India and Southeast Asia: Free Trade Agreements
(Limited Text - Ministerial Extracts only)
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Lord Sharpe of Epsom (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Purvis, and I am very grateful to my noble friend Lady Anelay of St Johns for tabling this short debate, which I am sure all noble Lords would agree has been most fascinating.
As she said regarding the progress of His Majesty’s Government in securing free trade agreements with India and countries in south-east Asia, this is the bedrock. It is a matter of enormous significance. After leaving the European Union, the previous Conservative Government pursued an ambitious and outward-looking trade policy. They secured agreements that unlocked new opportunities for British businesses and consumers, and our commitment to the Indo-Pacific region was steadfast, as I am sure all noble Lords would acknowledge. We recognised its growing economic dynamism and strategic importance. I gently say to the noble Lord, Lord Purvis, that this is not boosterism but common sense.
In May 2021, Prime Minister Boris Johnson and Prime Minister Modi agreed to deepen trade co-operation between the UK and India via the enhanced trade partnership. The noble Lords, Lord Sahota and Lord Bilimoria, made compelling observations about India’s spectacular growth, which makes the case for this deal and obviously a future FTA extremely attractive. The strategic approach under that agreement outlined the following benefits of such a deal: a potential increase in UK exports to India of between £8.8 billion and £16.7 billion by 2035 and a boost to UK GDP of potentially up to £6.2 billion by 2035, depending on the final terms. The Government’s strategic case is surely unarguable. It is to develop the UK’s status as an independent trading nation that seeks trade and investment opportunities and champions free trade. Surely that is even more pertinent in a world where such principles are currently under threat.
The noble Lord, Lord Purvis, asked a very interesting question on trade diversion. I look forward to the Minister’s answer on that.
I appreciate that any agreement reached must be beneficial for both countries, and that can take time. That being said, British exporters in financial services, technology, life sciences and manufacturing have much to gain. Will the Minister give us an update on progress for the benefit of our ambitious British businesses seeking more certainty for their exporting future, particularly in light of the competition from other areas and countries that were pointed out by my noble friend Lady Anelay and the noble Lord, Lord Sahota? Perhaps the Minister might also comment on the comments of my noble friend Lady Verma and the noble Lord, Lord Bilimoria, about the wonderful advantage we have because of our diaspora population in this country.
Our trade relationships with ASEAN nations, which is a region representing the world’s fifth-largest economy —I do not need to tell the Minister anything about that—are in danger of stagnation. The majority of the work behind the UK’s accession to the CPTPP was done under the previous Government and we of course welcome the current Government’s accession, but we must now capitalise on this advantage. The previous Government’s agreements with Singapore and Vietnam set a strong foundation. Can the Minister tell the House what steps the Government are taking to advance new partnerships with Indonesia, which is a fabulous opportunity, as my noble friend pointed out, and with Thailand and the Philippines? What is the Government’s strategy for this region, which is so ripe with potential benefits for this country?
As my noble friend Lord Vaizey so articulately explained, the trade benefits are substantial. Given his position as chair of the UK-ASEAN Business Council, I think the Government should seriously consider enlisting his services in that part of the world.
Free trade has long been a driver of prosperity, innovation and economic growth. The Conservative vision was one of openness, dynamism and ambition, but, under this Government, we are concerned that we are seeing signs of drift. Can the Minister reassure me that the Government are still steadfastly aligned with the previous Government’s strategic vision, as outlined under the previous Indian deal?
Negotiations of this scale require leadership, vision and determination. Businesses and consumers need certainty, and our global partners need confidence in Britain’s commitment to free trade. So, finally, what specific steps are the Government taking to accelerate trade talks with India? How do they intend to build on the CPTPP and partnerships in south-east Asia. Perhaps most importantly, do the Government still believe in the previous Government’s strategic vision?