Trade and Agriculture Commission: Role in International Trade Deals

(Limited Text - Ministerial Extracts only)

Wednesday 21st July 2021 Westminster Hall

[The Minister for Trade Policy (Greg Hands) [V]]

I apologise for having to join you virtually, Ms Bardell. I am self-isolating, as many are. I start by saying what a pleasure it is to serve under your chairmanship in what has been an excellent and generally well-informed debate, secured by my hon. Friend the Member for Tiverton and Honiton (Neil Parish), who is a respected and long-standing committed advocate of British farming interests. He was likened to a Rottweiler three years before he even got to the House of Commons, which is tribute indeed.

As the Government chart a new course for the United Kingdom as an independent trading nation, we will pursue the interests of our farmers and producers with the same energy, tenacity and determination that my hon. Friend has demonstrated. The UK is already tasting great success in agrifood exports, exporting nearly £22 billion-worth of food and drink globally last year. We have a trade surplus in the sector with the United States and with Japan and Australia as well.

The important market access work that my Department is doing with our international partners is also bearing fruit, including gaining access to the United States for UK beef producers for the first time in over 20 years—a success the industry estimates could deliver £66 million-worth of sales by 2025—and securing entry to Japan, China, Taiwan and others for British beef, lamb and so on. In Japan, for example, that could be worth as much as £127 million over five years.

Our plans for accession to the comprehensive and progressive agreement for trans-Pacific partnership, or CPTPP—the world’s hardest acronym to say—would give British exporters improved access to a community of 11 dynamic global markets with a combined GDP of £8.4 trillion. That would be a gamechanger for UK trade with the Asia-Pacific region.

The Government have made an iron-clad commitment to uphold the UK’s high standards for food and farming throughout our FTA negotiations. No compromise on our standards in animal welfare, food safety and the environment is enshrined in the Government’s manifesto, which the Conservative Members in this debate are all signed up to. After all, the UK’s production standards are second to none, which is why our farmers are proud to put the Union Jack quality label on their produce.

We heard from the Labour Opposition spokesman, the hon. Member for Sefton Central (Bill Esterson), that he wants to see more British food in our supermarkets. One hundred per cent. of beef in our major supermarkets is already UK-branded. We cannot go higher than 100%.

We very much want to see British produce here, but also able to be exported. That is why it is important that our agrifood sector can scrutinise the detail of the deals that we are negotiating. Underpinning that is the work of the original Trade and Agriculture Commission, which this Government established not under duress, but willingly, to examine our trade policy and identify new opportunities worldwide for British farmers and agricultural producers.

I am grateful to the commission’s chairman, Tim Smith, and to its members for their ambitious and comprehensive report, which puts forward innovative and far-reaching proposals to ensure that UK agriculture remains internationally competitive and that our animal welfare and environmental standards are protected.

Turning to the debate, the Chair of the EFRA Committee, my hon. Friend the Member for Tiverton and Honiton, asked when the response will be made. It will be made as soon as it is ready. The report is immense and covers strategic policies, standards, export, promotion, staffing, marketing, environment and animal welfare. It warrants a serious and considered response. The role of the new TAC will be as debated and approved during the passage of the Trade Act 2021 and the Agriculture Act 2020.

On standards, which the hon. Member for Bristol East (Kerry McCarthy) also asked about, our key standards rolled over in the withdrawal agreement. Those standards that we took from the European Union rolled over in the withdrawal agreement. I think there is some confusion about market access with standards. Others have raised greater market access for Australia. That has no impact on our standards. What is allowed into this country under our standards today will remain exactly the same after the Australia free trade agreement comes into force.

The question of the agricultural council is very important. They do a great job for us and it is important to understand that it is not just the agricultural counsellors who work to promote UK food and drink and agriculture abroad. The DIT’s international commercial network is in 119 different markets around the world, with 1,500 people working on export and market access.

There was a suggestion that we are dragging our feet. I do not agree with that at all. The new Trade and Agriculture Commission will be up and running in good time to scrutinise the Australia free trade agreement as soon as the legal text is available.

Support for the new TAC was also raised by the Chair of the EFRA Committee. It will have a secretariat. It will not have the capacity for modelling, as it is not within its remit to model the economic impact of a free trade agreement. It is important that the TAC focuses on its statutory mandate as set out in the Trade Act and the Agriculture Act.

My hon. Friend the Member for Penrith and The Border (Dr Hudson) rightly welcomed the animal welfare chapter in the Australia trade deal. He questioned the scrutiny, but I think our system of scrutiny stands up as at least as well as in any Westminster-style democracy when it comes to trade deals. He made a point about using international aid to promote sustainable farming. The UK currently does that very professionally. I have seen it for myself in countries such as Zambia and Colombia.

The hon. Member for Swansea West (Geraint Davies) is wrong, as was pointed out by my hon. Friend the Member for Totnes (Anthony Mangnall)—FTAs do not trump domestic law. There would be no need to put in amendments to domestic law reflecting a free trade agreement, if the FTA simply trumped domestic law. He is not correct on that.

On production costs, we have to look at why Australia currently sells 75% of its beef exports and 70% of its lamb exports into Asia. A large reason for that is the high costs of production, which are much higher. The cost of producing a tonne of beef, for example, in Japan is around £7,300. In Korea, it is £7,200. In the UK, it is £3,700—about half that. There is a good reason why Australia is much more willing and able to sell into those markets.

My hon. Friend the Member for East Devon (Simon Jupp) ably made points on the opportunities for exports. He is absolutely right. To be able to export, though, we have to abide by the rules of the international trading system. We cannot have it one way for imports and a different way for exports. The UK benefits enormously from international trading rules—we are a trading country—and we need to ensure that we abide by them. That point was made by various Members, including my hon. Friend the Member for East Devon. He asked for the Trade and Agriculture Commission to be put on a statutory footing sooner rather than later. It will be sooner; it will be up in good time to scrutinise the Australia trade deal.

The hon. Member for Westmorland and Lonsdale (Tim Farron) spoke of demonstrably lower standards in Australia. I refer him to the letter sent to him by the Australian High Commission. It is not my job to defend Australian agricultural practices, but it can put up a reasonable case. It is rated five out of five by the OIE—the World Organisation for Animal Health—in terms of performance in veterinary inspections. Also, Australia bans certain practices that I know the hon. Member for Westmorland and Lonsdale welcomes that are prevalent in the EU. Sorry—I should rephrase that. I know that he welcomes being in the EU; he does not necessarily welcome the practices. For example, the production of foie gras is allowed in the EU; Australia bans it. Australia bans the castration of meat chickens and so on, so Australia can put up a halfway reasonable case that it has good standards of animal welfare.

My hon. Friend the Member for Brecon and Radnorshire (Fay Jones) raises very strong points—I am delighted to address her farmers—as did my hon. Friend the Member for Totnes, who made a thoughtful, well-informed and balanced speech. The role of the devolved Administrations is very important. Trade policy is reserved, but it has an impact in areas of devolved competence. My hon. Friend the Member for Keighley (Robbie Moore) raised the precedents of the Australia free trade agreement. He is also right that each FTA is treated individually.

I thank all Members for the debate, which has been very helpful. We look forward to making further progress on all these matters in due course.