Japan Free Trade Agreement

Lord McNicol of West Kilbride Excerpts

Thursday 17th September 2020 Lords Chamber

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

I thank both noble Lords from the Front Benches opposite for welcoming the agreement. I share their view that this is a good agreement for the United Kingdom.

I will do all I can to answer the questions put to me. First, I can confirm that the IAC—our committee which scrutinises agreements—will be treated on all fours with the ITC, and anything that goes to the ITC will also go to the IAC. The next stage, which is going on at the moment, is that the agreement is being “legally scrubbed”, or put into a good state. When that is done, which will probably be sometime in early October, that agreement in the first instance will be presented in its entirety to the two committees. It will be presented to them in good time for them to report on the agreement at the same time as the whole agreement is laid before your Lordships’ House.

At the same time as we present the agreement, we will present an impact assessment, which will set out the impact of this agreement in various environmental and other matters and, critically, we will publish another assessment which shows where this agreement differs from the previous EU agreement. Therefore, if noble Lords do not mind waiting, when that final package appears in front of the committees, and through the committees to themselves, it will answer the questions that have been asked.

I repeat that we have no desire at all not to be transparent and open with your Lordships’ House. It will be of great benefit to us if these agreements are well understood. They are important in themselves but they will be even more important once our businesses throughout the land understand them and are able to operationalise them to their own benefit.

On some of the specific questions that were raised, I can confirm that there is no ISDS clause in this agreement, so that should not be a matter of concern. Rules of origin are the same as in the previous EU-Japan agreement but with three improvements: our coats, knitwear and biscuits industries have extended rules of origin, so will be able to bring in ingredients from a wider range of places than they could under the previous agreement. Therefore, noble Lords who enjoy their shortbread can be assured that it will now be sold on even better terms into Japan.

The noble Lord, Lord Stevenson, mentioned quotas, which are a very small part of this. Out of £150 million of agricultural trade between the UK and Japan, only £1 million is covered by quotas. As mentioned, our producers will be able to take advantage of the unused quotas in that, and for products such as Stilton cheese, that will certainly be of benefit to its producers.

The state aid references in the agreement are de minimis and the kind of state aid arrangements which we regularly find in agreements of this sort. This in no way creates a new state aid regime for the UK.

The noble Lord, Lord Purvis, mentioned GIs. Japan has agreed that we can put up to 70 further GIs in front of them and the tone of that discussion was very warm. Those GIs will go through a challenge process, but my right honourable friend the Trade Secretary and I are very confident that they, or at least the vast bulk of them, will be approved by the Japanese.

If noble Lords on the Front Benches opposite wish to see any further points of detail covered, I will be happy to deal with them separately. However, if noble Lords do not mind waiting for the next few weeks, until these agreements are out in the open, things will be very clear then, and I hope that will lead to people understanding and further welcoming a very important agreement.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.