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Mr Philip Hollobone (in the Chair)
I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between each debate. I remind Members participating physically and virtually that they must arrive for the start of debates here in Westminster Hall. Members are expected to remain for the entire debate. I must also remind Members participating virtually that they are visible at all times, both to each other and to those of us here in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and as they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall.
Mr Steve Baker (Wycombe) (Con)
I beg to move,
That this House has considered the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
I am absolutely delighted to serve under your chairmanship, Mr Hollobone, and delighted that the Government are seeking to accede to the comprehensive and progressive agreement for trans-Pacific partnership—something I proposed while I was a Minister. At the time there was very little interest from officials or from other Ministers. It is a shame we had to change the Government and then have a general election to get here, but least said, soonest mended.
I am personally invested in this accession, I am glad to say. CPTPP can provide a better standard of living for people in the UK and across the original member countries. It can deliver free trade plus self-government in this great age of interventionism. By preserving the right to regulate, it can allow democracies to function while delivering free trade—a point I hope to elaborate on before I finish. It is a high-standards agreement, as I will flesh out, and it can facilitate greater international co-operation, which those of us who are free market liberals should aim for.
I want to start by landing the central point: how important this debate is and how important the agreement could be. If we take the current members of CPTPP, and if the United States chose to return to the agreement, plus the United Kingdom, plus other potential accession countries such as Taiwan, it could result in a new platform free trade agreement for the world, covering more than half the global economy. CPTPP is therefore a major geostrategic agreement of relevance to the whole world, so I am really delighted to be here for this debate. It is absolutely vital that the United Kingdom is there at the start.
Colleagues will know the Prime Minister’s speech in Greenwich on free trade. It was an admirable articulation of the principles of free trade, and I wholeheartedly support the policy, which it is refreshing to be able to say.
I want to turn to the Government’s own document, “UK applies to join huge Pacific free trade area CPTPP”. It was issued when the Government formally applied. It explains:
“Joining the £9 trillion partnership will cut tariffs for UK industries including food and drink, and cars, while also creating new opportunities for modern industries like tech and services, ultimately supporting and creating high-value jobs across the UK. Unlike EU membership, joining does not require the UK to cede control over our laws, borders, or money.”
That part, of course, has now run on to the rocks. As the Government explain, it has:
“Modern digital trade rules that allow data to flow freely between members”.
It eliminates tariffs more quickly on UK exports than, for example, the deal that we have with Canada. The rules of origin are extremely important. I will not get into the detail, but they
“allow content from any country within CPTPP to count as ‘originating’.
That is extremely important in a world of free trade areas.
The Prime Minister was very proud to support the agreement. The Secretary of State put out an excellent statement. Our accession was supported by techUK, the Federation of Small Businesses and the CBI. I was very pleased to see such a wide range of support.
The reason why I originally came across the CPTPP was that when I re-founded the European Research Group, which seems a long time ago now, it was to unite the various wings of the Conservative party—ironically—and of course, crucially, to do research. We therefore sought the best expertise from outside Parliament, and one of the documents produced was by the Legatum Institute Special Trade Commission, as it then was. It was a group of visionaries led by Shanker Singham, who is now a personal friend of mine. In April 2017, it produced “A Blueprint for UK Trade Policy”, which in particular described the importance of what was then known as the TPP. It states:
“The TPP is probably the most advanced trade agreement that has been agreed by any group of countries. It is a high-standards, platform agreement that attempts to make progress on the most difficult aspects of international trade—especially behind-the-border barriers, regulatory protection, the impact of state-owned business on trade, and distortions more generally.”
It goes through some of the key factors in the agreement; possibly I will come back to those in passing.
I cannot possibly go through all the detail of the agreement and I hope that hon. Members will not test my capacity to recall and interpret the text, although I did wade through the original TPP in detail. There is a very helpful explainer on the New Zealand Government website, and I very much hope that in due course our own Government will explain the agreement, but I will just cover the key features.
The agreement covers goods and market access, including for agriculture, an issue that I wish I had enough time to get into—I hope that other Members will mention it —and services’ market access, which is of course crucial for the UK. We have a comparative advantage in financial services. We should be looking to work with like-minded countries around the world not only to participate in but to define a new global standard for financial services in particular and services in general; and the CPTPP is a great basis on which to start.
The agreement makes provision for easier travel under business visas. It raises labour standards for the region. That is of course a matter of acute interest to all Members of this House. It raises them in the region; that needs to be understood. It has environmental provisions, including ensuring that there can be no waivers or derogations, for trade advantage, from any environmental standards.
The agreement protects individual nations’ right to regulate. Of course, it does not need to be elaborated on—well, perhaps it does—that in this country the idea of using political vertical integration to deliver trade policy within customs unions with harmonised regulation has, whether people like it or not, run on to the rocks of lacking democratic consent. Now, as we come together in a spirit of good will, seeking to unite, move forward and be prosperous, that is something that we need to deal with. The CPTPP is really important because it preserves that right to regulate and preserves the independence of the member countries, while delivering free trade.
There are provisions for pharmaceuticals, investment, disputes and Government procurement, because of course Governments everywhere buy a great deal. There are provisions for intellectual property, geographical indications, trade facilitation, which I will come back to later, and state-owned enterprises, at which point I will say a word about market distortions.
One key feature of Governments’ highly regulating and, indeed, spending a large proportion of GDP is the effect that they have on market economies. It is really important as we go forward, if we are seeking to promote the maximum human welfare—I hope that, despite our disagreements, everyone in the House is seeking to maximise human welfare—that we minimise unhelpful distortions. We are not trying to create the wild west here, not under this agreement and not in any reasonable future. What we are trying to do is to have pro-competitive, welfare-enhancing regulation. Of course I am in favour of doing it under an English common law tradition; there will be Members in this debate who would like to use the Scottish tradition or whichever. But the British tradition of regulation has in some ways, I think, been suppressed by our EU membership and now needs to be rediscovered. Regulation has become altogether too prescriptive. We need to rediscover people’s capacity to co-operate to deliver high quality standards within a framework that is provided by the Government but is not too prescriptive.
As an example of how things could be done better, I refer in passing to how we regulate autonomous vehicles; I remember serving on the Vehicle Technology and Aviation Bill Committee. Our regulation sets out a framework of liability, but does not end up with the Government prescribing software standards, which personally I think would be a disaster. That is just one example of how, using the common law tradition, we can provide high-standards regulation that protects the public and is conducive not only to the enhancement of welfare, but to social progress through innovation—goodness knows we will need that if we are to drive up productivity. Those are just a few thoughts on regulation.
The Government’s document on accession sets out three reasons why we would wish to accede to TPP: first, to
“secure increased trade and investment opportunities that help the UK economy…overcome the unprecedented challenge posed by coronavirus”;
secondly, to
“help us diversify our trading links and supply chains, and in doing increase our economic security”;
and thirdly to
“help us secure our future place in the world and advance our longer-term interests.”
The Government explain that
“CPTPP membership is an important part of our strategy to place the UK at the centre of a modern, progressive network of free trade agreements with dynamic economies. In doing so we aim to turn the UK into a global hub for businesses and investors wanting to trade with the rest of the world.”
That should be a really exciting prospect for everyone in the House and across the country who understands the trajectory. It will help the UK to forge a leadership position, as the Government have set out. So the Government’s strategic vision is excellent.
The agreement also leans into a really important set of current global trends. People will complain that the idealists seek to replace our EU membership, but I do not know of any credible proposition to replace EU trade with CPTPP trade—that is not a practical proposition, and I do not think that anyone is seeking to do it. I am very pleased that the Government have a high-quality agreement in place with the European Union. It is not an either/or; it is a complementary proposition. I am very pleased that the agreement that we finally struck with the European Union facilitates the accession to CPTPP.
I draw on a Bain & Company report, which is a few years old now, on the declining cost of distance. This is not about the momentary cost of containers, but about the great global trends that have taken place in our world, driving down the cost of geographical separation. The Bain paper states:
“The catalyst for this historic shift is an array of new platform technologies that have pushed the cost of distance to the tipping point. Multibillion-dollar investments in robotics, 3-D printing, delivery drones, logistics technology, autonomous vehicles and low-Earth-orbit (LEO) satellites are giving rise to new products and services that sharply erode the cost of moving people, goods and information. As these technologies combine and converge, change will accelerate…A significant change in the cost of distance would prompt millions of economic actors to rethink their strategies and investments, and cause individuals to reassess where they work, live and raise their families.”
If the coronavirus crisis has done anything on that point, it is to accelerate the trend—here we are, debating the matter in Parliament, with hon. Members about to contribute virtually. Bain was visionary in seeing the declining cost of distance as technology advances, which plays into the accession to CPTPP.
I turn briefly to two final matters. The first is geopolitics. The world can be seen now to be polarising between the Asian authoritarians—Russia and China—and the liberal maritime democracies that believe in free trade. In a speech given to Policy Exchange, the former Canadian Prime Minister Stephen Harper said that the CPTPP would go
“from being a purely regional pact to now being the beginning of an alternative global order”.
It is a huge and extremely important vision, and the UK’s acceding to the agreement will be a key part.
Let us not forget what is at stake. We see the behaviour of China and we know that the rest of the world’s nations will need to set a better example to their people than this tendency to so control the lives of ordinary people, including persecuting some of them. That is an important illustration, in the little time that remains, of how trade is strategy today, and our accession to CPTPP is about that strategy for not merely the short run but the long run, to position the UK for success and as a global leader. I do not mean “global leader” in any unhelpful way, but in a way that says, “We are your friends and partners in a very open and equal way,” to great nations such as Japan, Australia, New Zealand, Singapore, Vietnam, Canada, Mexico, Chile and Peru.
All that grand talk of geostrategy will not mean much to many of the small businesses in Wycombe, and across the country, which are perhaps still struggling with working out which incoterms they should use to help to facilitate their trade with the EU. That leads to a wider issue of trade facilitation, which I hope my right hon. Friend the Minister will touch on. It is important that we help firms that are used to trading and exporting only within a customs union to understand that it can be relatively straightforward to export across the world. It is also important to help firms to get set up to do that. I hope that my right hon. Friend will bring his great expertise on those matters to bear through the Government, to help the firms in my constituency and across the country. There will be a huge task of simplification and explanation. The agreements are complex and their interpretation is difficult. It will be for the Government to show small firms how to take the best advantage of them.
I hope that my right hon. Friend will touch on the issue of when the Government will be able to set out their approach to formal negotiations, and that they will say more about their hopes, and what safeguards they will be looking to maintain. Perhaps there can be more about our right to continue to regulate ourselves when entering into such a large agreement. A great deal has been said about our being a small nation, but when I talk to people in Japan or, indeed, when I am inspired, Mr Brandis, the high commissioner of Australia to the United Kingdom, I find that the rest of the world does not see us as we have been encouraged to see ourselves, but as a potentially important catalyst in the new order. I should be grateful if the Minister would say something about major geopolitics, but I appreciate that that might be out of scope. However, perhaps he could emphasise how the issue is really about—I do not like to say “ordinary”—normal men and women trading in the UK, taking advantage of new arrangements around the world, the better to innovate, improve our lives, develop productivity and create a greater spirit of global co-operation around the world.
As I finish my speech, I think I should wave this great doorstop of a document that Business for Britain produced before the referendum, on the back of which is a poster, with a vision of Britain having a future with the world. The accession to CPTPP is central to that bright, hopeful future of trade and co-operation with the world, and I am delighted that my right hon. Friend the Minister is here to respond to what I am sure will be an interesting debate.
Mr Philip Hollobone (in the Chair)
The debate can last until 10.55. I am obliged to call the Front-Bench spokespeople no later than 10.22. That will be Drew Hendry first. The guideline limits are 10 minutes each for the Scottish National party and Labour spokesmen and the Minister; and Steve Baker will have three minutes to sum up the debate at the end. There are nine Back Benchers who seek to contribute before 10.22, and my aim is to get everyone in. If everyone is going to speak for the same length of time, Members will not want to speak for more than four and a half minutes. I know that Angus Brendan MacNeil, who is first, will want to show us how it is done within the time available.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)[V]
It is a great pleasure to serve under your chairmanship, Mr Hollobone. As I listened to you I was promising myself I would most definitely be finished by 10.22, but now I can see that I will have to finish four and a half minutes from now. I take on board your strictures, indeed.
I congratulate the hon. Member for Wycombe (Mr Baker) on obtaining the debate, which is timely. The International Trade Committee, which I chair, is looking at the CPTPP in the international trade arena. I do not know whether there are interventions in Westminster Hall, but if anyone is willing to give it a go we can show the powers that be in the main Chamber that it can be done. I do not think that we are bold enough to do that virtually yet, but it is a possibility that I mention in passing. I will not speak for long at all, Mr Hollobone, so you can relax.
If the debate is about the economy, we have yet to see assessments being done in relation to GDP. Much is made, in prose and flowery language, of trade deals for the UK in the light of the damage of Brexit, but very little is done in numbers. Numbers inform debates that should be about business and the economy. We know that Brexit means forgoing about 4.9% of GDP—these are the Government’s own figures—yet we have had no deals to make up for this damage being done to the economy. None of the trade deals that have been signed have been new; they have all been roll-over deals. The best, probably newest-ish, deal is the Japanese deal, but of course this comprehensive economic partnership agreement has only replaced the EU’s economic partnership agreement with Japan. That will grow GDP by 0.07%, according to the Government—about a 70th of the Brexit damage that is coming—but it is actually not that because it is a replacement deal, so the GDP gain is effectively zero. That should be borne in mind.
It should also be understood what trade deals do. The best of the trade deals that the UK can get, with the United States of America, will grow GDP by about 0.2%. That is 24.5 times smaller than the Brexit damage, so we would need about 24 such trade deals to make up for that damage. Unfortunately, with the USA accounting for a quarter of the world’s GDP, to get 24 of those kind of deals we would need to go and strike trade agreements on about six and a half planets populated with Americans and to which we can drive lorries. That is not really possible.
We have to understand the numbers behind this. There is no assessment of CPTPP. When an assessment is done, it should not include Japan, because a deal with Japan has already been landed; we cannot land the same fish several times. It is with a lot of other, smaller economies—Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Excluding Japan, that deal is probably approaching the level of about half the America deal, or about 0.1% of GDP; it may be a little more. If I say that the 4.9% GDP loss of the Brexit deal is £4.90, for ease of understanding, the America deal, which is worth 0.2% of GDP, would be worth 20p, the Australian deal would be worth 2p and the New Zealand deal would be worth 1p. There are very little gains to be made. That must be understood.
Distance is an important factor as well. With Ireland, the UK imports £12.4 billion of goods and exports £17.8 billion, roughly. It has a trade surplus with Ireland. With China—I use this for illustrative purposes—we import £49 billion of goods and export £30 billion. The numbers are sort of in the same ballpark, give or take £10 billion. China is 300 times larger than Ireland, but it is further away, and distance is important, as we know. The Pacific ocean, while being greatly big, is not really that close to our doorstep. Trade for people who sell, say, shellfish on lorries to the European continent is not eased with the Pacific being so far away; it does not allow for a weekly rotation of lorries.
The hon. Member for Wycombe mentioned visas. That could be changed now by the UK Government. Many a time have I pleaded with various Immigration Ministers to allow fishermen to come to help our economy, but for reasons of headlines in tawdry newpapers, they have resisted. We have seen a loss to our economy as a result.
We need to see what CPTPP can do and which supply chains will benefit from the loss of tariffs. We must also remember that CPTPP will be similar to the new deal with the European Union. It is only free trade. As with each and every other trade deal, there will be paperwork and hassle for anybody trading under the deal. In north America, some people just pay the tariff rather than trade under a deal, because things can be so difficult.
My final words, because I am aware of your strictures, Mr Hollobone, are that we need to see the assessment of CPTPP. It is nice to have the flowery language and the prose and the good intentions and whatever in the world, but it is numbers that talk. We need the bottom line. When we have just decided to burn 4.9% of GDP and have recovered none of it in return, the numbers for CPTPP—unfortunately; I would love to be a bit more positive about this—just do not stack up very far. Given that the Government have not produced assessments of that yet, I am betting that these are in the tenths of a per cent—about a fraction of the damage of Brexit unfortunately. We must be honest and frank with ourselves. I hope I did not take too much of the time and it is a great pleasure to serve under your chairmanship, Mr Hollobone.
Claire Coutinho (East Surrey) (Con)
Thank you for calling me, Mr Chairman. It is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Wycombe (Mr Baker) for bringing this important and exciting debate. The UK has always recognised the need to get ahead of the economic curve and the accession to the CPTPP will do that on two fronts. It will be part of the ambitious push towards free trade, which I will talk about later, but also delivers on our explicit foreign policy objective of tilting towards the Indo-Pacific. The Indo-Pacific is an area that I am passionate about, and I have been delighted to serve on the Policy Exchange on this issue. It is the fastest growing region in the world, and a core amount of our maritime interests are there. It is important to our national security in defending the rules-based order and our democratic principles.
Acceding to the CPTPP will be core to free trade for multiple reasons. First, in terms of scale, it accounts for 13% of GDP. If the US joins, which is entirely possible under the Biden Administration, it will account for over a third. I come back to the point about geography, which I do not completely buy, even for physical goods, as we have seen the rise of China and how that worked with exporting to the West, but also because the future of free trade will encompass digital trade. I commend the work of the Secretary of State in this area and the amazing progress she has made in securing seven out of 11 bilateral free trade agreements with the cohorts of the CPTPP. It is important to note that it is not just the Indo-Pacific—we have countries such as Canada, Mexico, and possibly the US joining. Alongside the delivery of our tilt to the Indo-Pacific, when fully implemented, the CPTPP will eliminate 98% of tariffs. Also, one of the best things is that it will bring about a standard set of rules of origin, meaning we could integrate our supply chain with the CPTPP. One of the beneficial ways that works is that 70% of our supply chain can be accumulated in any CPTPP country to account for the preferential tariffs received.
I come back to digital free trade, something that I have written about. The UK is a services superpower—the only country that exports more services is the US. The digital economy accounts for £150 billion of the UK economy. It is growing six times faster than the rest of the economy. It is important that the UK is at the front of pushing for ambitious digital provisions. That is at the centre of the CPTPP, which makes provisions for services, intellectual property and digital trade. It was not at the forefront of EU trade, so it will be really beneficial to the UK, particularly considering the shape of our economy—80% of our economy is based in services which employ 30 million people across the nation.
The UK is making great strides in this. I think the agreement with Japan accounts for the most ambitious digital provisions in the world, particularly on data localisation that means that expensive data centres abroad are not necessary, and we can use the brilliant ones here. We all know that data will be the fuel of the future. It will fuel our incredibly rich sectors, such as artificial intelligence and FinTech, which the UK excels at, and is why the CPTPP, given its shape, its geography and its importance in our foreign policy and strategic objectives, is exactly the right thing to pursue. I commend the Government in doing so.
Jim Shannon (Strangford) (DUP)
Thank you for calling me, Mr Hollobone. It is a pleasure to speak in this debate. First, I thank the hon. Member for Wycombe (Mr Baker) for setting the scene so well and comprehensively, in a well-delivered and detailed speech. I am sometimes a wee bit in awe of his presentations because they are so well put.
The motion explains exactly what we are after: a comprehensive and progressive agreement for trans-Pacific partnership. It is undoubtedly a massive debate. In 2019, UK exports of goods and services to CPTPP countries amounted to £58 billion—8.4% of the total. Imports were £53 billion, which was 7.3% of the total. Of the CPTPP countries, Australia, Canada, Japan and Singapore are the UK’s largest trading partners. I am pleased that the Ministry of Defence has given more focus to the Royal Navy in that area, which goes to the point made by the hon. Member for East Surrey (Claire Coutinho) about defending our national security interests and our military relationships with the likes of Australia, New Zealand and Malaysia, as well as Taiwan and Japan.
I see great potential in the deal. However, I want to explain to the Minister certain concerns that have been raised. It is clear that we must get the agreement right and that the House must be aware of every detail of the deal. In that vein, I seek assurance from the Minister that we will have not just this debate today in Westminster Hall but a full debate in the main Chamber and a meaningful vote on the UK’s accession to the CPTPP, with input from every Member of the House sought in that vote. That is important. All Members should have the opportunity to feed into that. I see the benefits of the partnership, so I come to it with a positive inclination.
Distance should not be an obstacle to trade. I have a particular interest in the agrifood sector—one of the biggest businesses in my constituency—where there is incredible potential for trade to be both comprehensive and progressive. We have a special relationship with New Zealand and Australia in particular, and economic ties with Japan and Singapore. We can develop them and do more with them.
The hon. Member for Wycombe referred to the insatiable demand that China has for every mineral right in the world—every speaker who follows me will probably refer to it. They want everything for themselves, or they want to have control of it, so we need an agreement in place that can take on the Chinese, so to speak. I see the CPTPP as a method to combat China’s influence politically and from a business perspective as well.
It has been suggested to me that, environmentally speaking, although CPTPP includes investor-state dispute settlements, the UK has the option of negotiating a carve-out from the investment component of the deal through side letters. There is the option pursued by New Zealand, which signed side letters with five CPTPP members to exclude compulsory ISDS. One of my biggest mailbag issues is the environment and I am keen that we do it right from an environmental point of view today, because we have it in trust for those who come after us: my children, my grandchildren and my great-grandchildren, whenever that happens—if I am still here, of course. It has been suggested that the UK should make ISDS a red line for accession, and negotiating objectives have been published that would demonstrate the Government’s seriousness about tackling climate change and guard against the other social and regulatory risks posed by ISDS. What consideration has been given to that suggestion and what is the Minister’s response?
Finally, I ask the Minister to confirm that businesses in my constituency can buy into the CPTPP opportunities. We have a highly skilled, young, eager and energetic workforce, and I believe that in the United Kingdom of Great Britain and Northern Ireland, better together, we can do these things to the betterment of everyone.
Virginia Crosbie (Ynys Môn) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Wycombe (Mr Baker) for bringing forward this important debate.
As the MP for a rural constituency—Ynys Môn, with its large farming community—I am keen to see the UK develop its trade partnerships across the globe, outside the constraints of the EU. The CPTPP will offer my farmers opportunities to export more British food overseas, in particular from the beef, sheep and dairy sectors, which are the mainstay of many farmers on Anglesey—for Rob and Kim Evans, Brian Bown and Trevor Lloyd.
The CPTPP offers a wealth of opportunity across the Asian, American and Australasian continents, with potentially lucrative markets for our produce: dairy products—cheeses in particular—to Canada and Australia; pork and poultry to Vietnam; beef to Japan; and mutton to Malaysia. My discussions with the National Farmers Union and the Farmers Union of Wales highlight the value that is placed on the quality of British produce overseas, particularly in markets where food safety is a key consumer concern.
The UK’s food is safe, traceable and audited. Our animals are well cared for and our meat and dairy produce is handled with care. My farmers see great opportunities in establishing the CPTPP. However, they also have concerns about the potential opening of the UK market to cheaper, lower quality imports from overseas. They are keen that the Government follows the commitments made at the time of the Trade Bill and the Agriculture Act 2020’s passage through Parliament. We committed then to upholding our standards and not opening the floodgates to substandard products.
We need to ensure that rules of origin are considered so that large-scale imports such as milk from New Zealand do not flood our market through a back door, putting domestic producers out of work. We need to ensure that substances that are illegal in the UK on environmental grounds, such as neonicotinoids, are not permitted for use on imported products, giving foreign producers cost advantages. We need to ensure that our farmers are not disadvantaged by the economies of scale available to producers in countries such as Australia, where the cost of beef and sheep production is significantly lower due to viable herd sizes and land costs. We must make sure that animal welfare and food production standards are at least equivalent to those we enforce in the UK. That means ensuring that, for example, growth hormones are not used on imports and the animal production index is used as a benchmark of animal welfare.
I reiterate that our farming communities are keen to ensure that agreements such as the CPTPP are aligned with the Government’s proposed campaign to raise awareness of brand Britain. We need to differentiate our produce and mark it out as different from the competition. By protecting our high standards and highlighting all that is unique and special about UK produce, we can support our farmers as they explore new markets and see our country established once again on a global stage.
Nick Fletcher (Don Valley) (Con)
It is a pleasure to serve under your chairmanship today, Mr Hollobone. I thank my hon. Friend the Member for Wycombe (Mr Baker) for bringing this debate.
I welcome the UK’s accession to the CPTPP as the next step in the evolution of our post-Brexit trade policy. The agreement will strengthen the bilateral trade deals we have and our negotiation with other CPTPP members. Crucially, it will allow us to expand our increased international trade without compromising on our sovereignty. It is, above all, an economic agreement. While it requires some alignment in trading standards, as all trade deals do, it does not seek to impose political alignment. There are no common laws and where disagreements between states arise, they will be resolved by an ad hoc arbitration panel rather than permanent courts. With such a wide range of countries and economies, I do not think it could be any other way. I look forward to trading more closely with partners who understand that productive trade relationships do not require uniformity.
We will continue to have full control over our laws, money and borders, while improving access for UK goods and services around the world. Rules of origin under this agreement mean that some of our most important industries will benefit. For instance, car manufacturers in the UK can use Japanese parts; as long as the final product is 70% CPTPP-origin, it will qualify for preferential tariffs when exported to Canada. Scottish whisky, too, will see tariffs significantly reduced or eliminated, going from 165% to 0% in Malaysia.
Just as importantly, these are the economies expected to grow significantly in the coming years and decades. In just three years, between 2016 and 2019, the UK’s trade with CPTPP states grew by 8% annually. Joining the CPTPP now means that our small businesses will have preferential access to these economies, and the small and medium-sized business support included in the agreement means that they will be able to take full advantage.
However, acceding to the agreement is not purely an economic choice. Among the CPTPP members are states with whom we have increasing security ties—in particular, Australia and Japan. Close economic partnerships can only help our overall relationship with strategic partners.
Finally, the Government have shown that they are open to skilled immigration from people around the world. Through the CPTPP, business people will hopefully soon benefit from a quicker, less expensive visa process. In all, the UK has a lot to gain and to offer from joining the CPTPP, and I look forward to more trade deals with a diverse range of countries in the years to come.
Richard Graham (Gloucester) (Con)
Like others, I congratulate my hon. Friend the Member for Wycombe (Mr Baker) on securing this debate about a cause that he, as a champion of global free trade, has long been interested in. He has often thought more strategically than many of us, so I congratulate him on his prescience in pushing forward with the aim of our joining the trans-Pacific partnership.
Now is an extraordinary moment for our country. It is important that we touch on one of the elephants in the room, which my hon. Friend alluded to. The application to accede to the trans-Pacific partnership is absolutely not a substitute for leaving the European Union. It is a way of growing our trade, investment, global relationships and opportunities for constituents in ways that could never have occurred while dealing with the issue of our relationships with the European Union, and is now not just possible but the right thing to do.
Let me be clear for the record that we need our trade to succeed everywhere in the world. We do not want a huge drop in trade with the EU as a result of leaving the European Union; we want to see a significant increase all around the world. This coalition of the willing around the Pacific region, which we aspire to join, gives us a huge opportunity. As several Members mentioned, the trans-Pacific partnership is not above all about tariff benefits. In fact, we have free trade agreements with seven of the 11 members, and no doubt we will shortly have them with at least two others.
The real benefits are around that most obscure of trading details: the rules of origin. The easiest way for me to try to bring that alive, particularly for my constituents, is to highlight the challenges for a bicycle manufacturer on the edge of Gloucester, in Hardwicke, which currently imports the frames from Taiwan and adds various things from their own factory and distributes and exports the bicycles around the world. That has become very hard indeed in the European Union as a result of the new rules of origin, but should we, and Taiwan, accede to the trans-Pacific partnership, the company’s global exporting prospects will be much better. Therefore, we should welcome both the opportunities from the origin and the new rules that will come from investment, intellectual property and digital trade.
As others have alluded to, particularly my hon. Friend the Member for East Surrey (Claire Coutinho), the opportunities that come out of the Japan free trade agreement in terms of digitalisation and liberalisation set a good precedent for what can be achieved by the CPTPP, which I prefer to refer to as the trans- Pacific partnership. The advanced provisions—there may be further opportunities on services from our negotiations with Australia and New Zealand—offer greater opportunities for a nation for whom 45% of exports are services.
There is another elephant in the room: China. Let me be clear that we can and should increase our trade with China, as the integrated review spells out; given that I am a former British trade commissioner to China, no one would expect me to say anything else. I believe in increasing trade everywhere—legally, and while supporting the values we believe in and champion.
That leads me to another element of our Indo-Pacific tilt. We should not expect that it will all be plain sailing, and nor would becoming a member of the TPP in itself prevent some of the many challenges that come about in countries where the systems, levels of corruption in some cases, amount of violence in others, will constantly challenge our own commitment to human rights. We have to find a framework for standing up for our values while making sure that our businesses have the confidence to know that they can trade in the long term.
Forty years ago, I made a decision, based on an instinct, to have the adventure of going to work for a British company in the far east. It turned out to be the best strategic thing that I have ever done, as it was for other businesses that did the same thing at that time. I am quite convinced that the decision our country is making today, on a much more rational basis, will be the right strategic move for us.
I am not sure that the description of the TPP by Stephen Harper, the former Canadian Prime Minister, as creating an “alternative global order” is necessarily where we are today. However, it is true that if the US gives the support to the TPP that was given it by the Obama Administration, that would be a significant game-changer, and our joining the TPP would turn it from a regional organisation into one with a wider global reach.
For all those reasons, I am disappointed that there are not more Opposition Members joining this debate today. This move will have benefits for our constituents across the country, and it is therefore in our interests to support the Government in acceding to the TPP.
Ben Everitt (Milton Keynes North) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I start by thanking and congratulating my hon. Friend the Member for Wycombe (Mr Baker) for securing this important debate about a subject that I know has been incredibly close to his heart for a long time; the temptation for him to give the “I told you so” speech was very well avoided.
I share the enthusiasm in this Chamber for joining the comprehensive and progressive agreement for trans-Pacific partnership, which I think we all agree we should just call “the trans-Pacific trade agreement”. It is a huge opportunity for the UK and indeed for Milton Keynes. The agreement covers one of the world’s largest and most dynamic free trade areas. It removes tariffs on 95% of goods between members, accounting for 13% of global GDP, which will immediately rise to 15% when we join. As my hon. Friend the Member for Gloucester (Richard Graham) said, when we join this partnership, it will not be the Pacific partnership; it will be a global partnership.
Our businesses will then have access to the most exciting and fastest-growing markets around the world—in Asia, Australasia, South America and North America. Our partners, of course, will have access to the hub of Europe—Great Britain. We are already working on bilateral agreements with Japan, Australia and New Zealand, but joining this partnership means that British businesses would go global.
I am excited about accessing these markets because they are right in Milton Keynes’s sweet spot. We have high-tech, high-skilled jobs, which will put us in the global fast lane. We are one of the most productive and innovative parts of the United Kingdom. We have delivery robots, Formula One teams, space technology, e-scooters, driverless cars and a reality TV star building a nuclear reactor—that is definitely not worrying at all.
Milton Keynes can be the Silicon Valley of Europe. We have the people, the technology and the can-do attitude. This is my call to arms for Milton Keynes businesses—global Britain and global MK. New partnerships such as the CPTPP are huge opportunities that are there for us to seize. Plenty of support is available for MK businesses to go global. The Department for International Trade stands ready to provide assistance with customs authorities, to ensure smooth clearance of businesses’ products, and to offer advice on intellectual property and other issues, such as business continuity. Milton Keynes businesses are eligible to secure export insurance to cover markets including the EU, the US, Japan, Australia, New Zealand, Canada, Iceland, Norway and Switzerland—and after UK Export Finance expanded the scope of its insurance policy, such export insurance is easier to obtain.
Exports from the UK to these markets totalled £499 billion in 2019, accounting for 74% of all international sales from the UK. Joining this partnership will put the UK and Milton Keynes at the centre of a network of free trade deals with dynamic economies, making us a hub for international businesses trading with the rest of the world.
There are huge new opportunities in forward-leaning areas, such as digital, data and services—all the things that Milton Keynes leads in. As my hon. Friend the Member for Don Valley (Nick Fletcher) said, the CPTPP is a partnership, so—unlike the EU membership that we had—joining does not require us to cede control of our laws, borders or money. That is great news for businesses and great news for our economy.
Mission control: this is global MK. We are on the launch pad. We are ready for lift-off.
Marco Longhi (Dudley North) (Con)
It is a real pleasure to speak under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Wycombe (Mr Baker) for securing the debate, and wish to align myself with the warm comments of the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Gloucester (Richard Graham) towards his good self. I followed and appreciated his endeavours well before I became a Member of this place.
Accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—yes, I would like to call it the CPTPP as well—will clearly strengthen our place on the world stage, giving us a truly global outlook following our exit from the European Union. Joining this free trade area, which covered some £9 trillion of GDP in 2019 alone, could cut tariffs in vital UK industries such as food and drink, and the automotive sector. To be a little parochial here, that is so important for my Dudley North constituents, the black country and the west midlands as a whole. Accession will also create new opportunities in forward-leaning areas such as digital and data, and across a whole range of services.
Opportunities for trade and collaboration now exist far beyond the confines of the EU, and I know that the British people would want us to pursue membership for the huge benefits that it could bring. It creates the conditions for growth, trade and jobs, and we are well placed to take advantage of those economic benefits, with several significant free trade agreements already in place. I commend the efforts of the Secretary of State and her wonderful team in securing them in such a short space of time.
All countries have felt the economic pinch from protecting citizens from the horrors of the coronavirus pandemic. The CPTPP will allow us to further diversify our economic resilience and supply chain to build back better. Something that has concerned me over the previous couple of decades, as we have looked at a global Britain, is the issue of onshoring, which has perhaps become of greater significance in particular key sectors of our economy.
The UK is world leading in digital advancement and research. Modern digital trade rules that facilitate free and trusted cross-border data flows remove unnecessary barriers for British businesses, facilitating even more trade, including for some of our world-renowned products. The CPTPP is a very-high-standards agreement, and the rules will have huge benefits for the UK. The reality is that UK products such as beef and lamb have been locked out of overseas markets for unfair reasons, so it is in our interests to sign up to a high-standards agreement that would benefit many of our farmers across the UK significantly.
We already have extremely ambitious standards in areas such as the environment, animal welfare, food standards and intellectual property. It is in our interests to be in agreement with similar ones, so that we can ask the same of other countries and get access to their markets. Accession will grow our economy, increase revenue and create jobs. Let us do it as soon as possible. People are listening. Businesses are listening, and this is about confidence.
Mr Philip Hollobone (in the Chair)
We now come to the first of the Front-Bench speeches, which will be by Drew Hendry from the Scottish National party, who also wins the prize for the most colourful backdrop.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]
Thank you, Mr Hollobone; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Wycombe (Mr Baker) on securing this important debate; it is a credit that we are getting the opportunity to speak about it. I have heard the lament about there not being more Opposition speakers; I know that he will be delighted that the SNP is always happy to provide the opposition to the Tories at Westminster.
My hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) pointed out that there is no assessment of CPTPP, and he made some very simple comparisons about losing £4.90, for example, from the deal with the European Union versus gaining 20p from the USA, or Australia for 2p. That is the stark reality.
Today we have heard Members across the Chamber talk about the effects on farming and dairy farmers—I will come to that shortly. We have also heard Members say that they do not want to see a drop in EU trade, but regrettably that has already happened.
There is no deal that will ever make up for what Brexit takes away from us. We simply cannot trust the Tory Westminster Government not to sacrifice protections for our NHS in negotiations to join this bloc.
By the UK Government’s own analysis, the trade deals they strike outside the EU cannot make up for the impact of Brexit on the UK economy. A trade agreement with New Zealand is estimated, to be charitable, to have a limited effect on GDP in the long run—the estimated impact is 0%. Indeed, under scenario 2 the UK Government documents state that GDP in New Zealand is estimated to see economic growth of 0.35%, but UK GDP would see a drop of 0.01%. Again, by the UK Government’s own estimates, the Japan-UK deal, which has already been signed, will add only 0.07% to UK GDP. That is really tiny, especially when we consider that we could have had a similar agreement anyway as a member of the most successful trading power in the world by far: the EU.
The EU single market accounts for 52% of all UK trade goods exports and 45% of all UK trade services exports. The EU has more agreements with more countries than any trade bloc in the world by far. In 2017, UK exports to CPTPP countries totalled just over £50 billion—about 8.5% of all UK exports. When compared with the EU trade bloc, this will do little to mitigate the damage of losing seamless access to that partner, which accounts for almost half of all trade.
People in Scotland know that rejoining the EU as a full member of the customs union and single market is the best possible option for protecting livelihoods and jobs. The UK Government’s constant—but deeply flawed—refrain is that we must instead focus on fast-growing economies outside the EU, but this is an unforgiveable act of harm to businesses and trade across the nations of the UK. It fails to acknowledge that, according to the World Bank, the EU has some of the fastest-growing economies in the world. They include our neighbour, independent Ireland, 31st; Hungary, 43rd; and even Malta, 52nd. The UK, incidentally, is 134th.
The CPTPP countries are not necessarily the fastest-growing economies in the world. In 2019, Mexico was ranked 176th; Japan, 159th; and Canada, 131st. After an absolutely terrible start to the year because of the Prime Minister’s shameful Brexit deal, joining the CTPTT would be another disastrous blow for Scottish farmers already reeling from this Government’s callous disregard for their business.
Figures from the ONS last week show that in February, wheat exports were still down 52%; fish and shellfish exports were down 54%; egg and dairy exports were down 39%; beverage exports were down 34%; cereal exports were still down 40%; and fruit and vegetable exports were still down 54%. Things are getting worse and worse for exporters, all because of the disastrous ideology of this Tory Westminster Government. On top of that, with talk of accession to the CPTPP trading bloc, farmers are genuinely and rightly concerned that existing member countries might insist that the UK lower our standards simply to join, unfairly undercutting our farming industry and again punishing our hard-working farmers here.
The National Farmers Union’s submission last month to the House of Lords International Agreements Committee’s inquiry into the UK’s accession to CPTPP stressed the importance of protecting the UK’s current high food and farming standards. This Tory Westminster Government have had plenty of opportunities to enshrine the current standards of consumer protection, including for agricultural produce. It speaks volumes that they have failed to do so at every single turn. It is clear that the Tories cannot be trusted to protect consumer standards.
Going by past experience, we cannot trust this UK Government to protect our NHS from harm in the CPTPP trade negotiations either, as it has been their policy to join trade partnerships that would allow foreign bids for public contracts through investor-state dispute settlement clauses. The Home Secretary has described Brexit as an opportunity for widespread deregulation. Given the words of many prominent Back-Bench and Front-Bench Tories, it is very easy to see why the public do not trust them. Some 85% of UK exports to the CPTPP are to Australia, Canada, Japan and Singapore, and the UK already has free trade agreements with seven of the 11 CPTPP members—courtesy of agreements made while the UK was in the EU, of course. In the CPTPP, the UK cannot decline to align on too many areas such as ISDS carve-outs for agrifoods, consumer standards and so on, and still expect to become a member. In short, if the UK joins, disastrous consequences are highly likely for some of our exporters.
It is abundantly clear that for Scotland to make the choices that it needs to protect people, protect jobs, protect standards and see that the NHS remains firmly in public hands, it must have the powers to do so. It must soon make a different choice from this Tory Brexit, little Britain approach. It must make better choices as a progressive, outward-facing and normal independent nation.
Bill Esterson (Sefton Central) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Wycombe (Mr Baker) on securing the debate.
There may well be positives for Britain from joining the CPTPP; there may also be negatives. The problem is that we just do not know, because the Government still have not published any of their negotiating objectives, or even an impact assessment of the deal. Last week, the International Trade Secretary said that Parliament would have full scrutiny of CPTPP through the Trade and Agriculture Commission—but the Trade and Agriculture Commission is not a parliamentary body, and its work can only supplement parliamentary scrutiny, not replace it. In the absence of any impact assessments, it falls to us to decide for ourselves, and I am sorry to say that it is not looking good for the Government.
British sovereignty, promoting British exports and jobs, protecting the NHS, agriculture, environmental standards, human rights, workers’ rights—those are just some of the challenges of the CPTPP. Let us address agriculture, environmental standards and human rights.
Farming has a proud part to play as part of Britain’s heritage. Over hundreds of years, we have developed high-quality produce with strict environmental and animal welfare standards. To continue that proud record, which is admired around the world, our farmers cannot afford for this Conservative Government to compromise on standards in trade agreements. The CPTPP could have some minor benefits to the UK’s agriculture sector but, as the National Farmers Union states,
“CPTPP includes major agricultural exporting countries”—
Australia, New Zealand and Canada.
The question for the Government is whether they will have to make concessions that will damage British farming as a price of joining the CPTPP. We do not know what increased market access CPTPP membership will provide for countries such as Australia and New Zealand, but we know that it will have potentially dire consequences for food and animal welfare standards. Will the Government be able to opt out of the parts of the agriculture chapter of the CPTPP agreement that would allow our agriculture sector to be undercut by lower standards of production? Major questions also remain over whether the UK will be able to retain current bans on the import of hormone-treated beef or chlorine-washed chicken.
Next we come to environmental standards. Palm oil is used in food products, detergents, shampoo, cosmetics, biofuel and even ice cream, but palm oil production is wreaking untold destruction on jungle habitats. Palm oil plantations cover more than 27 million hectares of the earth’s surface. The industry is pushing endangered species ever closer to extinction, and with their carbon dioxide and methane emissions, palm oil-based biofuels are estimated to have three times the climate impact of fossil fuels. Although the UK has a ban on palm oil imported through biofuels, Malaysia—a CPTPP member country—is one of the largest producers of palm oil, and Malaysian officials want the Government to scrap the protections that we already have against the import of palm oil. Palm oil is just one example, and it is emblematic of the potential dangers of signing up to a deal such as CPTPP. Will we be rule takers on imports of palm oil, or will we be able to insist on maintaining our high environmental standards? Parliamentary scrutiny would tell us.
Then we have human rights. Over the past few months, this Conservative Government have voted down amendments that sought to block trade deals with countries that commit genocide. The Foreign Secretary says that he would rather the UK ignored human rights concerns than lose out on trade agreements. Recently, the Government struck a deal with Cameroon, a country whose Government are carrying out a brutal subjugation of its English-speaking minority population. The Minister knows that even President Trump declined to sign a deal with Cameroon.
Now the Conservatives tell us that we should join the CPTPP, whose members include Chile, Malaysia, Mexico, Singapore and Vietnam, all of which permit child labour, forced labour, workplace discrimination, unsafe working conditions and the absence of trade union rights. Are the Government planning to negotiate tougher alternatives to the current clauses in CPTPP, which permit lower standards of production using exploited workers, or not? Although the Secretary of State for International Trade has said previously that the UK has no plans for a bilateral trade deal with China, does the Minister share my concern that a deal with China could take place by the back door via the CPTPP, or can he tell us whether the UK would be able to veto China’s application to join?
On human and workers’ rights, full parliamentary scrutiny and consultation with trade unions and human rights groups is essential if the Government want to build confidence that we should join CPTPP. Agriculture, environmental standards and human rights are just three of a number of CPTPP elements that urgently need to be addressed.
Businesses, workers, freelancers, consumers and the people of Northern Ireland are learning the hard way what a failure to negotiate effectively looks like under this Conservative Government. The trade and continuity agreement with the EU has left gaping holes in trading arrangements that the agreement was meant to deliver after the end of the Brexit transition. We cannot afford a repeat of the failures in the TCA with the application to join CPTPP, so will the Government reopen the 2019 CPTPP public consultation? At the time, it elicited only 55 bespoke responses from business, and the Government’s own surveys showed that only 21% of the British public knew what the CPTPP was. There is also the increasingly serious prospect that China may apply to join the CPTPP, which was not a consideration at the time of the survey in 2019.
Scrutiny of negotiating objectives, a full impact assessment and the reopening of the public consultation on CPTPP are all must-haves, as well as a guarantee that we will have at least as much time to examine the final terms of accession before a final vote in the House of Commons, just as the Australian, Canadian and New Zealand Parliaments had before their respective votes.
In the absence of scrutiny, the shadow Secretary of State for International Trade wrote to the Secretary of State, setting out 238 questions that must be answered if the Government are to have any hope of convincing Parliament that this is a good deal. Those questions included the following. Will the Government be able to negotiate exemptions from the CPTPP to address the concerns that I have raised today? What are the implications of joining the CPTPP for the retention of the UK’s current prohibitions on the import of hormone-treated beef and chlorine-washed chicken?
Will the UK have the right to impose import restrictions on products containing unsustainably sourced palm oil, and apply those restrictions to Malaysia and other CPTPP countries? How will the Government use their accession to the CPTPP to hold all member countries, including Brunei, Chile, Malaysia, Mexico, Singapore and Vietnam, to the commitments made under article 19.3 of the agreement and demand their compliance with the UK’s high standards of human and workers’ rights? Are the Government prepared either to veto any application by China to accede to the CPTPP, or to withdraw from the CPTPP, if we do not have that right, so we do not end up in a trade bloc with China by the back door?
Finally, will the Government guarantee at least the same amount of time to scrutinise the terms of the UK’s accession before they are put to a vote, as was given to the Parliaments of Australia, Canada and New Zealand?
Greg Hands (Chelsea and Fulham) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. This has been one of the finest Westminster Hall debates that I have attended in 16 years as a Member of Parliament. It is a genuine pleasure to be able to respond to it.
I pay tribute to my hon. Friend the Member for Wycombe (Mr Baker) for securing the debate. He made an excellent speech that made my case for CPTPP as well as I could. He gave a brilliant exposition of the benefits. He rightly points out that he was an early enthusiast for joining the CPTPP. Over the years, he has been a forceful advocate for a sovereign, independent trade policy. I know he has welcomed the FTAs that we have already agreed with 67 countries, with Serbia added to the list this week, and with the EU itself, as he pointed out.
I hope to cheer him further by outlining our plans to unleash even more of Britain’s trading potential through accession to the comprehensive and progressive agreement for trans-Pacific partnership. That is quite a mouthful and comes with the world’s hardest-to-pronounce acronym, the CPTPP—in trade, the longer the term, often the more important the content, and that is true of this agreement.
We know that 2020 was a time of unprecedented challenge on every level, but CPTPP is going to be part of the future of this country. Our accession to CPTPP will be central to our endeavour to build back better and to assist our economic recovery, and our preparations are advancing at pace. As colleagues know, on 1 February we submitted our notification of intent to begin the accession process. That was the first formal step before formal negotiations start later in the year. Joining CPTPP would give British firms access to a free trade area worth £9 trillion, made up of 11 like-minded nations that share our commitment to free trade, international co-operation and the rules-based system.
Britain is the first new country to apply to join this trade partnership since it was established in 2018, with big economies such as South Korea, Thailand and Taiwan. A good point was made by my hon. Friend the Member for Gloucester (Richard Graham), who knows the region incredibly well, as the Prime Minister’s trade envoy to Malaysia and the Association of Southeast Nations region. All of those also show interest in membership.
It is a high-standards agreement between sovereign nations, which together account for 13% of global GDP. UK membership would increase that share by nearly 20%, to 16% overall. As my hon. Friend the Member for Wycombe pointed out, we are not a small nation. Equally, nothing in CPTPP will impinge on our domestic right to regulate, which was one of his key questions.
This is very much a business-focused agreement, removing tariffs on 95% of goods traded between members and reducing other barriers to trade. The UK already does more than £110 billion-worth of trade with individual CPTPP members, and the average growth rate is 8% per annum. Some of our closest trade allies—Japan, Canada, Australia, New Zealand and Singapore—are there, as are big actual or potential markets, such as Mexico, Vietnam and Malaysia, but our membership would take those trade ties to another level, opening up even more opportunities for businesses of all kinds and all sizes across the United Kingdom, spurring growth, generating jobs, delivering prosperity the length and breadth of our country and helping us to level up opportunity nationwide.
This is good news for all regions and nations of the UK, which can strengthen their already lucrative trade ties with these markets. In 2019, for example, more than £3 billion-worth of goods were exported to CPTPP nations from the east midlands alone, together with £2 billion-worth from the north-west of England and £2.4 billion-worth from Scotland. With accession, those bonds of prosperity are set to strengthen and deepen in the years ahead.
To look at specific benefits for Britain in cutting-edge sectors that are shaping the world of tomorrow, from digital trade to tech and automation—these points were made by my hon. Friends the Members for Wycombe and for Milton Keynes North (Ben Everitt)—accession would allow us to work even more closely together with other members on the development of modern digital trade rules that facilitate free and trusted cross-border trade flows and remove unnecessary barriers to business. That point was also made extremely well by my hon. Friend the Member for East Surrey (Claire Coutinho), who spoke first in the Back-Bench contributions.
The depth and breadth of the CPTPP’s e-commerce chapter provide a platform for the UK to help to shape, together with big global players in the sector, the emerging digital trading rulebook. These markets offer exciting new opportunities for British tech innovators as we seek to bind the UK, which is after all Europe’s tech capital, ever more closely with the dynamism of the Asia-Pacific region, unlocking ever greater digital trade potential between us as we build on the nearly £19 billion-worth of digitally delivered services that the UK exported to CPTPP countries in 2019. Those points were localised really well by my hon. Friend the Member for Milton Keynes North in his “Global MK” speech, which I think will have gone down very well in his local area.
Accession would also make it easier for British business people to travel between member countries via the potential for faster and cheaper business visas—a point made very well by my hon. Friend the Member for Don Valley (Nick Fletcher). To return to a key question from my hon. Friend the Member for Wycombe, access to the agreement’s dedicated chapter on small and medium-sized enterprises will ease barriers to trade for small firms by cutting tariffs and reducing red tape, giving thousands of British SMEs greater access to these vibrant markets. A really important feature of modern free trade deals is the SME chapter. A free trade agreement can seem incredibly forbidding—a typical free trade agreement has 700 or 800 pages. Someone running an SME will not have the time, let alone perhaps the inclination, to read a 700 or 800-page agreement. The idea of the SME chapter is that it allows a company to navigate the free trade agreement and take advantage of things such as Government publicity about what is available there; it eases the passage for an SME and particularly a first-time exporter.
In addition, there is the potential for swifter elimination of tariffs on key British exports, including whisky. I look over to my friend from the Democratic Unionist party, the hon. Member for Strangford (Jim Shannon). There is that potential on whisky tariffs. Of course, everybody likes to think about Scotch, but what about Irish whiskey? I have a very good relationship with the Irish Whiskey Association, and we also always promote Irish whiskey—as well as cars, a point of particular relevance to my hon. Friend the Member for Dudley North (Marco Longhi), and the automotive industry.
We could also benefit from the rules-of-origin provisions, which mean that goods produced in any country within the CPTPP will be classed as originating in the free trade area. To give just one example, cars made in the UK could use more Japanese-made parts, such as batteries, and still qualify for tariff reductions when the completed cars are exported to other CPTPP members—for example, Canada. They would count as being of qualifying CPTPP origin. That is a win-win scenario for the British economy.
On parliamentary scrutiny, which has been raised a couple of times, this Government are committed to transparency and we will ensure that parliamentarians, UK citizens and businesses have access to information on our trade negotiations. On 7 December last year, the Secretary of State for International Trade made a written statement outlining the transparency and scrutiny arrangements that will apply to our new FTAs. I am pleased to confirm that those will also apply to the CPTPP negotiations. Before the launch of formal negotiations, we will publish our objectives, alongside a response to the public consultation that has already been held, which the Opposition Front-Bench spokesman, the hon. Member for Sefton Central (Bill Esterson) referred to, and an initial economic scoping assessment, which the Chair of the International Trade Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), referred to. He seems, however, already to have made up his mind about what will be in the economic assessment, but I shall see him later, when I appear before his Committee, and perhaps we will continue the discussion at that point.
We will continue to keep Parliament and the public informed of the progress of negotiations via regular updates, working closely with the relevant Committees in both Houses. My hon. Friend the Member for Wycombe sought an explainer. That is exactly what a lot of the documentation is intended to do—to explain the potential and actual benefits from the free trade agreement. As to the point that the hon. Member for Strangford made about a full debate, I would welcome one. I welcome this morning’s debate, and in the Department for International Trade we welcome the opportunity to explain and expand on Britain’s free trading future.
Most of the questions raised by the hon. Member for Sefton Central will, I think, be answered when we publish the negotiation objectives shortly, but to deal with one of his points—the idea that CPTPP will be a back door for a trade deal with China—I cannot make it clearer that there are no plans or intentions for a UK trade deal with China. It is very unlikely that China would meet the requirements for the CPTPP at the moment, and it is worth not forgetting that it is subject to the veto of existing CPTPP members, which, as the hon. Gentleman pointed out, do not yet include the UK. However, we might ask whether China would be welcomed by the existing members of the organisation.
We heard some rather tired, familiar arguments from the SNP Front Bench. I think that the party is always much more interested in debating Brexit than the UK’s trading future. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) did not like CPTPP, and I was not the least bit surprised, because the SNP has never supported any trade agreement negotiated by either the European Union or the United Kingdom. The hon. Gentleman may have a nice backdrop, but as to the content of his speech, it expounded the virtues of EU trade agreements, not a single one of which the SNP ever supported. The SNP voted against the Canada deal and it failed to support the Japan deal and the Singapore deal. Those deals were negotiated by the EU, which the hon. Gentleman now praises; so I do not think we will take any words from him. I did not for a moment expect him to support the CPTPP trade deal. The SNP is anti-trade, anti-Scotland and anti-Scotland’s best economic interests.
The hon. Member for Strangford raised an important point about ISDS. I should point out that ISDS procedures are already in place in 90 bilateral UK trade deals. We have never lost a case. We strongly believe that we have nothing to fear from ISDS, but we will shortly publish our negotiation objectives, which will include that important question.
Richard Graham
On the point from the SNP about what is really in Scotland’s best interests, does my right hon. Friend agree that it is curious that at this time, when those of us who are trade envoys to the south-east Asian region are doing so much to push for greater access for some of our great drink and food products, including Scotch whisky, the hon. Gentleman cannot see the advantages of the dialogue partner status with ASEAN and the TPP arrangements that the Minister is pursuing?
Greg Hands
Thank you, Mr Hollobone. I will not need three minutes, but I will answer my hon. Friend’s excellent intervention. I am always shocked by the insular nature of the SNP’s approach to trade and the fact that, by the look if things, it does not see any of the advantages of any trade agreements with anyone, but particularly with the far east. The potential for growth for Scottish produce, in particular, in the far east is huge—not just whisky, but also Scottish seafood produce and so on—but the SNP failed at each available opportunity, even when we were members of the European Union, to support any of those trade deals.
I go around the world battering down barriers, particularly to Scotch and Irish whiskey. I have been in Peru and engaged on its metal test. I have been in Taiwan and engaged on its lack of requirement for a lot code on bottles, which incites the counterfeiting of alcohol, and so on. We as the UK Government engage all the time on behalf of Scottish goods and services exports right the way around the world, and we make sure that Scotland’s voice is heard around the world and Scottish exports are boosted.
We have been consistently clear that the terms of UK accession to CPTPP must be right for British companies, right for British consumers and right for British farmers. We will negotiate firmly but fairly, and our red lines are well known. The NHS remains off the table, as do our world-class standards, from food and animal welfare to the environment—a data protection point brilliantly raised by my hon. Friend the Member for Ynys Môn (Virginia Crosbie).
Accession to CPTPP gives the UK the ability to foster stronger diplomatic and trading links with nations in the Indo-Pacific region, which is at the vanguard of change in the global economy and will be the engine of growth for decades to come. Joining this agreement will help us to harness the export and investment opportunities that lie before us as the world resets, recovers and returns to growth in the wake of the pandemic, and as we build back better, greener and more sustainably.
I hope my remarks have given a flavour of the vast potential that our membership of the CPTPP promises to bestow during this exciting time; its geostrategic importance, which was raised by my hon. Friends the Members for Wycombe and for Gloucester and others; the Indo-Pacific tilt, and the fact that we are doing this with some of our best friends; and the huge markets that are involved, with great potential. I thank my hon. Friend the Member for Wycombe again for securing this invaluable debate.
Mr Steve Baker
I completely agree with my right hon. Friend the Minister. Like him, I have hugely enjoyed this debate. He enjoys my unqualified support, so I will turn my remarks to some other aspects of the debate.
I thought that the best part of the contributions from the Front-Bench spokesmen for the SNP and the Labour party was their vivid illustration of the shortcomings of virtual proceedings, because we were not able to intervene on them to explode the fallacies in their speeches. I regret that they are not able to intervene on me now, and I look forward to them supporting the full resumption of proceedings in the main Chamber and in Westminster Hall, so that we can resume our normal to and fro.
I thought the Labour party were progressive, and yet this progressive agreement is one that they do not wish to support. Of course there are problems with labour standards among the Pacific rim countries, and I would very much like to see those problems addressed and standards driven up. Of course we want to get children out of child labour, and that is why I support a progressive agreement that improves labour standards in the region. If we were to listen to the Labour party, they would have us do a deal with no one who had not already met the standards of the western world, the United Kingdom and the European Union. We can see why they want to be in the EU.
The SNP, of course, is speaking entirely from its own hymn sheet. It wishes to leave the UK and rejoin the EU—that is perfectly plain from what it has said. I refer the SNP, in its pinched and miserable assessment of our economic prospects, to an article by the well-known pro-EU commentator Wolfgang Münchau—he often, of course, writes for the Financial Times—in his own Eurointelligence:
“So much for the Brexit scare stories”—
he writes—
“Apart from a short-lived disruption of trade flows Brexit has been a macroeconomic non-event…If you look at the latest IMF data and projections in the graphic above, you don't find a discernible macroeconomic effect of Brexit in the first ten years after the referendum.”
Mr Philip Hollobone (in the Chair)
Order. Members participating virtually are not allowed to intervene on any speakers in the room. If you persist, I am afraid we will cut you off.
Mr Steve Baker
Thank you, Mr Hollobone. It is only because of the manner of the speeches by the Opposition spokesmen that I am choosing to attack what they said. I look forward to them supporting the resumption of proceedings.
I have previously critiqued the computable general equilibrium modelling that is used, and I think that Opposition Members’ simplistic analysis and arithmetic shows that they, too, should look at the shortcomings of CGE models and at what can be done in the UK. Lord Lawson of Blaby has said that UK domestic settings will be dominant in our future, and that is something that Wolfgang Münchau turns out to agree with.
Turning to other colleagues, I enjoyed their speeches enormously—
Mr Philip Hollobone (in the Chair)
Order. I am afraid the hon. Gentleman will not be able to do that.
Motion lapsed (Standing Order No. 10(6)).