Comprehensive Economic Partnership (EUC Report)

Lord Gold Excerpts

Thursday 26th November 2020 Grand Committee

[Lord Gold (Con) [V]]

I too congratulate the noble Lord, Lord Darroch of Kew, on his insightful maiden speech and welcome him to the House. I am sure that, when we return to normal business, we will all want to hear his reflections on the soon-to-be-ending Trump White House.

The Government are to be commended for securing a new economic partnership with Japan in what has been an extremely short timespan when compared with normal trade negotiations. The achievement is particularly notable, as this is the first time that the UK has had to negotiate a trade treaty in some 40 years. When asked by the EU International Agreements Sub-Committee to identify the most significant feature of this agreement, one witness stated that it was in securing the agreement itself, in that by concluding an agreement we have avoided a trade impasse from 31 December and avoided being at a competitive disadvantage with EU exporters, which would have been particularly damaging.

Although the Government’s aim in their negotiations was to create an agreement as ambitious, high-standard and mutually beneficial as the EU-Japan economic partnership agreement, enhanced in areas of mutual interest, the reality is that this is a rollover of the EPA with certain additional features. As some have said, it is a rollover or continuity-plus agreement. This in itself is to be commended.

In acknowledging this achievement, however, there was no need to oversell what had been achieved, which, as other noble Lords have pointed out, the Government have to some extent done. As the report acknowledges, the agreement provides valuable continuity for businesses, consumers and other stakeholders and it avoids a return to WTO trading terms. Those negotiating our post-Brexit arrangements with the EU should please take note.

However, as other noble Lords have stated, the agreement is not perfect. For example, with regard to tariff-rate quotas for agriculture and food exports to Japan, the EU is given priority and the UK can only use the remaining headroom if there is any. Importers will not know until some time after purchase whether the imported items attract duty. Indeed, they may even have to pay the duty in advance or give security without knowing whether duty is payable. These factors may well be a disincentive to purchasing British products.

Nevertheless, the add-on features to the Japan agreement may prove significant, particularly in financial services and in relation to digital and e-commerce. The agreement also offers a potential extension of geographical indications for unique British products from seven to potentially over 70, although whether this can be fully achieved is at present somewhat speculative and may take some time.

In its work, the sub-committee, of which I have had the honour of being part, has learned a great deal, both on the way in which scrutiny of treaties might be undertaken and on how the process of negotiation might be improved. The Government have established a series of new trade advisory groups, which will identify business needs and set out what they seek in their aims for the negotiation. For true benefit to be gained from these advisory groups, it is necessary that they are kept informed and that there is an open dialogue with the relevant group so that those negotiating the treaty are aware of any worrying concerns and can hopefully cover these in the negotiation. Once the text is drafted, it may be too late to make changes.

The CRaG procedure provides a tight timetable for scrutiny of new treaties. By briefing the sub-committee in both public and private sessions and by providing confidential access to documents, the department has enabled the committee to undertake its work far more efficiently than would otherwise have been the case. I hope that the department has itself benefited from timely feedback from the sub-committee as the negotiations have continued and that this will be a regular feature as further treaties are negotiated.