UK-India: Comprehensive Economic and Trade Agreement
Lord Hannay of Chiswick Excerpts(1 day, 10 hours ago)
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Lord Hannay of Chiswick (CB)
My Lords, it is a pleasure to follow and applaud the excellent introductory speech of the noble and learned Lord, Lord Goldsmith, the former chair of the International Agreements Committee, on which I have the honour to serve. As we see him rotate off the chairmanship, I wish to say—I hope I am not going too far and taking in vain the name of others on the committee—how grateful we are for the skill and sheer hard work that he has devoted to the chairmanship.
The International Agreements Committee is relatively new and unfortunately not matched by a similar committee in the other place. Short though its existence has been, it has been required to handle, under the CRaG procedures, some quite significant agreements, of which this free trade agreement with India is certainly one. In every case, the House has accepted the advice that the committee has given, as it will, I hope, at the end of this debate.
The free trade agreement with India is significant for at least three reasons. First, India is the most populous country in the world. It is rapidly growing, with a huge internal market, and is becoming less fragmented as a result of its Government’s fiscal policies. Secondly, India has a long tradition of trade protectionism but is slowly moving away from that approach towards our preference for freer and fairer trade, with agreements with ourselves, the European Union and the United States—although the details of the last remain something of a mystery. Thirdly, we have been able to negotiate a free trade agreement that we believe to be fully consistent with the provisions of the GATT/WTO, the world’s rules-based trade order, which is taking some hard knocks from President Trump’s regrettable lurch into unilateral tariff impositions.
Is the agreement perfect? Certainly not, as the noble and learned Lord, Lord Goldsmith, said. It lacks substantial and effective provisions for trade in services, particularly legal and financial services. Services make up 80% of our economy, hence the need to treat this agreement not as an end point but as a living instrument that can be improved to mutual benefit over time. I hope that when he replies to this debate the Minister will confirm that that is how the Government will treat it.
Does the agreement risk flooding the UK with migrant workers? It does not do that, since the provisions of the agreement are largely limited to intra-company transfers similar to those that we already have with many other countries, to our and their mutual benefit.
Will the gains to the British economy, which are admittedly not enormous and in some cases not immediate, fall into our laps? They will not. They will materialise only if the Government give advice and support, in particular to small and medium-sized enterprises, to penetrate what is a complex and often difficult market. That will require a systematic effort by the Government’s export promotion functions and by the offices of our high commission in India, including its regional branches. Can the Minister say what we are doing to mount that effort?
Straying now a little on to two points that are a bit wide of the precise subject of this debate, I would like to ask whether we should not be using our very welcome membership of the CPTPP to bring both India and the European Union into the ranks of its members. It is often said that CPTPP members do not take positions on other countries’ membership, and I understand very well that the figure of China and Taiwan lurks in the background of that view, but it is slightly absurd. It must be the only membership organisation that I have ever come across where the members do not take a view about future members. I would like to hear what the Government have to say about the prospect of both the EU and India joining. I point out that, if India were to join the CPTPP, that would go quite a long way towards remedying the problem over the lack of provisions on services in this agreement.
Straying a little further again, I would like to point out that the Government’s trade policy and free trade agreements seem not to have reached Latin America. Yet the European Union has just included a very ambitious and important agreement with Mercosur, which is likely to be beneficial to both sides. I believe that a similar agreement could be very beneficial to us. I would like to hear from the Minister whether that is somewhere on the horizon of our future trade policy.
I do not want to close without a wider glance at the inadequacies of the CRaG process, although we will have an opportunity to debate them again on 16 March. The 21 working-days limit for the committee to take evidence and produce a report and for it to be debated is, frankly, absurd. It is absurdly short. In the present case, problems were avoided thanks to the Business Department having co-operated in briefing the committee about the content of the agreement before the CRaG procedure was triggered, but that does not always happen. Sometimes, we get a situation where, I am ashamed to say, as happened on one occasion, we have had to produce a report without taking any evidence at all because there was no time or opportunity to do so. But that is for 16 March. I would like there to be an agreement soon between us and the Government that, as a general rule, the Government will grant one additional 21-day period unless there is an overriding national interest not to do so. I hope that the Minister can reflect on that and discuss it with his colleagues before we meet on 16 March.
US Tariffs
Lord Hannay of Chiswick Excerpts(1 week, 3 days ago)
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Lord Stockwood (Lab)
The noble Lord raises a number of challenging and fast-moving issues, and I will try to respond as fully as I can. It is worth stating that the UK secured that preferential deal last year, driven by the Prime Minister’s direct engagement with President Trump. That was trying to give British businesses certainty and competitive advantages. The ruling at the weekend does not affect our preferential treatment in the key sectors such as pharma, cars and steel that the noble Lord mentioned.
The Business Secretary spoke to US trade representative Jamieson Greer this weekend, making clear our concerns about uncertainty and our degree of confidence in the honouring of those agreements that we needed, and he had those reassurances. UK officials across Whitehall and Washington are engaging intensively with the US as we speak, and those discussions will continue all of this week, at which time we can update the House. It is worth stating that we have always had a cool-headed and pragmatic approach to trade deals, and while I would not comment on other Governments’ policies, we do have a competitive advantage globally in the sectors we set out in the original negotiation. The biggest beneficiaries of this weekend’s announcements are those trade barriers coming down for other countries, but we still have the best deal globally, and we continue to negotiate to retain that preferential position.
Lord Hannay of Chiswick (CB)
My Lords, would the Minister say whether the Government’s information leads them to suppose that the President’s choice of 15% and its differential impact on countries was deliberate or inadvertent?
Lord Stockwood (Lab)
As a Minister only six months into the job, I have uncertainty in my own mind sometimes; I am certainly not going to comment on the US President. What I can say is that we remain the only country that has secured a 10% tariff on auto, securing hundreds of thousands of jobs; we are the only country in the world with a 0% tariff on pharmaceuticals; and we are the only country in the world to benefit from a 25% tariff on steel, aluminium and other derivatives. We believe that we will retain those competitive positions, but our position is to control the controllables that we have today and negotiate to retain those benefits for UK businesses.
Sanitary and Phytosanitary Measures
Lord Hannay of Chiswick Excerpts(6 months ago)
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Lord Hannay of Chiswick (CB)
My Lords, since we are a member of the CPTPP, can the Minister tell us whether any of the other members of that organisation have raised this problem with us and said there will be any incompatibility? After all, our intention to sign an SPS agreement with the EU is a matter of common knowledge.
Baroness Jones of Whitchurch (Lab)
My Lords, these issues are, as ever, discussed at the CPTPP ministerial meetings. We have assured all those partners that we will maintain our existing agricultural standards, as I have confirmed.
Craftspeople: European Union Travel and Trade
Lord Hannay of Chiswick Excerpts(1 year, 9 months ago)
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Lord Offord of Garvel (Con)
I thank the noble Lord for that question. We have a trade and co-operation agreement. In fact, our Brexit deal was one of the most progressive trade deals we had at the time of Brexit, which has been capitalised upon now, to 73 countries comprising 60% of global trade. Therefore, we have no tariffs and quotas for UK-EU goods trade. The Government’s aim is to maximise and make the best of that. The British people voted for Brexit to release the benefits of Brexit, which are increasingly coming through in our economy and trade. There are some costs to be borne along the way.
Lord Hannay of Chiswick (CB)
My Lords, could the Minister explain to the House how it is that you do a deal with the EU on a state-by-state basis?
Lord Offord of Garvel (Con)
I refer the noble Lord to my colleague in the other place, Greg Hands MP, who is the Minister for Europe. He is spending an increasing amount of time in European capitals. We also have 300 embassy staff working in the EU on deal-by-deal arrangements with countries to help, for example, our musicians and crafts folk. It is working very well.
CPTPP: Conclusion of Negotiations
Lord Hannay of Chiswick Excerpts(2 years, 10 months ago)
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Lord Hannay of Chiswick (CB)
My Lords, the Minister asked for a bit more enthusiasm for the CPTPP. As one who has spoken in debates in this House and in Grand Committee in favour of the agreement that has now been concluded, I do not think I qualify as lacking enthusiasm, but does the Minister not recognise that you get more enthusiasm by quoting figures that are valid, reliable and solid? For example, he quoted trade with Vietnam. That is very valuable indeed, but we have a free trade area agreement with Vietnam already, so can he say what CPTPP membership will add to what we already have? When he talked about trillions of trade in that area, that is of course true, but those are not all benefits to the United Kingdom. Enthusiasm will come if there is solid reason for it.
On China, will he answer two questions? At what point in time does our view on an agreement between the CPTPP and China—and indeed Taiwan; both have applied —become valid? At what point do we have an equal say? Presumably not now, because we are not yet a CPTPP member. Presumably not just when we ratify it—will all members have to ratify it before we have a say in China’s relationship? It would be really helpful to have this; I asked the question in earlier debates and I am sorry to say that his predecessor never wished to reply to it.
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord for raising these points. He asks what the benefits are. As I have stated, the free trade agreement with Malaysia is in itself a worthy goal. We in this Chamber would be delighted—and I as a Minister, and the Department for Business and Trade, would be very comfortable—if all we had was a free trade agreement with Malaysia, where there are tariffs of up to 80% on some of the spirits we export. It is one of the largest consumers of Scotch whisky in Asia.
Secondarily, and more importantly, he mentioned Vietnam. The tariffs we have under our current agreements with Vietnam, on exports of pork, chocolate, engines and medicines, for example, are going to end far more quickly, so there is a speeding up of the process: if we already have a parallel agreement there is, in many instances, a speeding up of our access to those markets. It also highlights the importance of other areas, such as professional qualification recognition, which is so important; how services function; and the very important rules of origin. For all of us who believe in a renewed UK automotive sector, it is exactly these broad rules of origin that will allow us to make a success of this trading region.
The final point, which is often missed because we rightly look at the detail and the statistics, is that there are powerful personal, emotional and philosophical elements to joining this relationship. It gives us great sway over the future of global trade. It makes us relevant in a core area, in terms of our long-term national defence. It brings us closer together with other nations and it acts as a beacon to our exporters in this country—frankly, we could do with more of the companies in this great nation of ours exporting. I look forward to the opportunity this debate brings to give us a truly world view, rather than one that focuses simply on our locality, and put fire in the heart of our nation’s exporters to take our products and services to the rest of the world.
Electric Cars: Export to EU
Lord Hannay of Chiswick Excerpts(3 years ago)
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Lord Johnson of Lainston (Con)
I greatly thank the noble Lord for his intervention and for the important promotion of this industry. I say to anyone who is thinking of locating their business in Spain that Ferrovial announced yesterday that it is leaving Spain because it is one of the least hospitable environments in Europe to do business, whereas we know that Britain remains the top destination for doing business in Europe and the second most important destination for foreign direct investment in the world. It is important to remember and celebrate that last year we raised more money for technology and start-ups, which is precisely what we are talking about with the battery and EV industry, than France and Germany combined, more than China, and more than India. It is a testament to this Government’s efforts to ensure that we have the subsidies and support, including government support, to enable our citizenry—some of the best educated in the world—to take advantage of this. I take the point made by the noble Lord very seriously. We are doing a huge amount: the facts bear it out, the money is coming here and so is the industry.
Lord Hannay of Chiswick (CB)
My Lords, would the Minister perhaps be so kind as to answer the question that the noble Lord, Lord Fox, asked about the use of the machinery of the trade and co-operation agreement to take up with the European Union any difficulties that might arise through a change in circumstances described, because it is really important? With the presumably better climate that now exists for our dealings with the European Union, surely this is the time to raise the matter in the appropriate top-level committee of the TCA.
Lord Johnson of Lainston (Con)
We work with all our partners to ensure that trade with the European Union is as seamless and friction-free as possible, and I know that we all congratulate the Prime Minister on the resolution of the situation in Northern Ireland. I believe personally and passionately from my conversations over the last few days alone—including at a breakfast I attended with the Spanish Business Council—that this will allow a substantial number of the market access barriers, the other areas of friction, to be removed. This was demonstrated when we saw the reintroduction of discussions on the Horizon programme almost immediately following the announcement of the Windsor Framework, so I am very confident that a practical solution can be reached, but these are short-term measures. The reality is that we need to build our own capacity in this country, invest in it and support it, and that is exactly what we are doing.