Trade Agreements

Debate between Baroness Fairhead and Lord Fox

Thursday 14th February 2019 Lords Chamber

[Baroness Fairhead]

I thank the noble Lord. I think I heard two questions there. First, he asked whether it is true that if, as is the Government’s priority, we leave with a deal—that is, with a withdrawal agreement and an implementation period—the EU has to propose that the UK is treated as a partner for the purposes of these trade agreements. That is correct. I do not believe that that is a secret. My understanding is that the countries with which we have been having these discussions are happy about that and are supporting continuity on that basis. That has been the basis on which we have been proceeding.

Secondly, the noble Lord asked what tariffs would be in place in the case of no deal. Again, I stress that a lot of the focus is on getting a deal, although there is a risk of no deal. We have already started to provide information on GOV.UK and have provided technical notices to businesses with some elements of specificity and suggestions about what they can do. If it looks as though there will be no deal, clearly the Government will come forward with a day-one tariffs paper. As I imagine the noble Lord would expect, I cannot confirm the date of that but I can confirm that it will happen.

[Lord Fox (LD)]

My Lords, I join the noble Lord, Lord Stevenson, in thanking the Minister for bringing this Question to the Floor. As the Statement makes clear, these deals account for around 11%—or 16% if you include Japan—of our total trade. That figure pales into insignificance when compared with the 48% of trade that we have with the European Union; nevertheless, it is important, and it is important to the companies that trade on that basis. It is important too because it is something of an act of faith. The Secretary of State was very clear that these deals would be easy and that they would be in place on the stroke of midnight, or one second after midnight. He was unequivocal and confident.

In Committee on the Trade Bill, my noble friend Lord Purvis of Tweed pressed the Government time and again to come forward with details of the progress on these deals. However, the Government did not give any and it is very regrettable that we are having this discussion due to a leak. The details having leaked, it seems that the Secretary of State’s bulletproof confidence is slipping.

In answer yesterday to the Member for Eddisbury in the other place, the Secretary of State said:

“The Government are assessing where we are with each of the agreements. Where we believe that it will not be possible fully to replicate, we will set out a technical notice in the coming days”.—[Official Report, Commons, 13/2/19; col. 895.]


Additionally, in answer to my right honourable friend Tom Brake, he said that he would now keep Parliament updated on progress “in the coming days”. Can the Minister tell us on which day this update will be forthcoming?

[Baroness Fairhead]

My Lords, I can only repeat the Statement from my right honourable friend the Secretary of State for International Trade. The update will be given shortly—as he said, in the coming week.

Trade Bill

Debate between Baroness Fairhead and Lord Fox

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 23rd January 2019 Lords Chamber

[Baroness Fairhead]

I thank the noble Baroness, Lady Kramer, for the further question, and will try to reassure her. The Government have been engaging actively with those third parties on that approach since it was outlined as part of the implementation period arrangements at the European Council of March 2018. But we must consider that a decision for those third parties, those countries themselves. Any action or internal measure taken is for them to consider based on their own domestic legislation and practice. Indeed—this is a critical point—some internal measures, given their very nature, may not even be public knowledge. For this reason, let me assure the noble Baroness that we agree it is right that we engage actively both with third parties and with multilateral organisations and encourage them to consider the steps needed for their own domestic legislation. This enables the continuity that, as the noble Lord, Lord Price, said, in principle they all fundamentally agree with, because it is in their mutual interest.

Moving into the future and the next 10 weeks, if we go to a new deal, this will have to be even more revved up, because we are hoping and planning for an implementation period. But as the noble Baroness will be aware, that would require an agreement, and therefore we must also have plans in place for no deal. We do not think it appropriate for the UK Government to essentially monitor a list of the actions over sovereign countries and hold them accountable. It would also be practically challenging for the reasons I have set out.

[Lord Fox]

I do not think anyone on these Benches has said that the UK Government should be holding the other Governments to account for these actions. We are asking whether you understand what the necessary actions are. Are you tracking them? Do we really know the critical path each agreement has to take in order to reach the golden point of Dr Fox’s magic moment when they all become reality? I think you are saying that you do not know what the path is, that you are not mapping that critical path and that therefore you cannot say how long it is going to take because you just do not know.

[Baroness Fairhead]

I say to the noble Lord that we are actively working and engaging with them. It is for them to decide. They have discussed with us what they currently believe. Some they are actively working through, some the third countries and bodies do not choose to make public—to us or anyone else. That is what I am trying to explain. I do not want this House to be in any doubt or to give the sense that we were just asking them and walking away. We are actively engaging with all the parties I referred to.

I now turn to Amendments 19 and 97. I will take those together, as they both—

Trade Bill

Debate between Baroness Fairhead and Lord Fox

Monday 21st January 2019 Lords Chamber

[Baroness Fairhead]

My guidance is that it is because it will already happen as a result of the withdrawal Act so it is unnecessary. There is also the risk of including some but maybe leaving one out. That is my understanding, but clearly this may be a matter that we take up on Report.

The vast majority of these EU agreements are already in operation and have not resulted in a lowering of standards on animal welfare, the environment or food safety. The powers in the Trade Bill will be used not to lower standards but only to implement obligations. As I said before, it is not the intention—nor do we have the opportunity or time—to make changes; it really is about rolling over. I can hear from the mood of the House that this may not satisfy or reassure, but it is certainly the guidance that we have had. I am sure that this will get brought up again on Report.

I will move on to Amendment 15, tabled by the noble Baroness, Lady Jones, and supported by the noble Baroness, Lady Young. The EU has pushed to include trade and sustainable development chapters, including provisions on environmental protections, in its free trade agreements since the free trade agreement completed with South Korea. In general, these point to commonly held international standards on environmental protection, agreed through multilateral environmental agreements, and commit each party not to reduce these protections in a manner affecting trade. Again, these commitments will be retained as we transition these agreements. However, these commitments do not prevent us improving our protections as we see fit. The UK will be bound by international multilateral environmental agreements to which it is party and we are committed to upholding those obligations. We will continue to collaborate with our European and global partners to protect our environment.

The withdrawal agreement contains non-regression clauses on environmental and labour standards. The UK already has some of the highest standards in the world in place and noble Lords should be confident that we will maintain high regulatory environmental standards once we leave the EU. A reciprocal non-regression commitment would mean that neither party could lower its regulatory standards below current levels. The UK will maintain its high regulatory standards for the environment and we are committed, as I said, to upholding our obligations.

With reference to Amendment 15, I reassure the noble Baroness, Lady Jones, that the Government will ensure that our high environmental protections are maintained. We will also transition all EU FTAs, including the provisions on environmental protections provided within these and the commitments not to reduce our commitment to international standards. I hope that this reassures the noble Baroness and the noble Baroness, Lady Young of Old Scone, who sought an answer on this.

Turning to the concerns raised on standards in Amendment 25, this amendment would ensure the UK could ratify trade agreements with third countries only if those agreements ensured that imports complied with food safety, environmental and animal welfare standards set in primary and subordinate UK legislation. I have already pointed to the requirements of the CRaG, which ensures that Parliament can block trade agreements. As a result, we are absolutely clear that all existing commitments relating to standards and regulations will remain in place. Far from reducing standards, this Bill is about preserving the beneficial arrangements that consumers and businesses enjoy. This includes the high regulatory standards embedded in our existing agreements. I say again that the Bill is not about making provision for future free trade agreements; this amendment goes beyond the purpose of this Bill.

[Lord Fox]

I am sorry, I know it is late. To use CRaG as the safety net for this seems to be rather the wrong way around. We should be getting any future agreement right, rather than relying on the CRaG process to fix it. I think perhaps the Minister should look at this the other way around and get it right the first time.

[Baroness Fairhead]

Earlier in the debate, we went through the process for agreeing these continuity agreements. We have not talked about the scrutiny for future trade agreements, but maybe there was some confusion in how I articulated this.

The noble Lord, Lord Kerr, and my noble friend Lady Byford raised a number of important points about future free trade agreements but I think we agreed to defer those to later in Committee. We have already been clear that we will introduce bespoke legislation as necessary to implement those future free trade agreements. The Secretary of State for International Trade has already launched four consultations on prospective future trade agreements and announced that the Government will introduce bespoke primary legislation as necessary to implement these.

Turning to Amendment 26, tabled by the noble Baroness, Lady Jones, the Government have listened to representations from stakeholders both within and outside Parliament on this point. In response, the Government have already amended the legislation in the other place so that the interests of producers are explicitly stated as one of the factors for consideration, just as the new clause before us seeks to do. This completed the list of core considerations when setting the tariff, while not making it unmanageably long.

Trade Barriers (Revocation) (EU Exit) Regulations 2018

Debate between Baroness Fairhead and Lord Fox

Wednesday 28th November 2018 Lords Chamber

[Baroness Fairhead]

Definitely not. What happens when this goes to the MAAC—Market Access Advisory Committee—is similar to what will happen when it goes to the market access team, which is the new team set up inside the DIT. All concerns and market access issues can be raised on an online site and, as I tried to explain, they will be reported on. The concerns will go back to businesses and particular sectors and will also come before this House. So within the bounds of commercial confidentiality, the concerns will be logged as specifically as possible. In fact, it will be similar to the current approach: the areas will be reported on and will not just stay in the ether.

[Lord Fox]

From that answer, it is still not clear what they will plug into. Perhaps the Minister can help on that. Improving the resources from three or four people to 20 people sounds impressive—until you think about the scale of the task. If the Minister’s wonderful online system will gather in more issues, as it is supposed to, there will be a lot of work to do.

There is a large variety of sectors. For example, rules of origin will be a major issue around non-tariff barriers in the food sector; we have not mentioned those dreaded words. The department will need tremendous ability to analyse and substantiate any claim around that. Automotive and aerospace are industries that I know better—and chemicals. All those industries have immense specialisation in them and a great number of legal issues around them. The reason this process becomes complicated quickly in its TBR mode is that there are those complications. Simply having an online form will not remove that complication. So understanding the scale of the resource, it seems that, unless nobody bothers to do this, 20 people will soon be insufficient. Attracting sufficient expertise to address that issue will be a real challenge.

[Baroness Fairhead]

Again, the noble Lord makes good points. The market access team will be made up of 20 people, as I said. That is similar to the number of people on the Market Access Advisory Committee, which exists currently for all EU nations. There are 28 people there—one for each EU nation—as against 20 who will focus just on the UK.

The new digital system will be online and accessible to all businesses. I will come on to engagement in a moment, but we have had feedback from discussions at the round table of businesses that there is unanimous support for the new approach. Businesses see it as a way to make sure that the system is accessible and that more information can flow in a less restricted way, eventually becoming a two-way process.

I will touch briefly on engagement and consultation. As I said, the TBR process has been used very rarely, so we reached out to organisations that have used the process or contemplated doing so. We sought their feedback on the most effective way to use it. We engaged with businesses on the right approach to the online service. They have had an active role in user testing to make sure that the external-facing side is fit for purpose. We reached out to and included stakeholders from the full range of sectors, including food and drink, pharmaceuticals, alcoholic beverages and automotive; they all attended the round table. We also spoke to those who had been actively involved in TBRs. We also engaged with stakeholders who fed into the design of the service. All that engagement had the aim of making sure that we had something that businesses thought was the right support for them in terms of the market access barriers that they see.

The noble Lord, Lord Fox, made an important point about the power of the UK and its capability to influence. This is not new to us. On trade missions, I often push back at some of the trade regulations and non-tariff barriers. We can see significant successes in pushing back on regulations on a UK-only basis. For example, Taiwan removed the barriers on pork from the UK. That was done not on an EU basis but on a UK bilateral basis with Taiwan. Similarly, the Chinese block on UK beef was also pushed back. So we have the ability to push back on such regulations.

The noble Lord, Lord Stevenson, was concerned about mixed feedback. The broad majority of businesses were comfortable with this non-statutory approach and supported it unanimously. Even the entity that was more interested in continuing with a statutory option appeared pretty sanguine about moving to this approach and could see some real benefits. My understanding from the impact statement is that neither the TBR approach nor the new approach regulates business, so no impact assessment is needed. However, I hope that I have conveyed our significant engagement with all parties that we think would be interested in the approach.

I truly appreciate the challenge we face here. I hope that I have given noble Lords some confidence in what is being created, because it will support British businesses and help them push back the barriers. The approach has been designed with the objective of being business-led. With this in mind, I ask noble Lords to support this instrument.