Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Anthony Mangnall Excerpts

Report stage
Tuesday 19th March 2024 Commons Chamber

[Sir Iain Duncan Smith]

It is a pleasure to speak to new clause 1, which is signed by a cross-party group of MPs who all believe that Parliament should have the right to scrutinise trade deals. It seeks to ensure appropriate parliamentary scrutiny of the UK’s position toward the accession of economies that are designated—that word is very specific—as “threats” or “systemic challenges”. It would achieve two things. First, the Government would be required to produce a report assessing the impact of the economy’s accession on the UK, and both Houses of Parliament would have a non-binding vote on the UK’s position regarding the accession of the economy in question. In other words, we would take the temperature of Parliament’s view, even if it disagreed with the Government. That is important, because the public need to know about it, so we should not be frightened of this.

[Anthony Mangnall (Totnes) (Con)]

I thank my right hon. Friend for introducing the new clause. Some of us have been arguing for parliamentary scrutiny of trade deals for the last four years. There is a mechanism in the form of the Constitutional Reform and Governance Act 2010. Is that not the better vehicle, because it has already passed? It also offers a vote, theoretically, for us to be able to scrutinise our trade deals.

[Sir Iain Duncan Smith]

I will come to that in a minute, because it does not, and that is the whole point of the new clause. In the 2023 integrated review refresh, the countries defined as threats were Russia, Iran and North Korea, while China was designated a systemic challenge. The new clause does not directly mention China, but of the eligible countries under the current integrated review, China is the only economy that has applied to join. In fact it is theoretically next on the list to go into the comprehensive and progressive agreement for trans-pacific partnership.

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[Liam Byrne]

It is a pleasure to follow the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). I will speak in support of new clause 1, which he tabled, as well as the new clauses tabled in the names of my right hon. and hon. Friends.

I welcome this debate and the new clauses and amendments that have been tabled, but I lament the fact that we have not been permitted a full debate on the treaty—something the right hon. Gentleman argued for very eloquently. We needed a debate today not merely on the three chapters of the CPTPP covered by the Bill, but on the full 30 chapters of the treaty, with all the associated annexes and bits of analysis and argument.

I do not want to detain the House for very long, because the Business and Trade Committee went to the length of writing and publishing a report earlier this year. However, I want to underline the point about the lack of scrutiny. Of course, it was the Government themselves, in the Grimstone rule, who said that no new free trade agreements would be ratified by His Majesty’s Government without a full debate on whether we should agree to them. When I asked the Secretary of State on 23 January whether she would agree to a debate under the terms of the CRaG process, she said she would be “happy to support” such a debate. Her officials then wrote to the Clerks on the Select Committee to say that such a debate had been requested, only to be told by the Leader of the House that no time was available. The Leader of the House confirmed that in writing to me last week in a letter in which she said:

“it has not been possible to find time for a debate in Government time.”

The House of Lords is having a debate on the treaty today on the recommendation of the International Agreements Committee, so why can’t we? Are we second-class representatives in this House? Are we unqualified to have a debate on all 30 chapters of the treaty? Are we not qualified to speak, on behalf of the people we came into public life to represent, about how the treaty will affect their future? I think we are. I think we should have a debate on the full treaty.

And I cannot believe that we are out of time. Members will have seen the report in the Financial Times last week, which said that the working day in this Chamber

“has been shorter on average this parliamentary session than in any other in the past quarter century”.

Are we seriously saying that we have not been able to find time for a debate, which it is the Government’s policy to support, on one of the only free trade agreements that His Majesty’s Government have been able to bring forward since we left the European Union?

On Twitter, the Minister—I am a keen follower of the Minister on Twitter, he will be pleased to hear—said last week that there have been four parliamentary debates on the treaty, but I wonder if he is sure about that. When I asked the Clerks on the Select Committee to check that, they were left scratching their heads a little bit. They could not find all four that the Minister referred to. We have to accept that there is no shortage of controversy in the Bill, not least because the Secretary of State herself resiled from the figures that describe the benefits of the treaty to the country.

[Anthony Mangnall]

I thank the Chair of the Select Committee for giving way. It is a pleasure to serve on the Committee with him. I thought I might just throw a bone in the form of cross-party support on this point. Having a debate is not just about pointing out controversies; it is about having the opportunity to justify and debate things about which our constituents care. These trade deals make a difference not only to the businesses, but to the services and agriculture sectors in our respective constituencies. That is why it is damaging not to have a debate: it fails to allow us the opportunity to persuade people that trade deals can be a force for good.

[Liam Byrne]

The hon. Gentleman is absolutely right and I commend his contribution both to the Committee and to the report that we published on the CPTPP earlier this year.

There are a number of important new clauses and amendments not only about the future expansion plans of the CPTPP and what our policy on those might look like, but also, in the names of my right hon. and hon. Friends, about investor-state dispute settlement. This is important because in all the fanfare, arguments and passionate bits of literature and speeches offered by the Government about the virtues of the treaty, it was always positioned as a gateway to the fastest-growing economy on Earth that will represent a significant fraction of economic growth in the future. Of course, what was often missing from those eloquent descriptions was a recognition that the countries in the CPTPP represent only about a fifth, at best, of the Indo-Pacific region.

We are surely right to worry that there could well be a Government drive to expand the orbit of the treaty to a much wider group of nations. If the Government really want to take aim at the biggest economies on Earth, they may well encourage China to join. However, when I asked the Secretary of State whether it was her policy to agree to or block China’s accession, she said that that was not something we could discuss on the Floor of the House or in the Select Committee. That is why safeguards are needed. We might even be so bold as to merely ask for a little bit of clarity on the Government’s future strategy. That is why the amendments on the future pathway of the treaty are so important and why I hope we will have a vote on some aspect of that today, even if it is not on the new clause tabled by the right hon. Member for Chingford and Woodford Green.

I will talk briefly about new clause 3, which relates to ISDS. It is important, because His Majesty’s Government have agreed side letters with a number of countries to take us out of the ISDS process. That is not an exemption or safeguard that we saw when it came to agreeing to the treaty, yet the treaty includes countries such as Canada—I think we are just about on fraternal terms with Canada at the moment; we may have failed to agree an FTA with it, but quite why is a matter of some dispute between the Canadian Government and the Secretary of State. Canada is home to some of the biggest pension fund investors on the planet and we know that those funds are especially litigious. Although the Minister was right, when he answered these questions in earlier conversations, to say we have never lost an ISDS case, the reality is that many fear there will be a chilling effect on the regulations we bring forward because of a fear of the peril of ISDS procedures.

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[Mr Speaker]

Let us remain in the south-west. I call Anthony Mangnall.

[Anthony Mangnall]

It is a privilege to follow the hon. Member for Kingswood (Damien Egan), and may I congratulate him on his maiden speech? It is somewhat frustrating, as one of the younger Members on the Conservative side of the House, to find new Members turning up who look fresher, healthier and readier for the fight. He also managed to unify the House when talking about potholes; I do not think he will find any disagreement on that subject. He comes to this place with a huge amount of experience, not just from fighting other seats, but having been Mayor of Lewisham, where he did extraordinary work on community land trusts that Members from across the House have commented on and would like to follow in our constituencies. I am sure that his family are somewhere in the Gallery and will be proud of his maiden speech. He has done very well.

I would like to make a few remarks about CPTPP, the tongue-twister that seems to have made many Members of this place fall sideways. We should start by recognising what the United Kingdom has managed to do over the last four years. We have recognised the global ambition of fulfilling our trade objectives. We have succeeded in joining CPTTP, but we have also secured deals with Japan, Australia, New Zealand, Norway, Iceland and Liechtenstein, as well as joining the Singapore digital partnership. I spend my life repeating the fact that we have made those deals; it is important that we recognise their true value, not just to GDP, but to businesses, the economy, the environment and business people across the United Kingdom and, indeed, the world. It shows that we are determined to fulfil our promise and commitment to sign deals to bolster our position in the world. Of course, negotiations are also under way with the Gulf Co-operation Council, Israel and others.

In joining CPTTP, we are signing a deal with the fastest-growing region in the world. Now that we have tariff-free trade relations, the UK is set to increase trade with the countries in CPTTP by £37 billion by 2030. It is a market worth £110 billion to UK trade. With growth at 8% between 2016 and 2019, UK membership is only expected to boost that figure. Conservative figures—I say “conservative” because I feel that they are underestimates—suggest that there will be a £1.8 billion increase to GDP and an £800 million boost to take-home pay for workers. Additionally, estimates are that trade with the 11 members will increase by an average of 65%, with the west midlands, Scotland and Northern Ireland benefiting most, so I look forward to hearing the SNP’s point of view, and whether it will support the Bill.

As has already been mentioned, the point of this deal is that it allows us to have tariff-free trade in goods. CPTPP has new product regulations, expands our role and opportunities for services, and ensures mobility for business people. Digital trade will be enhanced and intellectual property enshrined, with benchmarks created by the United Kingdom, and the CPTPP has sustainability at its core. However, I would like to focus my remarks on new clauses 1 and 4.

It has been my cause, war or campaign—however one wants to phrase it—over the last four years that Parliament should do better on our trade agreements. We should spend more time scrutinising and debating them. It is always a source of frustration that when we have debates on trade, so few people show up. The ability of this House to explain the value of a trade deal to our constituents, to justify its economic value and to talk about the potential security risk is diminished when we do not have opportunities on the Floor of the House to discuss the merits or demerits of any trade agreement.

I disagree with new clauses 1 and 4 not because I am being belligerent, or because the Whips have me under the cosh, but because we need to focus on reforming the Constitutional Reform and Governance Act 2010. Parliament cannot opine on every single international treaty. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) made a point about whether accession to CPTTP should be debated on the Floor of the House. There could be no limit to that, but he did not explain—I will let him intervene if he wants to—how he would get around the royal prerogative issue; international trade agreements are not in the hands of Parliament, but in the hands of Government Ministers. That was not considered in his remarks.

[Sir Iain Duncan Smith]

I agree. I could have taken this even further, but my point is that the Foreign Office dislikes any idea of debate and discussion. However, we have a Trade Department, which needs to be imbued with the power to ensure that debate happens. I am completely in favour of just punching through the nonsense and the poor use of the prerogative.

[Anthony Mangnall]

I understand that, but I feel that punching through on this occasion would be the wrong approach. I agree with my right hon. Friend that the Foreign Office’s appetite for us debating these issues in this place should not matter one jot, because it is our right as parliamentarians to discuss free trade agreements and whether they work. Respectfully, I say that the mechanism for ensuring that we get better trade agreements, and can be reassured about their economic value and benefits to the British people and our national security, has to be achieved by upgrading the Constitutional Reform and Governance Act.

The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) made an excellent point when he referred to the Public Administration and Constitutional Affairs Committee report’s recommendation on enshrining a methodology to ensure that CRaG operates within 21 sitting days, and that a meaningful vote is held at the end of that period. If that were ever to take place, it would be meaningful, because it would delay the signing of any free trade agreement by 21 days.

[Lloyd Russell-Moyle]

The hon. Gentleman makes a very good point about the need to change CRaG; we mentioned that need in our report. Our report made it clear that a lot of changes do not necessarily need legislation, but they do need a change of approach from the Government. There should be a clear commitment made at the Dispatch Box that debates will always be called when there is significant interest in a subject, and particularly when there are commitments around new accession. If the Government made those commitments, it would be enough, but they are still not forthcoming. Does the hon. Gentleman agree that the Minister should stand at the Dispatch Box today and give those commitments, so that we can move forward with some certainty?

[Anthony Mangnall]

The hon. Gentleman and I served for a long time on the International Trade Committee, as it was previously known, and I should start my response to him by paying enormous credit to the Secretary of State, who came in front of the Committee a number of times, and who wrote to the Leader of the House to ask for time to debate CPTTP within the CRaG period. I am afraid that my ire and irritation at our not having secured that time must now be focused on the Leader of the House, but the hon. Gentleman is right to say there are simple steps that we can take to make sure that this House is properly briefed on these issues. One of them—I absolutely declare my interest—would be to give Privy Counsellor status to members of the Business and Trade Committee. I do not think anyone would disagree with that suggestion. It would certainly be a very popular move, and when it has been mentioned in the Committee, it has been welcomed with open arms. I am glad that it has the approval of the House. But, in all seriousness, there has to be a set process and the CRaG mechanism allows us that opportunity if done properly. It is there and it must be reformed, regardless of who is in government. It is in the interests of the entire House to amend and implement CRaG.

[Sir Iain Duncan Smith]

I fully agree with my hon. Friend’s wider purpose, but I come back to the point that Lord Lisvane made very clearly, which is that we still do not have the ability to debate the entry of a security risk country. He pointed out that CRaG does not do that because of its nature. I agree with my hon. Friend’s wider point that CRaG must be reformed, but we have a Bill going through the House at the moment and this is a better time to at least get a foothold in that debate rather than say that we will do it another time.

[Anthony Mangnall]

I really do accept the point that my right hon. Friend makes—how could I disagree when he is making that absolutely essential argument on national security. But what he is asking for might be viewed in very different terms by the other 11 members of the CPTPP. There are standards to join the CPTPP in the first place that would prevent China from joining unless it improved its act. He has talked about the lessening of appetites in places such as Australia for China to join. I am not sure whether that is the case, but there is a standard within the CPTPP that would prevent China from joining, and as my hon. Friend the Member for Wyre Forest (Mark Garnier) has already remarked, we have a veto in this instance. I think this is more about ensuring that we have a debate and a vote in this place on the values of a trade agreement. If we are worried about a new accession to the CPTPP, it is for us to make that case to the Secretaries of State in the Foreign Office and the Department for Business and Trade, and for them to go back to the other 11 countries and make the case in that way.

[Lloyd Russell-Moyle]

I welcome almost everything that the hon. Gentleman—my hon. Friend—is saying, he and I having worked together a lot on this issue, but the reality is that other countries in the CPTPP have arrangements that allow their Parliaments to have deliberations on significant treaty changes and on the incoming of new members. We are talking not about the CPTPP arrangements but about our arrangements for authorising our Government to go ahead and agree. Surely he must agree that it would not undermine the CPTPP if we were to make our own arrangements on how we were to instruct our Government.

[Anthony Mangnall]

Forgive me if it sounds trite to say that I worry about mission creep, but if we did that on this, might we not also do it for the World Health Organisation, or for any other body that might be under suspicion of having some adverse state actor involved in it? I worry about how we go about this. I worry about Parliament always trying to have a say and slowing the process of how our trade agreements are signed and ratified. We need to be efficient and quick in the way we do it, but we must also ensure that we have the opportunity for debate, as we have today in this debate on the merits of the three chapters in the Bill.

I want to end with a parting shot. As has been mentioned by the Chair of the Business and Trade Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), we were told that we would have the opportunity to debate the full 30 chapters of the CPTPP within CRaG, and it is disappointing that we do not have that. The Government—the Secretary of State and the Minister—have done an amazing job in engaging with the Committee, but this is a serious disappointment. It lessens the progress that has been made to date on signing new trade agreements and ensuring that this place has a say on our future.

[Sarah Green (Chesham and Amersham) (LD)]

I stand to speak to new clause 12, which stands in my name, and also to new clauses 11 and 13. I would like to begin by stating once again that the Liberal Democrats want to see an ambitious trade policy aimed at creating opportunities for British firms around the world and new jobs here in our country. The Bill and our accession to the CPTPP are a step in that direction. The point has been well made, in this House and in the other place, that the projections in the Government’s own impact assessment are for GDP growth of just 0.06% by 2040, so although the UK’s accession to the trading bloc can and should be welcomed, the cause for celebration is limited.

I would like to speak to three new clauses that aim to address some key issues with the Bill and the UK’s accession. New clause 12 would require the Government to publish an assessment of the impact of the CPTPP’s performers’ rights provisions. We know the worries of our creative industries surrounding the Bill. The lack of reciprocal agreements for UK artists in CPTPP countries leaves our creatives exposed. The UK is rightly proud of our world-leading creative industries and we should also be proud of a world-leading intellectual property regime. We must be sure that this Bill and this trade deal do nothing to jeopardise that. There is a need for clarity and certainty in this area, and that is why I tabled new clause 12, which I hope Members will support.

New clause 13 would require the Government to conduct a review examining how the implementation of the treaty affects the costs faced by exporting and importing businesses in the UK. That report would have to consider the existing costs that those businesses were already facing as a result of trade regulations. We know that the stated ambition of the Government is that the deal will minimise red tape and trade regulations when trading with other CPTPP countries, which is a welcome goal. However, the British Chambers of Commerce has found that almost two fifths of businesses list regulations and red tape as a significant barrier to exporting. We need to be assured that our businesses will be supported to trade and flourish. With that in mind, it will be worth while, after our accession, to take the time to assess how the deal and the wider trade regulation landscape are affecting British businesses. That is the purpose of new clause 13.

It is clear that the CPTPP will likely grow over time as new countries join and accede to the deal, which will bring new opportunities but may also pose risks. The potential accession of China is one example, and the concerns regarding that possibility have been well discussed by colleagues in this Chamber and the other place. New clause 11 would require the Government to provide an impact assessment on the accession of countries that have made, and will make, a formal request to join the CPTPP. This will allow us to have a clear and informed vision of what the accession of each new country would mean for the UK. I believe this would be a reasonable and common-sense measure.

I finish by echoing what has already been said about parliamentary scrutiny. It is welcome that we are having this debate today but, in reality, we are debating a very limited and narrow Bill. We need proper parliamentary scrutiny of trade deals, and I ask the Government to ensure that it happens in future.

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[Lloyd Russell-Moyle]

The hon. Gentleman is quite right. Some people claim that that would happen, but others claim that it would strengthen our position. When the EU says, “This is our backstop,” we know that it is not bluffing because the backstop has been set by the EU Parliament. Now, negotiators can say, “Well, we know that that is not really the backstop, because you can go away and cajole your Back Benchers to vote this through anyway,” whereas in other systems, they can say, “I’m sorry, but the Senate will not approve this because the committee is holding my feet to the fire.”

However, there are other ways of doing it. As other Members have mentioned, we could allow the matter to have Privy Council status and meet in camera, to allow involvement in negotiations. In multilateral processes, other Governments embed parliamentarians in their negotiating teams. The Norwegians, for example, embed parliamentarians in their WTO negotiating teams in the day-to-day back and forth. Of course, in Norway, the WTO is dealt with by a different department from bilateral treaties, so there is a slightly different way of negotiating different kinds of deals. We can determine what kind of deal it is from the level of negotiation and whether Parliament is involved. If Norway were dealing with the CPTPP, parliamentarians would be embedded in that process, but if it were dealing with the Japan deal, they would not.

There are granularities of parliamentary overview and scrutiny, but almost all systems have developed them over the past 50 years as trade deals have basically become international lawmaking processes rather than dealing just with trade—they deal with all aspects of our life. However, we effectively paused our processes when we joined the European Union, and we have now reverted to where we were before joining. Although I accept that our process are now in the CRaG law, they have not evolved properly.

Let me address my new clause 2. Around 90% of the world’s oil palm trees are grown in just a few islands in Malaysia and Indonesia. Currently, less than 20% of that palm oil has received certification for sustainable palm oil forestry. The CPTPP will remove tariffs from palm oil. Of course, the aim of removing tariffs is to increase trade, so it seems implausible to say that we do not think it will increase the amount of palm oil in the UK that comes from unsustainable forests. The same could be true of tropical woods. Two of the 11 forests that supply our tropical woods and are identified as in danger are in the CPTPP region, but they have no additional protection.

[Anthony Mangnall]

First, Indonesia is not part of CPTPP. It is also important to note that the Malaysians have introduced a certification and standard for more sustainable palm oil plantation. I am not saying that that is perfection—it certainly is not, there is a lot further to go—but it is a good example of how, by forming a trade agreement through CPTPP, we can raise standards, not lower them.

[Lloyd Russell-Moyle]

The hon. Gentleman makes a perfectly sound point. That is why my amendment does not say that we should not join the CPTPP, or that we should disallow it for those purposes. It would require the Secretary of State to lay before Parliament a monitoring report on the level of unsustainable palm oil and forest products that are entering this country before we join the CPTPP, and to report regularly on those imports. If and when this House, or Ministers themselves, believe that action is needed, the data will be there to prove it. If we do not collect that data, we will not know, and we will be blind to the problem.

The same is true of our obligations on climate change and biodiversity. Personally, I would prefer a stronger environmental section in the Bill, but it is what it is. However, it should be noted that 119 pesticides that are permitted in CPTPP countries are not permitted in this country, 56 of which are considered to be highly harmful to human beings. Yes, we have standards for food, but there are no production standards, and there are no standards for pesticides that are not food-based. The problems with some of those pesticides—the killing of bees and other wildlife—are not just about human consumption: sometimes, those pesticides are banned not because they harm human beings, but because they harm the fauna and flora around us. When we import goods that contain them, they can enter the food chain; even worse, they can enter the animal food chain, which is not regulated by the same food standards and therefore causes huge problems. We need Government oversight of those points to ensure that we do not end up damaging some of our crops through pesticides that we ourselves have banned.

Turning to new clause 3, I am particularly concerned about ISDS. At long last, the Government have agreed that we should withdraw from the energy charter treaty, primarily because in a changing world, we need to make changes to our energy policy to make it more green. Our continual inclusion in the energy charter treaty would bind us to ISDS agreements, which we have seen targeted at a number of European states that have made moves to increase their environmentally friendly sources of energy. That is now a danger to us: even though we have not lost an ISDS case, it is a danger to our future and to policymaking. If we have made that case for energy, I think the same case could be made for almost all our arrangements.

It is useful to note that our agreements with Australia, New Zealand and Japan—all of which are part of the CPTPP—did not include ISDS. In fact, the agreement with Japan included a clause to say that we would not enact ISDS unless we signed or entered into another agreement that includes it, so the very fact that this agreement includes ISDS triggers a number of ISDS courts in other agreements that we have signed, which I think is risky and dangerous. We need a report on the risks that ISDS poses to the UK, because we could have rogue investors who end up taking us to court even if it is against the national interest of the two respective states. Of course, citizens cannot access ISDS—it is not a global court where citizens who have been harmed can seek redress from a Government. Only corporations that have invested in a particular country can do so.

ISDS actually means that corporations that invest into Britain from outside have higher protections than a British corporation that invests in plants here. I think it is totally wrong that a British corporation is more vulnerable to changing policy than a foreign one. It should be a level playing field, but at the moment, a British corporation that has invested here has no recourse to ISDS if policy changes in Britain, but corporations from outside do—the Minister is frowning a bit, so I was just trying to explain the difference. There is also a well recorded chilling effect from ISDS that we must be particularly aware of.

Fundamentally—again, I go back to the thing that we are not meant to mention—under the European Union, at least there were open courts to which we appointed judges. ISDS means secret tribunals that do not always have British judges, so there is a problem there. If we are meant to be taking back control, surely we should be taking power away from secret courts and allowing sunlight to be the justice that we seek.

Apart from the matters covered by the two new clauses I have tabled, I think this treaty is a step in the right direction. We should support it, but I wish the Government had negotiated as well as New Zealand and other countries that sought and won protections that, I am afraid, our Ministers failed to even bother seeking.