Transatlantic Trade and Investment Partnership (EUC Report)

Lord Liddle Excerpts

Tuesday 17th June 2014 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I do not have much to add to the excellence of the report by the noble Lord, Lord Tugendhat, and his committee. It is a truly comprehensive report. I put my name down to speak in this debate because, as a strong supporter of open trade—as a believer that it is a driver of economic growth and of great help to poor people through lowering prices—I am very concerned, on the basis of my own contacts and workings on the continent, about the political mood towards TTIP in the European Union at the moment, and I think that a major political effort will be required if this objective is to be secured. At the end of the debate I would like to hear from the noble Lord, Lord Livingston, whether he shares this concern about the progress of the negotiations and the rising political opposition to TTIP, and what the Government propose to do about it.

Of course, trade negotiations are always difficult, as I learnt in the time I spent in my noble friend Lord Mandelson’s cabinet when he was Trade Commissioner in Brussels. The United States is an extremely difficult partner to deal with. Its political system is, if anything, even more dysfunctional than that of the European Union. Therefore, it is extremely difficult for an American Administration to get their ducks in a row to do a major trade agreement.

There is no certainty at the moment about when trade promotion authority, which is essential to this, is going to be secured—possibly at the end of this year, possibly early in the life of the next Congress. There is great uncertainty about that. There is a lot of opposition to trade agreements within the Democratic Party as well as on the part of the Tea Party on the right. The noble Lord, Lord Lamont, is right that the way in which the regulatory institutions in the United States operate is that a lot of them are independent, as it were, of the Administration and it is quite difficult to get them to agree to make progress.

We have the great advantage, which I think the Government have not properly recognised, of having a European Commission that has been pro-free trade and is a key driver on the European side, but in my opinion there is no natural majority on the Council for ambitious trade agreements. We have allies among the northern Liberals but we always have to carry Germany, and if we are going to get an agreement through we always have to carry Italy as well; the Italian vote in the Council is crucial on these questions.

I am concerned about the general political mood after the European elections, which the noble Lord, Lord Tugendhat, referred to: the feeling that what has gone wrong, the reason for the rise of populism on the left and the right in Europe, is not that Europe has not economically reformed enough in the direction in which many in Britain want it to: rather, that there has been too much liberalisation and globalisation and that the EU has partly contributed to that. That is a large part of the motive behind the support for populism and the rise of protectionism.

There are also specific reasons, which the noble Lord referred to, such as the Snowden and BNP Paribas affairs, but the last time that I was in Brussels attending debates on this subject I was amazed by the strength of feeling among NGOs on the question of whether environmental and food safety standards would be threatened by this agreement or—the point my noble friend Lady Quin referred to—on the question of the investor-state dispute mechanism and whether it could be used as a lever to, as it were, privatise our sacred public services in Britain, including the NHS.

What alarmed me most was to be told that the German and Austrian trade unions, which in European affairs I normally look on as pillars of common sense on matters European, both economic and political, are having serious doubts about the TTIP agreement. The worry that one has politically is that there are already populists in the Parliament, but if at the same time the trade unions, the Greens and the social democratic left are mobilising against this agreement, we will find that we do not have a majority for it in the Parliament.

That would be a great pity, because the economic gains as set out—although, like anyone else, I do not believe the precise numbers that are put on these things—are potentially huge. It would also be a pity geopolitically, as the agreement would revive trans- atlanticism. At a key point in history, when there is a real risk of America turning to Asia, this would be an opportunity to revive the transatlantic relationship. It could build something that might have great long-term potential if we can, as it were, establish a trade agreement that contains within it mechanisms for agreeing on regulation for the future. That would be a tremendous step forward in America and Europe’s ability to set global standards in a world where economic power is shifting against us. It would be very important for us and crucial for our ability in future to defend our interests and values in trade.

Also, the Government have said that TTIP is very important for their own objectives of achieving reform in the EU and, if they are re-elected, for building a case for support for the EU in a referendum. Do the Government share these concerns? What are they going to do about them? How are they going to address them? We have to try to reassure on some of the points that have been made on environmental standards and food safety standards. We have to find the means of providing reassurance. We have to provide the means of finding the assurance that we are not signing away special legal privileges to corporations that allow them to override national policies and insist on their entitlements to win contracts where we want to protect our public services. We have to find some way of providing those assurances.

If you are going to win support for trade agreements that involve very big economic adjustments—and there will be big adjustments in agriculture and textiles, and possibly in automobiles, as a result of this agreement—you have to have some social mechanisms in place to compensate for those difficult adjustments.

We face a potentially serious situation. It is of great concern, and I hope the Minister will be able to assure us that the Government are fully on top of this, are determined to find allies, and have a political strategy for ensuring that this important agreement goes through.