Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Lord Spellar Excerpts

Thursday 24th June 2021 Commons Chamber

[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.

[John Spellar (Warley) (Lab)]

Will the right hon. Gentleman give way?

[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]

Will the right hon. Gentleman give way?

[Dr Fox]

I will, as I said I would; my memory is not yet that short. It is important that we understand what the opportunities are in a free trade policy outside the European Union in relation to those four categories in that free trade hierarchy.

[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.

--- Later in debate ---

[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?

--- Later in debate ---

[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.