Future Free Trade Agreements

Lord Spellar Excerpts

Thursday 21st February 2019 Commons Chamber

[Dr Fox]

I have read a number of representations from a number of organisations, particularly in relation to investor-state dispute settlements on matters such as healthcare, but let me say first that the ISDS system does not and cannot force the privatisation of any public services, and under current UK and EU agreements, claims can be made only in respect of established investments; they cannot be made in relation to an alleged failure to open up public services to a potential investor.

In the comprehensive and economic trade agreement, which has been ratified by this House, there is a clear reservation on healthcare services, which the Government have said we want to use as the template for the future. For the sake of clarity, I will read out the provision. Under the heading “Cross-Border Trade in Services”, it states:

“The United Kingdom reserves the right to adopt or maintain any measure requiring the establishment of suppliers and restricting the cross-border supply of health-related professional services by service suppliers not physically present in the territory of the UK, including medical and dental services as well as services by psychologists; midwives services; services by nurses, physiotherapists and paramedical personnel; the retail sales of pharmaceuticals and of medical and orthopaedic goods, and other services supplied by pharmacists.”

We have made it very clear that there will be nothing in future agreements that will stop the Government being able to regulate our public services, including the national health service. That is set out in statute; it is there for all those who take an interest to read. There is no point having the same old arguments that were raised by the Transatlantic Trade and Investment Partnership, because we have already made that specific proposal; it sits there in CETA, which was ratified by this House, although its provisions, including NHS regulation and services, labour law and environmental services, were not supported by the Opposition. Perhaps the hon. Gentleman would like to explain why.

[John Spellar (Warley) (Lab)]

I thank the Secretary of State for that clarification. He has made it abundantly clear that the privatisation threat to our health services lies not with trade deals from which we can be fully protected but from his own Government’s privatisation agenda, which is still ongoing.

[Dr Fox]

While I clearly reject the latter part of what the right hon. Gentleman has said, the rest of it is very important. Trade agreements make it very clear that it is up to the elected Government of the United Kingdom to determine what they do with public services. The matter is therefore decided by the British electorate and not by any forces outside the United Kingdom. I am grateful to the right hon. Gentleman for making that point.

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[Dr Fox]

I have already said that we give high priority to those standards, including animal welfare standards. That has been an essential part of what the Government have set out. I know that it would be advantageous for the Opposition if that were not the Government’s position, and they would like it not to be our position so that they could attack it, but we want to maintain our high standards of consumer products, our high environmental standards, our high standard of labour law protection and our high animal welfare standards as part of our approach to global trade. I am not sure that I could be clearer but, no matter how often the Government restate their position, there are those who do not want it to be our position and who want to interpret it in a completely different way.

The Asia Pacific region will be a key engine of global growth in the 21st century. That means that the comprehensive and progressive agreement for trans-Pacific partnership, or CPTPP, is a key interest for the United Kingdom as we leave the European Union. It is an extraordinarily global free trade agreement, spanning 11 countries on four continents: Japan, Vietnam, Singapore, Malaysia, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. Those 11 countries are collectively home to around 500 million people, constituting some 13% of global GDP and more than £95 billion-worth of current UK trade. If the UK were to accede to it, we would be the second-largest economic member within the agreement, which would then cover a sixth, or 17%, of global GDP—nearly equal to the EU minus the UK.

There has been a positive response across CPTPP members to the Prime Minister’s announcement of the UK’s interest in potential accession. In particular, it has been welcomed by both the Japanese and Australian Prime Ministers.

[John Spellar]

I thank the Secretary of State for mentioning the welcome developments with regard to the partnership. I hope, though, that accession would not be at the expense of trying to move towards a free trade agreement with our great friends and allies in Australia.

[Dr Fox]

The right hon. Gentleman, as ever, anticipates my very next point. In addition to considering access to that comprehensive international trade agreement, we are at the same time moving forward with ambitious bilateral discussions for future free trade agreements with two of our closest friends and allies: Australia and New Zealand. Both countries are important strategic partners with which the United Kingdom has a deep shared heritage, built on the foundations of democratic values, security, language, our common legal system, culture and, of course, sport—although not all with equal success. It is because of our shared values and our firm belief in free and open trade that we want to strike cutting-edge free trade agreements with Australia and New Zealand, seeking to go further than CPTPP—indeed, further than any FTA ever before—in areas of shared ambition such as services and digital.

Many UK businesses already view Australia and New Zealand as an attractive base for their regional operations, and their proximity to Asia makes them excellent partners for UK firms in a region that stands to deliver nearly two thirds of global growth to 2030. Unlike the EU, Australia and New Zealand have trade agreements with the world’s second largest economy, China.

EU-Japan Economic Partnership Agreement

Lord Spellar Excerpts

Tuesday 26th June 2018 Commons Chamber

[The Minister for Trade Policy (George Hollingbery)]

I beg to move,

That this House takes note of European Union Document No. 7959/18 and Addenda 1 to 11, Proposal for a Council Decision on the signing, on behalf of the European Union, of the Economic Partnership Agreement between the European Union and Japan; and European Union Document No. 7960/18 and Addenda 1 to 11, Proposal for a Council Decision on the conclusion of the Economic Partnership Agreement between the European Union and Japan; and welcomes the proposed signature and conclusion of the agreement.

I am delighted to be here today to debate the EU-Japan economic partnership agreement, although I confess it feels slightly peculiar to be standing here and speaking to the House after three years of silence. The agreement is broad and ambitious, offering excellent opportunities to the UK. The Government have long supported the EPA, and I welcome the opportunity today to set this out in my new role. However, let me first take a moment to thank my predecessor, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), for all his works as the Minister for Trade Policy and indeed for his kinds words in the previous debate. He did an excellent job in promoting UK businesses around the world and shaping our future independent trade policy—I very much recognise that I have large shoes to fill.

[John Spellar (Warley) (Lab)]

Will the Minister just give us a list of his achievements?

[George Hollingbery]

I am not entirely sure whether the right hon. Gentleman is talking about my achievements or those of my right hon. Friend. [Interruption.] The establishment, in conjunction with the Secretary of State, of a brand new Department for International Trade and preparing ourselves for Brexit is evidence in itself—I could list a great many things.

The Government have an overarching commitment to free trade—

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[Barry Gardiner (Brent North) (Lab)]

I welcome the Minister for Trade Policy to his new post. I am delighted to have him opposite us at the Dispatch Box. I also pay tribute to the right hon. Member for Chelsea and Fulham (Greg Hands) for the work that he did in this Department. We had many voluble exchanges in Committee and on the Floor of the House and he always dealt with them with exceptional good humour. I am sure that he will return to the Front Bench at a later stage and I look forward to that.

I am grateful for the opportunity to speak in this debate to set out our position on the EU-Japan economic partnership agreement. The relationship with Japan is, as many have said, of enormous importance, and we on the Labour Benches want to ensure that our future co-operation boosts trade and jobs in both our economies.

Exports make up 30% of our national economic output, and we celebrate the jobs and the myriad other benefits that come from international trade. No country exemplifies the importance of foreign investment to our economy more than Japan. It is Japanese companies that have chosen to invest billions in the manufacturing capital of this country over many decades, and with that investment has come jobs—good jobs, skilled jobs. Some 3,800 are directly employed by Toyota, with 7,000 directly employed by Nissan, and 3,400 directly employed by Honda. We could double those figures when we factor in the indirect employment in the UK that comes from these companies—the manufacturers of parts that go into their supply chain and the logistics companies that ensure their just-in-time delivery systems.

I was at Honda a week ago last Friday speaking both with the unions and the management in Swindon. A new car rolls off its production line every 69 seconds, and its just-in-time supply chain is critical to that performance. That is why workers at that plant were telling me of their strong support for Labour’s position on a new customs union that would stop disruption to that supply chain and why they cannot understand the Government’s red line that there should be no such customs union after we leave the EU.

The Government have put our trading relationship with Japan under enormous strain because of their disorganised approach to Brexit. Companies such as Honda will speak for themselves, but many working there cannot understand why the Government are taking such a risk with their livelihoods. Japan is one of our key export partners. It accounted for £12.5 billion of our exports in 2016.

[John Spellar]

Before my hon. Friend moves on from his comments about Japanese companies in the UK, will he join me in commending the very long-term view that those Japanese companies take? They invest significantly not only in capital equipment, but in their staff and their continuous training programmes, all of which have been an example that, I am pleased to say, has now been followed by many British companies.

[Barry Gardiner]

Indeed. I absolutely agree with my right hon. Friend. The Japanese investment into our country over many, many years has been hugely beneficial not simply in creating those jobs, but in sustaining them into the future. We absolutely cannot afford the Government’s red line, which puts that in jeopardy.

As I was saying, Japan accounted for £12.5 billion of our exports in 2016—it was our fifth largest export market. A Labour Government would certainly want to do a trade deal that builds on the commercial and diplomatic ties that bind our two countries together. The Government have been forced into calling this debate by the European Scrutiny Committee, chaired by the hon. Member for Stone (Sir William Cash). The Committee rightly said that the agreement raised

“complex legal and policy issues for the UK”,

which remain unanswered.

Draft EU-Canada Trade Agreement Order

Lord Spellar Excerpts

Tuesday 26th June 2018 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I am grateful for the opportunity to speak in this important debate on the Floor of the House at last. The order will specify CETA as an EU treaty for the purposes of the European Communities Act 1972. It is important to recognise that, unfortunate though it may be, the agreement itself cannot be changed at this stage by anything we might say this afternoon.

We want a comprehensive and mutually beneficial trade agreement with Canada. We want to boost fair and open trade with our closest allies and neighbours. Of course we do. We share a common language, unique cultural and economic bonds, the same parliamentary model and a common legal tradition, and we count Canada among our closest, oldest and most trusted allies.

In 2016, our exports to Canada amounted to some £8.3 billion—our seventh-largest non-European export market. In turn, we are Canada’s third most important export market. Our appetite for Canadian goods means that Canada runs a trade surplus with us of some $6.8 billion according to 2017 figures. We are Canada’s most important European trading partner. The vast majority of Canada’s European-bound goods move through our ports. We are the second-biggest recipient of Canadian investment. Similarly, we are the second-biggest foreign direct investor into Canada. More than an estimated 700 British firms have an established presence in Canada and some 1,100 UK firms are owned or controlled by Canadian interests.

In matters of trade, the UK and Canada face similar issues. Boeing’s efforts to have punitive tariffs levied on Bombardier C Series aircraft threaten thousands of jobs both in Canada and here, where the company’s Northern Ireland plant engineers and manufactures wings for those aircraft. We both face the spurious and illegal tariffs imposed by President Trump on our steel and aluminium exports under the false pretence of national security.

Do we want a trade deal with Canada? Of course we do. Only by working together can we and Canada address and resolve American protectionism and make a concerted effort on the world stage to enforce the rules-based system that underpins international trade. Only by working together can we push for a serious response to global overcapacity issues.

[John Spellar (Warley) (Lab)]

Will my hon. Friend give way?

[Barry Gardiner]

I will give way to my right hon. Friend in a moment if he is patient—I am sure he will be.

Yes, a Labour Government would very much welcome a trade deal with Canada built on the commercial and diplomatic ties that bind our two countries; a deal that seeks to further elevate our shared standards, rights and protections; and a deal that would lead to increased economic prosperity and jobs. The EU-Canada comprehensive economic and trade agreement is not such an agreement.

[John Spellar]

I thank my hon. Friend for giving way. Given the considerable links and advantages of our relationship with Canada, if we cannot do a deal with Canada, which country can we do a deal with?

[Barry Gardiner]

The presumption in my right hon. Friend’s question is entirely wrong. The presumption is that we cannot do a trade deal with Canada, but of course we can. We want to do a trade deal with Canada, but he will recognise that we did not want the TTIP deal with the United States even though the United States perhaps has a claim above Canada’s to be our closest ally on the international stage. The question is not who but what. Of course we can do a deal, but it must be the right deal for British business and jobs.

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[John Spellar (Warley) (Lab)]

I declare an interest as the chair of the all-party parliamentary group on transatlantic trade. Also, like many of my constituents and many colleagues here, I have family in Canada. I will shorten what I was going to say about our strong links to Canada, but I want to stress our shared history, culture and institutions, both national and international. Also, we have heard about Canada’s Liberal Government, whose Prime Minister, Justin Trudeau, has been trashed by Team Trump. So, what’s not to like?

The question we have to ask is: if not Canada, who? We will obviously be discussing trade relations with the EU, but that will not be an easy discussion and it will take some time. Obviously, in the future we will rightly have to do a trade deal with the United States, but at the moment, given that it is pulling back from TTIP and NAFTA, and that it has shut down discussions on the TPP, and with the tariff wars extending, this is not the best environment in which to have those discussions.

Discussions with China will need to focus on addressing China’s trade-distorting practices, which are a threat to the multilateral system, as was said recently in a statement from the European Trade Union Confederation and the American Federation of Labour and Congress of Industrial Organisations in the United States. We shall be discussing Japan in a few minutes, but it too is a mature democracy and very effective trading partner. It is a big investor in the UK, and a country with which we ought to be doing a trade deal as part of the world trading order. So I say again: if not Canada, who? I suppose we could do a trade deal with Venezuela, but it might not meet the human rights hurdle any time soon.

What have the underlying problems been? I can give the House two examples. First, my hon. Friend the Member for Brent North (Barry Gardiner) drew our attention to the investor-state dispute settlement provisions, which have caused great concern, but he conceded that over several decades, and with nearly 100 agreements containing ISDS provisions, there have been four cases against the United Kingdom and we lost none of them. Such arrangements are worth looking at, between two trading blocs with mature legal systems, but we seem to be making a mountain out of a molehill.

Secondly, the underlying problem with CETA is that it was seen as the son of TTIP, the transatlantic trade deal to which opposition built up over a period of time—having initially had considerable support in, for example, the progressive areas of the trade union movement—particularly on the basis of anti-Americanism. My hon. Friend mentioned public concern from civil society, by which I think he meant non-governmental organisations. Any study will show the way in which this has been orchestrated, particularly by the Rosa Luxemburg Foundation, the foundation of the German left party, Die Linke, which grew out of the old East German Communist party.

In conclusion, this agreement is certainly to be welcomed, in order to strengthen the bonds between our two great nations and peoples.

Oral Answers to Questions

Lord Spellar Excerpts

Thursday 6th July 2017 Commons Chamber

[Dr Fox]

I am sorry to hear such a lack of understanding of how the modern economy works. Particularly for countries that have a large proportion of their trade in services, services trade does not depend on distance. In fact, what we need is increasingly close co-operation with countries that are similar to us in their economic status, not necessarily geographically proximate, although I entirely understand that for goods the geographical distance does have a greater bearing.

[John Spellar (Warley) (Lab)]

One country with which negotiations on trade have been very advanced is Canada, with the EU discussions on the Canadian trade deal. Obviously, the Secretary of State will want to seek to replicate that fairly quickly after our exit from the EU, but that has been subject to a huge amount of disinformation regarding the costs and benefits of the deal. When are the Government actually going to take on this issue and set the record straight?

[Dr Fox]

What we do not know at present is what the state of the EU-Canada agreement will be at the point at which we exit the European Union. It may well be that all countries have ratified it, but as the right hon. Gentleman is well aware, as a result of the Singapore judgment every single Parliament and some regional parliaments will have to ratify the deal. If the deal is not ratified at the point at which we leave the European Union and has only provisional application, it will have no basis in UK law, in which case we will have to have the fall-back position of using that as the basis for a future UK-Canada agreement.

Commonwealth: Trade

Lord Spellar Excerpts

Wednesday 22nd February 2017 Westminster Hall

[Jake Berry]

I agree absolutely. I was in touch only this week with the Falkland Islands Government, who are watching this debate to see what is said about the Crown dependencies and overseas territories. I will come to how we must absolutely ensure that they are not left behind in any new Commonwealth trade deals.

Doing business in the Commonwealth makes sound economic sense for Britain. This is not a throwback to a sepia-tinted view of the Commonwealth; it is about ensuring that Britain’s economy grows. The facts speak for themselves. The Commonwealth is a market that comprises 52 largely English-speaking countries with a combined population of 2.6 billion, covering a third of the globe. Some 60% of its citizens are under 30, and half of the top 20 global emerging cities are in it. It should be noted that, although the UK has a trade deficit with the EU, it has a trade surplus with the Commonwealth that stood at £1.9 billion in 2015. The Commonwealth contains mature and open economies such as Canada, Singapore, Malaysia, New Zealand and Australia, exciting new emerging markets such as India, and developing economies in Africa, the Caribbean and the Pacific. It has a combined GDP of more than $10 trillion. It includes five G20 countries, with trade projected to surpass $1 trillion by 2020.

[Mr John Spellar (Warley) (Lab)]

Among the mature economies and G20 countries that the hon. Gentleman mentions is Canada, and I hope he joins me in welcoming the House’s decision on 8 February to endorse the EU-Canada trade deal. In parallel with that deal, should not we look into a trade deal with Canada to take place shortly after we have left the EU? After all, if we cannot do a deal with Canada, where many of us have relations and with which we have strong links and a strong strategic and security alliance, who the hell can we do a deal with?

[Jake Berry]

I believe we can do a trade deal with Canada. The whole country was recently united in shouting “Where on earth is Wallonia?” That shows that the European approach to negotiating trade deals is wrong—I will come on to how the Government can set out a better approach than the EU-Canada trade deal. Canada has indicated that it wants a trade deal with Britain.

The Commonwealth’s GDP does not match the EU’s, which is some $16 trillion. However, the EU’s growth rate has averaged only 1.7%, while the Commonwealth’s is currently more than 4%. As Britain prepares to leave the European Union, it is with the Commonwealth—our extraordinary family of nations—that we should seek to strike trade deals. A recent report on the Commonwealth states that on average it is 19% cheaper for businesses in the Commonwealth to do trade, because of our common legal systems, language and culture. The Commonwealth and its nations represent a growing and increasingly important market for Britain; Britain, in turn, represents the fifth largest economy in the world and a gateway into Europe for Commonwealth nations.

When it comes to trade deals, we in this country have a lot to learn from our Commonwealth partners, which are blazing a trail for free trade among themselves. Australia already has a free trade agreement with New Zealand and is negotiating a free trade deal with India, and both Australia and New Zealand are parties to the Association of Southeast Asian Nations deal. Britain should seek to emulate such trade deals. Unlike the EU, Australia and other Commonwealth partners have not made the perfect the enemy of the good. In many cases, they have opted for a sectoral approach. They are prepared to sign multiple trade deals—the one between Australia and Singapore is an example—and when areas of co-operation are agreed, they sign a trade deal about those areas and put the more divisive areas to one side. We should compare that with the eight years that it has taken the EU to negotiate with Canada.

I hope that at the Commonwealth Trade Ministers meeting next month the Minister and his Department will seek to start negotiations with Canada, Singapore, Australia, Malaysia and New Zealand, which are large, open economies.

Oral Answers to Questions

Lord Spellar Excerpts

Thursday 9th February 2017 Commons Chamber

[Greg Hands]

I have seen this proposal, and we are very enthusiastic about the future of UK trade with Canada. I repeat that we are currently very supportive of CETA going through. We think it is very important for the UK, for the European Union and for Canada, and we will continue to campaign for it to go through, not least in the face of the new-found opposition by Her Majesty’s Opposition.

[Mr John Spellar (Warley) (Lab)]

May I point out to the Minister that in the deferred Division, a majority of Labour Members voted for the trade deal? Given that Canada is such a long-standing Commonwealth friend, ally and defence and trade partner, could he answer this basic question: in a post-Brexit world, if we cannot do a deal with Canada, who the hell can we do a deal with?

[Greg Hands]

I thank the right hon. Gentleman very much indeed for that question. He is right that more Labour MPs—86—voted for CETA than the 68 who voted against it, with perhaps more than 100 abstaining. This agreement has been eight years in gestation. You would have thought, Mr Speaker, that the Opposition would have got their act together by now. On the point that the right hon. Gentleman made, I quote from one of his colleagues, who said:

“If we don’t support a trade deal with liberal, Justin Trudeau-led Canada, who do we support trade deals with?”

[Mr Spellar]

That was actually me.

[Mr Philip Hollobone (Kettering) (Con)]

Post-Brexit, will CETA be transitioned into a bilateral arrangement, or will there need to be a fresh Canada-UK agreement?

Oral Answers to Questions

Lord Spellar Excerpts

Thursday 8th September 2016 Commons Chamber

[Dr Fox]

I congratulate my hon. Friend on his personal commitment to trade and the practical way in which he is demonstrating it. He makes a useful point. All of us should encourage businesses in our constituencies to export. In a nation that built itself upon free trade, it is disappointing that only 11% of businesses export. I hope that my Department will help all Members improve that position and create the expertise required to get all parts of the United Kingdom exporting to all parts of the globe.

[Mr John Spellar (Warley) (Lab)]

Will the Secretary of State explain to our European partners the huge benefit to their industries of car and truck sales to the UK and ensure that there are no obstacles to our own vehicle makers selling to the EU? While he is at it, will he persuade other Departments to behave like their European counterparts and support domestic industry and buy British?

[Dr Fox]

On the latter point, the GREAT campaign has been moved to the Department for International Trade and I am keen for it to encourage people in this country to buy British where possible. He makes an important point about the wider negotiations in that the European Union has a huge trade surplus with the United Kingdom. It is more in their interest than ours—if that is possible—to maintain an open, free-trading environment.