EU-Japan Economic Partnership Agreement

Angus Brendan MacNeil Excerpts

Tuesday 26th June 2018 Commons Chamber

[George Hollingbery]

My hon. Friend is plainly right: we have debated this matter and are giving it further scrutiny today.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

rose—

[George Hollingbery]

I have already taken up nine minutes of the House’s time, so if the hon. Gentleman will allow me, I shall make a little progress.

The treatment of UK services suppliers will be fairer as a result of the EPA and comparable to that of Japanese suppliers. That is good news for UK priority sectors such as finance, postal, telecommunications and maritime.

The national health service, which was discussed considerably as part of the heated debate—as were, indeed, public services generally—is a national treasure. I know all too well the importance that fellow Members and, indeed, the population of the United Kingdom place on the need to safeguard the NHS for generations to come. I share that view and wish to be clear with the House that the delivery of public health services is safeguarded in the trade-in-services aspects of all EU free trade agreements, including the EU-Japan EPA. For the avoidance of doubt, for the UK that incontrovertibly includes the NHS in this agreement.

Although investment protection is not featured in the agreement, investment liberalisation provisions will help to improve market access for British companies. Right hon. and hon. Members should note that the EU and Japan will continue to engage to negotiate a stand-alone investment protection agreement.

For the first time in an EU trade agreement, there is a dedicated chapter on corporate governance, which sees the EU and Japan reaffirm their commitment to the OECD principles on corporate governance. The UK played a key role in agreeing those principles at the 2015 G20 summit. The House should be clear that the inclusion of corporate governance provisions in the EPA does not unduly limit the UK’s ability to act further in this area at national or international level.

The agreement explicitly refers to our commitment to labour rights and environmental standards, and neither party will seek to reduce such thresholds to boost trade.

[Angus Brendan MacNeil]

I welcome the Minister to his new position and wish the right hon. Member for Chelsea and Fulham (Greg Hands) well for the future.

This is the second time today that we have heard the UK Brexiteer Government welcome the European Union’s trade agreements; it seems that when ideology is put to one side and practicality comes in, the EU does not seem to be at all as bad. Currently, what really concerns the Japanese is the relationship that the UK will have with the European Union, because 40% of Japan’s investments in the EU are currently in the United Kingdom. That has led to considerable nervousness in Japan. As well as this agreement, will the Minister be cognisant of that fact?

[George Hollingbery]

I take the hon. Gentleman’s point, but I must say that I do not think it is widely relevant to the matter before us. Suffice it to say that the UK Government clearly share concerns that we should have a good and friction-free relationship with the European Union after we have left.

--- Later in debate ---

[Mr Marcus Fysh (Yeovil) (Con)]

It is a pleasure to follow the hon. Member for Dundee East (Stewart Hosie) and to have heard a free trade speech from the Opposition Benches. I welcome my hon. Friend the Minister. Let me also praise my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) for his sterling work on these issues in the Department, and for his engagement with the various Committees of which I am a member.

This agreement is very important to the UK, and I support it. The total trade between Japan and the UK is worth £127 billion, and Leonardo, in my constituency, has a relationship with Kawasaki, producing helicopters, which it would like to expand. As my hon. Friend the Minister said, the Government’s impact assessment forecasts gains amounting to no less than £3 billion from the new agreement, partly as a result of increases in both imports and exports. Cheaper imports help our economy, which is one of the main reasons why we voted to leave the EU and its customs union.

After we leave the EU there will be great opportunities to improve on the Japan agreement, especially in respect of services, in which our economy has a strong interest. The Japan EPA states that world standards should be followed, and demonstrates how we can use methods of regulatory co-operation in the agreement that we make with the EU to guide, smooth and facilitate the handling of goods at our borders with it.

[Angus Brendan MacNeil]

Given the high praise that the hon. Gentleman is heaping on the European Union, might it not be important to have some bits of paper from both the European Union and Japan saying that this relationship could continue—as he has suggested that he would like it to—following the UK’s departure from the European Union? We would not want to find ourselves in a less advantageous position.

--- Later in debate ---

[Jeremy Quin]

I will allow the hon. Gentleman to continue.

[Angus Brendan MacNeil]

rose—

[Geraint Davies]

Go on.

[Angus Brendan MacNeil]

The hon. Gentleman is making an absolutely fantastic speech on inputs and imports. [Interruption.] He actually is, if Members would listen to what he is saying.

The important point, which the hon. Gentleman will be aware of, is what I heard when I was in Detroit with the International Trade Committee in February. It is that the Americans are more concerned about the relationship that the UK has with the EU—and, I suspect, that we have with Japan as well—because if the companies in which they have invested find there are obstacles and their supply lines are disrupted by tariffs, border checks or whatever, that will have serious economic effects.

[Geraint Davies]

It is in the interest of the Americans for us to be separated, isolated and small so that we can be picked off. They obviously intend to impose their standards. They are selling more asbestos, they have lower chemical standards and lower standards of food safety—I am thinking of chlorinated chicken and so on. They will impose those standards because we will be desperate to have a deal and we face problems. We are better as part of team EU.

There are worries if we find ourselves excluded from the Japan-EU deal as we Brexit. That will include services—80% of our exports are services—and financial services. The axis of yen plus euro would be a danger to the City of London.

Captain Fox is boldly going to try to establish trade relations that no one has had before, but might find that we currently have a trade relationship that is even better. In the round, when people realise that and lose their enthusiasm for Brexit, they will realise that such trade agreements underpin the need for a public vote on the deal. When we have that, Britain will decide that it wants to stay at home in Europe.

--- Later in debate ---

[Emma Little Pengelly (Belfast South) (DUP)]

I welcome the motion before the House. As with the previous debate, I believe this is a logical and sensible approach as we move through Brexit into the transition and into renegotiating these matters. The Democratic Unionist party will therefore be supporting the motion.

In Northern Ireland, we have a number of Japanese-owned businesses. This has happened more through an organic approach, whereby companies have been taken over by Japanese companies. However, I had the opportunity to go to Japan with a trade mission a few years ago and I could certainly see huge opportunities, which will only help and which I think will be good. I believe this is a good deal.

I think some will be surprised by the comments and criticisms that have been made today, particularly on process, but there is a very easy answer to them. It is only through the United Kingdom leaving the customs union and leaving a customs union that we can put in place our own meaningful processes on international trade. European Union processes, in relation both to this motion and to the previous motion on CETA, have flushed out a number of key issues relating to investors, arbitration and services. I welcome the Secretary of State’s statement about looking at services and their potential as we move forward and renegotiate the deals that are in place. The experience of the European Union in such deals provides valuable learning opportunities that can inform our way forward as the United Kingdom takes responsibility for this policy area.

We have heard many different contributions from across the House about free trade, which we proudly support. The Secretary of State has also said, however, that free trade does not mean trade without rules. Brexit provides the opportunity for a meaningful discussion and debate, for the first time in a long time, on what the rules should be for the United Kingdom.

Fundamentally, international trade deals must be good for all parties. They must be positive for business, consumers and our economy, and for building international relationships. To listen to many, including in this place, there seems to be much confusion about that. I have no doubt that our UK negotiators and the UK Government must—and will—go and fight for the best deal, and a good deal, for the United Kingdom with the European Union and in trade deals globally. However, that must take into consideration our UK regional interests. It must also take account of Northern Ireland interests.

The freedom to make our own trade deals undoubtedly brings opportunities, but sadly they have been drowned out by so much negativity. I believe that not having a proper and meaningful debate thus far about the potential for trade deals, free of the European Union, is sad for business and bad for business. We need to move on and embrace the opportunities that Brexit will bring. The Secretary of State will be aware of the very strong desire to do so of many in business and the strong advice on economic impacts relating to the importance of EU-third party trade deals to the UK economy. I support the Government’s policy on rolling forward the EU third-party trade deals with some 40 countries. Some will be surprised that there has been opposition from the Labour Front Bench team today to the Canadian and the Japanese deals, and, since it is the Government’s policy to roll forward the existing deals with all 40 countries, there needs to be an indication now of which of those deals Labour Front Benchers no longer support and feel should be renegotiated.

[Angus Brendan MacNeil]

Would it not be useful if the UK Government could give bits of paper to those 40 countries to show that the warm words actually mean something?

[Emma Little Pengelly]

Absolutely. As I indicated, I fully support the desire of the Secretary of State and the UK Government to secure those agreements and roll them forward. It is absolutely clear that the best approach—the logical, sensible approach—is to secure the current situation. We should agree this motion, as we agreed the previous motion, and use that as the foundation to build on and renegotiate in due course. It is absolutely clear that business wants as much certainty as possible about this. I welcome the fact that there have been discussions with many of the third parties who have the EU-third party trade deals, but I, along with many others across this Chamber and with business right across the United Kingdom, want certainty as quickly as possible. I support the Government in getting on with that job, getting the clarity that we need and getting the best deal for the United Kingdom as we Brexit.