Trade Bill

Baroness Chakrabarti Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Tuesday 15th December 2020 Lords Chamber

[The Earl of Caithness (Con)]

My Lords, my memory goes back to Committee and the powerful speech of the noble Lord, Lord Hendy, who set out the arguments against ISDS extremely well. There was a lot of powerful argument there. But I am also grateful for the intervention of my noble friend Lord Lansley, who always manages to sow those little seeds of doubt as to whether we are going in the right direction. Notwithstanding those seeds of doubt, I believe we are going in the right direction with these amendments, on the simple basis that ISDS permits any investor in this country to sue the UK Government for anything that might harm their profits in any way.

Therefore, I have one particular question on this matter for my noble friend Lord Grimstone. I believe I am right in saying that, since 1986, we have had an ISDS agreement with China. If that is the case, are the UK Government not widely exposed on the Huawei case? In relation to banning Huawei from operating in this country, there is no clause within the agreement, as I understand it, that says that we can ban a company from operating for national security purposes—so is not the UK hopelessly exposed? As a result of that, should not all our bilateral agreements be rethought, as suggested by my noble friend Lord, Lansley, because there is this loophole?

My second question to my noble friend concerns the Government’s eagerness to join the Trans-Pacific Partnership. As my noble friend will be aware, New Zealand is seeking an exemption from the ISDS. In our negotiations to join this organisation, will we also seek an exemption from ISDS, and if not, why not? If New Zealand has set a precedent, it would be only logical for us to follow because that must be the right way forward.

[Baroness Chakrabarti (Lab) [V]]

My Lords, it is a pleasure briefly to follow those who have already spoken on this group, and I support Amendment 19 in particular. I am no expert in international trade law, but I rest assured that my noble friend Lord Hendy will speak very shortly.

Briefly, my concerns about ISDS are that the mechanism overrides the supremacy of Parliament—including your Lordships’ House and the other place—overrides the domestic rule of law, discriminates on grounds of nationality in favour of foreign investment corporations and prioritises the profits of investor corporations over people and the planet, as we heard from the noble Baroness, Lady Bennett of Manor Castle. Therefore, I see the mechanism as a fundamental challenge to the rule of law, both domestically and internationally, and not what taking back control is about in the minds of most people in the United Kingdom and further afield, I suggest.

My one question to the noble Baroness, Lady Kramer, who spoke so clearly about her own concerns, is: will the multilateral tribunal that she anticipates really be capable of addressing those fundamental concerns about prioritising corporations over the wider public interest—climate catastrophe, human rights and so on? Will it be capable of designing something that is not the wolf in sheep’s clothing that the noble Baroness, Lady Bennett, described? With those concerns firmly on the table, I support Amendment 19.

[Baroness McIntosh of Pickering (Con)]

My Lords, the authors and mover of these two amendments have done the House a great service. I welcome my noble friend the Minister to his place for the first of these debates that he will be summing up this afternoon. This is a very vexatious area in trade disputes, and it has been very much at the fore of this critical stage of an agreement on free trade with our EU partners— I know that is not the subject of this afternoon’s debate. It is worrying that, at this late stage, we are still arguing—and have been for two years, since the European Union (Withdrawal) Act was passed—about what the dispute resolution mechanism will be.

I will make a general point: it is extremely important at this stage that we know what the dispute resolution mechanisms will be. I place on record my acceptance as less than satisfactory of the arrangements of the World Trade Organization. I think it fair to say that the current position of the United States in this regard is less than clear. As I understand it, in his time, President Obama made moves to remove the US from the general World Trade Organization dispute resolution mechanism scheme—the next stage after disputes have been raised. It is by no means clear, and I have not yet heard—I may have missed it—what the incoming Biden Administration will do in this regard.

My noble friend Lord Caithness mentioned the Huawei decision, and, obviously, we are also caught, as I understand it, in the Boeing situation, with infringement tariffs being whacked on us for the Airbus scenario—and, latterly, we have come forward, seeking to do the same to Boeing, for similar infringements of the World Trade Organization arrangements there. As such, I am very uneasy that, in the current state of the Bill, I do not see any reference to what the dispute resolution mechanism will be in the agreements that fall under this—unless I have missed it—so I would like confirmation of what that resolution mechanism will be.

I welcome that the noble Baroness, Lady Kramer, said that the UK has been at the forefront of setting this in the EU-Canada arrangement—but then my noble friend Lord Lansley said that those arrangements have never been brought into effect in relation to the EU. This is a very grey area, and it is vital that, before the Bill leaves Parliament, we know what the dispute resolution mechanism in this regard will be. Mindful of the lengthy debate that we had in Committee, I seek further clarification at this stage, using these two amendments as an opportunity to probe in this regard.