Australia Free Trade Agreement
Debate between Lord Robathan and Lord Purvis of Tweed
Lord Robathan (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Kerr, with whom I used to sit on this committee. We sparred a little; he particularly did not like my suggestion that smoking in the committee should be banned, even when it was on Zoom. But never mind—I think other members of the committee will understand that.
I, like him, am broadly philosophically a free trader—not totally, but broadly philosophically one. I thought I would be the first person speaking in this debate to welcome the free trade agreement but the noble Lord, Lord Oates, welcomed it, albeit with quite a few reservations. I do welcome it, wholeheartedly. The report, which I have read is mostly—this is not meant to be condescending—extremely sensible and raised some very reasonable points.
I was on the committee at the beginning of the investigation. It was extremely well chaired by the noble and learned Lord, Lord Goldsmith, and I regret that he has felt the need to stand down from the House of Lords because of rather controversial issues about declarations. I thought he was a really good chairman and extraordinarily balanced. I am sure the noble Baroness, Lady Hayter of Kentish Town, is similarly balanced and a good chairman, but I have no experience of that.
I shall just explain why I left the committee, which is slightly illustrated by this debate. I left because I was too often the sole voice on the committee who wanted the trade agreements to work. I am afraid that too many on the committee wanted to see post-Brexit trade deals fail because they wanted Brexit to fail. I found this extremely sad because I am interested in the good of this country, not in party-political—or whatever—machinations.
This UK-Australia trade deal is far from perfect—we have heard about a lot of the defects in it—but please show me a free trade agreement that is perfect. When we were in the European Union, the EU agreements were extraordinarily torturous and slow, often reaching no conclusion at all, not least because they were trying to satisfy 26 or 27 members of the EU. They were looking after French farmers, for instance, which is more important in the EU than the benefits of a free trade agreement to consumers and society as a whole.
I am a farmer, as declared in the register of interests, and I know things can be very hard. However, interestingly—I would like my noble friend to confirm this when he sums up—I understand that the current quotas of beef and lamb imported into the UK from the antipodes are not nearly filled, so this free trade agreement will not make things worse. I have to say that some of the arguments being advanced have echoes of the corn law debates.
The common agricultural policy—of which we all have experience in one way or another—is very expensive, extremely disruptive to agricultural communities and, frankly, madness. Surely it is better to be out of that. I would love to hear somebody among those who will speak later defend the common agricultural policy. It has hugely harmed the agricultural sector in so many ways—I agree that perhaps it needed sprucing up, but, nevertheless, it really has.
Climate change has been much mentioned. I have been banging on about climate change and environmental issues since I got into the House of Commons, 30 years ago. When I first mentioned climate change, it was thought to be a rather eccentric obsession; it is not anymore. However, I have to say that the report is somewhat nitpicking on the issue of Australian coal. I agree with the sentiment, but those with nostalgia for our imperial past may not have realised that Australia is a sovereign country now, not one of our colonies, so it is up to Australia to decide what to do. Yes, we can lobby for it, but hold on, how many of us are not wearing something—in my case, it is my socks and shirt—that were not made in China?
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Viscount, as I frequently do in these debates. I enjoy his contributions, and the debates, and I will touch on his substantive point on the scrutiny period in a moment. Given his comment, combined with that of the noble Lord, Lord Kerr, on these issues, discussing the quality of the horse’s breeding after it has bolted, I am willing—unless the Minister is able to be reassuring—to table a Motion to extend the scrutiny period beyond 20 July. I have done this before and will do so again, because we need to properly discuss these issues in both Houses.
I pay tribute to the committee for its work; I have done so before and I will continue to do so. Its reports are for debate in this House but they also inform it and the public, and they do a great constitutional service. My noble friend Lord Oates and I are literally Liberal free traders, and we therefore welcome the agreement, especially the parts on services, recognition of professional qualifications and the movement of people, which the noble Lord, Lord Liddle, mentioned. In supporting free, fair and open trade, many of our debates are more about non-tariff barriers than tariff barriers. This was particularly the case with Australia, as was mentioned, because its tariffs on UK exports were already low, and the regulatory elements of alignment are therefore very important.
There are questions about services support and facilitation, such as data transfer, where the committee highlighted that there is no data equivalence with Australia. This may cause difficulties for our combined services trade with those with whom we are seeking equivalence agreements. So I hope that the Minister will be able to say whether we expect to take forward in a meaningful way the discussions on data equivalence agreements with Australia to support the reassurance of consumers as well as trade facilitation.
I also enjoyed the debate because there were a couple of areas where there was not total unanimity. The noble Lord, Lord Robathan, was a case in point: I enjoyed his personal resignation statement—obviously, he felt left out—and I agree with him on China. I flippantly said that I do know where the cloth that I wear is from; I was an ambassador for the Scottish College of Textiles in my former constituency, and these are important issues.
The noble Lord raised a point with the noble Lord, Lord Liddle, on where we are geopolitically with our agreement with Australia, and with New Zealand, which we discussed. One of New Zealand’s oldest trade agreements is with China and, at the same time, the UK now has the biggest trade deficit of any country in our nation’s history: we have a trade deficit with China of over £40 billion in goods. This means that we need to debate this open-eyed. I smiled when the noble Lord seemed so envious of the French power to do harm to our farmers that he wanted to bring that back so that we could do harm to our own farmers—
Lord Robathan (Con)
As a farmer, I definitely do not want to do harm to farmers. But I have seen the harm done by the common agricultural policy, which I am sure the noble Lord thinks is marvellous.
Lord Purvis of Tweed (LD)
No, but we did not see output of beef and hill sheepmeat going down 5% and then 3% with any individual agreement, which is what we have seen with the Australia agreement. Perhaps those Brexit-supporting farmers now see the reality that the Government’s own impact assessment says that output will go down 5% and then 3% over 15 years in these sectors. Because I formerly represented a hill-farming constituency, I do not think that this is simply a case of doomsayers; these are genuine issues about the sustainability of our farming industry.
I pay tribute not only to the committee but to the noble Lord, Lord Grimstone, who has resigned from the Government; I enjoyed being his Liberal shadow. I look forward to the seventh Trade Minister whom I will shadow in this place when she or he takes office. I reassure the noble Baroness, Lady Hayter, that it is not her—it is me.
I agree with the overarching twin themes of the committee’s report: first, that this agreement was negotiated in the absence of a wider trade policy—in certain areas, it sits slightly alongside the Government’s export strategy, which I welcomed, but I have not yet seen too much read-across between the two—and, secondly, that the desire to move fast was to secure some boosterism and headlines between our Prime Minster and Australia’s, or, as the press reported at the time, between “BoJo and ScoMo”. We can reflect that neither is in office just months later, so we can question why there was such a rush.
When the noble Lord, Lord Grimstone, introduced the Queen’s Speech debate on trade, he wanted to reassure us that all parts of the UK would benefit from the 0.08% bounty over 15 years of this agreement—or, as the noble Lord, Lord Udny-Lister, said, that there is something in it for everyone. However, when I raised the fact that this had been oversold, I was wafted aside. It appears that it was quite hard for the Government to dismiss the Regulatory Policy Committee, which is tasked with reviewing what the Government say in their impact assessments. It was interesting to note that the Government had to bring forward a second impact assessment after the Regulatory Policy Committee published its initial review. On page 5 of this review, the committee said:
“As originally submitted, the IA was not fit for purpose as the results in the IA were presented in a way that disproportionately emphasised the beneficial impacts with very limited discussion of the risks, disadvantageous impacts, and potential mitigations. In addition, the IA did not adequately describe a range of significant risks and uncertainties associated with the impacts and did not contextualise the estimates sufficiently. The IA suggested a greater degree of certainty and accuracy to the projections than was supported by the underlying evidence and modelling.”
In a way, that neatly sums up how this Government sell their trade policy. Presenting the higher case not “supported by … evidence” means that, when we scrutinise the agreements, they turn out not to be as promised—this seems to be the approach across the Government. I say “the Government”, but it seems as if we have more than one at the moment: there is Liz Truss, the free trade fighter, alongside Anne-Marie Trevelyan, who is breaking WTO rules to have protectionist steel tariffs. Some Ministers on the one hand claim that we are seeing developing standards in nature, biodiversity and animal welfare; I am sure that the noble Viscount, Lord Younger, will say in his speech that this is the case. Other Ministers, apparently in the same Government, are saying the opposite: for example, the Foreign Office Minister the noble Lord, Lord Goldsmith, said yesterday:
“Rishi Sunak has evidently agreed to make Mark Spencer the … DEFRA Sec of State. Mark was the biggest blocker of measures to protect nature, biodiversity, animal welfare. He will be our very own little Bolsonaro. Grim … for nature. But great news for political opponents”.
It would be helpful if the noble Viscount could outline which measures have been blocked by the Treasury because, if a serving Minister says it, we should know about it.
As the noble Lord, Lord Liddle, and others have indicated, this is in the context of now seeing that the evidence has been very clear that our trade with the European Union has declined. This means that the concern raised by some of the witnesses to the committee—that some of the benefits of the Australia agreement might simply be those of displacement, rather than new and additional trade—is very relevant. That even means that the issue that consumers might seek cheaper prices will not necessarily be realised. It also means that the issues raised by some, including the noble Baroness, Lady McIntosh of Pickering, will be relevant for our consideration: that we will not have a level playing field and we would prevent some of our agricultural industry from using certain materials and practices that would be permitted from shipped-in products from Australia—a point raised by the noble Duke, the Duke of Montrose. This is not protectionism; it is realism.
One area which is striking—and especially astonishing given what Liz Truss and every Minister in the department had previously said—is that the UK failed to secure any protection for those goods that have geographical indicators, as the committee indicated. Why? We have heard time after time, during debates on the then Trade Bill and elsewhere, that GIs would be protected, but they are not. This is from Liz Truss, who made her name championing cheese in that famous speech, but has now raised the white cheesecloth on supporting products with geographical indications. We have now fully entered the Wonderland of Alice, because we will be able to protect those products which have geographical indications only should Australia sign an agreement with the European Union, because the European Union would provide the protection—I think the term is “give back control”.
This is a “landmark”, according to the Government’s statement and the noble Lord, Lord Udny-Lister, but my understanding is that landmarks are so called because they are followed. However, from reading the committee’s report, I think it struggled to get clarity from the Government as to whether this will set some form of precedent for other areas. The Government will no doubt say—I have heard them say it previously—that each agreement is negotiated on its merits, et cetera. However, at the same time, we hear the Government saying that this is a gold-standard, “landmark” agreement. This, therefore, raises questions about the impact on diagonal cumulation for developing countries and uncertainty as to that policy; uncertainty to the policy on ISDS, because it was to be reviewed in Canada; and about the situation with Japan. The noble Lord, Lord Grimstone, was a supporter of ISDS; will any new Minister have the same approach?
On the question of standards, which I have raised previously, for genetically modified products or the use of pesticides, is it okay to bring in produce that has been reared using banned products? Will they be approved for our consumers simply because those banned products are at a low level? The Government should be clear about their intentions.
The final point which has been raised—a very relevant one—regards the remaining lack of clarity as to when there will be sufficiently strong guidance for those operating within Northern Ireland.
We support this agreement, but we are not blind to the realities that it will have a negative impact for certain sectors. We certainly think that involving Parliament with less of the boosterism and headline grabbing, and more of the serious work of proper consideration of what trade policy would look like in future, would result in stronger agreements which are less rushed and more sustainable. Ultimately, they will help the British economy, so that it would not be 0.08% but considerably more.