Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Debate between Lord Spellar and Liam Fox(3 years, 5 months ago)
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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.
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
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.
Oral Answers to Questions
Debate between Lord Spellar and Liam Fox(5 years, 7 months ago)
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Dr Fox
It is important that we take climate issues seriously. Whether or not individuals accept the current scientific consensus on the causes of climate change, it is sensible for everyone to use finite resources in a responsible way. The United Kingdom was the first country to establish legally binding emission targets, through the Climate Change Act 2008, and we have reduced emissions faster than any other G7 country. We are leaders in clean energy production, and it is estimated that $11.5 trillion is likely to be invested globally in clean energy between now and 2050. That represents an enormous opportunity and the potential for more jobs in the United Kingdom, which, as I have said, is already a global leader in terms of both practice and exports.
John Spellar (Warley) (Lab)
Dr Fox
There is also the small matter of putting British taxpayers first, and ensuring that they are getting value for money from any contracts that we award. However, I entirely agree with what the right hon. Gentleman said about Anzac day. In fact, may I take the opportunity to invite colleagues to join me and others at the wreath-laying ceremony that will take place at the Cenotaph at 10.30 this morning, and the service at Westminster Abbey that will follow it?
Future Free Trade Agreements
Debate between Lord Spellar and Liam Fox(5 years, 9 months ago)
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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.
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.
Oral Answers to Questions
Debate between Lord Spellar and Liam Fox(7 years, 4 months ago)
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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.
Oral Answers to Questions
Debate between Lord Spellar and Liam Fox(8 years, 2 months ago)
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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.
Iran (Proposed Nuclear Agreement)
Debate between Lord Spellar and Liam Fox(9 years, 5 months ago)
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Mr Spellar
That may be true, but such an agreement is preferable to achieving none of those objectives. Not everything has to be agreed, particularly if we view the possession of nuclear weapons as a qualitative rather than simply quantitative change—it is not only another step. Throughout the history of arms control agreements, it has been recognised that the nuclear threshold is a particular and qualitatively different threshold in international relations. We could therefore have arms control agreements with the Soviet Union, even though it was repressing its own citizens and the citizens of eastern Europe and sponsoring terrorism abroad.
Mr Spellar
I take the right hon. Gentleman’s exact point. In fact, he is reinforcing my argument. The fact that there are other undesirable aspects of the Iranian regime does not necessarily mean that we cannot seek a proper, verifiable and effective nuclear agreement. We may argue about how that is achieved, but the other aspects, desirable as they may be—we should certainly press them with the Iranian regime—should not prevent us from reaching an agreement. The former Defence Secretary is right: we need to focus on the arms control agreement.
I wish that I had some of the confidence of the hon. Member for South Norfolk (Mr Bacon) about the internal dynamics of the Iranian regime. The same goes for his comments about the sponsorship of terrorism. He referred to relations with Hamas and Hezbollah, but Iran acts as the armourers of those organisations. Furthermore, it is reasonably argued that in many cases Iran is pressing and supporting elements within Hamas and Hezbollah who want to take things further, as against those who want a more moderate position.