Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(3 years, 5 months ago)
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The Secretary of State for International Trade (Elizabeth Truss)
I beg to move,
That this House has considered the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
I am delighted to open this debate on our future membership of the trans-Pacific partnership. Five years after the British people voted to leave the European Union, we are delivering on the promise of Brexit. After taking back control of our trade policy, we have been opening up the world’s largest and fastest growing markets to the best of British exports by negotiating an unprecedented number of trade deals. We have struck deals covering 68 countries plus the EU, worth £744 billion. We have gone further and faster to champion our interests in deals with Japan and the European economic area.
This month, we are writing the biggest chapter yet of our trading story. We brought world leaders together at the G7 to promote free and fair trade. We reached agreement in principle with Australia—our first ever trade deal negotiated from scratch—and we are working to agreement in principle with New Zealand by August. We have drawn a line under the long-running 17-year Airbus-Boeing dispute. Now, the United Kingdom is making history as the first country to negotiate its accession to the comprehensive and progressive agreement for trans-Pacific partnership. This group of nations covers half a billion people across 11 economies, worth £9 trillion in global GDP. On Tuesday, I presented our plans to Parliament, including our scoping analysis. We know that the richest opportunities lie in the Asia-Pacific region, where about two thirds of the middle class will be expected to be in 2030, driving an appetite for high- quality goods and services that we produce here in the UK. We can see that in the fact that our exports to the CPTPP are expected to grow by 65%, or £37 billion, over this decade. That is in addition to the static comparative benefits of the deal, which are estimated at £1.8 billion of GDP.
Jim Shannon (Strangford) (DUP)
First, may I congratulate the Secretary of State on all she does to bring about these trade deals? She will be aware of the fact that CPTPP countries such as Australia, Canada, Japan and Singapore are the largest UK partners for some 80% of UK trade. It is important to get new deals, but it is also important to build on the deals with the countries we have. Can the Secretary of State assure us that that will be part of the Government’s strategy for the future?
Elizabeth Truss
The hon. Gentleman is absolutely right. The CPTPP enables us to have much deeper trading relationships, particularly in areas of UK strength such as digital, data and services, where there are very strong chapters on those issues.
The fact is that the likely benefits of joining the CPTPP are much greater as the economic centre of gravity shifts towards Asia and as more countries join the agreement. Joining this partnership will position us at the heart of the action in global trade. The CPTPP is exactly the kind of free trade area the UK wants to be part of: it is liberalising on tariffs and other trade barriers; it has high standards on labour and the environment; it is ambitious in digital and services; and it is tailor-made to help us to cement the UK’s status as a global hub for services, digital and advanced manufacturing. Our exporters will no longer have to pay tariffs on 99.9% of their goods, from Scotch whisky and Stoke-on-Trent ceramics to cars made in the north of England and the midlands. Our farmers will benefit from a strong appetite for beef and lamb in Asia, with CPTPP markets expected to account for a quarter of global meat demand by 2030. Our manufacturers will enjoy common standards and rules of origin, securing flexibility, reliability and lower prices on inputs.
Marco Longhi (Dudley North) (Con)
Does the Secretary of State agree that if British business is to invest it needs confidence, and that that confidence will come by restating our commitment to free trade by diversifying our trade offer, generating new jobs and bringing more stability to the jobs we already have?
Elizabeth Truss
My hon. Friend is absolutely right. A key benefit of the CPTPP is increased resilience. It means that our exporters will not have all their eggs in one basket. They will have options about where they send their goods. It will also mean our importers are able to rely on strong relationships in countries which follow the rules and have good standards in areas such as the environment and worker protection.
Rachael Maskell (York Central) (Lab/Co-op)
I am grateful to the Secretary of State for giving way. I have been crunching the numbers. If we look at our trade deficit, we see that this agreement will bring in just £300,000 a day in exports compared with the £11 million a day we are losing in our deal with the EU. Should her efforts not be put towards ensuring that the deal is comprehensive so that we can trade across the channel, in view of the carbon impact of trading across the world?
Elizabeth Truss
The logical position, if the hon. Lady does not believe in trading across the world, is that she only believes in having protectionism for the UK. The reality is that trade with the EU has bounced back. This is about positioning Britain for the future, and where the growing markets of the future are. We are expecting trade with CPTPP countries to increase by 65% by 2030. The hon. Lady is harking back to the past; we are looking at where the future opportunities are for Britain.
As the world’s second largest services exporter, we will be perfectly placed to benefit from strong provisions securing the free flow of data and easier business travel to CPTPP countries. True to the British people’s priorities, there are no strings attached to this deal that would force us to cede control over our laws, our borders or our money. Instead, the UK will join 11 fellow sovereign nations in one of the world’s largest free trading areas. This House can be proud that the UK is at the front of the queue and set to be the CPTPP’s first new member since it was established in 2018. This is a testament to the ties that we have forged with our Pacific partners and to the UK’s fierce commitment to high standards. It also shows that our independent trade policy is not just about the here and now, but about the long term. As part of the CPTPP, we can strengthen it as a bulwark against unfair trading practices. Together, we can bring home the benefits of free trade for all our people.
Our accession will have full parliamentary scrutiny. We committed to publishing our negotiating objectives, consultation response and scoping assessments at the outset of our negotiations, and we did that earlier this week. All of this will be fully scrutinised, including by the new Trade and Agriculture Commission. That puts us in a very strong position compared with comparable parliamentary democracies. Five years on from the referendum, we are demonstrating what global Britain is capable of. We are back as a major force for global trade, striking more trade deals than any other nation has been able to manage.
We have the world knocking on our door, eager to do business with Britain. That is why I am working with allies worldwide, from the United States to India and from the Gulf states to Japan, to break down barriers to trade, and we are now seizing the shimmering opportunity offered by this jewel of the Pacific, the CPTPP. Joining will do more than ever to realise our vision of global Britain as we embrace new markets while levelling up every region and nation of the UK. That is the bright future awaiting us as part of the CPTPP, and I commend these negotiations to the House.
Emily Thornberry (Islington South and Finsbury) (Lab)
I thank the Secretary of State for holding this debate. I do, however, feel obliged to point out that she has brought us here today to discuss Britain’s accession to an agreement which, as things stand, and according to the Government’s own figures, will add a maximum of 0.017% to UK GDP, yet on Monday, when the House discussed the urgent threat to the British steel industry, which is worth six times that amount to our GDP and has 34,000 jobs directly at stake, the Secretary of State could not even be bothered to turn up. Let me just say, on behalf of all the Labour MPs who spoke in that debate and the steel communities they represent, that I hope the Secretary of State was watching and that in the six days we have left before our steel safeguards expire, she will listen to reason, accept that she has been wrong, and take emergency action to keep our steel safeguards before it is too late.
Jessica Morden (Newport East) (Lab)
I wholeheartedly agree, on behalf of the steelworkers and steel industry in my constituency, with the point that my right hon. Friend makes. The Government are pretending that there is nothing they can do on steel safeguards, leaving our markets unprotected and undermining our whole industry. This is a real chance for the Government now, and at this point in time our UK steel industry cannot afford for it to fail.
Emily Thornberry
My hon. Friend is quite right. I recommend that the Secretary of State read the speeches of many Members in that last debate. I have to say that it reminds me of reading, in March, the Department for International Trade’s report “Global Britain, local jobs”, in which it purported to tell us how many jobs in each region and constituency were dependent on trade. It did not mention any jobs in steel or agriculture. I thought at the time that that was a mistake, but I fear that actually it looks more like a forecast.
We ought, perhaps, to turn to the CPTPP. I have three key quotes to put to the Secretary of State from esteemed figures in Canada, Australia and New Zealand, all of which I hope will illuminate what is actually going on in the accession process—certainly rather more than the Government have to date.
The Secretary of State will recognise my first quote, because it was said directly to her last July when she was discussing the CPTPP with the former Canadian Prime Minister, Stephen Harper. “The UK,” he told her,
“is going to have to identify what are its offensive interests and what are its defensive red flags…You can seek tailor-made provisions,”
but
“the other countries are going to have a…take-it-or-leave-it approach…That is a big decision for the UK.”
It is indeed a big decision, but before the negotiations have even begun, the Secretary of State has apparently conceded defeat. Indeed, reading the Government’s so-called negotiating objectives, this appears to be the only negotiation in British history in which the objective is to accept everything the other side wants as quickly as possible, with not one single demand of our own. There is not one single clause in the thousands of pages that make up the agreement where the Government will seek any exemptions or amendments to reflect Britain’s interests. That is the literal definition of being rule takers and not rule makers.
Even when the Government make a veiled reference in their document to the prospect of China joining the CPTPP, the best they can offer in response is the assertion:
“We would only ever support applicants who meet CPTPP’s high standards on rules-based free and fair trade.”
In other words, they have no opinion of their own on whether a back-door deal with China is an acceptable prospect for Britain, and no concerns at all about the Uyghurs, slave labour or genocide. All they can say instead is that China will have to obey the same trade rules as us. That weak acceptance from the Government that we cannot change the CPTPP rules is deeply worrying when it comes to protecting our NHS, our food standards and other defensive concerns.
It is also deeply frustrating when it comes to promoting the interests of British business and the adoption of British standards in the trans-Pacific region. Why are the Government not using the accession process to press for improvements to the current provisions on financial services, small businesses and mutual recognition of qualifications? Why is the Secretary of State not arguing for new chapters to cover educational exports, chemicals and pharmaceuticals, and co-operation on new technology? Why are the Government not seeking to strengthen the agreement when it comes to protection of labour rights, animal welfare and the environment? The Government are doing none of those things.
Mr Steve Baker (Wycombe) (Con)
The right hon. Lady must know that the CPTPP preserves the member states’ right to regulate for themselves. Will she not accept that that is one of the attractions of these arrangements compared with the EU, which we have just left precisely to recover control of our own regulation?
Emily Thornberry
I hear what the hon. Gentleman says, but it is palpable nonsense. We can have whatever standards we want in our own country, but if we are allowing those standards to be undermined by cheap imports that are made to different standards, we are essentially saying to our producers or our farmers, “You can keep our standards and you can go out of business.” Frankly, every other country in the world negotiates trade agreements in the interests of that country, but at the moment this country seems to be negotiating trade agreements in order to prove a political point, and that political point is that Brexit works. Frankly, I think that we should be putting our country’s interests first and foremost, rather than petty point-scoring. This is very dangerous behaviour.
Craig Williams (Montgomeryshire) (Con)
Will the right hon. Lady give way on the petty point-scoring point?
Emily Thornberry
The hon. Gentleman is an expert at it, and I will of course give way.
Craig Williams
I defer to the right hon. Lady’s knowledge of that. May I ask her directly whether she will go further, beyond the petty point-scoring, and tell us whether the Labour party supports joining this partnership or not?
Emily Thornberry
I will of course get to that in the later part of my speech and I hope that the hon. Gentleman listens carefully.
Sarah Owen (Luton North) (Lab)
Earlier, the Secretary of State said that people are knocking down the door to do business with Britain, but is not it time we were a bit fussier about who we let through our door, especially when it comes to genocide, forced labour, and people who want to trade with us who we should morally object to?
Emily Thornberry
My hon. Friend makes a good point that Ministers should remember a little more actively.
The Government are joining the agreement with no ambition to improve its deficiencies, no attempt to deal with its threats and no effort to make it work in Britain’s interests. The trouble is that, when someone goes into a negotiation looking as if they are willing to accept anything in the deal, they come across to the other party as if they will do anything to get it. That brings me to the second quote, by the Secretary of State’s Australian counterpart, Dan Tehan. He said of the recent negotiations:
“We’ve been very clear with the UK that… they’ll need a gold standard FTA with us if they’re going to have a realistic chance of joining the CPTPP”
because
“We have a very large say in what accession looks like”.
There it is: the man the Secretary of State threatened with an uncomfortable chair ended up holding her over a barrel.
Let us look at the consequences. As the price for UK access to the CPTPP and the 0.017% that will be added to GDP, the Secretary of State was willing to accept every single demand from Australia when it came to tariff-free, quota-free access for their cheap and cruelly produced meat.
Emily Thornberry
The Minister says, “Oh! Oh!” Does he know what mulesing is? I suggest that he finds out, then looks us in the eye and tells us whether there are cruel practices in Australia.
No wonder Dan Tehan said that the Austalian National Farmers Federation was “over the moon” when he told them about the deal he had struck, while farmers up and down Britain curse it as a betrayal. Kit Papworth is the director of a farm business in Norfolk—perhaps he is a constituent of the Secretary of State’s. He said:
“The deal is an absolute dereliction of everything that farmers have been promised… It is farmers being sold down the river once again… while agriculture… is being left… to die.”
Kerry McCarthy (Bristol East) (Lab)
I thought it was surprising that we did not hear more from Secretary of State, as a former EFRA Secretary, about farming standards. Does my right hon. Friend agree that the concerns that she has so eloquently expressed make it all the more important that we have proper scrutiny of the deal and not something that just rubber-stamps it at the last minute?
Emily Thornberry
That is absolutely right. I saw an article in The Daily Telegraph this week by Jeremy Warner, which said, “It is vitally important that FTAs are pursued in a transparent and accountable manner that takes fully on board the interests, fears and concerns of domestic constituencies and affected sectors. The battle for free trade needs to be won as much at home as abroad.” That is why we need to know whether we will get a proper debate and votes in this place. The Secretary of State has said nothing about whether Parliament will get a vote either on the negotiating objectives or on a deal at the end of the day.
Marco Longhi
The shadow Secretary of State quotes articles. Does she agree with the article in the Socialist Worker that states that protectionism will not protect workers’ jobs?
Emily Thornberry
No.
Let us move on to New Zealand and Canada. Having seen what has happened with Australia, they will surely demand the same deal for their farmers as the price of support for UK accession to CPTPP. Handshake by handshake, the future of British farming will be sold.
The threat to our country’s interests lies not just in what the Secretary of State is willing to do, or in the interests that she is willing to sacrifice as the price of admission to the agreement, but in what will happen once we are in the door. That brings me to my next quote, which is typically pithy and to the point, from New Zealand’s Prime Minister Jacinda Ardern. She said that investor-state dispute settlement “is a dog”.
When she inherited the CPTPP negotiations at the last minute in 2017, the new New Zealand Prime Minister was willing to jeopardise the entire process to demand that New Zealand be exempted from the provisions on investor-state dispute settlement. She did not want the threat of lawsuits in the name of wealthy foreign corporations restricting her ability to introduce policies for the protection of consumers, workers, the environment and public health policy. For the same reason, we have had no IDS—or, rather, ISDS—[Interruption.] Well, it was a Freudian slip. That is why we have had no ISDS provisions in any of the post-Brexit trade agreements signed by the Government with 67 non-EU countries, with the European Union and with Australia. So when it comes to CPTPP, why are the Government not simply following New Zealand’s lead and demanding an exemption from the provisions on ISDS? Again, it goes back to the big decision taken by the Secretary of State that what matters most is not minimising the risks of this deal, maximising the opportunities and making it right for Britain, but simply getting it done as quickly as possible, even if that means selling out our farming industry and exposing our country to the risks of ISDS.
It is apparently okay, though, because in respect of all of those risks the Government simply assert that we have nothing to fear. We have the same assurances with respect to food safety, online harms, patent laws, procurement rules, data protection, medicine prices, intellectual property and our NHS, and that is all without mentioning the 22 suspended provisions in the agreement, which the strategy document simply ignores. We are simply told that none of those provisions will be a problem for the UK and that we should trust the Government—we should trust the Government to protect our interests, even though they cannot tell us how. Instead of exemptions, we are reliant on assertions. Instead of amendments they offer us assurances. I respectfully say to the Secretary of State that we have had enough of the Government’s assurances when it comes to negotiations on trade, the Northern Ireland protocol, non-tariff barriers with Europe, and the betrayal of our fishing industry, our farming industry and our steel industry. We have had enough of being told by them just to take their word for it and everything will turn out fine and all our interests will be protected.
The reason this matters so much is because it is this Secretary of State who stands personally accused of saying one thing to the British farming industry and another for the sake of CPTPP. If she is willing to break her promises to the farming community that she represents, why would not she do the same to the health service on which we all depend? That is why, while the Labour party remains committed to the possibilities that joining the CPTPP offers, we will continue to demand a fresh approach to the accession process, starting with proper protection for our farmers and food standards, total exemption from the provisions on ISDS, and a complete carve-out for our national health service, patient data included.
Emily Thornberry
I am about to finish so I will not give way again.
I was talking about the importance of negotiating a deal where there would be specific demands and where there would be carve-outs. All those things may take more time than the Secretary of State would like and it may be a harder negotiation than those she is used to, but none of that should matter when what we are trying to do is get what is best for Britain.
Dr Liam Fox (North Somerset) (Con)
It seems a long time since 18 July 2018, when I first announced to the House that we were beginning the public consultation phase that would inevitably lead to where we are today, so I congratulate the Secretary of State and her Ministers on getting us to this point so expeditiously, and I thank all those at the DIT who have done so much to get us into this position, particularly Crawford Falconer and John Alty, who is to stand down as permanent secretary. I wish him all the best and give him my very grateful thanks for all the work he has done.
Especially in the light of the speech by the shadow Secretary of State against international trade, it is right to say why we believe in free trade. We believe in free trade because it allows countries to use comparative advantage within an international rules-based system for the benefit of their own people and those outside their own borders. It is essential for developing countries to be able to trade their way out of poverty in the long term, and the rise of non-tariff barriers among the world’s richest countries over the past decade is a disgrace that we should hear a lot more about.
As I have said before, in Q1 of 2009, only 0.7% of all the G20’s imports were covered by restrictive measures; it is now 10.3%. That is putting an almost insurmountable barrier particularly to small and medium-sized enterprises in developing countries. We need to get a grip on that because whatever we talk about in the aid debate we are counterbalancing in the restrictions that we are putting on in the trade debate. If we want to have a morally consistent policy on development, we need to deal with both sides of the equation.
Free trade is also about consumers. I want the incomes of working families in Britain to go further. I want them to have greater choice, and for them to be given greater information about the products that they buy so that they can decide for themselves how to spend their money, not so that the Government can determine what choices they can and cannot make. It is essential that we say that, because some people even in my own party seem to have forgotten why free trade is so important.
Marco Longhi
Does my right hon. Friend agree that consumers will therefore have cheaper access to white vans and St George’s flags, which particularly our self-employed make use of in the construction industry?
Dr Fox
I cannot think what my hon. Friend is alluding to, but it is certainly true that consumers will have access to far greater choice. Look at the range of consumer goods that we have—all sorts of white goods, not just vans. Look at the quality of what we have in terms of household appliances. They are cheaper and better quality, and they have a greater technology than they would otherwise. That is what free trade means. The trouble with free trade is that its benefits are very widely spread to consumers, whereas any difficulties to producers tend to fall on very narrow sectors and are therefore used politically by the Opposition to promote their anti-trade policies.
Dr Fox
I will in a moment. Five years ago this morning, those of us who campaigned to leave the European Union were awakening on that great historic day to realise that we had won the referendum and that Britain would have a very different future. The free trade policy that it allowed us was very specific in terms of the benefits that we could have: it would allow us to shape a policy in the interests of not only the United Kingdom but free trade, in which we as a country profoundly believe, or at least used to all believe, in the political consensus in this country.
It is a freedom to shape global policy that leads to greater liberalisation in all its forms. I am glad to see the Chair of the International Trade Committee present. He has heard me say this before, so I apologise to him for repeating myself, but there is a clear hierarchy in liberalisation. The greatest liberalisation comes from multilateral global agreements, which is where we should all be going; it is the gold standard. The next level down is the level of plurilateral agreements; if we cannot get multilateral agreement, we can at least make progress towards it with those who are willing to see liberalisation take place. The next level down is the geographical grouping, where countries can come together to create a more open market. Finally, there are the bilateral free trade agreements, which, although they are easier to get, tend to produce less in terms of liberalisation. It is important that we understand that there is a hierarchy in all of that.
John Spellar
The right hon. Gentleman knows that I am very supportive of trade and trade agreements. Equally, I was rather surprised by his response to the hon. Member for Dudley North (Marco Longhi). Should we not be encouraging people to buy white vans made in Luton, and trying to ensure that St George’s flags are made and sold in the United Kingdom?
Dr Fox
The right hon. Gentleman is quite right that we should ensure that as much is made in the United Kingdom as possible. The point is that consumers should be free to choose what they buy with their own money. If we can manufacture goods and services in the United Kingdom of the appropriate quality, and at the appropriate price, I am quite sure that British consumers would choose to buy those, but I do not believe in restricting the choice for British consumers because we are unable in certain sectors to produce those things.
Another important element of policy outside the European Union is our ability to help rebalance the global trading economy. That is why CPTPP is so important. The CPTPP, were the United Kingdom to join it, has about the same proportion of global GDP as the European Union minus the UK. It will provide us with an ability to rebalance within that. Why does that matter? It might help us get momentum in some of the areas that matter, where we were unable to get traction inside the European Union. We might get traction on a global agreement on e-commerce, for example, or an agreement on environmentally friendly goods—the environmental goods agreement—which is barely in existence or has any life at the moment. In this era, if we cannot agree to take tariffs off solar panels or wind turbines, what can we agree at a multilateral level? Putting our energies into groupings that may drive that forward is extremely important, not just for the UK, but beyond.
The final point that I want to make is that the real advantage of CPTPP is not what proportion of GDP it adds in value; it is strategic. CPTPP is primarily, in my view, a strategic alliance, and it relates to how we think about the issue of China. China promotes its agenda of state capitalism—though “state capitalism” is an oxymoron; capitalism has to be independent of state control—but, at present, sits inside the World Trade Organisation without having made the adjustments to market mechanisms that are required for the proper functioning of members inside the organisation. The measures that we have tried have not been successful in bringing China into a more acceptable position. The WTO has been unable to cope effectively with the abuse of state subsidies. The OECD has done a lot of work studying the data available across borders and looking at measurements of production, which offer some help, but the WTO seems incapable at present of dealing with the China question.
The United States was unable to deal with the China question through tariffs. All that President Trump’s tariffs on China did was reduce the trade deficit with China, but it did not reduce America’s trade deficit overall, because when consumers did not buy Chinese goods because they were too expensive in the United States, they bought them from elsewhere. The use of tariff policy to drive global trade in a particular way only results in trade distortion and diversion, exactly as we discovered.
If we were able to join CPTPP, there would be another prize, which the Secretary of State did not mention but I am sure she believes in: the ability to attract the United States back to the partnership. The decision by the Trump Administration to leave the trans-Pacific partnership was, in my view, a completely wrong decision. If we are able to get United Kingdom membership, the United States joining CPTPP becomes a lot more attractive to Members across the parties in Congress. The UK plus the United States joining CPTPP would take us to about 40% to 43% of global GDP, which is a much better counterbalancing measure to China than anything that we have seen so far.
I am therefore 100% behind my right hon. Friends the Secretary of State and the Minister for Trade Policy in taking this policy forward. Five years ago, we were on different sides of the debate in the European Union referendum, but there is nothing like the zeal of converts to take us forward. I congratulate the Secretary of State and the Minister of State—one of the finest Ministers I ever worked with—on taking this agenda forward. It is the right thing for the United Kingdom and, much more importantly, it is the right thing for global trade and to ensure that the developing world has a chance of finding a sustainable way out of poverty in the long term.
Madam Deputy Speaker (Dame Eleanor Laing)
After the spokesman for the SNP, I will come directly to the Chairman of the Select Committee. At that point, there will be a time limit of five minutes, but that will then reduce to three minutes.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
What a pleasure it is to follow the right hon. Member for North Somerset (Dr Fox). I feel that he overstretched himself by describing SNP Members as anti-trade, given that his Government and his party have overseen the first four months of Brexit and a 33% slump in exports to the EU from the UK. However, let me try to start on a point of agreement with the Secretary of State, who has now left her place. It is good to see the US tariffs on Scotch whisky dropped—that is welcome—but Scotch whisky should never have been put in such a position in the first place.
While any, even tiny, opportunity to make up some ground on Brexit losses should be explored, it is clear that no deal this Government can strike will make up for what Brexit has already taken away from us. It is clear that the potential positives of this proposal are minuscule and the risks are much larger. The Government’s very own figures—buried deep in the environmental notes—point to growth in their long-term forecast of just 0.08% to 0.09% of GDP over 15 years. That is scant reward for the trade-offs on control over regulations and standards required, and it is a drop in the Pacific compared with not only the lost trade for Scottish and other UK companies, but the massive increases in the cost of goods that they have incurred. The simple fact is that here we have a Government desperate to get free trade agreements for their own sake, while ignoring industry and the advice of trade experts.
Emily Thornberry
I am sorry to interrupt the hon. Gentleman, who is making a very interesting speech. Can I just ask him to look again at page 65 of the document? He cited the figure as 0.08%, but it is much lower, because the 0.08% includes Malaysia joining, and Malaysia has made it perfectly clear that it is very much having cold feet because of the ISDS provisions.
Drew Hendry
I thank the shadow Secretary of State for that clarification, and she is indeed right. There I was being generous to the Government about the effects; I will certainly try to learn the lesson there.
The Government have ignored industry and the advice of trade experts just to prove their own self-harming political point. They were warned that the precedents of the Australia deal would inevitably lead to other countries demanding the same capitulations, but they said that that would not happen. Now the New Zealand Trade Minister is on record demanding zero-tariff access to UK markets as a result, and of course others are following. In negotiations on the CPTPP, the UK cannot decline to align on too many areas, such as ISDS, agrifoods, consumer standards and more, and still expect to become a member.
In short, if the UK joins, the consequences are very likely to be disastrous. In all of the nations of the UK, the farming unions have stressed the importance of protecting the UK’s current high food and farming standards. After a calamitous few months for the food and drink sector across the UK, almost every organisation representing Scottish agrifood interests has written to the UK Government calling on them finally to take Scottish interests into account over negotiations with the CPTPP’s Australia.
Having failed in their duty over consultation with industry, devolved Administrations and regulators, the Government have of course failed to give this Parliament a meaningful vote, so let us ask the Government: will they bring forward a meaningful vote on the CPTPP? I will give the Minister the opportunity to respond if he would like to do so.
Drew Hendry
It is a no.
What assessment has been made of the failed TTIP deal, on which the CPTPP is based? It contains a TTIP-style regulatory co-operation chapter, risking the abandonment of standards through forums that were notoriously devoid of any scrutiny. The Tories have had plenty of opportunity to enshrine current standards of consumer protections—including for agricultural produce, pesticides and animal rights, and also for digital rights, workers’ rights, environmental standards and the independence of public services such as the NHS—yet they have failed to do so at every turn. The Home Secretary herself is on record as saying that Brexit was an opportunity for widespread deregulation, and of course she was not alone. It is easy to see why the Scottish public do not trust them over the warm words they put forward.
An investor-state dispute mechanism is a key provision within the CPTPP. It allows firms to sue Governments for measures that harm their profits. This can result in very negative impacts on the environment and regulation designed to combat climate change. There is also evidence of ISDS being used to challenge health provision and labour rights. Will the Minister confirm that the UK will not agree to ISDS as part of the CPTPP? It is likely that CPTPP membership would see a rise in the amount of pesticides and antibiotics in food imports. Thousands of times the amount of carcinogens such as iprodione are allowed in produce from CPTPP members as they are in current UK equivalent foodstuffs. One hundred and nineteen pesticides currently banned in the UK are allowed for use by certain CPTPP members. How can the UK Government exclude those products and guarantee that they will never appear on our supermarket shelves if they sign up? Of course, they cannot. Malaysia, a CPTPP member, is actively manoeuvring to reverse the ban on palm oil extracts, which are notorious for causing deforestation, leading to increases in greenhouse gas emissions.
John Spellar
Can the hon. Member tell us which countries he thinks Britain can do trade deals with?
Drew Hendry
There is an entire continent in Europe that we could be doing trade with. This is the thing: we have had a 33% drop in trade with the EU in the first four months since Brexit was implemented in January, and CPTPP membership would be a literal drop in the ocean in trying to replace that trade.
As I was saying, palm oil is notorious for causing deforestation, leading to increases in greenhouse gas emissions. Will the Minister therefore confirm for the House that the UK will enforce a ban on palm oil? What climate change assessments have been made of the impacts of the deal on the UK’s climate change commitments?
Currently, 85% of the UK’s exports to CPTPP members are to Australia, Canada, Japan and Singapore, and the UK already has free trade agreements with seven of the 11 members through agreements made while the UK was a member of the EU. The only real driving force for Brexit Britain to join a trade alliance on the other side of the world is political. It is not economic. Scotland has been dragged out of the EU against its wishes and, as I have said—I will repeat it again—in the first four months of leaving that single market, UK trade exports to the EU have plummeted by 33%, trade for businesses has been hammered, and the costs of goods for industries, including distilleries, have shot up by 20%.
David Linden (Glasgow East) (SNP)
My hon. Friend made the point earlier about welcoming—it would be churlish not to do so—the dropping of tariffs on Scotch whisky. He will be aware that I am the chair of the Scotch whisky all-party parliamentary group. Will he join me in calling on the Government to respond to the alcohol duty review that they have been sitting on for six months? The Scotch whisky sector will need as much support as possible to get back on its feet, so will he join me in calling on the Treasury Bench to get on with it and give the sector more support?
Drew Hendry
I absolutely concur with my hon. Friend the chair of the Scotch whisky all-party parliamentary group. The past four months have been devastating. In that same period, Scottish fishermen have been sold out, Scottish farmers have been betrayed, and powers to protect our regulations and standards—and even our NHS—have been steamrollered by this Government. The agreement does nothing to rectify that. That is why more people every day are realising that Scotland needs to be an independent country to make the right choices to protect our food and drink industry, our farmers, our crofters, our NHS and our people.
Madam Deputy Speaker (Dame Eleanor Laing)
With a time limit of five minutes, I call Angus Brendan MacNeil.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Tapadh leibh, Madam Deputy Speaker.
I also thank the Secretary of State for the debate. It is good to see the right hon. Member for North Somerset (Dr Fox), the former Secretary of State, in his place. The International Trade Committee had many interactions with him in his old role.
Dominic Cummings was right, or at least partially right, in some of his utterances this week. In particular, he was correct when he said that politicians have been obsessed with trade deals that are not that significant when it comes to economic growth and drawing lines on maps. I am not sure what other howitzers he will be sending the way of the UK Government, but I do not think that will be the last.
When we come to trade deals, trade, the issue of Brexit and the comprehensive and progressive agreement for trans-Pacific partnership, the important things are numbers. When we look beyond the flowery language, we see that even the Government’s own figures show we are talking about 0.08% of GDP—that is £1.8 billion. We have to take that in the context of Brexit, which is a 4.9% damage event to the UK economy. It is like saying, “I had £4.90 and I threw it over my shoulder, and now I’m scrabbling around on the other side of the world for 8p”. That is the ratio difference we are talking about. The Australian deal is worth 2p, and an American deal would be worth 20p. A New Zealand deal might give us another penny and the Canadian deal is worth about 3p, so all in all, we have thrown away about £4.90 and are hoping to get back, with what I have talked about there, 30-odd pence.
Emily Thornberry
The points that the hon. Gentleman is making are very important, and Government Members ought to listen to them carefully. Quite a lot has been made of the statistic of a 65% increase in trade projected for this region by 2030, but on close examination of the document, is it not right that that projected increase in trade is one that Government figures show would happen irrespective of whether the UK joins the CPTPP?
Angus Brendan MacNeil
The right hon. Lady makes that point in her own way, and I do not want to go into it too much given that the clock is still ticking.
The comprehensive and progressive agreement for trans-Pacific partnership is not actually as comprehensive as it seems. Only seven out of the 11 countries have actually ratified it. Malaysia, Chile, Peru and Brunei have not. When we take out their GDP contributions, the figure goes down to 0.5% of GDP, or 5p that is available from the CPTPP to recover the £4.90 that has been lost by Brexit.
That is as far as we can go with the good news. I am now going to have to give the House some bad news. This morning, Neale Richmond, the Irish TD, who is never off our screens and is a fantastic representative of Ireland, brought to my attention in a tweet that the Republic of Ireland now has, for the first time ever, a trade surplus with the UK, as UK exports to the Republic of Ireland are down 47.6%. That is £2 billion of trade gone. Remember that the UK was talking about a £1.8 billion increase from the CPTPP. With Ireland alone, the damage of Brexit has wiped out what could be gained from the CPTPP.
There may be some good news in Ireland, depending on people’s constitutional stance. North-south exports are certainly up and are making for a far more integrated economy, with a 22.4% increase in exports to Northern Ireland from the Republic and a 44.2% increase in imports to the Republic from the north. That is against the background that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) pointed out of the 33% fall in trade that has been truly damaging the economy. The Secretary of State said earlier that we were putting our eggs in one trade basket. It looks as though we do not have any eggs in any trade basket, the way it is going at the moment. Certainly, from my talks with the British Egg Industry Council and the British Poultry Council, it is very much a real-life chicken-and-egg situation as to which way this is going.
I also want to point out some privacy issues. I have had correspondence from constituents that I want to bring to the Government’s attention, and I am sure that they know what I am talking about—making sure that people’s data is actually safe and is not traded around to second, third and fourth parties in a global context.
I also want to raise the issue of patent attorneys. UK patent attorneys are a fifth of the number of patent attorneys in the European patent convention, and they do a third of the work at a value of about £746 million. Let us take that away from what is left of the CPTPP—the 0.5%, or £1.1 billion. If this damages the UK patent attorneys’ relationship with the European patent convention, it would just about negate everything from the CPTPP, and there is a very real possibility that this could happen. UK patent attorneys are flagging this up constantly. The Government should be well aware that we are now talking about not a 0.8% or a 0.5% gain from GDP, but perhaps only a 0.2% gain. So we are down to 2p after throwing away the £4.90 that I referred to earlier.
What are we left with? We have thrown away £2 billion with Ireland, and might gain a few hundred million with the CPTPP. We are risking our farming and crofting trade with Australia and much else. We have walked away from our partners next door, as my hon. Friend pointed out. It might be strategic, but what do we say to people who are losing their jobs and to the businesses that do not grow because of this economic damage? I do not think the Government have an answer. This appears to be a Government wanting to come back waving bits of paper, much like Neville Chamberlain, and shouting “Trade deals in our time”. It is not good enough for anybody who is trying to make a living up and down the nations of the current UK.
Madam Deputy Speaker (Dame Eleanor Laing)
With a time limit of three minutes, I call Craig Williams.
Craig Williams (Montgomeryshire) (Con)
I shall speak ever quicker, Madam Deputy Speaker.
It is a great pleasure to follow the Chairman of the International Trade Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil). I serve on that Committee and I look forward to scrutinising the detail of this, both in private and in public sessions, with him. It is also a great pleasure to follow my right hon. Friend the Member for North Somerset (Dr Fox), who set out his vision and made some important points, which Members on both sides of this Chamber should reflect on, about the developing world and how we can help it through trade and liberalisation. His point struck home about how hollow the international aid debate is when we do not help our partners and fellow democracies around the world on the back of trade.
It is important again to look at the strategic context for this CPTPP. I am proud to have got that out in one go, as I have been practising—the International Trade Committee helps with that. The context is a £9 trillion market. In 2030, it will represent 65% of the middle-class consumers of the world, in places where meat consumption and meat imports are going up, which is important for a rural constituency such as mine. The demand for the fifth quarter—I will not go into details about that part of the carcass, which we do not consume and do not want in this country—is over there.
I am struck by the fact that this partnership will be good for the premium products that the farmers in my constituency produce—the dairy, Welsh lamb and beef. The demand and consumption is increasing in the part of the world we are talking about, not decreasing as it is in the European markets, and that is where we need this country to be. This is where I would like Ministers, including my right hon. Friend the Minister for Trade Policy, who will be responding to this debate, to be focusing for our agricultural communities. It is worth again stressing the strategic context of this deal; these are the growing markets where we want to be sat around the table. This is where I want Welsh lamb to be promoted very vigorously by Her Majesty’s Government. This is where we want Scottish whisky to be promoted and sold. This is the access we want.
Craig Williams
I will discuss that with the Chairman in many debates, no doubt. However, my last 30 seconds are coming to an end, so all I will do is wish the Front-Bench team well in progressing this partnership. My Welsh farmers want access to this market. I wish him well in scrutinising it as it goes forward.
John Spellar (Warley) (Lab)
I am a strong believer in free trade—I think it is a very good idea. However, the priority has to be the terms of the deal, not just the fact of doing a deal. It is the same as in business: too often, for the advisers, the lawyers and often even the chief executives, it is doing the deal that matters, but for the business and its workers it is the terms of the deal that matter. This is also about Government managing the follow-through. Let us be clear: one reason why free trade has a bad name in this country and in the United States, but particularly here, is that it has become a free-for-all. For the British Government, we buy trains, boats, military planes, ambulances, police cars and so on from anywhere in the world. No other country behaves like that. That is about decisions of Ministers. Frankly, unless Ministers develop some backbone and start to instruct their civil servants to support British industry, trade will continue to be mired in controversy in this country.
That is a great shame, because trade has made a transformation in the lives of hundreds of million—probably billions—of people around the world, particularly in China and Asia. It has raised living standards and aspirations. Barriers to trade, financial, physical or administrative, reduce living standards, as we are finding out and as a number of colleagues have mentioned. When talking about trade, we should remember that we have a massive trade deficit with the EU, which is why it should be negotiating more realistically with us—our Ministers should not be grandstanding, and should also be negotiating realistically with the EU.
We also have to recognise that all change comes with associated costs and disruption. Look at the industrial revolution, the agricultural revolution and the corn laws in this country, which caused massive issues. We should learn the lessons of history and look at how we manage the transition, but that will require an active role for the Government; I know that is against their ideology, but it is absolutely necessary in order to deal with this fast-changing world.
Finally, there are a lot of problems all around the world with the unequal distribution of income arising from change, and particularly from the current technological revolution. The best way to deal with it is to support workers’ rights in these agreements and support trade union rights and free trade unions. Joe Biden has said that very clearly, but the message has to get through to our Government. There is a new sheriff in town in Washington, and we ought to be supporting him in backing workers’ rights around the world.
Damian Collins (Folkestone and Hythe) (Con) [V]
The UK is one of the world’s greatest centres for digital trade, a sector that is vital to the future success of our economy. We want to attract investment and talent from across the globe and open up markets to the services that British companies provide.
Data is the fuel of the digital economy, driving everything that people and businesses see and do online. We need to work towards common standards among nations in how data is gathered, stored and processed, which can give citizens certainty about the security of their personal data when they share information with businesses online, as well as when they use apps on smart devices and cloud storage systems. We know that people care about these issues: more than 90% of iPhone users who have been given the choice have opted out of allowing apps such as Facebook to access data from non-Facebook apps on their devices.
At the recent G7 summit, the Government led successful negotiations between nations to create a business tax regime that is fit for the digital world. Trade agreements can also be used to help to establish common standards for data protection and processing. Laws affecting digital regulation and data protection should be set by Parliament rather than in trade agreements, which is why I spoke against the proposal by President Trump’s Government to include in trade agreements American legislation limiting the liability of tech platforms for the content posted on their sites—a measure that would restrict our ability to legislate to improve online safety, for example. That had formed part of the US’s agreements with Canada, Japan and Mexico, but I was pleased to receive assurances from the Secretary of State that it was something that we would not accept.
The CPTPP agreement seeks not to impose new digital and data policy, but to create certainty for citizens and businesses alike about the safety of their data and the interoperability of systems. I know that the Department for International Trade has closely consulted the Information Commissioner’s Office on the CPTPP’s terms and the obligations that it creates; in the ICO’s opinion, it is compatible with UK data protection law. It has also noted that a number of CPTPP member countries have already been granted data adequacy decisions under the EU’s GDPR, including Canada, Japan and New Zealand. The CPTPP also contains provisions similar to those in the UK-Japan agreement recognising the importance of data protection to electronic commerce and committing all parties to implementing a data protection framework that takes relevant international standards into consideration.
The ICO believes that it is possible to have separate but complementary data adequacy processes with international trade agreements. In Asia-Pacific, such agreements tend towards greater reference to international data transfers and the free flow of data in agreements, particularly to address risks of data localisation. It is important, however, to properly consider and understand the implications of any provisions in trade deals that cover privacy and data protection, particularly with regard to the processing of UK citizens’ data in a third country.
Sarah Olney (Richmond Park) (LD)
The UK’s application to join the comprehensive and progressive agreement for trans-Pacific partnership is founded mostly on its diplomatic advantages rather than on its advantages for international trade. Strengthening our ties with established and developing free market economies and liberal democracies is a positive goal in itself, and it is right that we should think about how we can leverage our international trade power to build those partnerships, but we need to balance our diplomatic interests with our economic ones.
Joining an existing economic partnership whose rules have already been developed and cannot be changed for our benefit is fraught with risk. Before accession, there should be a full consultation, debate and vote in Parliament so that every part of this country and every economic sector can review the risks and benefits and contribute to the decision. Greater scrutiny leads to better decision making. A better and more informed awareness of the risks will surely help us to better leverage any advantages.
The principal risk and, as I understand it, the reason that the Biden Administration are reluctant to sign up to the CPTPP is that the rules governing membership inhibit national Governments from pursuing their public policy objectives. That inhibition is primarily through the use of investor-state dispute settlements, which the CPTPP allows. ISDS allows private companies to sue national Governments if public policy limits their ability to make profits. ISDS has been used to challenge important environmental regulations, including water pollution controls in Germany, a ban on fracking in Canada and various regulations on mining in east Africa and South America. There is also evidence of ISDS being used to challenge health provision, labour rights and other important regulations. ISDS was used in Egypt to challenge an increase in the minimum wage. Philip Morris sued Australia for attempting to introduce plain-packaged cigarettes and Slovakia was sued for attempting to nationalise part of the health service.
The risk to the UK is clear. The need for us to take urgent action to tackle climate change has been spelled out for us once more this morning by the Climate Change Committee in its new report. This country is not on track to meet our net zero commitments without urgent further action. There is public pressure and political consensus on the need for that action and we should not put ourselves in a position where action can be undermined by carbon-emitting companies looking to make profits. There is too much at stake.
The CPTPP places obligations on members to recognise each other’s standards as equivalent. This is a huge concern for those who value the UK’s high standards of agriculture and food safety. Enabling the import of agricultural and food products into this country that do not meet our existing thresholds or welfare and quality will weaken our domestic producers.
I was going to make some observations about data, but the hon. Member for Folkestone and Hythe (Damian Collins) who spoke just before me covered that really well, and I merely endorse his comments.
If we were firmly focused on our diplomatic and trade interests, we would not have left the single market or the customs union. As we try to mitigate the various impacts of those Government decisions, we need to be honest about the trade-offs required from different courses of action. Are the risks of entering into this partnership worth the 0.017% uplift in GDP? The public deserves a proper scrutiny of these plans, so that we can make the best decision in the national interest.
Virginia Crosbie (Ynys Môn) (Con) [V]
It is a pleasure to speak in this debate, and, as the Member of Parliament representing Ynys Môn, a rural constituency with a large farming community, I am keen to see the UK develop its trade partnerships across the globe outside of the constraints of the EU.
Recently, I held a meeting in English and in Welsh between the Minister of State for Trade Policy and local farmers here on Anglesey specifically to discuss our new trade partnerships. Questions had been raised by individual farmers, as well as local representatives of the young farmers, the National Farmers’ Union and the Farmers Union of Wales about the impact of trade deals on their business. My farmers welcomed the opportunity to discuss the CPTPP, what trade partnerships can offer them, and the opportunities to build the British brand overseas, to market our produce as being of exceptional quality and, of course, to export more British food overseas. Beef, sheep and dairy are the mainstay of many farmers here on Anglesey and the CPTPP will open up a wealth of opportunity for them across the Asian, American and Australasian continents, with potentially lucrative markets for our produce, including dairy products—in particular, cheeses to Canada and Australia, pork and poultry to Vietnam, beef to Japan, and mutton to Malaysia.
Peter Williams, one of my local sheep farmers, has extensive experience of working in the middle east, and he shared how our lamb and mutton can be differentiated to make it more attractive to that market. Our meeting highlighted 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 questioned the Minister about branding for British and Welsh produce and are keen to ensure that agreements such as the CPTPP are aligned with the Government’s proposed campaign to raise awareness of brand Britain. However, they also had concerns about the potential opening of the UK market to cheaper, lower-quality imports from overseas, and the Minister was keen to reassure us on this point. When the Agriculture and Trade Bills passed through the House, the Government made a commitment to upholding our standards and not opening the floodgates to substandard products, and the Minister reiterated that commitment. The Government have already stated that animal welfare and food production standards for imports will be at least equivalent to those that we enforce in the UK. For the avoidance of doubt, this means that we will not be accepting chlorinated chicken or growth hormone-fed meats.
By protecting our high standards and highlighting all that is unique and special about UK produce, we can use agreements such as the CPTPP to support and grow our farming communities on the domestic and global stages.
Carla Lockhart (Upper Bann) (DUP) [V]
It is right that we in the UK seek to bolster our trade relationships across the world to boost our economy, create jobs, promote growth and benefit from exit from the European Union and the freedom that offers. That said, we should ensure the standards that we enjoy and value are not lessened because of such arrangements. In my constituency, I have many small family farms that spend each and every day working hard but are weighed down financially and by the time commitment needed to produce food to the highest standards.
Our farmers can truly boast of the safest food, with world-leading environmental standards, animal welfare standards and traceability from farm to fork. It would be wrong if trade deals and accession to the trans-Pacific partnership brought with them a lowering of those standards through the opening of our markets to cheaper products produced to lesser standards and with a negative impact on our environment. There is much focus now in the UK on the carbon footprint of farming. It would be terrible to impose targets on our farmers while we ship lesser product from the other side of the world.
These arguments are well rehearsed, and my colleagues and I have made them before in this House as we debated the Agriculture Bill and the Trade Bill. We need the Government to live up to their commitments that our farmers would not be sacrificed in the quest for free trade deals and that the standards we enjoy in the UK at considerable cost to our agriculture industry will not be diluted by new trade agreements. I recognise the opportunities—opportunities that a range of industries, including agriculture, wish to seize upon—but the Government must honour the commitment to farming families across the United Kingdom.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to follow the hon. Member for Upper Bann (Carla Lockhart). Five years ago yesterday, I voted to leave the European Union. Newcastle-under-Lyme voted to leave the European Union, and so did the whole of Britain, so eventually we did, no thanks to some Opposition Members. It was never about retreating into an island fortress, as some people like to suggest, and it was never about retreating from free trade. In fact, as the famous Spectator cover had it, for many of us it was about getting out and then into the world.
CPTPP is the sort of organisation that British people thought they were joining in 1973 and that they voted to join in 1975: the common market, as it was back then, where countries enforced their own laws, but there was not enforced harmonisation. Unlike the EU, by joining the CPTPP—I hope we will do, and I welcome what the Secretary of State said in her speech about the progress we are making—we will retain control of our borders, our money and our laws, and we will secure the growing opportunities, including: increased trade and investment opportunities; the opportunity to diversify our trading links and our supply chains to increase our domestic security, especially in the wake of what we have seen with the pandemic and other threats around the world; and, the opportunity to turn the UK into a global hub for free trade. That is a vision I hope we can all get behind.
Angus Brendan MacNeil
The hon. Gentleman is talking about free trade. I mentioned in my speech the damage to trade with neighbours in Ireland, for instance, but we used to trade very freely—with no paperwork, no hurdles and no hassle—with the 27 other member states of the European Union. How many countries across the world can we now trade with in the same way?
Aaron Bell
I thank the hon. Gentleman for making that point. I think he would accept the point that I have made that exiting the EU was not about wanting to retreat from free trade. I would rather we had been able to get a better deal with the European Union, but it was not interested. A lot of the time, it seemed that the EU wanted to punish us for Brexit to put other people off from doing the same. I am afraid it was aided and abetted by Opposition Members who met the EU when we were negotiating, so I will not take any lessons from the Opposition today about negotiating this agreement.
As the Secretary of State said, some of the richest opportunities will come from the Asia-Pacific area, with £9 trillion-worth of a growing middle class for our exporters. These include exporters in Staffordshire and Newcastle-under-Lyme such as global British icons like JCB, companies in my constituency like Doulton, which sells water filters to the growing markets in developing countries, and niche smaller start-up companies like the Staffordshire Gin Company. We have heard a lot about whisky today; let us talk about gin. The Staffordshire Gin Company is already exporting to Singapore. and this trade deal will reduce its tariffs. I invite the Minister and the Secretary of State to come up with me for some quality assurance of the Staffordshire Gin Company’s products. I am sure we could have a very good session there.
But I do not just want to talk about the benefits for our exporters and our producers, because, as my right hon. Friend the Member for North Somerset (Dr Fox) said so eloquently, free trade is a win-win, but the true benefit is to consumers. Companies and producers are not there for consumers to service; they are there to service the consumers. It should be up to people to make their own choices to have lower prices, whether the goods are supplied from Newcastle or New Zealand. That is the true prize of free trade—the true sense of comparison of markets and also the benefits for developing countries that he and my hon. Friend the Member for Montgomeryshire (Craig Williams) spoke about. We must not lose sight of the benefits to consumers. They may be more diffuse—perhaps a few pence off the weekly shop—but that adds up in a community like Newcastle-under-Lyme. That is the real, true benefit of this. We should obviously focus on the benefits for our exporters and the potential jobs that will be supported, but whenever we talk about free trade we must not lose sight of the real reason for it, and that is to make people’s lives better—consumers both at home and abroad.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
UK membership of the CPTPP would be a significant achievement for post-Brexit trade and open up a major export market for exporters in Scotland and across the UK, presuming that it does not lead to a decline in the high standards for goods and services that we currently possess and does not undercut our industries with lower-quality goods. In 2019, UK exports of goods and services to the signatory nations of the agreement amounted to £58 billion, or 8.4% of all UK exports. In the light of the ongoing Brexit-related trade disruption, engagement with this market is especially crucial in opening up new markets and diversifying our trade.
However, it is essential not to forget some of the possible costs of entry into the agreement and to ensure that as we sign these important trade deals we do not compromise our high standards of food safety, animal welfare and environmental protection. The farming industry has been keen to emphasise that unshackled trade with countries that have lower standards on agricultural produce poses a real threat to the industry unless rules on standards are clearly enforced on imports. In February, Mark Williams, chief exec of the British Egg Industry Council, emphasised that a significant percentage of the cost of egg production in the UK comes from the high food standards expected of domestic producers via existing legislation. Without these standards being enforced on imports from countries that the UK has free trade agreements with, we could see our farmers substantially undercut by low-standard produce. Mexico, one of the signatories, is one of the world’s most significant egg producers, with some 160 million egg-layer birds kept mostly in cages, with no significant national hen welfare legislation.
Another matter the Government must consider carefully is the investor-state dispute settlement mechanism. In accordance with chapter 9, section B of the agreement, the UK Government would be required to accept an ISDS arbitration mechanism. Although some signatories of the agreement have won derogations from this rule via bilateral side instruments, the UK, according to many trade experts, including the UK Trade Policy Observatory at the University of Sussex, is unlikely to be able to secure for itself such a derogation as existing members are keen to ensure compliance with existing CPTPP rules.
Due to the catastrophe of Brexit, our exporters are being denied the unfettered access to the EU’s single market that they long enjoyed. For the Scottish and UK economy to prosper, we must continue to act to secure new markets for their trade, as I know the Secretary of State has been doing. However, the Government must take on board these serious concerns about our regulatory autonomy and food standards when seeking to gain access to these markets. Our industry and environment alike depend on it.
Mr Steve Baker (Wycombe) (Con)
We live in interesting times, and I do not doubt that, whether it is in 100 or 1,000 years, historians will look back and record that these were times of great tumult—from the global financial crisis, through the unseating of a number of leaders around the world and Brexit, through to what I fear will be the next financial crisis, as inflation comes in and causes problems for bond markets, at which point we will have a great moment of decision. I believe that in that decision we will crystallise a great and long-standing crisis of political economy—how we are governed and how power is constructed so that we can deliver free trade and prosperity for all and raise the standard of living for everyone.
Whether people like it or not, the UK rejected the idea of political integration to deliver free trade within customs unions and harmonised regulations. The British public rejected it, not only in the referendum but in subsequent elections. This is where the CPTPP comes in and is so important. Yes, it is about trade, but it is about more than that; it is about strategy. It shows how we can be more prosperous, more free-trading, in a way that retains that crucial right to regulate.
I spoke for 15 minutes in a debate on 21 April, and I am very grateful to the Minister for Trade Policy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), for responding. I do not propose to repeat all of what I said, but I said in particular:
“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.”—[Official Report, 21 April 2020; Vol. 692, c. 260WH.]
That is what I am looking to the Government to deliver.
I mentioned Taiwan in my speech. I would like to see Taiwan accede to the CPTPP along with us, together with the USA. If a number of accession countries joined, we could end up creating a new free-trading platform containing over half of global GDP. That would create a great force for good in the world.
Having recently met the Taiwanese ambassador, I am inclined to suggest to my right hon. Friend the Minister that he supports Taiwan’s accession to the CPTPP. Would he also look into proposals that Taiwan has made to the Government to deepen our trading and investment relations specifically? Given Taiwan’s very important semiconductor industry, it seems to me in the national interest that we should deepen and strengthen that friendship.
Finally, let us look at what a country as progressive as, presumably, any Opposition Member could wish—New Zealand—says in summarising CPTPP and the environment. One of its websites points out:
“The Environment chapter includes two key general commitments that underpin mutually supportive trade and environmental policies.”
It explains that CPTPP parties will effectively enforce their environmental laws.
As I run out of time, I recommend the website. It shows just how high-standards this agreement is.
Richard Graham (Gloucester) (Con) [V]
It is great to be the tail-end Charlie of this debate on the CPTPP. In this year of the Indo-Pacific pivot, the Government have already made huge steps forward to strengthen our partnerships across one of the world’s most exciting areas. We have a new trade deal with India, which by the way, is our second-largest investor over the last 12 months, with inward investment up 25%, and a significant knock-on impact on our jobs. There is the joint economic trade committees with Thailand and Indonesia, the agreement to have dialogue partner status with the Association of Southeast Asian Nations, the first ever completely new independent free trade agreement with Australia, and one coming up with New Zealand, and now agreement for the CPTPP trade negotiations to start.
Some will—and indeed have—poured scorn on the differences that each of those steps will make individually, but collectively it is very hard to dismiss the fact that the overall impact of the Indo-Pacific pivot is already considerable and the opportunities ahead even greater. The CPTPP with 11 countries is already a large market, with supply chain diversification benefits from its rules of origin, but the potential is there for more than four ASEAN members to join, and South Korea as well; and of course the biggest of all would be the US, which would bring an area of huge importance to the free-trading world.
Yes, of course, as we go forward, the Government will need to address the investor dispute resolution and agricultural concerns of this House and our constituents, but I hope that Her Majesty’s loyal Opposition will not continue to peddle the myth that the NHS will somehow be auctioned to a fictional Pacific region buyer. Let us instead recognise that trade is good, that it will benefit our exporters and our consumers, that the trans-Pacific partnership is a huge step forward in our strategic direction, and that the potential is absolutely the right one for the benefit of all parts of the United Kingdom.
Bill Esterson (Sefton Central) (Lab)
If all the existing members of the CPTPP ratify the agreement, we will increase our total trade by £3.3 billion. That is quite a lot less than £9 trillion. To put it in context, that total estimate of £3.3 billion equates to about a third of our annual trade with Luxembourg, and £1.7 billion of exports is about 15% less than we export to Kazakhstan each year. Joining the trans-Pacific partnership will produce an increase in GDP over 15 years of just 0.08%, and if Malaysia maintains its refusal to ratify the agreement, as it is threatening to do, that will fall to 0.017%. In real money, that is £400 million, so I suppose the Secretary of State could cover the cost of two new royal yachts instead of one. The reason that the projected increase in trade is so small is, of course, that we already have trade deals with seven of the 11 CPTPP countries, with two more on the way with Australia and New Zealand. The truth is that the extra benefits from joining were always going to be very small. Before the Minister repeats the projected figure of a 65% increase in trade by 2030, he would do well to remember that the increase projected by his Department is regardless of whether we join the CPTPP or not.
The Secretary of State puts the CPTPP at the top of her list of priorities, but where, as my right hon. Friend the Member for Warley (John Spellar) said, is the action on standing up for British industry and jobs? We have a steel industry that faces an existential threat because of her inaction. It contributes £2.1 billion directly to GDP and another £2.7 billion indirectly, as well as providing 34,000 well-paid skilled jobs in our regions and a further 42,000 jobs in supply chains. That represents a £4.8 billion contribution to the UK economy, as against a possible maximum benefit from joining CPTPP of just £1.8 billion after 15 years.
The impact on our economy and our steel communities of losing the British steel industry dwarfs the impact of joining the CPTPP, yet the Secretary of State continues to give all her priority to the latter agenda while resolutely ignoring the former and voting against Labour measures to defend the industry from total ruin. There is still nothing from the Secretary of State on the catastrophic threat to the steel industry from ending the safeguards, which run out next Wednesday. What a disgrace that the International Trade Secretary chose not to use today’s parliamentary time to introduce the emergency legislation needed to save the steel industry. Think of the 76,000 people who work in the steel industry and their families, for crying out loud!
There is a more direct connection between CPTPP and steel, so when the Minister responds to the debate, can he tell us how the Government will ensure that our membership of CPTPP is not used by China as a back-door route to dump steel on the UK market through Vietnam? What specific provisions will the UK Government negotiate—if they are going to negotiate anything—to prevent CPTPP from enabling the dumping of steel in the UK? Finally, will the Government take the action needed by next Wednesday and save our steel industry?
The Minister for Trade Policy (Greg Hands)
We have had a good debate, if a little short. Joining the great global partnership of CPTPP promises to unleash a wave of trade-led growth in our country, generating jobs and delivering prosperity to every part of the UK. The launch of negotiations for our accession is an important moment for Britain as an independent trading nation. It shows that, once again, major economies want to do more business with the UK and that it is possible to strike ambitious trade deals that go further than those negotiated by the EU. The CPTPP is a free trade area comprising 11 nations that account for 13% of global GDP, worth £9 trillion, with a combined population of 500 million across four continents. By welcoming the UK into its fold, the CPTPP will become even stronger, its share of GDP rising to 16% and gaining an even louder collective voice on the world stage in pursuit of its shared priorities. The strategic case for this was well made by my right hon. Friend the Member for North Somerset (Dr Fox), my hon. Friend the Member for Gloucester (Richard Graham) and others as being important for the UK not just in trade but also in terms of wider strategy.
As the Secretary of State said earlier, it shifts the UK’s economic centre of gravity towards faster growing parts of the world such as Asia, where 65% of global middle-class consumers are expected to live by 2030, and the Americas, and there are great opportunities in this for UK agrifood, a point well made by my hon. Friends the Members for Ynys Môn (Virginia Crosbie)—I was delighted to meet her farmers a couple of weeks ago—and for Montgomeryshire (Craig Williams) and the hon. Member for Upper Bann (Carla Lockhart). It is also a great opportunity for Staffordshire gin, a point made by my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell).
Britain would become the first new member of CPTPP since it was established in 2018, and other significant economies such as the Philippines, Thailand, Taiwan and South Korea are looking to follow suit. My hon. Friend the Member for Wycombe (Mr Baker) mentioned Taiwan and he will know that I am a 30-year-long enthusiast for Taiwan; we have Joint Economic and Trade Committee talks later this year, but I am always open to better trading links with Taiwan. This is a high-standards agreement between sovereign nations—a point made by my hon. Friend the Member for Newcastle-under-Lyme—and a business-focused deal that removes tariffs on 99.9% of the goods we export to CPTPP members and reduces other barriers, particularly for our vital services industry.
Turning to the content of the debate, the shadow Secretary of State, the right hon. Member for Islington South and Finsbury (Emily Thornberry), spoke for twice as long as the Secretary of State but it was all the usual doomsaying and talking the country down. As my right hon. Friend the Member for North Somerset said, she is the shadow Secretary of State against international trade. She has had three years to consider whether Labour supports this deal—three years—and she still has not made up her mind. Perhaps, however, we should not be surprised, because Labour could not make up its mind on deals with the component countries—the members. Labour abstained on Japan, is opposed to the Australia deal and against Singapore, and split three ways on the Canada deal. The right hon. Lady talked about the NHS, food safety and animal welfare; nothing in the CPTPP threatens our standards and it is clear that there will be no compromise on our standards from our manifesto.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) again went on endlessly about Brexit, as did his party colleague the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), but he and the SNP have never supported any trade deal ever so I do not think that whatever I say to him today is going to make him support it. He said that the UK had not agreed to join the investor-state dispute settlement. First, the UK has never lost an ISDS case and, secondly, I recommend having a look at the details. Labour put out a press release a few weeks ago saying that it decries the ISDS provisions in the Australia deal, but there are no ISDS provisions in the Australia trade deal. We heard a very considered contribution from my hon. Friend the Member for Folkestone and Hythe (Damian Collins); he spoke in favour of the deal, and I agree with him that we would not sign up to the provisions that are included in the United States-Mexico-Canada agreement. Turning to the Lib Dems, Vince Cable was all in favour of these deals when he was in the coalition Government and the Minister for Trade, and he was actually in favour of ISDS proposals as well.
There are specific benefits for the cutting-edge sectors that are shaping the world of tomorrow such as AI, services and technology, and the deal will allow us to work closely with CPTPP members on modern digital trade rules, business travellers, slashing red tape, agrifood and more. When negotiations conclude, the UK’s accession will be subject to the Constitutional Reform and Governance Act 2010 scrutiny process alongside the statutory Trade and Agriculture Commission report and I commend UK accession to CPTPP to the House.
Question put and agreed to.
Resolved,
That this House has considered the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Madam Deputy Speaker (Dame Eleanor Laing)
I will now suspend the House for three minutes in order to make arrangements for the next item of business.