The Secretary of State for International Trade (Elizabeth Truss)
I am delighted to announce that last Friday we reached agreement in principle on a free trade deal with Japan. The UK-Japan comprehensive economic partnership agreement is a major moment in our national history. It shows that economic powerhouses, such as Japan, want ambitious deals with the United Kingdom, and it shows that the UK can succeed as an independent trading nation. It shows that we can strike deals that go further and faster than the EU—British-shaped deals that suit our economy.
This deal will drive economic growth and help level up our United Kingdom. On tech, it goes far beyond the EU-Japan deal, banning data localisation and providing for the free flow of data and net neutrality, benefiting our leading tech firms. In services, we have secured improved market access for financial services and better business mobility arrangements for professionals and their families. On food and drink, up to 70 of our brilliant British products can now be recognised in Japan, from Welsh lamb to Yorkshire Wensleydale cheese, English sparkling wine and Stornoway black pudding. Under the EU deal, that was limited to just seven. We have also secured tariff reductions on British goods from biscuits to pork, as well as continued access for malt and Stilton cheese.
In manufacturing, lower tariffs on parts and improved regulatory arrangements will benefit major employers such as Nissan and Hitachi in the north-east. The deal strengthens our ties with the world’s third-largest economy and deepens the bond between two like-minded island nations who believe in free and fair trade.
One of our greatest Prime Ministers, Mrs Thatcher, saw the value of co-operating with Japan in areas such as the automotive sector and electronics in the 1980s, which attracted the likes of Nissan and Toyota to our shores and delivered lasting benefits. Now, in 2020, we will unleash a new era of mutually beneficial economic co-operation with our great friend Japan, pushing new frontiers in areas such as tech and services trade. Japan, as one of the world’s major economies, is a vital partner for the UK and one of the most significant nations in the Pacific region. Securing this Japan deal is a key stepping stone towards joining the trans-Pacific partnership, which is one of the world’s largest free trade areas, covering 13% of the global economy and £110 billion-worth of trade. Accession is vital to our future interests. It will put us in a stronger position to reshape global rules alongside like-minded allies. It will hitch us to one of the fastest growing parts of the world. It will strengthen the global consensus for free trade at a time of global uncertainty and creeping protectionism. Japan, alongside this agreement, has given its strong commitment for UK accession to the comprehensive and progressive agreement for trans-Pacific partnership, and last week I co-chaired a chief negotiators’ meeting of all 11 TPP countries—the first time that a non-member state has been asked to do this—where we discussed the path to UK membership. As negotiations progress, we will bring forward the formal application process to Parliament, and ensure that it is scrutinised openly and transparently.
As I have promised, there will be a full scrutiny process for the Japan deal and all the other agreements that we strike. Prior to entering negotiations, we issued a scoping assessment and published our objectives. During the negotiations, we have engaged extensively with business and stakeholders, including sharing sensitive tariff and market access information with our new trade advisory groups. We have established a Trade and Agriculture Commission to put our farmers at the heart of trade policy and ensure that their interests are advanced. When it is complete, I will be issuing a copy of the final deal to the International Trade Committee for scrutiny. We will also produce an independently scrutinised impact assessment, covering social, labour, environmental and animal welfare aspects of the agreement so that parliamentarians are able to interrogate the deal and prepare a report that is debated in Parliament. Ultimately, Parliament will decide whether to ratify the deal through the Constitutional Reform and Governance Act process or to withhold its support.
I am strongly of the view that this is a great deal for Britain. It benefits all parts of our country while protecting our red lines on areas such as the NHS and food standards. The agreement that we lay before Parliament will be the first of many, because there is a huge appetite to do business with global Britain and a huge opportunity for every part of this country to benefit from these agreements. This deal is a sign and a signal that we are back as an independent trading nation, back as a major force in global trade and back as a country that stands up for free enterprise across the world. This is just the start for global Britain.
Emily Thornberry (Islington South and Finsbury) (Lab)
I thank the Secretary of State for advance sight of her statement and congratulate her on reaching this agreement. It is a much-needed relief for all those UK companies that would have seen their trade with Japan revert to World Trade Organisation terms if the agreement had not been reached by the end of the year. It is also a welcome benefit at a time of great economic uncertainty for the UK’s digital and tech sectors, and for other key exporters, which will benefit from greater access, faster tariff reductions or stronger geographical indication protections under this agreement than they enjoyed under the previous EU-Japan agreement. In the absence of a treaty text and a full updated impact assessment, there is much about the UK-Japan agreement that we still do not know and will not know until those documents are published. Nevertheless, I hope that the Secretary of State can answer some initial questions today.
First and foremost, will the Secretary of State tell us, in billions of pounds and percentages of growth, what benefits this agreement will produce for UK trade and GDP over and above the forecast benefits of simply rolling over the existing EU-Japan deal? I was glad to hear her refer to consultation with the farming sector. Can she tell us what benefits the sector will derive from this deal if the EU reaches its tariff rate quota limit for agricultural products, and how that will compare with the benefits that the sector was forecast to derive from the EU-Japan deal? Will she also tell us what the impact of Friday’s agreement will be on the UK aerospace sector relative to the impact of the EU-Japan deal?
Let me turn to three specific issues. Given that there has been lots of discussion about Stilton, can the Secretary of State tell us exactly how the treatment of Stilton differs under the deal that she has agreed compared with its existing treatment under the EU-Japan deal? Given the current debate on state aid, can she confirm that the provisions on Government subsidies that she has agreed with Japan are more restrictive than the provisions in the EU-Canada deal, which No. 10 has said is the maximum it is prepared to accept in any UK trade deal with Brussels? On a similar subject, what provisions, if any, are included in the UK-Japan agreement relating to public procurement, and are they also consistent with the Government’s current negotiating position on an EU trade deal?
On the subject of Brexit, will the Secretary of State simply agree with me that, as welcome and necessary as this deal with Japan is, it is nothing like as important in terms of our global trade as reaching a deal to maintain free trade with the European Union? Our trade with Japan is worth 2.2% of our current global trade. That does not come anywhere near the 47% of trade that we have with Europe under the Government’s best-case scenario. The deal they signed on Friday will increase our trade with Japan by a little less than half in 15 years’ time. That is nothing compared with what we will lose in just four months if we do not get the deal with Europe that this Government have promised. That is why Nissan and every other Japanese company operating in Britain have told us that the deal that will determine the future of the investment and the jobs that they bring to our communities is not the one that we signed with Japan, but the one we sign with Europe.
I am glad that the Secretary of State has committed to a further debate on the agreement, given that there are many more questions to ask, but frankly there is no point in having that debate if Parliament does not have the right to vote. Will the Secretary of State guarantee today that once the treaty text and all the impact assessments have been published for proper scrutiny, she will bring the agreement back for a debate and vote, in Government time, just as will be done in the Japanese Parliament? It surely cannot be the case that this House will have less of a right to vote on a self-proclaimed historic deal agreed by the Secretary of State than will be enjoyed by our counterparts in Japan. May I ask her today to guarantee a vote, and to make it a precedent that will apply to all the other historic agreements she mentioned in her statement and that we hope are still to come?
Elizabeth Truss
After the right hon. Lady’s congratulations to me on securing this important deal, it is perhaps a bit churlish of me to point out that she did not vote for the original EU-Japan deal, so none of the original benefits she talked about would have come into existence had we followed the steer given by the Labour party at the time. The deal we have secured goes significantly beyond the EU-Japan deal in areas that are important to the United Kingdom. For example, the data and digital chapter in some cases goes beyond the CPTPP and sets new precedents for a high-quality deal. On business mobility, financial services, geographical indicators and rules of origin, there are advances in all parts of the negotiation that benefit all parts of the UK and all parts of business.
The right hon. Lady asked about the impact assessment. No doubt she has read the scoping study, which shows a £15 billion increase in trade under this deal, but of course we will conduct another impact assessment following the finalisation of the details of the deal, which we will indeed publish. It will also cover the deal’s environmental impact, social impact and impact on agriculture. [Interruption.] From a sedentary position, the hon. Member for Harrow West (Gareth Thomas) asks when we will publish it. The answer is that we will do so when we have completed the full legal scrub of the documents and signed the agreement.
The right hon. Lady asked me about agriculture. I am pleased to hear that she shares my strong interest in improving exports of Great British products around the world. The vast majority of agricultural products such as beef and pork are not subject to tariff rate quotas, and we have secured the full liberalisation of those products under this agreement, which is a tremendous boost for British farmers. There is a limited number of areas where there are tariff rate quotas, and that represents about £1 million worth of business versus just over £150 million for the remainder of agriculture, but in those areas we have fought hard to ensure that British exporters continue to get the benefit of exports into the Japanese market at lower tariff rates, including but not limited to Stilton. We have also secured an agreement on malt barley, and we are the second largest exporter of malt into Japan, so that is a significant benefit for British farmers. We have also succeeded in getting more liberal rules of origin on many food and drink products, which will mean that more producers are able to export into Japan tariff-free.
As the right hon. Lady knows, under the Constitutional Reform and Governance Act 2010, Parliament can refuse to ratify trade deals. Parliament has the power that other Parliaments have. If there is not a majority in this House for this trade deal, which I do not think will be true because it sounds like she has changed her mind since she voted against the Japan deal last time, it will simply not be ratified.
The right hon. Lady asked me all kinds of questions about the details of the agreement. Obviously, as we, first of all, share it with the International Trade Committee and then with Parliament, she will be able to see the details, but I assure her that the subsidies chapter is the standard kind of chapter you get in an FTA. It is vastly different from what the EU is trying to do with us, which is essentially impose the EU state aid regime in Britain. As David Frost has made clear, that is simply not acceptable.
The right hon. Lady tries to compare and contrast the EU and Japan. We can have both deals—we are global Britain. We want to have deals with CPTPP, with the United States, with the EU and with Canada, and I believe that that is absolutely possible. I am afraid to say that the right hon. Lady still seems to want to relitigate the EU referendum. In 2016, the people of Britain decided. It is time for her to get behind it.
Scott Mann (North Cornwall) (Con)
I congratulate the Secretary of State on this heroic and historic new trade deal, and on proving the doubters wrong yet again. Under the EU-Japan deal, there were just seven geographical indicators. Under this new agreement, she has managed to potentially secure another 70, including west country lamb and west country beef. Can she outline how the new deal will benefit beef, lamb and dairy farmers in my constituency?
Elizabeth Truss
I thank my hon. Friend for his question. I am looking forward to visiting Davidstow, which is one of the major cheese exporters from the United Kingdom, this Friday. The answer is that dairy products, such as cheddar from Davidstow, will go down to a zero tariff over time as a result of the agreement. We are protecting new product names, whether it is Cornish pasties or clotted cream. We will also see reductions in tariffs for fantastic products such as beef, also from Cornwall.
Stewart Hosie (Dundee East) (SNP)
I congratulate the Secretary of State. I recognise that, although this deal shares many similarities with the EU deal, it goes slightly further in a limited number of areas, not least the geographic indicators. It would be interesting, however, to find out just how many the UK pushed for as part of the EU deal. On the vexed issue of cheese, which is barely mentioned, surprisingly, it would appear from the reading today that all UK manufacturers can do is fulfil unused EU quotas. I welcome what she has said on data, and what has been described as the digital trade chapter is real progress; however, she will want to confirm that, even with that, if all goes according to plan in GDP terms this deal will be worth less than one tenth of 1% of UK GDP—barely denting the losses anticipated from Brexit.
The elephant in the room is the UK’s stated intention to breach international law and to break legally binding treaties. That is important because the Japan deal is primarily significant in paving the way for CPTPP accession. We know the attitude of the United States—that there will be no deal if the UK breaches international law—and the approach of many of our potential CPTPP partners is very similar. Australia, for example, has demonstrated consistent support for a far-reaching system of international law, and has made a valuable contribution towards realising that. It is a country committed to a rules-based international system. This is all about trust, so would it not have been better for winning the big prize of CPTPP accession if the Secretary of State had stood up and announced the withdrawal of the internal market Bill, rather than boasting about very small gains in this Japan deal?
Elizabeth Truss
Only the SNP could say that £15 billion of extra trade is insignificant, but this Japan deal is not just important economically in itself; it is important, as the hon. Gentleman mentioned, for accession to TPP, a trade area worth £110 billion. That is vital. This is a step forward. One of the key things we have secured is strong agreement from the Japanese to help us accede to TPP.
I hope that the hon. Gentleman is also pleased by the extra protection we have secured for Scotch whisky. There have been issues in Japan, and the Japanese Government have agreed to work with us and the industry on the development of enforcement mechanisms for lot codes on wines and spirits, meaning that Scotch whisky will be even better protected in the Japan market.
The hon. Gentleman talked about cheese. The vast majority of the cheese we export is not subject to quotas. Thanks to this deal, as I mentioned to my hon. Friend the Member for North Cornwall (Scott Mann), the tariffs on our cheese will go down to zero over time, which will be of huge benefit to Scottish cheddar producers.
Martin Vickers (Cleethorpes) (Con)
I congratulate my right hon. Friend on achieving this agreement. Free trade, of course, is the key to prosperity for all our constituencies, and it is particularly important and valuable for mine, with the largest port in the country at Immingham. I particularly welcome the mention of the trans-Pacific agreement. Will she outline how she will continue with that agreement and move forward with agreements with countries such as Australia?
Elizabeth Truss
We are the first potential accession country that has had a meeting with all 11 chief negotiators. We will now go into separate discussions with those countries to prepare our accession plans. I hope to be able to formally apply early next year so that we can make progress and accede to this high-standards agreement, which will give British exporters access to the fast-growing Pacific market.
Mr Speaker
We are now heading up to Scotland to Angus Brendan MacNeil, Chair of the Select Committee.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]
Tapadh leibh; feasgar math, Mr Speaker. First, the Secretary of State made very welcome mention indeed of Stornoway black pudding. She then went on to say that she is delighted about the deal, described it as a major moment and said that she feels this UK-Japan FTA is ambitious. However, the GDP figures show it is worth a seventieth of the deal with the EU—a seventieth of the cost of Brexit—so is getting a deal with the EU not 70 times more important than this admittedly very welcome UK-Japan comprehensive economic partnership agreement? Will the Secretary of State also clarify whether any of this is dependent on EU co-operation or deals, especially on cumulation?
Elizabeth Truss
I am pleased to hear the hon. Gentleman’s welcoming the increased protection for Stornoway black pudding in the Japan market. He will note that a number of other indicators have been given access to that market, which is important. There are also, of course, huge benefits for Scottish lamb and beef farmers in terms of reduction in their tariffs.
On the hon. Gentleman’s point about the EU, this is not an either/or choice. Global Britain wants to have a good trading relationship with the EU and a good trading relationship with Japan and CPTPP. That is all possible, but what it will take is for the EU to give us a deal in the way that it has given Canada a deal.
Alicia Kearns (Rutland and Melton) (Con) [V]
This deal is a great success story. A global—[Inaudible.] I chair the all-party parliamentary group on geographically protected foods. Will my right hon. Friend kindly set out the benefits for—[Inaudible.]
Elizabeth Truss
Once we have the fully legally scrubbed deal, that will go to the International Trade Committee on a confidential basis for that Committee to analyse it. We will also undertake independent analysis on the key points that I outlined earlier—the environmental impact, the social impact and the impact on animal welfare standards. That will then be debated by Parliament and, through the CRaG process, if Parliament is not happy, it will be able to not ratify the deal. I do not think that will be the eventuality, however, because I think people will recognise that the deal is of benefit to the UK economy.
Mr Jonathan Djanogly (Huntingdon) (Con)
From what I have seen of the deal so far, it is a great deal and the Secretary of State is to be congratulated on securing it. Coming out of Brexit, it will do much. However, I note that the deal now goes to the Japanese Parliament, as has been said, for pre-signing approval, but not by law to this Parliament for pre-signing approval. Will my right hon. Friend acknowledge—preferably in the Trade Bill, which is going through the other place—that, post Brexit, the UK needs a modern, relevant, fair and workable scrutiny regime for new FTAs and not just a return to the pre-EU, outdated 1924 Ponsonby rule, which is restricted to ratification?
Elizabeth Truss
I understand that the deal will go to both Parliaments at the same time—it will go to the Japanese Diet at the same time as it goes to the International Trade Committee in this House for its analysis. As I have said, under the CRaG process, which was introduced by the Labour Government in 2010, Parliament can block the deal if it does not like it, and that process is roughly equivalent to those in other Parliaments, including in Canada, Australia and New Zealand.
Alison McGovern (Wirral South) (Lab)
I note what the Secretary of State said about impact assessments, but what discussions has she had with the Office for Budget Responsibility about whether it will produce a forecast of the impact of the deal, specifically comparing it with WTO trading conditions and what would have happened if we had just rolled over the EU-Japan deal?
Elizabeth Truss
I am committed to making sure that we have independently audited analysis of the deal that we complete, but the hon. Lady has highlighted a hypothetical situation. We are now in a world where we have left the EU, even though some Opposition Members do not seem to want to acknowledge that. What we have to talk about is the benefits of signing the deal versus not signing it.
Sir David Evennett (Bexleyheath and Crayford) (Con) [V]
I warmly welcome my right hon. Friend’s statement and congratulate her on this agreement, which is really good news. Can she explain how small and medium-sized enterprises, which are the backbone of our British economy, will benefit from this excellent deal?
Elizabeth Truss
The deal with Japan has a dedicated SME chapter, which is all about reducing the red tape that SMEs face, making it easier for UK and Japanese SMEs to understand the others’ markets and providing information to make it easier for them to export and gain the benefits of international trade.
Christine Jardine (Edinburgh West) (LD) [V]
I thank the Secretary of State for prior sight of her statement. Yes, we also welcome the trade deal, but I have two serious concerns. First, it seems to simply mirror what we have with the EU, and, apart from symbolic wins on things such as Stilton cheese, the Government have failed to leverage any real, meaningful benefits. Also, given that the deal has stricter state aid regulations than the disputed ones in the EU proposals, do the Government actually have a trade strategy?
Elizabeth Truss
I urge the hon. Lady to look beyond the EU—90% of global growth is coming from beyond the EU. Both Japan and the wider Pacific region, which is a fast-growing area, are vital for Britain’s future economy. Of course we want a deal with the EU, but that should not stop us doing advantageous deals with fast-growing parts of the world and working with allies to put forward the cause of free and fair trade.
Mr Speaker
To help Members, I advise them that I will run this session until 4.37 pm.
John Howell (Henley) (Con)
I, too, congratulate my right hon. Friend on this trade deal. Can she say a little more about how the south-east will benefit from this? It is not just financial services there. She will be aware that the increase in both exports and imports over recent years has been in road transport.
Elizabeth Truss
We have achieved improvements in areas such as transportation services as well as financial services in the trade deal. We have also improved professional and business mobility, making it easier for business people to travel between Japan and the United Kingdom and increasing our economic links. That will be particularly helpful for the south-east of England.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) [V]
I of course congratulate the Secretary of State on any trade deal, but she has done a deal with Japan, which represents 2% of our trade, in a week when we have probably lost the 15.5% deal we might have had with the United States. On the day when a Japanese company, SoftBank, has sold off one of the jewels in the crown of British technology, is it not shameful that she could not bring herself to mention Arm from Cambridge? Will the people of this country not despair at her not mentioning that?
Elizabeth Truss
That was a typically upbeat question from the hon. Gentleman. It is not true that our deal with the United States is not progressing; on the contrary, we are in the middle of a very positive negotiating round in which we are currently discussing market access terms.
Steve Double (St Austell and Newquay) (Con)
I congratulate the Secretary of State on securing this deal. I am delighted, as the people of Cornwall will be, that the iconic Cornish pasty and Cornish clotted cream are to be protected, along with many other geographically protected British products. Can she say what further opportunities there will be for Cornish producers to export to Japan as a result of this deal?
Elizabeth Truss
My hon. Friend is right: a number of products in Cornwall—whether the Cornish pasty, west country farmhouse cheddar or clotted cream—will benefit from this deal through not only lower tariffs but increased recognition of their geographic indicators. I will be in Cornwall later this week, and I hope to talk to producers about how we can increase their exports and take advantage of these new opportunities.
Alyn Smith (Stirling) (SNP)
I find it absurd that the House is being asked to debate a text that has not been published, because with trade deals, the devil is in the detail. I want to pick up on the point about state aid provisions, because I am curious about this. In today’s Financial Times, it is reported that the UK and Japan
“have agreed to replicate the restrictions on subsidies in the EU-Japan deal that went into effect last year.”
I was involved in that in Brussels, in a previous incarnation, and it goes far beyond what the UK is looking for in the UK-EU trade deal. I listened carefully to the Secretary of State’s response, and she said that it is a “standard” state aid clause, which strikes me as bizarre language, because there are no standard state aid clauses in any trade deals ever anywhere. Has she made the commitment reported in the Financial Times? Will she stand by it, will she resile from it in six months’ time in a limited way or has she dropped the ball?
Elizabeth Truss
I find it extraordinary, when I am appearing in front of the House to update it, for the hon. Gentleman to complain that I have not given the next update. I am here because, every stage that we agree with the Japanese, I want to share it with the House and have that debate. Of course there will be another debate when we have produced the final text, which he will be able to participate in. Many FTAs have subsidy clauses, but no FTA, apart from the one that the EU is demanding with the UK, has one bloc imposing its subsidy regime on another country.
Ben Everitt (Milton Keynes North) (Con)
By now, the whole House will know of my love of the autonomous delivery robots in Milton Keynes. I am assured that they can deliver geographically protected goods such as Stilton and pork pies, but they are also part of the UK’s larger tech industry. Will my right hon. Friend update the House on how our tech businesses will be helped by the data and digital parts of the deal?
Elizabeth Truss
The deal will, in essence, underwrite digital and data flows between the UK and Japan, so there will be no requirements such as data localisation and we will uphold the principles of net neutrality and enable the free flow of data. It will mean that brilliant companies, such as those in my hon. Friend’s constituency, will be able to sell their products into Japan without hinderance.
Christian Matheson (City of Chester) (Lab)
Further to the question from the hon. Member for Stirling (Alyn Smith), if the FT article is correct, the Government have, in this deal, signed up to more restrictive conditions on state aid than those being negotiated with the European Union. Will the Secretary of State confirm that the negotiations with the EU are all about deterring it from reaching a deal so that it will walk away, and we can then blame it for no deal and not take the hit that would otherwise be aimed at the Government?
Elizabeth Truss
I am not quite clear what the hon. Gentleman’s question was—it seemed to be more of an accusation—but, as I have said, the subsidy clauses in the deal are standard FTA clauses. They are nothing like what the EU is demanding of us.
Virginia Crosbie (Ynys Môn) (Con)
Last year, 277 Welsh businesses exported to Japan. Does the Secretary of State agree that the new tariff reduction in beef represents an exciting opportunity for farmers such as Brian Bown, who is chairman of my local National Farmers Union and is at a cattle auction this afternoon, and Gerald Thomas, who is president of the Farmers’ Union of Wales?
Elizabeth Truss
British beef and lamb were let back into the Japanese market in 2019. In this deal, we have achieved significant tariff reductions on beef and more protection of geographic indicators such as Welsh lamb and, of course, Ynys Môn sea salt from my hon. Friend’s constituency.
Dr James Davies (Vale of Clwyd) (Con)
I congratulate my right hon. Friend on securing this free trade agreement with Japan. Will she outline the benefits that she sees it bringing to the economy of north-east Wales?
Elizabeth Truss
There are huge benefits to the economy of north-east Wales, whether in digital and data, agriculture such as Welsh lamb, or areas such as manufacturing, where we have reduced the cost of bringing in car parts and agreed closer regulatory co-operation between Japan and the UK.
Jim Shannon (Strangford) (DUP)
I would have thought it was impossible to put a line through me, but that is by the bye.
First, I thank the Secretary of State for all that she is doing. Her eagerness to get trade deals the world over is infectious and should encourage everyone in the House. It is an indication of the fact that the global market is anxious to get started with the UK as a trading partner.
I note that there are set to be strong tariff reductions for UK pork and beef exports, with low tariffs for food and drink, and more generous quotas for malt than in the EU-Japan deal. Will the Secretary of State confirm how that will translate for malt for my local whisky producer, Echlinville Distillery in Kircubbin, and for Bushmills whiskey as well? How will it translate for the Northern Ireland pork and beef industries, which provide the best pork and beef in the world—we have that in Northern Ireland and in my constituency? Can we expect an increase in the market for exports to Japan?
Elizabeth Truss
We absolutely can expect an increase. As I said, British beef has only just been allowed back into the Japanese market, and we are now going to see significant tariff reductions. Northern Ireland is, of course, a strong exporter of such products, and it will also benefit from the increased protection of geographic indicators, whether for the Armagh Bramley apple or the Lough Neagh eel.
Stephen Kinnock (Aberavon) (Lab)
The Secretary of State mentioned Nissan; of course, there is an intrinsic link from Nissan to UK steel, which is intrinsically linked into the talks with the United States. Will she guarantee that President Trump’s completely unrealistic and unreasonable section 232 tariffs on UK steel will be removed from the trade negotiations with the United States as a precondition for those negotiations to proceed?
Elizabeth Truss
We are in active negotiations with the United States, and one of the things I have been very clear about is that we need to see those unfair section 232 tariffs on our steel removed.
Lia Nici (Great Grimsby) (Con)
We are very excited in Grimsby about this trade deal, because we feel it will create a huge benefit for our family-owned fish processors, particularly those for flat fish, and for our fish smokehouses of Alfred Enderby. How will this help to improve fisheries?
Elizabeth Truss
There are two benefits for fisheries from this deal. First, we are going to see a reduction in tariffs on all kinds of fish, be it mackerel, cod or salmon. And my hon. Friend will be pleased to hear that traditional Grimsby smoked fish is one of the geographical indicators we are going to replicating in Japan.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP) [V]
How long will it be until the UK Government realise that this Japan deal is not as good as is being touted, and then U-turn and renege on it? Should my constituents take the Secretary of State’s word that they will not do so?
Elizabeth Truss
We have already made significant progress, achieving agreement in principle; we are working on the legal scrubbing, and I will bringing this back to Parliament very soon.
Alun Cairns (Vale of Glamorgan) (Con)
I warmly congratulate my right hon. Friend and her ministerial team on securing this deal in such quick order. Wales has a long history of attracting inward investment from Japan, with the first foreign direct investment project from Sony coming to Bridgend back in 1973. However, will she guarantee that the finest lamb in the world—Welsh lamb—will have its geographical indicator protected, so that we can continue our deep trading relationship with Japan?
Elizabeth Truss
My right hon. Friend is right about the investment in both countries. This deal seeks to deepen that economic relationship, in services, in manufacturing and, of course, in agriculture. I am delighted to say that Welsh lamb is on the list of geographical indicators that should be recognised by Japan.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The north-east has benefited significantly from Japanese investment, so I welcome the continuation of existing trading relationships, which this deal largely represents. However, the Secretary of State will know that for Nissan and for investors more generally, and for jobs in the north-east, the deal that matters is the “oven-ready” one with the European Union. Will she set out precisely what the differences are between the state aid provisions in this Japanese deal and those rejected in the EU deal, apart from the fact that the latter are already in place?
Elizabeth Truss
I have recently visited Hitachi and Nissan, both of which are pleased with the progress we have made in the Japan deal. Of course, like all of us, they want a deal with the EU, but it has to be the right deal for Britain. My lesson, as Trade Secretary, is that we have to be prepared to hold out for the right deal.
Mr Tobias Ellwood (Bournemouth East) (Con)
May I join others in congratulating my right hon. Friend on securing such an important deal? I hope she goes on to secure future deals for Britain. May I also encourage her to ensure that this new opportunity is considered in the integrated review, because our economic security and our national security go hand in hand?
Elizabeth Truss
My right hon. Friend is right on that, and one important aspect of this deal and our relationship with Japan is that it is a leading free enterprise democracy. We need to be working with like-minded countries, not only to protect free trade across the world, but to make sure trade is fair. That is one of the huge benefits of joining CPTPP: it is a high standards trade agreement of countries that believe in free trade.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I welcome the progress that was made in relation to geographically protected indicators, a number of which come from the northern isles in relation to this deal? The Financial Times article, to which other Members have referred, does say that David Frost is concerned that the Secretary of State has given away more in relation to level-playing field issues than he is offering to the EU. If that is correct, then that is very serious indeed. Will she commit to publishing the state aid clauses now?
Elizabeth Truss
I am pleased that the right hon. Gentleman appreciates the new listing of Orkney beef, Orkney lamb and Orkney Scottish Islands cheddar, and I think we also have a Shetland geographical indicator—
Elizabeth Truss
I am sorry to hear the right hon. Gentleman denigrate foodstuffs from his own constituency. [Hon. Members: “Wool”!] I am sorry but I did not hear him. We are still in the legal scrubbing process with Japan —[Interruption.] That has nothing to do with wool. Once that process is finished, we will be sharing our text with the International Trade Committee, which will then fully analyse it.
Mr Steve Baker (Wycombe) (Con)
I congratulate my right hon. Friend heartily and her chief trade negotiation adviser who, I think, led this particular negotiation if I recall correctly. I want to welcome the fact that the Government have agreed disciplines to avoid anti-competitive market distortions and subsidies in particular. Does she think that we could offer a similar regime to the EU in order to reassure it that we will be behaving fairly as an independent United Kingdom?
Elizabeth Truss
We are very committed to behaving fairly in all our dealings, but, as I made clear earlier, what the EU is asking for is not a standard FTA clause, but for the EU state aid regime to be put into UK law, and that is not on.
Kim Johnson (Liverpool, Riverside) (Lab)
Our total trade last year with Japan was worth £31 billion, which is hugely important, but to put it in perspective, our total trade last year with the Netherlands was three times that amount. Although we all welcome this deal, is the Secretary of State concerned that we have not yet secured our continued free trade with the Netherlands and the other 26 EU member states?
Elizabeth Truss
I do not think that £30 billion is to be sniffed at in terms of our trade with Japan. The hon. Lady must look to the future when what we will see is the vast majority of global growth coming from outside the EU. What we want is for the UK to be hitched to those growth opportunities, so that our businesses can expand. I do not see today as a maximum or a steady state. Of course we can do more in the future, but what these lower tariffs mean is that it will be easier and more economic for our businesses to export to Japan.
Tom Tugendhat (Tonbridge and Malling) (Con)
First, I congratulate my right hon. Friend on this fantastic deal, which demonstrates not just Britain’s place in Asia, but Britain’s place on the Asian and American continent as part of CPTPP. I am delighted that she is joining me and the Japanese Defence Minister in praising the CPTPP and encouraging Britain to play a more active part. Will she also, however, urge the Defence Secretary to bring the Japanese into the six eyes, as it will be then?
Elizabeth Truss
I will pass that call on to my colleague, the Defence Secretary. My hon. Friend is absolutely right about the central importance of TPP, not just as a huge economic opportunity for the United Kingdom, but as a beacon of free trade and fair play that will be vital as we seek to reform the global trading system.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Based on the British Government’s own best-case scenario figures, am I right in calculating that it will take 71 deals of this nature to make up for what will be lost by pursuing the British Government’s policy of leaving the EU single market and customs union?
Elizabeth Truss
Mr Speaker, I think some hon. Members have got the wrong title of today’s statement. They seem to think that it is about the EU referendum, which I believe happened three years ago.
Gary Sambrook (Birmingham, Northfield) (Con)
Last year, 717 businesses across the west midlands benefited from exporting to Japan, so does my right hon. Friend believe that places such as Birmingham will benefit from this £15 billion boost, which will help create jobs and economic advantages for local people, despite the many protests of the doomsters, gloomsters and doubters opposite, who said it would never happen?
Elizabeth Truss
My hon. Friend makes a very important point. We were previously being told that we would not get a deal with Japan, or we would not get a better deal than the EU had got with Japan. Well, that has been shown to be wrong, and the people who are going to benefit are the people of the midlands and around the country, who are going to see their goods able to be exported to Japan at a lower price, which means more jobs and more opportunities.
Alex Norris (Nottingham North) (Lab/Co-op)
Free global trade is a good thing, but it does pose challenges under our climate change obligations. The Secretary of State has committed to an impact assessment. Will she also commit to have a chapter in there on the climate impacts and what we are doing to mitigate them to the lowest level possible?
Elizabeth Truss
I can assure the hon. Gentleman that there are very strong climate change commitments in our agreement with Japan.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
May I echo the sentiments on this side of the House and offer my own personal congratulations to the Secretary of State on a great deal? Can my right hon. Friend provide greater detail on how this deal will make it easier for business people to move between the UK and Japan?
Elizabeth Truss
I certainly can. This deal goes beyond the deal the EU had agreed both in terms of UK business people being able to go to Japan and Japanese business people being able to come here. That is vitally important for industries such as financial services and professional services—for example, the increased ability to bring families with people on business visits—and there are wider rules about what type of professions qualify. Overall, this will see an increase in the exchange of professional people between both countries.
Alison Thewliss (Glasgow Central) (SNP)
We have already heard from many colleagues about the limitations of scrutiny within this House of this trade deal, but can the Secretary of State tell us what role there will be for the Scottish Parliament and the Scottish Government in having any input into the deal?
Elizabeth Truss
We have been very closely involving the Scottish Government in all our work. In fact, my right hon. Friend the Trade Minister spoke to his Scottish counterpart early today.
Miss Sarah Dines (Derbyshire Dales) (Con)
As my right hon. Friend knows, it is in fact in the Derbyshire Dales that the best Stilton in the UK is made, with Hartington Blue, Dovedale Blue and other great cheeses such as Peakland White. Can my right hon. Friend further elucidate how this agreement will benefit my Stilton producers and other great cheese producers across the UK?
Elizabeth Truss
My hon. Friend certainly has a wide array of excellent Stiltons in her constituency. What we have done through this agreement is protect our access to low tariffs for Stilton, and gained a commitment from the Japanese to even wider access when we accede to CPTPP. Overall, for all types of cheese, we are seeing tariffs coming down, which will mean more of our great British product going into the Japanese market.
Chris Bryant (Rhondda) (Lab)
Of course, I welcome this because, as Asda would say, “Every little helps”—[Hon. Members: “That’s Tesco!”] Oh, is it? It is Morrisons in Porth in the Rhondda. But I am worried about Welsh lamb. There is a serious issue here, which is that 92.5% of Welsh lamb exports go to the EU, and even at the best estimates of what the Government are hoping for, only 3% will go to Japan, so if we end up with tariffs of 38% on the 92.5%, we will have killed the Welsh lamb industry. Will the Secretary of State really put all the energy she possibly can into getting a good deal for Welsh lamb with the EU as well as with Japan?
Elizabeth Truss
Of course, Lord Frost is negotiating the EU deal, and I know that one of his key areas is making sure we get good access for our agricultural products to the EU market. However, I would point out to the hon. Gentleman that of course the US is the second largest importer of lamb in the world, so I hope for his strong support for a US deal as well as for our deal with Japan.
Shaun Bailey (West Bromwich West) (Con)
I congratulate my right hon. Friend on securing this deal. May I ask her what work she is undertaking with local stakeholders, particularly in the Black Country, so that my businesses in Wednesbury, Oldbury and Tipton can truly take advantage of the opportunities presented by the deal?
Elizabeth Truss
I thank my hon. Friend for his question, and I know that the Minister for Trade Policy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), recently had a webinar with businesses from the Black Country, but of course as we approach 1 January, we want to encourage more businesses to get involved in this exciting trade with Japan. It is a huge market, the British brand is very appreciated there and it is also a gateway to the wider Pacific region.
Geraint Davies (Swansea West) (Lab/Co-op) [V]
Margaret Thatcher got Japanese car companies to come to Britain as a platform to export into the single market. As a result of this Japanese deal, along with the Secretary of State’s expected EU deal, will there be more or fewer Japanese cars being exported from Britain into the EU?
Elizabeth Truss
I am very pleased to hear the hon. Member’s tribute to our great Prime Minister, Mrs Thatcher. That is a first from him, and I hope it is the first of many. The answer is that we want a successful British car industry, and car companies such as Nissan are supportive of this deal because it brings extra benefits to the UK.
James Sunderland (Bracknell) (Con)
Does my right hon. Friend agree that this is an excellent deal for the United Kingdom, that it offers great possibilities for England, Scotland, Wales and Northern Ireland, and that it is just another reason why we are better off together as a Union?
Elizabeth Truss
My hon. Friend is absolutely right. This deal has benefits and opportunities for all of the UK. It is a central part of levelling up our country, ensuring that every region and nation has those opportunities and gets jobs and growth into its local areas.
Mr Speaker
In order to allow for the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.