Future International Trade Opportunities

Debate between Angus Brendan MacNeil and George Hollingbery

Wednesday 1st May 2019 Westminster Hall

[The Minister for Trade Policy (George Hollingbery)]

I thank my hon. Friend the Member for North Warwickshire (Craig Tracey) for introducing this important debate, and thank hon. Members from across the House for the many informed contributions, which I will return to before I have finished.

This debate is important because trade really matters to the UK. At £634 billion last year—equivalent to 30% of GDP—exports are not some separate add-on to our economy; they are integral to it. That is before we even get to our record £1.3 trillion of foreign direct investment, which last year alone created 76,000 new jobs, or the benefit of imports in giving us a wider choice of more affordable goods.

That is not the high-water mark, however: there are more opportunities to come. The patterns of world trade are shifting. We are entering a Pacific century after four Atlantic ones. The latest World Bank figures show China adding an economy the size of Portugal’s to its GDP ever four months—a pretty astonishing statistic. The UK will be one of the few developed countries to stay in the top 10. We can take advantage of that shift if we act now. That is why the Government have consulted on new trade agreements with the USA, Australia and New Zealand, and on potential accession to the catchily named Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a cross-Pacific agreement that covers 11 nations and already 13% of the world’s GDP, including many of the growing markets to which my hon. Friend referred in his speech.

The nature of trade is also shifting. McKinsey estimates that digital trade flows contribute more to the world economy than the entire trade in goods. Services are becoming ever more international. The UK is well placed to take advantage of those trends, too. We have a flourishing digital sector, with Europe’s largest e-commerce market. We are the second largest service exporter and, as my hon. Friend mentioned, we have particular strengths in areas such as insurance, where Lloyd’s is the world leader in maritime risk and specialist insurance and reinsurance.

That is why, in December, we submitted our WTO service schedules, to give continuity for our service exporters, and why, once we represent ourselves at the World Trade Organisation, we will be pushing for further liberalisation and further reform within the rules-based, consent-based, multilateral framework it provides. That also means looking beyond traditional trade agreements, which is why my Department has secured market access for everything from energy trading in China, to beef and lamb in Japan.

My hon. Friend mentioned a report by the London Market Group. As a specific response to that report, we have set up a new workstream with LMG to promote insurers in Association of Southeast Asian Nations countries. I saw that at first hand when I visited Singapore not long ago and met Prudential, which is working with Babylon. Amazingly, Prudential has a subsidiary in Malaysia that is nearly 100 years old and another in Singapore that is 85 years old. It has subsidiaries in Vietnam and in Indonesia and business throughout the ASEAN region, and I was very impressed by its attitude. It understood the power of data and of digital to allow it to insure more properly.

Colleagues have raised a number of issues, and I would like to deal with one or two of those. We have published a Command Paper on scrutiny and have made it absolutely clear that we wish to be transparent in how trade deals are dealt with in the House of Commons. The House of Commons, and indeed the House of Lords, should have full and proper scrutiny and we are pursuing those models. We are coming to a conclusion about the way in which we wish to do that and no doubt we will in due course negotiate with various parties in the House.

The hon. Members for Harrow West (Gareth Thomas) and for Dundee East (Stewart Hosie) both noted that services are at the centre of the UK’s agenda. Barriers to trade in services are generally behind the border, and with free trade agreements we deal with those issues through joint economic forums and multilateral interactions.

An independent trade policy is an opportunity for the UK. I understand the issue of the weight of 600 million people, but that also means that our trade policy is compromised. It is compromised in a good way—do not get me wrong—but it is designed to fit 28 nations. With a UK-based trade policy, we, with the sixth largest economy—or the fifth largest, depending on how it is measured—will have a tailored free-trade policy, which will be for the UK alone, and there will plainly be advantages in that.

The hon. Members for Swansea West (Geraint Davies), for Harrow West and for Na h-Eileanan an Iar (Angus Brendan MacNeil) made plain that what they want is no Brexit at all. We all have starting points on that question. I would describe myself as a democrat first and a remainer second, and the British people, while they did not speak with an absolutely unified voice on this issue, have told us that we should leave the EU. The hon. Members’ proposition simply does not deliver Brexit.

On continuity agreements, most Members will agree that there are all sorts of different motivations among our partners.

[Angus Brendan MacNeil]

Will the Minister give way?

[George Hollingbery]

If the hon. Gentleman looks at the clock, he will see that I cannot give way. Actually, rather than finishing my speech, I ought to give my hon. Friend the Member for North Warwickshire space to sum up. I thank all hon. Members.

Oral Answers to Questions

Debate between Angus Brendan MacNeil and George Hollingbery

Thursday 13th September 2018 Commons Chamber

[George Hollingbery]

It is important to point out to my hon. Friend and, indeed, to the House that our duty of sincere co-operation means that we are only exploring information at this stage since we may not, cannot and should not explore actual free trade deals. However, the UK-US trade and investment working group has now met on four occasions and will meet again in November in Washington. We want our future trade agreements to work for all sectors and regions of the UK, including the UK’s highly valued ceramics industry in Staffordshire, for which my hon. Friend is a doughty champion. The Secretary of State will be chairing the consultation in Birmingham on 1 October. My hon. Friend recently wrote to me requesting a meeting for that particular sector, and we will be exploring dates shortly.

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

A potential free trade deal with the United States of America is reckoned to be worth about 0.2% of GDP, but the loss of GDP with a mere FTA deal with the European Union is 6%, which is a loss thirty times greater than the gain from America. Even if the Minister got an equivalent free trade agreement with the rest of the world, he would need a world population of 15 billion —twice the current population—to make up the gap. There are only 7.5 billion people on earth. Where are the Government going to make up the gap in GDP loss that this Brexit is costing the United Kingdom?

[George Hollingbery]

I point out to the hon. Gentleman that the British people voted in a referendum to leave the European Union and that is exactly what we are organising. We are in the middle of negotiating with the EU on a wide-ranging and comprehensive package of proposals that will allow trade to continue with the EU hopefully much as it does now.

Oral Answers to Questions

Debate between Angus Brendan MacNeil and George Hollingbery

Thursday 28th June 2018 Commons Chamber

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

An important issue connected with trade deals is actually a Home Office matter, I refer to the issue of visas. Whether the trade deals are with developing countries or with Australia and New Zealand, the big thing that they talk about is not two-year visas but five-year visas. What work is the Minister doing with the Home Office to bring some sense into this area? Incidentally, that is also needed on the west coast of Scotland in relation to fishing.

[George Hollingbery]

The hon. Gentleman will know very well that mode 4 is applied in many circumstances, and that it was part of the Japan-EU free trade deal. Our conversations with the Home Office are ongoing, but it will always be a matter of national policy that we will control our own immigration system. Despite what is said in trade deals, that is protected.

EU-Japan Economic Partnership Agreement

Debate between Angus Brendan MacNeil and George Hollingbery

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—

--- Later in debate ---

[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.