EU-US Trade and Investment Agreement

Adrian Bailey Excerpts

Thursday 18th July 2013 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate my right hon. Friend the Member for Wentworth and Dearne (John Healey) on securing this debate. It is fair to say that, although the issues we are discussing have exercised the financial press, their implications have not yet achieved high levels of visibility among the general public. I hope that this debate will at least go some way towards rectifying that. Given the limited time available, I will not talk about the more general issues. Instead, I shall focus on the implications of an EU-US trade agreement for my own area. My right hon. Friend mentioned the need for the Government to demonstrate what the potential impacts would be in local areas, and the fact that some of the issues would be of particular importance to the west midlands and the black country has not hitherto been recognised.

Historically, the area’s manufacturing has been dominated by the car industry, which has suffered for many years but is now undergoing a renaissance, largely as a result of the foreign direct investment by the Tata brothers and the revival of Jaguar Land Rover. It gladdens my heart when I see those vehicles queuing up at the docks awaiting export. About 80% of the cars we produce are exported, and the US is the second-largest market after Europe for those exports. Jaguar Land Rover holds second and third place with its Land Rover and Jaguar models, but if they are considered together, it holds first place.

[Mr Spellar]

I thank my hon. Friend and good neighbour for giving way. As a fellow black country MP, I know that it is good that foreign buyers are buying from Jaguar Land Rover, but would it not be even better if British public bodies, especially the police, bought from Jaguar Land Rover rather than from Mercedes and BMW, which they tend to prefer?

[Mr Bailey]

I know that my right hon. Friend has campaigned on this issue for many years and I totally agree with him. We need to look properly at procurement policies to realise that point, but I will not get tempted further down that path now.

As far as I can see, the big issue for the motor industry is that, for the UK and the US, tariff barriers are relatively low but that is not quite the same as the barriers between the US and the EU. One of the challenges for the British negotiators as part of the US team is to ensure that the EU does not concentrate only on overt tariff barriers. If that is the case, there will be a general benefit, but the EU will benefit disproportionately. In case anyone considers this to be an anti-EU argument, let me make it absolutely clear that I think we have a far better chance of prosecuting a good deal as part of the EU negotiation than we would if we were not part of it—but this particular issue does need to be addressed. The fact is that the removal of non-tariff barriers within the US is considerably more important for stimulating exports or reducing costs, and the British Government must concentrate on those as part of the EU negotiating team.

Let me highlight a few areas where I believe the British Government need to get behind those who are already engaged in this work. The first relates to how the myriad of technical regulations—quite understandably in respect of road safety and the environment—dictate a range of different regulations in different countries. Standardising them provides a big challenge. I know that the European Automobile Manufacturers Association and the American Automotive Policy Council are working on this at this moment, but it is up to the Government to see that that work comes to a positive conclusion and give it all the support they can.

Secondly, on the global scale, the United Nations is working on standardising global technical regulations. Although this might not be part of the specific brief of the EU negotiating team, it would be helpful if the EU and the US, working with the UN, standardised their approach so that the standardisation of regulation applies not just within the EU and the US but throughout the rest of the world. That would provide a further impetus for both sides.

Another issue affecting our dealings with the US is the disparate and federated nature of its regulatory bodies. There are national federated bodies involved in regulations on environmental protection and road safety, but there are, of course, state bodies as well. That provides a specific challenge to get the sort of coherence and pace of reform that we need to conform to the timetable.

[Mr Cash]

rose—

[Mr Bailey]

I could not possibly resist the temptation to invite the hon. Member for Stone (Mr Cash) to intervene.

[Mr Cash]

Would the Chairman of the Business, Innovation and Skills Committee consider whether there will be a fast-track agreement in Congress, as this has been an issue of some contention? In that context and within the framework of the constitutional arrangements of the United States, it is important to bear in mind that the commercial rights of the states themselves are important, too.

[Mr Bailey]

The hon. Gentleman raises an important point. Provision exists within the US constitution for a fast-track process. To conform to the timetable we are looking at, that would certainly be necessary, and it is up to our negotiators to ensure that it happens.

The standardisation of the customs procedures is another issue. Manufacturers often complain that many hours are lost as a result of non-standard procedures, so this should be a potentially fruitful area for negotiation.

Finally, let me acknowledge that although the details are all terribly difficult, extremely technical and often obscure, their impact on trade and thereby on countries’ economies, jobs and growth is very significant. The Government therefore need to do everything they can to work with the organisations engaged in resolving these highly technical problems.

I mention the BIS publication, “Estimating the Economic Impact on the UK of the Transatlantic Trade and Investment Partnership (TTIP) Agreement between the European Union and the United States” final project report, which I am sure the Minister knows by heart. It spelt out the disproportionate level of benefit that would accrue to the motor industry and companies such as Jaguar Land Rover and their suppliers in my area of the black country from a successful reduction of both tariff barriers and the sort of non-tariff barriers to which I have alluded. On an optimistic view of a 75% reduction in non-tariff barriers, car exports could go up by as much as 26%—a 26% increase on the already vigorous and buoyant production from Jaguar Land Rover in my area. That would be of enormous benefit for economic growth and jobs.

I believe that by working with the EU to expand our market to 800 million people—half the world’s gross domestic product and a third of the world’s trade—the motor industry could be incredibly successful. I hope that the Government will map out the benefits of such a free trade agreement for areas such as mine.