Turkey: Free Trade Agreement

Lord Foster of Bath Excerpts

Tuesday 27th April 2021 Grand Committee

[Lord Foster of Bath (LD)]

My Lords, I, too, serve on the committee and pay tribute to our excellent chairman. I also thank the Minister for his constructive engagement with the committee and my noble friend for securing this debate.

As we have heard, this is a rather modest FTA, which is explained only in part by Turkey’s continued customs union with the EU. The limited negotiating objectives rather suggest that the Government wanted a quick deal rather than a quality one and, frankly, nothing that the noble Lord, Lord Hannan, and the noble Viscount, Lord Waverley, said changes the fact that, given the strong hand we had, it is surprising that, rather than waiting two years before negotiating a more comprehensive deal, we did not seek more in this deal.

After all, the deal is vital for Turkey—its most important since the 1995 customs union with the EU, it says. They export more to us than we do to them. Without a deal, tariffs on exports to the UK would have cost Turkish losses of £1.7 billion, so it is disappointing that we did not seek to include more in the deal. After all, we are a service economy, yet trade in services is not covered, nor is investment, public procurement, digital trade and much else. As we have heard, Turkey has a poor record on human rights, yet, despite the Government’s vision of a values-driven free trade and the Minister’s claims that trade does not have to come at the expense of human rights, they are not covered. Given Turkey’s equally poor record on workers’ rights, it is disappointing that they too are excluded.

I very much hope that in the Minister’s response, as others have requested, he will say how all those issues will be discussed in the forthcoming discussions on an enhanced agreement, but there are a number of remaining questions. The committee sought an assessment of the additional cost of the FTA to UK businesses. While acknowledging that the administration costs of new customs paperwork, such as declarations of origin, could have “substantive impacts” on trade in goods, the Minister has still not provided any estimate, so I hope he does today. As with other agreements, the committee is anxious to compare the situation pre and post Brexit.

The Government are also confident that the impact on supply chains will be minimal, yet they describe the ending of the cumulation of content from other PEM signatories as “a notable difference”. Can the Minister tell us how a notable difference has only a minimal impact on supply chains?

On tariff rate quotas, which were resized and calculated on historic usage, can the Minister explain whether the new TRQs contain sufficient headroom to support UK businesses which seek to expand trade with Turkey? The noble Lord, Lord Lansley, discussed subsidy and state aid in detail, so I ask one simple question. We know that, under the deal, any disputes will now have to be referred to the WTO. Can the Minister explain how that will be done when there is no requirement for the parties even to notify each other of subsidies that have been granted?

Finally, picking up the point made by the noble Baroness, Lady McIntosh, I hope that the Minister will also update us on the current review of technical barriers to trade.