Free Trade Agreement: Iceland, Liechtenstein and Norway

Lord Grimstone of Boscobel Excerpts

Thursday 14th October 2021 Lords Chamber

This trade agreement, while important, may not be considered massively instrumental to the future of the British Isles. Yet contained in it are many important features that the Government need to take far more seriously and consider again carefully.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I thank the noble Earl, Lord Kinnoull, for tabling today’s Motion, and I congratulate the European Affairs Committee on its first foray into reporting on free trade agreements. Given the quality of this report, the IAC will need to look to its laurels. I also thank the committee for acknowledging the speed and pace at which these negotiations were successfully concluded and the ambition that is inherent in the final outcome. I will try to take the advice of the noble Lord, Lord Hannay of Chiswick, and prize modesty over hyperbole in my remarks—but perhaps not that of the noble Lord, Lord Purvis of Tweed, about stressing negativities rather than positivities—as I go through this.

I shall quickly deal with the question that my noble friend Lady McIntosh asked about the Professional Qualifications Bill. My understanding is that the House is likely to have the pleasure of returning to it some time after the first week of November. I am sure that when it returns we will be debating the points that my noble friend and the noble Lords, Lord Purvis and Lord Grantchester, have raised today. I look forward to that.

I note the comments made by noble Lords about the fact that the explanatory materials accompanying the FTA fell short of the committee’s expectations. The materials were drawn from the practice and approach we took to such materials for other continuity FTAs to date. Perhaps the difference between us is that I see this as a continuity FTA with some enhancements, as opposed to a new FTA, but I will come back to that rather arcane point later. Of course I note the concerns raised by the committee, in particular by the noble Baroness, Lady Ludford, in respect of accessible formats. As someone who is having a cataract operation on his right eye tomorrow, I fully endorse the need for fonts in these documents to be readable.

Moving on, I welcome the opportunity to debate and discuss this continuity FTA with noble Lords. I thank all those who contributed to the debate. I will try to respond to the many insightful and well-informed points that have been made. I think we all recognise that this debate has covered a wide range of topics. Some of them were perhaps not entirely within the scope of the Motion, while some were very technical, but I will of course respond to noble Lords in writing on all these points.

The free trade agreement between the UK and Norway, Iceland and Liechtenstein is an important achievement. We have enjoyed a strong trading relationship with these three countries for many years. Securing this trade agreement was important to all parties; as we have heard, total trade between them was worth no less than £21.6 billion in 2020. This continuity FTA is comprehensive and will support UK businesses across a wide range of critical sectors, including digital, financial and professional business services. It also locks in tariff-free trade on the vast majority of goods.

I agree with the noble Lord, Lord Grantchester, that this agreement contains some very progressive clauses on matters such as the empowerment of women. Of course, when negotiating new free trade agreements, it is always our objective to carry on this process of including progressive clauses. Perhaps it is the case that, with these three particular parties, we had like-minded counterparties in these matters. Negotiations are negotiations; they may not always be straightforward but I assure noble Lords that we always press for such things in our negotiations. There is much common ground across this House on the matters that it is right and proper for us to press on—including human rights, which we have debated many times in the context of free trade agreements.

As part of a shared goal to continue the deep trade relationship the four countries have shared in the past through the European Economic Area and single market, we have very good provisions in digital trade, mobile roaming and business travel. That is to be welcomed.

With all due respect, I want to correct the point made by the noble Baroness, Lady Ludford, about some of these mobility provisions. The mode 4 commitments with the EU under the TCA are similar to our commitments in this agreement and the mode 4 chapter provisions in the EU TCA. Indeed, in some ways, they go beyond what was agreed with the EU. If I may, I will write to the noble Baroness to clarify that further.

The agreement delivers services market access across a wide range of sectors. This is great news for professional and business services, financial services and transport services sectors. For example—it is a small example—Norway has agreed to remove residency requirements for senior management and directors. As I say, it may seem small, but it means that more British talent can be on Norwegian company boards without having to relocate there. These benefits, and the others in the agreement, demonstrate that this is a good agreement. Let me say to my noble friend Lady McIntosh that this agreement is good for all parties; it is a symmetrical agreement. I was pleased to see this acknowledged in the committee’s reports.

These negotiations were undertaken in the spirit of continuity to protect existing trade and future-proof our long-term relationship. However, translating the trade relationship that the UK enjoyed with these partners via the EEA agreement and single market into a bilateral FTA context has been a complex task. To future-proof our long-term relationship, all four countries agreed that the legal framework of a bilateral free trade agreement was the best way to protect and build on existing trade.

In answer to the question of the noble Earl, Lord Kinnoull, about further incremental progress in this relationship, these countries are our close trading partners and we will continue discussions on how to further strengthen trade in the future, using the joint committee arrangements as appropriate. I pick up the point made by the noble Lord, Lord Purvis: I hope that our Parliaments will have close contact with each other, which will be a good thing. We have pressure from our Parliaments and parliamentarians to improve and strengthen this agreement as we move forward. We will, of course, absolutely try and keep pace—the worry of the noble Lord, Lord Hannay—with any progress that the EU makes with these countries. We will try to make sure that we do at least as well as the EU does.

The noble Earl, Lord Kinnoull, asked about scrutiny of this trade agreement and questioned, quite properly, whether it fell short of undertakings that we have previously given. This was also a matter of concern to the noble Baroness, Lady Ludford, and the noble Lord, Lord Grantchester. We are in no way pulling back from the WMS of last December, but perhaps I may remind noble Lords that it outlined the Government’s approach to new FTAs with countries that did not have a trade agreement with the EU before the UK’s exit. We and I regard this agreement as a continuity agreement, albeit with some enhancements—I am trying to avoid hyperbole—and the Government have followed the same scrutiny process for this agreement as we did with other continuity agreements.

I can reaffirm that for new FTAs, the Government are committed to even greater transparency. In the ongoing live trade talks with Australia, New Zealand and CPTPP—although I hope noble Lords will understand that I cannot go into fine detail as to where those negotiations have reached—we set out our negotiation objectives, alongside a response to the public consultation as well as an initial economic assessment. The Government have continued, and will continue, to keep Parliament and the public informed on the process of negotiations via regular updates, including close engagement with the International Trade Select Committee and the IAC.

Some Peers have been kind enough to refer to the Grimstone rules in this matter. Modesty prevents me claiming credit for them but I can reassure the House that I am absolutely committed to the concept of parliamentary scrutiny for FTAs. I will continue to be committed and to argue for it whenever I see that we may be pulling back from that, which I certainly hope that we will not.

Perhaps I may say a few words regarding consultation with the devolved Administrations because I know that this was an area of concern to the committee and other noble Lords, including the noble Lord, Lord Purvis of Tweed. It is of course important to note— I have to put this on the record—that international trade negotiations are a UK reserved competence. It is in that context that we carry out our consultations with the devolved Administrations. However, regarding the specific negotiations that we are talking about, I can reassure noble Lords that there have been months of engagement with the DAs. I should recite, slightly at length, how that has been manifested.

It has involved a quarterly ministerial forum for trade with Ministers from the devolved Administrations; a six-weekly meeting involving senior officials from across the devolved Administrations; several chapter-specific policy round tables hosted by departments on key areas such as goods, rules of origin, and services and investment; regular chief negotiator calls running in parallel with key moments in the negotiations; and texts shared in areas of devolved competence such as services, climate change and environment, women’s economic empowerment and procurement, to name but a few, before the text was finalised with the negotiating partners.

I can understand why the devolved Administrations will perhaps always ask for more, but I believe that the level and frequency of engagement at all levels in the short timeframe for these negotiations makes clear our commitment to deliver trade agreements that will benefit every corner of our country.

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[Lord Purvis of Tweed (LD)]

I am grateful to the Minister for giving way. He knows that I am a cheerful Jeremiah, even if I wish to be awkward sometimes and ask specific questions, some of which are about geographical indications. Could the Minister explain why the Government failed to secure with Norway the protection of the geographical indicator for the UK’s fifth-biggest food and drink export, the biggest single sector that is protected under a GI—Scottish farmed and wild salmon? Norway is our biggest competitor country around the world and is very keen for the world to take Norwegian salmon as Scottish—so why did the Government fail to do this?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord. That was the first intervention I have ever had at this Dispatch Box, so it was a pleasure that, perhaps unsurprisingly, it came from the noble Lord, Lord Purvis. I quite accept the importance of the point that he raises. You cannot get all that you ask for, of course, when you negotiate these agreements. The agreement is as it is, but, if I can provide more information on the background to the noble Lord, I will of course do that and copy it to other noble Lords.

In conclusion, I again thank all noble Lords for their many insightful contributions to this important debate. I have resisted giving a running commentary on our total trade policy in this debate—we would be here for a lot longer if I were to do that—but, of course, I am always very happy to answer noble Lords’ questions on that. I look forward to continuing to engage—

[The Earl of Kinnoull (CB)]

I am very sorry to be the second person ever to intervene on the noble Lord—and, of course, I am going to speak after him. But could he address the concordat point that has been raised?

[Lord Grimstone of Boscobel (Con)]

Perhaps the noble Earl could remind me what the concordat point was.

[The Earl of Kinnoull (CB)]

Certainly—there is a recommendation in the latest report from the International Agreements Committee that a concordat be entered into. The International Trade Committee in the House of Commons has written in support of that. So there is considerable support for it in Parliament, and it would be very interesting, as the noble Lord is here, to hear the Government’s current thinking.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

I thank the noble Earl. My memory flooded back as soon as he started to explain that. I thought that the report from the IAC was very good, as a marking of progress over the last year. It has made recommendations, which we are studying closely, and we will of course respond to the IAC on that in the normal way within the agreed timeframe.

Coming back to this debate, I look forward to continuing to engage with noble Lords on trade relationships between the UK, Norway, Ireland and Liechtenstein in the future.

[The Earl of Kinnoull (CB)]

I thank the Minister, who is unbelievably courteous and was as courteous as ever when still answering emails from me at 9.20 pm last night. I think he realises that the whole House is very grateful for his engagement. I add my thanks to my many colleagues who have spoken in this interesting debate, unfortunately held late on a Thursday—a time when not so many of our colleagues were going to be here. I will not go through what everyone said—I would certainly never do that—but I have written down three things that I thought worthy of reflection.

The first is the chimera nature of this free trade agreement, which on the one hand is new and on the other is old. There is an element of a chimera nature, but I hope the Minister will reflect on the fact that the scrutiny processes in this House are well developed. The International Agreements Committee, which was born out of the European Union Committee earlier this year, is a highly professional organisation that wants to do good, not harm. Rebalancing, as I put it, between Parliament and the Executive is necessary, so I hope that if a similar agreement came along it might fall on the other side of the fence and that there would be some engagement.

In fact—this is my second point—as the Minister went through the good news about the devolved Administrations, I very nearly got up and said, “Can we have that as well?”, because they are getting a heck of a lot more engagement and discussion of these things than our own International Agreements Committee. That is another thing that the Minister might like to reflect on. I know he is deeply interested in scrutiny, and getting that balance right is very important. It is indeed a balance, and there could be too much. Reflecting on that would be good.

The final point—it seems to be the final point every time I get up in debates such as this—is Northern Ireland, of course. The Minister generously said there would be business guidance. There was no timetable on that, but I very much hope that guidance will come along pretty quickly. At the moment, if I were trying to import raw salmon into Northern Ireland, I am not sure what I would do, because it is the beneficiary of now being tariff free in the UK but not in the EU. Who knows what would happen to a piece of raw salmon when it arrived in Belfast? That needs urgent attention. There are quite a lot of other things to do with Northern Ireland that we raise in the report and that I hope would be coped with at the same time.