Transatlantic Trade and Investment Partnership (EUC Report)

Lord Jopling Excerpts

Tuesday 17th June 2014 Lords Chamber

[Lord Jopling (Con)]

My Lords, this report has been extremely well received all round. I hope very much, when the Minister comes to reply on behalf of the Government, that he will be able to tell us that the Government have received it as warmly as it seems to have been received everywhere else. Extremely warm tributes have been paid both to our staff and in particular to our chairman. I want to endorse that as strongly as I possibly can. We have been extremely fortunate, both in the staff, but especially in the chairman’s experience as a Commissioner in Brussels, which has been absolutely invaluable.

I am in no doubt that there are major economic and trade gains to be achieved as a result of a successful negotiation of TTIP. However, of those people who put figures on this, I hesitate a little. How much the benefits will be, or how soon they may come, is an unknown and is only subject to pious hopes and, in my view, random speculation. For instance, a great deal will depend on the negotiating skills of the Commission in the months and years that lie ahead of us. In my experience, the negotiating skills of the Commission certainly used to be patchy. I can remember just a few years ago I aroused the wrath of that lovely man who many of us miss so much, the noble Lord, Lord Grenfell, when he had been told that I had been addressing a large audience in Brussels. I had been recalling the period when I was a member of the Agriculture and Fisheries Council of Ministers and said there were some members of the Commission whom I would not feel comfortable asking to go to market to sell a cow of mine.

Quite frankly, the Government must keep a very close eye indeed on this negotiation as it proceeds to ensure that the Commission is not giving away what it might be tempted to give away to get a deal. We should understand that the Americans do not take prisoners in negotiations of this sort. The noble Lord, Lord Liddle, referred to this, and he was absolutely right. It has been referred to earlier and the noble Lord who just spoke referred to it. I was deeply shocked by the take-it-or-leave-it attitude of the members of the United States Administration from the Treasury who we met. They refused to accept that financial service could be part of the negotiations. As my noble friend the chairman said, this approach is just unacceptable in a negotiation of this sort, and I hope that the Commission will be extremely tough in saying that it is unacceptable.

As has been mentioned, our report makes it clear that the largest part of an agreement will be on the issue of non-tariff barriers; they are much more important than the relatively low level of trade tariffs. The noble Lord, Lord Brittan, who came to give evidence to us, pointed out that the previous negotiation failed because an agreement on non-tariff barriers could not be arrived at. My great concern with regard to non-tariff barriers is that a successful negotiation might not give us everything that we would like because of the federal structure of the United States and the underlying structure of states’ rights. As I kept saying during the course of our inquiry, there is a danger that an agreement could be made that would be made effective at federal level but would not be fully applicable at state level. The danger is that individual states would be free to cherry pick the details of an agreement, endorse what is to their benefit and ignore the less attractive ones. This would be especially difficult over procurement issues, although procurement fairness within the EU on this side of the Atlantic leaves a certain amount to be desired and is nothing for us to be proud of. The reference in paragraph 136 of the report to the example of the Canadian agreement with the European Union is relevant here. The final sentence of that paragraph states:

“The Canadian provinces had thus ‘participated fully’ in the negotiations, which had resulted in access to an estimated 70 to 80 per cent of the Canadian procurement market between the federal government, the provinces, and the large municipalities”.

I think that we ought to apply ourselves to seeing what we could adapt from the Canadian agreement.

I will say a word about some of the agricultural problems, and here I declare an interest as a recipient of funds from the common agricultural policy. When this negotiation started, people were saying that agricultural problems could be among the biggest stumbling blocks, but it seems to me that at last Europe has begun to dismantle some of its headstrong opposition to, for instance, genetically modified crops. I understand that agreement has been reached in the past week or two that will mean that for the first time, quite rightly, properly controlled genetically modified crops will be grown in Europe, and that is welcome. However, the United States should realise—I am saying this for its benefit—that opposition to, for instance, genetically modified crops and growth-promoting hormones is really contrary to the science and is a straight policy of trade protectionism. When Europe banned artificially enhanced hormone treatment for the production of beef, I was the only Minister who voted against that ban. It was done in spite of the scientific evidence. It was evidence that the members of the Commission had requested, and when they got it, they suppressed it because they did not like the advice they got.

People should understand that these hormones appear naturally in beef, whether artificially enhanced or not; they are a natural function and natural part of beef. Quite frankly, it is impossible to tell from a piece or side of beef whether that animal was given artificial growth-promoting hormones—I say artificial but they are exactly the same as the natural ones in the meat. It is impossible to tell whether they were implanted in the beef or not and, quite honestly, the European Union’s opposition is nothing more than good old-fashioned luddism.

Here again there are lessons to be learnt from the Canadian agreement. During our discussions and evidence-taking, we came across relatively few outright opponents of the negotiation and, principally, they came from among the representatives of organised labour. However, I felt that the line that the American trade unions took and their approach, while understandable, were largely driven by fear of the unknown and that they were preparing for something that might be unattractive.

I was really surprised, when we went to Washington, that TTIP was far from the front of the minds of some members of the United States House of Representatives and the Senate. I think it was the noble Baroness, Lady Henig, who referred to the street outside and the noble Lord, Lord Radice, who referred to other places in the United Kingdom, where not many people know what a TTIP is. It was not terribly different on Capitol Hill.

Understandably, we now have a lull in the hard phase of the negotiations themselves. This is totally understandable with the elections we have just had in the European Union and the mid-term elections on Capitol Hill coming in only a few months’ time, together with the lame-duck Commission, pending the appointment of a new one at the end of the year. However, come 2015, early next year, there will be an 18-month window to come to an agreement. I believe that the President will be very keen indeed to achieve a settlement over TTIP in the final months of his presidency. The stakes and the benefits to his inheritance are very great, and I think he will go very strongly for it. My concern is that, if there is a totally Republican Congress on Capitol Hill, it may be tempted to play silly games in order to thwart him. That would be the greatest misfortune. It is vital that Congress gives the President the fast-track arrangements, which mean it cannot pick from the agreement but has to either take it or leave it. We were assured when we were there that Congress would give fast-track permission to the President, but the last two years of a presidency can sometimes give rise to actions in all parliaments which are not exactly logical.

I just hope that, in the 18 months of this window from the beginning of next year, we can achieve an agreement which will be for the benefit of both the Americans and Europe—including, in particular, the United Kingdom.