The UK’s Relationship with the Pacific Alliance (International Relations Committee Report)

Baroness Falkner of Margravine Excerpts

Monday 1st February 2021 Grand Committee

[Baroness Falkner of Margravine (CB)]

My Lords, I, too, thank the noble Lord, Lord Howell of Guildford, and the committee for the report. Let me say how pleased I am to see that the committee has turned its attention to these countries in Latin America. I broadly agree with its recommendations, notably that the UK

“should deepen its engagement with the Pacific Alliance”.

Turning to the Commonwealth, which I know is dear to the heart of the noble Lord, Lord Howell, the reports notes that Australia, New Zealand, Canada and Singapore have applied for associate status to the alliance. What conversations have Her Majesty’s Government had with these like-minded states and fellow Commonwealth members as to their aims in seeking this status? Will the UK consider joining them in the longer term?

I will also refer to the UK export strategy. My concern is less to do with languages, which the report emphasises, as the US and Canada are more geographically proximate to that continent. I suspect that their institutions, as well as language centres, will be the more natural home for learning English than the United Kingdom. However, taking paragraph 65, I agree that our share of trade is extremely modest. I notice that the committee took evidence from the City of London Corporation, but that body, important though it is, does not speak to the regulatory and supervisory aspects of the UK’s skills and know-how in these areas. I emphasise this as a really important aspect of our influence in emerging markets.

The report emphasises innovation and research, and in this context I am informed by two pieces of work. I, along with a few other noble Lords, have been serving on the Economic Diplomacy Commission of the London School of Economics, the report of which is due out shortly. That report, and the evidence we took, say that services should be front and centre of the UK’s export strategy. Professional services are a hugely significant part of that, given that it is a global industry where regulations work upstream at global level and that most advanced and emerging market economies apply rules negotiated through the Financial Stability Board, the Basel Committee on Banking Supervision and so on. We in the United Kingdom are not only significant players at those levels—after all, the City of London is ranked number two globally among financial centres—but leaders in fintech and other innovative products. We thus have capacity and knowledge in the regulation of new innovations, where we might usefully share our expertise. I hope that the Department for International Trade will be able to promote that aspect of our professional services.

Another omission in the committee’s report, for me, stems from another piece of work that I have done recently and which the noble Baroness, Lady Anelay of St Johns, and other Members have mentioned. I served on Policy Exchange’s commission on a strategy for the Indo-Pacific region, chaired by the right honourable Stephen Harper, the former Prime Minister of Canada. As an aside, I am delighted to join other noble Lords in congratulating the director of Policy Exchange on his introduction to the House today as the noble Lord, Lord Godson. It has been a pleasure to work with him over the years. The emphasis of that report, A Very British Tilt, is the role of the UK in reinforcing a sustainable rules-based order in the Indo-Pacific region. For us, this should take a twin-track engagement approach.

First, we advocate a prosperity agenda focused on trade economics and technology issues, the latter including intellectual property, digital standards, science co-operation, sustainable development and environmental protection. Secondly, our report advocates a security agenda, seeking to reinforce regional security and the resilience of domestic socioeconomic political institutions in the Indo-Pacific countries, which may be open to our expertise. The report we are discussing today notes that Pacific Alliance countries, along with the UK, seek to pursue membership of the CPTPP. Apart from the obvious geographical difference—whereas the committee looked at the countries of the eastern Pacific, we looked at the western Pacific—there is much commonality, which I hope the FCDO can usefully incorporate from both. I look forward to the Minister’s reply.