexit border tax, and they will be coming to our constituency surgeries asking for help. We owe them the respect of having an answer.
Richard Thomson (Gordon) (SNP)
May I say what a pleasure it is to follow the hon. Member for Walthamstow (Stella Creasy)? She makes an excellent case for rejoining the European Union. I could have scarcely put it better myself, and I hope her leader is listening. She makes some important points, any teasing aside, about the importance of economic data and of being able to model the impacts of the Government’s decisions.
I rise to speak to new clause 10, which is in my name, but first I would echo a number of voices from various parts of the Chamber that have expressed regret that we have before us a narrow Bill to ensure compliance with the requirements of the CPTPP, rather than a debate on the substance and fundamental principle. That is something on which, collectively, we could do much better.
Gareth Thomas (Harrow West) (Lab/Co-op)
I rise to speak to new clauses 4 to 7 and amendment 1. I draw the attention of the House to my entry in the Register of Members’ Financial Interests in relation to BPI. Let me at the outset say what a particular pleasure it was to listen to the maiden speech of my new hon. Friend, the hon. Member for Kingswood (Damien Egan). His description of his constituents’ comments to him during the by-election will chime with all on the Opposition side of the House. It is clear that he will be an asset to the House, and I think it is fair to say that south London’s loss is undoubtedly Kingswood’s gain.
We support accession to the CPTPP because of its geopolitical benefits and the benefits to trade, relatively limited thought they are set to be. Given that the Conservative party has delivered a recession, a cost of living crisis and the worst growth rate in the G7, any uptick in trade and ultimately growth, however limited, would be welcome. There remain, however, a series of concerns about the Government’s approach to the CPTPP and trade deals. Our amendments and new clauses seek to address the weak arrangements for parliamentary scrutiny of trade deals; the growing concern about the investor-state dispute settlement; and issues around performers’ rights, environmental, animal welfare and food standards, and the help that businesses will be offered to exploit the benefits, however limited, of this deal.
On new clause 1, I recognise the concerns articulated by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), which were echoed by the right hon. Member for North Somerset (Sir Liam Fox), and I am sympathetic to the former’s call for an enhanced role for Parliament. I am also sympathetic to new clause 11 from the hon. Member for Chesham and Amersham (Sarah Green), under which Parliament would require an assessment of the impact of any new country’s joining the CPTPP. However, I think we need to go further than both those new clauses do. Labour’s new clause 4 would require Ministers to publish such an impact assessment in Parliament and to give the House a vote on any new country joining the CPTPP. Given the security issues, the impact on particular sectors of the economy and on jobs in the UK, as well as the opportunities that an accession could bring, the British people surely have a right to expect this House to consider the merits, or lack of merit, of any new accessions to the CPTPP.
During the Lords debate, the Minister said that he thought that a new state joining CPTPP would trigger the CRaG process in the UK, but the CRaG process, as increasing numbers of Members across the House have largely come to agree, is clearly not fit for purpose; PACAC is the latest Committee to make that clear, in its recent report. New clause 4 provides the opportunity to reform part of that process. Let me refer to what was said by the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), and by the hon. Member for Totnes (Anthony Mangnall) and my hon. Friend the Member for Walthamstow (Stella Creasy). We were promised by the Secretary of State and by the Minister in Committee that there would be a debate under the CRaG process, as opposed to there being just this small implementing Bill. We now know that the debate will not happen, so that is another broken promise on trade.
The impact of new countries joining the CPTPP will vary, but could be considerable in certain situations. It is only right that this country expects the House to consider those impacts carefully. I hope that the right hon. Member for Chingford and Woodford Green, and the hon. Members for Totnes, and for Chesham and Amersham, can be persuaded to support our new clause. It would achieve what they want in practice and go further. With the leave of the House, we will press our new clause to a vote.
On new clause 5, I hesitate to damage the reputation of my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and my right hon. Friend the Member for Hayes and Harlington (John McDonnell), who made excellent speeches on the ISDS. Over the past 10 years, the marked acceleration in usage of the ISDS by large, litigious corporations to challenge Governments’ climate-related or other environmental decisions has prompted concern at the highest levels in the US, in European capitals and at the UN, so much so that Governments across the world are increasingly excluding or revoking the ISDS provisions.
The problem with the ISDS is that it is secretive; it avoids perfectly effective domestic public legal systems; it discriminates against small and medium-sized businesses; it often prevents the voice of those with a genuine interest in the decisions from being heard; and it holds back environmental and other progressive public policy changes. Strikingly, the OECD could find no sustained evidence that the ISDS was key to securing and maintaining business investment. The Nuffield Trust’s briefing for today’s debate stated that the ISDS could enable companies to challenge some health regulations and NHS policies.
The US, Canada and the European Union have all taken steps to revoke the ISDS provisions in some of their major treaties. The average amount—this is just the published cases—that Governments have been forced to pay, from taxpayers’ money, is about $600 million for climate cases. It seems even more noteworthy that the UN Secretary-General’s special rapporteur on environment and human rights expressed concern just last September that the ISDS was a significant threat to the net zero transition, the Paris agreement and tackling climate change.
Some in government clearly share some of those concerns, as they wanted to exclude the ISDS from the bilateral trade deal with Canada, and supported its abolition from trade with the European Union. The Minister was somewhat evasive in Committee. Initially, he tried to duck questions on why the Government wanted to exclude the ISDS from a bilateral trade agreement with Canada but were quite happy to leave it in the CPTPP for Canadian investors to use. Given that Ministers have signed side letters with Australia and New Zealand to disapply the ISDS between our countries in the CPTPP, it seems bizarre that they have not attempted a similar approach with Canada.
Just after Committee, the Government confirmed that they were pulling out of the energy charter treaty, in which ISDS arrangements play a major role, saying that it does not fit with net zero ambitions. The Minister might want to try again to explain why it is essential that we remain committed to the ISDS elements of the CPTPP. It is time for a clear-eyed assessment of the risk that the ISDS poses to our interests. With the leave of the House, the Opposition will press new clause 5 to a vote.
There continue to be significant concerns about the environmental impact of accession to the CPTPP, and the impact on food standards and on animal welfare. The CPTPP covers two of the 11 deforestation fronts expected to account for 80% of deforestation by 2030. A range of environmental groups are very concerned that when the UK joins the CPTPP, preferential access to our markets will be created as a result of the removal of tariffs on palm oil. That could increase demand for products from threatened zones and exacerbate the risk of further deforestation. Ministers still have not published —never mind presented to this House—deforestation due diligence legislation under section 17 of the Environment Act 2021, so it is difficult to accept Ministers’ claims that they are fully committed to our climate change targets, and to protecting important sources of global biodiversity.
On food standards, deep concerns remain that, despite their protestations, the deals that Ministers have negotiated, including the CPTPP, will allow into the UK ever more food produced to lower standards, particularly animal welfare standards. The whole House will remember the words of the former Environment Secretary, the right hon. Member for Camborne and Redruth (George Eustice), who told the House that the Minister and his colleagues had given away
“far too much for far too little”.—[Official Report, 14 November 2022; Vol. 722, c. 424.]
when they negotiated the UK-Australia free trade agreement. The Royal Society for the Prevention of Cruelty to Animals and the National Farmers Union, in particular, have raised concerns that new tariffs negotiated with Mexico and Canada will leave farmers in the UK much more vulnerable to imported eggs, pork and chicken that are produced to standards that would be illegal in the UK. The Pesticide Action Network UK raised concerns acknowledged by the Trade and Agriculture Commission—concerns also raised by an hon. Friend behind me—that more food produced using pesticides banned in the UK will be imported into the UK
Lloyd Russell-Moyle
My hon. Friend is making an excellent, excellent speech. [Interruption.] Well, he knows it anyway, but there is nothing wrong with praising. Is it not also a sign of how the Government, time and again, let down our creative industries? If it were steel or farming, Conservative Members would be in the ear of Ministers through their trade partnership committees, but creative industries are locked out of many of them and ignored. That is why Labour has put forward a plan to put creative industries at the heart of our economic development.
Gareth Thomas
My hon. Friend is generous in his description of my speech—I am grateful to him—and absolutely right about the importance of Labour’s plan for the creative sector.
Reform of the UK’s copyright framework should not be taken lightly, and it should only follow proper and well-considered consultation. Otherwise, we risk endangering our gold standard of protection for our vital creative sector. I gently suggest to the House that the reforms allowed for under clause 5 should not have been shoehorned into this Bill, and certainly not without a thorough consultation having taken place first. In that regard we are sympathetic to the merits of new clause 12, tabled by the hon. Member for Chesham and Amersham. We will continue to scrutinise developments in this area, and we hope that Ministers will reach a final decision, after the consultation, that will not have the adverse impact that is feared by some outside the House.
As I have said, I share the concerns expressed by my hon. Friend the Member for Brighton, Kemptown in new clauses 2 and 3, and I therefore hope he will join us with enthusiasm in the Lobby later today. Similarly, I share the desire of my right hon. Friend the Member for Hayes and Harlington for much greater adherence to the conventions of the International Labour Organisation. We raised this issue in Committee, and as I said earlier, I share his frustration—and that of other Members—that Ministers have not allowed the House a substantive debate under the CRaG process.
Liam Byrne
My hon. Friend, who is making an excellent speech, is right to underline the point about ILO obligations. In the 2022 Queen’s Speech we were promised an updating of the Modern Slavery Act 2015 that would have required much stronger action and transparency on supply chains in order to eliminate forced labour. That measure seems to have disappeared, so we must insist on more robust action in our trade agreements if we are to wipe out the scandal of modern slavery.
Gareth Thomas
My right hon. Friend is absolutely right. Ministers will have heard his point; whether they will act on it remains to be seen, but I certainly hope they do. If we are lucky enough to be elected at the next general election, we will certainly work with the ILO to try to drive better adherence to its conventions.
Last but not least, I share the ambition of my hon. Friend the Member for Walthamstow, who made a powerful speech, for a much more open dialogue on trade and the axing of more of the red tape, bureaucracy and barriers to trade with European markets thrown up by the poor negotiating skills of the last Prime Minister but two.
There remain, in particular, serious concerns about scrutiny of trade agreements and about the damage that ISDS provisions could do, so we will, with the leave of the House, press new clauses 4 and 5 to a vote.
The Minister for Trade Policy (Greg Hands)
I thank colleagues for their contributions to the debates on this important Bill. Let me begin with the new clauses relating to new accessions to the CPTPP: new clause 1, tabled by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith)—who always demonstrates his passion on this important matter—new clause 4, tabled by the hon. Member for Harrow West (Gareth Thomas), and new clause 11, tabled by the hon. Member for Chesham and Amersham (Sarah Green).
As the House may know, there is no rule within the CPTPP that requires new applicants to be dealt with on a “first come, first served” basis. Rather, it has been agreed within the group that applicant economies must meet three important criteria—called the Auckland principles—and it is on those key principles that applications will be assessed. Applicants must: first, be willing and able to meet the high standards of the agreement; secondly, have a demonstrated pattern of complying with their trade commitments; and thirdly, be able to command consensus of the CPTPP parties. Those strong criteria will be applied to each accession application. It is right that we in the United Kingdom, as a new member of the CPTPP group, work within the principles of the group to achieve a consensus decision.
I remind the House that while the UK rightly participates in discussions on this topic with CPTPP parties, we will only have a formal say over an application post-ratification and entry into force of the agreement. It is therefore crucial that we ratify the agreement and become a party, so that we can work with CPTPP members decisively on each current and future application. With that in mind, it would not be appropriate for the Government to give a running commentary on individual applicants, not least because to be drawn on individual applicants now, ahead of the UK becoming a party to the agreement, could have an impact on our ability to achieve that important goal of ensuring that the CPTPP enters into force. I should also make it clear that our own accession process has set a strong precedent. The robust experience that the UK has undergone has reinforced the high standards and proved that the bar is not easy to meet for any aspirant.
Regarding the scrutiny of any hypothetical future accession, I can assure the House that any accession of a new party to the CPTPP would require an amendment to the terms of the CPTPP. Therefore, as with the UK’s accession protocol, our firm intention is that such a future accession would be subject to the terms of the Constitutional Reform and Governance Act 2010—the CRaG process. I assure the House that CRaG is applicable to plurilateral agreements such as the CPTPP. The Act makes no distinction between bilateral, plurilateral or multilateral treaties as outlined in section 25 of CRaG.
Liam Byrne
The Minister is being characteristically generous in giving way. We obviously sought a debate under CRaG for this treaty. The Secretary of State, who is now in her place, told our Committee that she supported that, but the Leader of the House then refused to make Government time available for that debate. What further assurances can the Minister give us that there would indeed be a debate if the treaty was changed in the way that he described?
Greg Hands
The Government’s position is unchanged. It is always the desire of the Government, as expressed by the Secretary of State in writing to the House and to the right hon. Gentleman as Chair of the Select Committee, to urge and to ask for there to be a debate, but that will always be subject to the availability of parliamentary time. In a little bit, I will discuss the opportunities that there have been to scrutinise the CPTPP, which have been manifold in recent years.
Greg Hands
I will give way a little later.
The Act makes no distinction between bilateral, plurilateral and multilateral treaties. In addition to Parliament being able to make its views clear through the CRaG process, let me remind the House that, as a dualist state, any legislation necessary to implement the treaty—such as alterations to tariffs legislation, to take a hypothetical example—would need to be fully scrutinised and passed by Parliament in the usual way. It is the long-standing policy of His Majesty’s Government not to ratify international agreements before all relevant domestic legislation is in place. Were Parliament to refuse to pass any necessary implementing legislation, ratification of an agreement would be delayed.
I thank my right hon. Friends the Members for Chingford and Woodford Green and for North Somerset (Sir Liam Fox) for their opening speeches. Both are strong supporters of the UK joining the CPTPP. Indeed, my right hon. Friend the Member for North Somerset, who is the former Secretary of State, initiated these talks back in 2017 with me at his side, and successive Secretaries of State have given maximum priority to doing so. I am now in my fourth stint in this role, and it is fantastic to see his and my vision in 2017 now nearing fruition and being very close to UK ratification.
My right hon. Friend the Member for Chingford and Woodford Green and I know that Parliament is perfectly capable of expressing a view on an international agreement and whether a country might join it, and the Government of the day would be very likely to take notice. In debates in this House over some years now, he has made clear his views on trade with China, has gained support and attention, and been effective in doing so. Indeed, he has helped to achieve changes in policy in relation to supply chains in Xinjiang, and I agree with his support for Taiwan —a full member of the World Trade Organisation—as an important trade partner for the UK. We are positive about this kind of debate in the House.
The right hon. Member for Birmingham, Hodge Hill (Liam Byrne), who chairs the Select Committee, mentioned the scrutiny that there has been in this House for the CPTPP agreement, and he doubted whether there had been four debates. I had a slightly nagging feeling that I may actually remember each of the four debates, so I went back and checked the four debates, which started with the very first one that I responded to in April 2021. There have been four debates in this House and in the other House on the CPTPP. There have also been two oral ministerial statements and 16 written ministerial statements, and five separate Select Committees have taken evidence from Ministers and senior officials on the matter. There has been a Trade and Agriculture Commission report and a section 42 report. This is not an under-scrutinised trade agreement—rather the opposite. As has always been clear, we want the CPTPP to expand to fast-growing Asia-Pacific economies. I also agree with the Auckland principles.
Greg Hands
Of course I will give way—if the right hon. Gentleman first concedes that this has been a well-scrutinised trade deal.
Liam Byrne
Not quite. I am grateful to the Minister for setting out the full history, but will he accept that the Secretary of State believed that we should have had a debate, under the CRaG principles, on the full treaty? This Bill covers only three of 30 treaties. It is a matter of disappointment to many of us in the House that even though the Secretary of State no doubt argued vigorously and passionately for the debate, the Leader of the House was unable to grant us time. That is not necessarily the precedent that we want to establish for further trade treaty scrutiny.
Greg Hands
Of course, the right hon. Gentleman was a Minister in the last Labour Government, and he will remember that there are the vagaries of time available. Making an application to say that we would like there to be a debate is not the same as those who run the parliamentary timetable agreeing to there being one.
Let me move on to the new hon. Member for Kingswood (Damien Egan), who made a very accomplished and well delivered maiden speech. He spoke fondly of predecessors whom I know and like, such as Roger Berry and Rob Hayward. He won a keenly contested by-election—I have been to a few by-elections in recent years, and I was grateful to be given a bit of time off and to not go to Kingswood. None the less, I have great admiration for those who win by-elections. I have seen at close hand that they are a different kind of contest.
The hon. Gentleman spoke of his support for free trade and for rewarding hard work, and expressed sympathy for the Government, who have faced the challenges of covid and Ukraine. I agree with him on all of those issues, and the Government do too. I look forward to his continuing the tradition of an independent-minded Member for Kingswood—but please do not tell the Labour Whips Office.
As ever, my hon. Friend the Member for Totnes (Anthony Mangnall) spoke passionately about trade and CPTPP. He is always probing on those issues.
Various amendments and new clauses that have been tabled ask for additional impact assessments. Before addressing some of those amendments directly, I would like to reassure the House that the Government will publish a biennial monitoring report and a comprehensive evaluation report of the agreement within five years of our accession.
Amendment 1 and new clause 12 would introduce commitments to publish impact assessments on the performers’ rights provisions in this Bill, and I will set out why we consider them to be unnecessary. The impacts of the rules depend in large part on how they are applied in particular cases through secondary legislation made under the Copyright, Designs and Patents Act 1988. That secondary legislation may restrict or extend particular rights to particular countries. Wherever the Government intend to make significant changes to the secondary legislation, we will engage with affected industries and carry out an impact assessment. The Intellectual Property Office has done that recently with its consultation and its assessment of the impact of potential secondary legislation on the broadcasting and public playing of recorded music. A commitment to assess the impacts of the measures in this Bill is therefore unnecessary, and risks overlooking the effects of the secondary legislation.
I will now turn to new clauses 2 and 6, which broadly focus on environmental and other standards. I can provide assurance that the UK will continue to uphold our high environmental standards in respect of all our trade agreements, including CPTPP. As I have previously mentioned, the Government intend to publish a comprehensive ex post evaluation of the agreement within five years of the UK’s accession, and I can confirm that this evaluation will include an assessment of the environmental impacts of our accession. In addition, the independent Trade and Agriculture Commission was asked to scrutinise the UK’s accession protocol and produce a report. The TAC concluded in its advice, published on 7 December 2023, that
“CPTPP does not require the UK to change its levels of statutory protection”
in relation to the aforementioned areas.
Lloyd Russell-Moyle
It is very welcome that there will be a five-year report. Will it include numbers on unsustainable palm oil and rainforest wood to ensure that we are not exploiting more than we are at the moment?
Greg Hands
That is exactly the sort of thing that I would expect the report to do. I must say that I am delighted that the hon. Gentleman has mentioned the Government’s record when it comes to palm oil, because 86% of UK imports of palm oil were certified as sustainable in 2022—up from 16% under the last Labour Government in 2010, when we took office. Deforestation related to palm oil in Malaysia has fallen by 60% since 2012, according to the latest available figures, and we will keep working with countries such as Malaysia to build on that work.
As soon as parliamentary time allows, the Government will be tabling their forest risk commodities legislation under the Environment Act 2021, which will make it illegal for larger businesses operating in the UK to use key forest risk commodities produced on land illegally occupied or used. The Government have confirmed that palm oil products would be included under the regulated commodities. Additionally, I once again refer to the report of the independent Trade and Agriculture Commission, which concluded that
“it is unlikely that CPTPP will lead to an increase in palm oil being grown on deforested land”.
Moving on to new clauses 3 and 5, relating to ISDS, the UK’s accession to CPTPP will benefit UK investors. I do not think the Opposition understand how business works. We support British businesses operating overseas. They create jobs in this country—jobs that the Labour party does not seem to like.
Dominic Raab (Esher and Walton) (Con)
I thank my right hon. Friend for progressing CPTPP with all his usual energy, because it will boost trade and be of huge strategic significance. It is an opportunity of Brexit that must be grasped. On investor-state dispute resolution, he is absolutely right that we must not give way to the naysayers. It will be overwhelmingly in the UK’s interest, given the protections for UK businesses and exporters and the certainty it will provide in the massive growth region of the Indo-Pacific.
Greg Hands
My right hon. Friend also played a really important role in getting CPTPP through. I remember our joint visit to Vietnam in 2021, when we argued for Vietnamese support. He is right to say that it is important to remember that the UK has never lost an ISDS case. Equally, it is important for us to protect UK businesses operating abroad. They provide jobs and secure livelihoods at home. I find it astonishing that the Opposition, as they lurch ever leftwards, seem to forget that the whole time.
I can assure the House that the UK already has investment agreements containing ISDS provisions with around 90 trading partners, including seven of the 11 CPTPP parties. The UK provides a welcoming investment environment with a non-discriminatory regime, strong rule of law and good governance. We are clear that, where we negotiate ISDS, we will not hinder our inherent right to regulate in the public interest, including in areas such as the environment and labour standards.
I turn to new clauses 7, 9, 10 and 13, which focus on the impacts that this deal will have on our businesses and our economy. The Government want UK businesses to benefit from the ambitious provisions in the CPTPP as far as possible after we accede, and we are working to raise awareness of the agreement and ensure that businesses have the knowledge they need to take advantage of the opportunities that CPTPP will present when it enters into force for the UK.
New clause 8, tabled by the right hon. Member for Hayes and Harlington (John McDonnell), focuses on labour standards. I notice that there is no official Labour amendment focusing on labour standards. Maybe Labour does not care about labour any more, but I know that the right hon. Gentleman does. The CPTPP labour chapter includes binding provisions on fundamental labour rights and on hours of work, health and safety, and minimum wages. It reaffirms CPTPP parties’ obligations as members of the International Labour Organisation and requires that parties do not waive or derogate from their domestic labour laws in order to encourage trade or investment.
Amendment 2, also tabled by the right hon. Member for Hayes and Harlington, relates to the conformity assessment regulations referenced in the Bill. The amendment would allow changes to the conformity assessment regulations only following a motion to resolve against the ratification of the UK accession protocol first. I just think it would be unwise for us to pass an amendment to resolve against the ratification of UK accession in advance.
This has been a wide-ranging debate, and we have debated important issues. I particularly want to minute my thanks to my right hon. Friend the Member for Chingford and Woodford Green, who has rightly raised important questions about our trade with China, and to other right hon. and hon. Friends who have supported the process of the UK acceding to CPTPP.
I do not want to tempt fate, but this might be my last chance to speak on our accession in this House before the UK formally ratifies joining CPTPP. I and, I believe, the whole Government passionately believe that CPTPP offers a great future for the UK, and I have seen our accession through from being a novel idea in 2017 to ratification, and hopefully accession, in 2024. Not many of us in this place have been able to do that over a seven-year period, and I am grateful to all my ministerial colleagues, successive Prime Ministers who have supported CPTPP and my excellent Department for International Trade and Department for Business and Trade officials for being with me on this very exciting journey.
Sir Iain Duncan Smith
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 4
Report: accession of new states to the CPTPP
“(1) Before any decision is made by the Government on the accession of a new state to CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the potential benefits and impact of the accession of that candidate state on the United Kingdom.
(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”—(Gareth Thomas.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Secretary of State for Business and Trade (Kemi Badenoch)
I beg to move, That the Bill be now read the Third time.
I would like to thank Members across the House and noble Lords in the other place for the interest they have shown in this legislation throughout its passage. The Bill may be narrow in scope, but the underlying agreement it relates to and the benefits it could bring for British business, the economy and the British people are wide-ranging. By acceding to the comprehensive and progressive agreement for trans-Pacific partnership, we will strengthen our ties with some of the world’s most dynamic economies and gain greater access to the Indo-Pacific region, which will account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come.
Crucially, acceding to the CPTPP will mean improved market access for UK exporters in existing CPTPP parties, including Malaysia and Brunei—our very first free trade deal with these fast-growing economies. In turn, the partnership will simplify supply chains and cut costs for innovative firms based here in the UK, such as Wrightbus, a long-established family-owned Northern Ireland bus manufacturer, which will benefit from opportunities to import parts at lower tariffs from Malaysia. We have also agreed more liberal rules of origin with Malaysia, making it simpler for British brands such as Jaguar Land Rover to export British-designed, British-made vehicles to that market at lower tariffs.
However, our future accession will be good not just for British businesses selling their goods abroad but for consumers here at home. It could provide consumers with wider choice and cheaper prices at the supermarket checkout, on everything from Chilean and Peruvian fruit juices to honey and chocolate from Mexico. Inward investment in the UK by CPTPP parties will be encouraged when we accede, building on some £182 billion-worth of investment in job-creating projects in 2021 alone.
As hon. Members will know, the Bill affects the whole of the UK. Clause 3 and the parts of the schedule relating to Government procurement engage the Sewel convention, so we have sought legislative consent from the Scottish Parliament, the Senedd and the Northern Ireland Assembly. Let me reassure hon. Members that there has been regular engagement with the devolved Administrations before the Bill was introduced and throughout its passage at both Ministerial and official level. I thank the devolved Administrations’ Ministers and their teams for working so constructively with us. It is in part thanks to their efforts that the Scottish Parliament passed a legislative consent motion in February. The Welsh Government published a legislative consent motion on 5 March and recommended that consent be granted to clause 3 and relevant parts of the schedule. Due to a mis-step during the moving and consideration of the motion, that legislative consent was not granted. I understand there are plans for a further Senedd vote on legislative consent for clause 3 and relevant parts of the schedule. However, in the event that a further vote is not scheduled in the Senedd before Royal Assent, the UK Government will proceed with the Bill without consent from Wales.
Members will know that the Northern Ireland Assembly was suspended when the Bill was introduced last November, which prevented us from seeking legislative consent at that time. However, my Department has engaged with Northern Ireland officials throughout this period, providing them with updates as the Bill has progressed through Parliament.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for her positive remarks about all the regions of the United Kingdom, which is good to hear. In her discussions with the Northern Ireland Assembly, has there been an opportunity to engage with the businesses in Northern Ireland that have been holding things together, and the Ulster Farmers’ Union? The Secretary of State is always energetic when it comes to pursuing those matters, but it is important to have that reassurance.
Kemi Badenoch
The hon. Gentleman raises a good point, and he is quite right. My right hon. Friend Minister for Trade Policy has engaged with them. In fact, upon the return of the Northern Ireland Assembly, he wrote to the Minister for Finance at the earliest opportunity to request legislative consent. I am grateful that the Minister agreed with the Bill’s devolution analysis and, in principle, to begin the legislative consent process. Nevertheless, we still face a challenging timeline and a pressing need for the Bill to complete its passage. That is vital to allow for secondary legislation to be made and for ratification of the UK’s accession protocol. As such, we cannot delay passage of the Bill to allow the Northern Ireland Executive and Assembly greater time to consider legislative consent. That would jeopardise all the current ratification timelines. I recognise that the legislative consent process is normally concluded before the last amending stage in the second House. Given the timing of the return of the Northern Ireland Assembly, that has been extremely challenging, but I believe it is still right that we allow the Northern Ireland Executive and Assembly as much time as we can to consider our request. In the event that legislative consent is not granted by the Northern Ireland Assembly before the deadline for Royal Assent, we will still have to proceed. Failing to do so would compromise the commitments we have made in our accession protocol.
On Second Reading, I outlined the wealth of benefits that will come with the UK’s accession to the CPTPP: the growth-spurring and business-boosting effect it will have on our economy. Since that time, we have had some spirited and worthwhile debates. I would particularly like to thank the hon. Members for Harrow West (Gareth Thomas) and for Gordon (Richard Thomson) for the constructive manner in which they scrutinised the legislation. I commend those Members who sat on the Public Bill Committee, including my hon. Friend the Member for Shipley (Philip Davies) and the hon. Member for Ealing Central and Acton (Rupa Huq), who showed their great expertise as Chairs. I also thank the Minister for Trade Policy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) for expertly shepherding this legislation through the House with his consummate skill and good humour, and for delivering what appears to be a clean Bill. I will let Members review Hansard to see how many times my right hon. Friend reminded the hon. Member for Harrow West that he voted for CRaG. I think I heard that quite a lot throughout the debate.
It would be remiss of me not to mention a number of other Members by name for their valued input throughout the Bill’s passage, including my hon. Friend the Member for Totnes (Anthony Mangnall), whose Second Reading speech and interventions made an excellent case not just for UK accession to CPTPP, but for the benefits of free trade more generally. I am also grateful to him for highlighting the scrutiny provided by the recent Trade and Agriculture Commission report on the UK’s agreement to accede to the CPTPP—a report that stated that the CPTPP does not require the UK to change its levels of statutory protection in relation to animal or plant life, health, animal welfare or environmental protection.
On Second Reading, we also heard useful insights from several of the Prime Minister’s trade envoys, notably my hon. Friends the Members for Wyre Forest (Mark Garnier), for Gloucester (Richard Graham) and for Cleethorpes (Martin Vickers), as well as from the hon. Member for Liverpool, Walton (Dan Carden). The right hon. Member for Birmingham, Hodge Hill (Liam Byrne), as Chair of the Business and Trade Committee, brought a critical eye to bear on aspects of the underlying agreement, on which I hope he has now been reassured. My hon. Friend the Member for Penrith and The Border (Dr Hudson) rightly championed the UK’s high food and animal welfare standards that the Government will continue to protect, and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) demonstrated his well-honed ability to probe legislation with regards to the future potential accessions of economies to the CPTPP. The Business and Trade Committee more broadly has my thanks for its engagement with, and scrutiny of, this important Bill.
This legislation will help to ensure that the UK meets its international obligations upon accession to the CPTPP. When the Bill achieves Royal Assent, it will mean that we have put the UK at the heart of a dynamic group of countries in the Indo-Pacific, providing new opportunities for British companies to sell more of their high-quality goods and services to a market of over 500 million people and a combined GDP of £9 trillion. With that in mind, and in the hope that it will therefore garner support from all hon. and right hon. Members, I am pleased to commend the Bill to the House.
Gareth Thomas
We support the UK’s accession to the CPTPP. Despite the concerns we raised during the Bill’s stages, we have not stood in the way of its passage through this House thus far and we do not intend to divide the House on Third Reading. We recognise the geopolitical benefits and the economic benefits, limited none the less as they are likely to be in the near future.
In Committee, we outlined a series of concerns about the inclusion of provisions on the investor-state dispute settlement, and its implications for the NHS, the environment and workers’ rights. We raised concerns about performer’s rights and why on earth the Government chose to launch a consultation on the provisions after the Bill had already begun making its way through Parliament—talk about putting the cart before the horse. We also raised environmental concerns, probing Ministers about deforestation, palm oil, increased carbon emissions, the use of pesticides, threats to indigenous wildlife, and the undermining of the UK’s commitment to combating climate change and preserving biodiversity.
The Secretary of State promised a debate on CPTPP under the CRaG process to the Business and Trade Committee. In Committee, we were also promised a debate on CPTPP by the Minister under CRaG, which has not happened. I say it gently to them both: sadly, it is one more example of Ministers ducking scrutiny of the trade deals they sign. It is almost as if they have something to hide.
We have been grateful in particular to the TUC, Chester Zoo, the World Wildlife Fund, the Trade Justice Movement, Transform Trade, the National Farmers Union, the Royal Society for the Prevention of Cruelty to Animals and the Alliance for Intellectual Property for their help in ensuring that we fully understood the implications of the Bill. I am grateful for their generosity with their time and expertise.
One cannot help feeling that had the Government initiated a thorough consultation exercise much earlier in the proceedings, before the CPTPP was a done deal, we might have come out of the negotiations as less of a rule-taker and with a better deal for the UK. Better consultation with the nations and regions could have happened throughout the whole CPTPP process, but both the Scottish and the Welsh Governments lamented poor communication at key stages from Ministers. Hopefully lessons have been learnt, and we will all have to take the opportunity of the CPTPP review in 2026 to look at what more can be achieved.
I thank all the members of the Public Bill Committee. I particularly thank my fellow shadow Minister, my hon. Friend the Member for Slough (Mr Dhesi), for his invaluable contributions, help and support during the Bill’s passage, but I also thank my hon. Friends the Members for City of Chester (Samantha Dixon), for Cardiff North (Anna McMorrin), for Reading East (Matt Rodda) and for Hammersmith (Andy Slaughter) for their time and commitment to that part of the scrutiny process. I thank Members on both sides of the House, and those in the Lords, who—on Second Reading, in Committee and on Report—have joined in the hard yards, the necessary work, of scrutinising what is a key trade arrangement. I thank the Minister of State, too, for his particularly generous description of me in Committee as a “serial rebel”—which might surprise one or two—and I thank both him and the Secretary of State for their other contributions, some of which have been helpful. [Laughter.] I hope that the dialogue, especially that on the International Union for the Protection of New Varieties of Plants and on performers’ rights, will continue, and I thank the Ministers for their letters to me on those issues.
The UK’s joining the CPTPP will not make up for the Government’s failure to deliver a good trade deal with Europe, or the Conservatives’ broken manifesto commitment that 80% of the world would be covered by new trade agreements—including a trade deal with India, which the Secretary of State herself said this month was highly unlikely to happen any time soon. We remain in the dark as to whether we will ever be tasked with scrutinising a UK-Canada trade deal, or whether negotiations are indeed ongoing, as the Minister says, or they are not, as the Canadians say. What we do know is that, while the Government have made some outlandish claims about the benefits of the UK’s joining the CPTPP, it is likely, as the Office for Budget Responsibility has said, to lead to just a slight increase in GDP “in the long run”. With exports having dropped last year and set to drop further this year, and given the three following years of anaemic growth in exports, even the smallest opportunity for growth is welcome.
The Bill is needed to incorporate the CPTPP agreement in domestic legislation, and that is something that we do not oppose. There are benefits to joining, and despite reservations, we certainly welcome the opportunities that will be opened up for some British businesses. For those reasons, as I have said, we will not stand in the way of the Bill’s completing its passage tonight.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to speak on Third Reading. I must admit that I had hoped we would be closer to the moment of interruption at this stage, because there is further business on the Order Paper relating to energy strategy, which I spoke about earlier in the Delegated Legislation Committee; but even I do not want to test the patience of the House by speaking for the best part of an hour.
This is a truly monumental moment for the United Kingdom. Having left the European Union, we are planting our flag around the world and making sure that we drive free trade. It is right to believe, on the basis of all the evidence, that free trade is good for this country, and good for prosperity throughout the world.
I feel an element of sadness about some of the trade agreements made when we were in the European Union, as it seemed that some of the poorest countries in the world were being deprived of a proper trading relationship. I refer to the trend whereby it is still only sub-Saharan African nations that truly are exceptionally poor; unfortunately, at times it felt as though those countries were being deprived of a lot of prosperity due to EU protectionism, but we now have the opportunity to branch out on our own in that regard. We should remember that a lot of African nations are our brothers and sisters in the Commonwealth. Of course I understand that World Trade Organisation regulations apply to everybody, but it is important that we try to factor in what we can do to get wealth to as many nations as possible, because that would be good for this country and for others around the world.
The hon. Member for Harrow West (Gareth Thomas) said that there was no consultation. Actually, the consultation journey started in 2018. I think it was initiated when my right hon. Friend the Member for North Somerset (Sir Liam Fox) was the Trade Secretary. My right hon. Friends the Members for South West Norfolk (Elizabeth Truss), and for Berwick-upon-Tweed (Anne-Marie Trevelyan), and the person who really cemented the deal—the Secretary of State for Business and Trade, my right hon. Friend the Member for Saffron Walden (Kemi Badenoch)—have really taken us on that journey.
We should give the Prime Minister credit for his proactive approach to trade, and the red lines that he was prepared to draw for our farmers, recognising that we have some of the best farming and food production in the world. Those red lines are not about trying to be protectionist, but reasonable standards, the prosperity of our nation and ensuring a two-way street.
In my time as Secretary of State for Environment, Food and Rural Affairs, this work really mattered. I am conscious of the discussions that have taken place, and I appreciate that it can seem frustrating that we are only involved after the trade negotiations, in ratifying the agreement, but I can assure the House that it was imperative that we got the balance right when it came to values and red lines. I again pay tribute to the Secretary of State and the Prime Minister for securing a really good deal.
It is important that we take advantage of this treaty. There are certainly far more agricultural attachés now. It is important that people do not just focus on what might be imported into this country and what that means for standards, because we have been very strong on the standards agreed in this treaty. In fact, we have more problem with the fact that there are not the same animal welfare standards across the European Union; we need to work on that as part of our ongoing relationship, and as part of our free trade agreement with the EU.
There are other factors of concern; for example, there is the fact that production costs are a lot lower in some of the 11 other member states of the treaty. We have the living wage, but we also have access to grants and things like robotic milking machines—something I never thought I would see, but which, as I saw at the Great Yorkshire Show last year, works exceptionally well. One of the key measures in the Agriculture Act 2020 was brought in to validate people’s concerns. That is why I want to pay tribute to the Trade and Agriculture Commission, which produced a pretty hefty report after establishing its initial terms of reference. The process started in July 2023 and the report was published in December 2023, and was designed to cover issues of environmental protection, animal and plant life or health, and animal welfare. It is worth reading.
The key question that my right hon. Friend the Secretary of State asked the commission was:
“Does CPTPP require the UK to change its levels of statutory protection”
in all those areas? The report basically said, “No, we don’t need to. In fact, WTO rules mean that we can keep our statutory protections in all these areas, and there is no impact on our ability to adopt statutory protections in the future and to maintain the ones we have.” That really matters, because at the time, other nations—and, dare I say it, environmental groups here—were trying to bring lots of different elements into the discussion. As I said, I will not keep the House as long as I had originally intended, but I should like to mention Malaysian palm oil, and hormone-treated beef and similar; absolutely no way will the United Kingdom allow that sort of product into this country. We certainly made sure that was a red line.
I am conscious that Third Reading will be agreed, but I want to say a few extra things on issues raised by the National Farmers Union. It is really important that we take them seriously. We said that we would look at all the standards when we went into new trade deals, and the Trade and Agriculture Commission did a very thorough job, for which I commend it. The NFU would like us to go even further on domestic production standards. Importantly, we are now part of this global treaty, and we did not seek to require others to re-ratify the laws in their countries by adding elements. All the member states are already party to various international conventions on the environment, and it is important to note that we have new allies. As we take this step forward and try to increase trade, we need to make sure that we can share our learning and understanding, and show how it adds value. I genuinely believe that when we start to increase significantly the number of agricultural products that we send to other parts of the world through this treaty, it will show that those foods can be sold at a premium.
I was fortunate enough in my time in government to visit some of the countries in the CPTPP. Most recently, I visited Vietnam. Such visits are important for making sure that good standards are in place, and that those countries are our friends in the future. Several of the countries are already in the G20 or the Commonwealth, and we also have some new friends. It is important that we continue to respect that, because at times it feels as though we diminish what other countries do to take trade forward.
I did say that I was not planning to speak for an hour, much to the joy of people in this Chamber, I am sure. I fully endorse this treaty. It is good for our farmers and our country, because it means that we can reduce tariffs on a number of products, including those that can be onshored and put into our freeports, so that we can increase the value of our manufacturing. I wish this treaty well and, as I say, look forward to all the trade and prosperity that will come for the United Kingdom, but also for people around the world.
Richard Thomson
May I take this opportunity to thank the Clerks for all the assistance that they have given throughout the scrutiny process, and to offer heartfelt thanks to the researchers who support my group for the help that they have given me throughout the passage of this Bill?
Those on the Treasury Bench will no doubt be delighted to hear that the SNP will not seek to divide the House on this Bill. We have never said that there could not be advantage from the CPTPP, but we could not be clearer that it offers a poor substitute for the trade deals that were left behind as a result of our leaving the European Union. Let us remind ourselves that, with the CPTPP, we have essentially swapped the four freedoms of the European single market—a market of half a billion consumers, right on our doorstep—for an agreement with a combined economy of almost half the size on the opposite side of the world, which takes only 8% of our exports. It seems to be a bit like putting an Elastoplast on an amputation.
The Government’s impact assessment, which I know is highly contested, even by the Government themselves, indicated that the long-term increase in trade will be worth £2 billion a year, or 0.06% of GDP. We are all aware of the parable of the hare and the tortoise, but I am not sure that many tortoises could live long enough to make up that ground. Whatever benefits do arise—at this point in time, they look distant and minimal at best—they will always and forever be less than we could have had in different circumstances.
Along with others, throughout the passage of the Bill, I have sought to warn the Government that they should find a way to quantify the impacts of CPTPP, and the risks right across a range of sectors that will be affected by it. We will remain vigilant, and will hold the Government to account, where the outcomes justify it. I suppose that I should not disturb the bonhomie that there has been, but one big question remains: will all those on the Front Bench be reunited to discuss any further trade deals before the Prime Minister has to call an election? I await the answer with bated breath.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Royal Assent
Wednesday 20th March 2024
(9 months ago)
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