Transatlantic Trade and Investment Partnership (EUC Report)

Baroness Henig Excerpts

Tuesday 17th June 2014 Lords Chamber

[Baroness Henig (Lab)]

My Lords, as a member of the EU sub-committee that undertook the inquiry, I draw your Lordships’ attention to my declaration of interest in the report.

I start by thanking the noble Lord, Lord Tugendhat, as others have done, for his expert chairing of the inquiry and particularly for ensuring, with his customary good humour, that we focused our minds on the central and strategic issues that we needed to discuss. Given the complexities involved that we have already heard about and given the wide range of issues that we could potentially have covered, that was no mean feat. The report bears all hallmarks of his erudition, long experience and great expertise; we all benefited from that. That is what I should like to put on record. I also extend my personal thanks to our special adviser, the committee clerk and the policy analyst, whose help and guidance I greatly appreciated.

We in this Chamber are all well versed in international trade and investment issues. I am sure that is true, looking around. Where do we start to explain to non-experts and to the person in the street and on the doorstep what TTIP is all about, what it might deliver and why it is potentially so important? A good place to start might be with a very current analogy with which some of your Lordships may be familiar: the World Cup. In Brazil at the moment, there are 32 teams drawn from across the world, very different in style and approach but all playing to the same rules on identically laid-out pitches. Noble Lords might ask what that has to do with TTIP. Of course, in the field of international trade and investment, countries and trading blocs have their own individual rules and regulations. The United States has in place a structure within which business and commerce operate, and so does the EU. Unfortunately, the structures are not the same and that causes difficulties, but the important point is that the rules and regulations that are in place have been derived over decades from political debate and from public participation.

As between the United States and the EU, there are many similarities in both approach and ethos. Therefore, the importance of TTIP, as the noble Lord, Lord Tugendhat, and my noble friend Lord Giddens, have both emphasised, is that it is an ambitious but timely attempt to forge as many common sets of rules and regulations as possible between the US and the EU, which together account for nearly half the world’s GDP. It is important that we do not lose sight of that overall vision in the detailed, myriad discussions about individual issues and categories of product—or, indeed, in the labyrinthine issues about investor-state dispute mechanisms, about which I listened at great length, although I am not absolutely certain even at this moment whether I fully understand them.

As our report points out, TTIP,

“has both a strategic dimension, and a geopolitical one … One of its most important legacies may be the establishment of a structured dialogue on regulatory matters between the EU and US sustained into the future”.

It is important that we point out that that agreement would not be at the expense of the rest of the world. Experts from the Centre for Economic Policy Research predict that it would have a positive impact on worldwide trade and incomes, and that it would be pivotal to the progress of other multilateral initiatives, including the Doha round.

We have already heard from the noble Lord, Lord Liddle, that by no means all political groups in the EU support this vision. We know, for example, that the Green parties are campaigning strongly for policies of self-sufficiency and that UKIP wants the UK to go it alone and unilaterally draw up its own rules and regulations. We have also heard from the noble Lord, Lord Tugendhat, that, curiously, Conservative MEPs have joined the Conservatives and Reformists Group, which looks as though it will strongly oppose the TTIP agreement. Therefore, we have the most curious spectacle of Conservative MEPs in Europe opposing their own Government’s policies on TTIP. That really is bizarre. I do not suppose that the Minister wants to say too much about it, but I feel that I have to point it out.

Further afield, China is watching all this very carefully. We know that it plays to its own government and Communist Party rules, and we know that it does not have too many public debates about trade agreements. We know, too, that it does not tolerate pressure groups, such as Friends of the Earth. None the less, assuredly, China will fall in with whatever trade structures are most advantageous to its worldwide economic interests. Therefore, even if TTIP does not achieve all its objectives, it will, as speakers have already emphasised, give the opportunity for the EU and the United States to lay down a template for future trade and investment agreements, and other big powers, such as China and India, will have to take note of that. That is one of its big, important points.

Our report makes clear the ambitious scale and complexity and the difficulties involved in these negotiations. However, we have not heard too much—and we ought to raise this—about substantial progress. I think that there has already been a lot of substantial progress, which we should be celebrating and highlighting. For example, on the EU side, there is a lot of common ground among members and agreement on a great majority of issues. There is a clear view of what the EU wants from America. For me, what is really significant about all this is that Britain is playing a pivotal role in the negotiations, because of its strong links with the United States and its membership of the EU. Our report again points that out.

Everything that we read or hear about Britain’s role in Europe at present is depressingly negative, yet here we have the British Government playing a really important central role in a set of groundbreaking trade and investment negotiations, which could have a major impact for the rest of this century. We also see Britain working with EU partners, forging strong relationships with France and Germany and shaping the negotiations with the United States. Should we not be hearing more about this? Is it not the answer to UKIP, to Conservative MEPs and to the Brexit advocates who want to pull us out of Europe as quickly as possible?

Would we really want to be Norway, Switzerland or Turkey at this point, watching anxiously as the negotiations proceed, wondering how they will impinge on our own interests, working out how we can tap into any benefits that might result and not get left behind? Of course we would not—it would be like being relegated from the Premier League. Who wants to relegate themselves voluntarily from the Premier League when TTIP offers so much for the development of trade and industry in the coming decades, for jobs and new opportunities, and when we in Britain are playing such a central role in helping to shape it? I really think that we should be hearing more about this, so I ask the Minister, as I asked him when he came before the committee: how are we spreading the word? What is the Government’s communications strategy for this good news story? Who is spreading the word about what is at stake, the role Britain is playing and how small businesses and consumers are likely to benefit if a deal is concluded? I should like to hear, as other speakers have already raised, what is planned in this area. What are the CBI, the Institute of Directors and other business and trade bodies doing to spread the word? This is not just a government issue; a number of organisations should be sharing the load of explaining what is going on and what is likely to result.

We are looking at the prospect of international trade being made easier by the adoption of common rules, the lowering of trade barriers, the cutting of bureaucracy and regulations and the liberalisation of trade in services and public procurement. All that is not just good news for established businesses or for global corporations; I agree with the noble Lord, Lord Tugendhat, when he said that it is also good news for ordinary people. For example, there are those who buy and sell on the internet—what we might call the eBay economy—which is spreading very fast in this country. It really matters, yet, as the noble Earl, Lord Sandwich, said, if you stopped 100 people walking down Millbank this afternoon and asked them about TTIP, almost none—probably absolutely none—would know anything about it. That is a major problem and we need to change it.

What are the prospects for success? We know that there are political constraints on both sides. In the United States, there will not be much progress this side of the November mid-term elections, and that probably gives a window of about a year before American attention switches to the forthcoming presidential elections. In Europe, a new Commission will have to settle in, so it seems that 2015 will be the critical year for making progress. Again, of course, there will be constraints that hold things up. In Europe it will be having to clear every decision through the Commission; in the United States it will be what can be agreed by Congress and what has to be reserved for the individual states, which, we can be sure, will jealously guard their own power and interests. So progress is likely to be slow and patchy.

We have already heard that the United States wants to exclude financial services from any deal. We know about European sensitivities over genetically modified food and the protection of countries’ cultural heritage. Yet it is possible that negotiations will be more successful than we fear, and that momentum will gather pace. Assuredly, there will not be agreement on everything, but to return to my first point, if it proves possible to lay down common rules in a number of areas and if procedures are agreed for future negotiations, that will be a big win. It will in turn help to lay the basis for future trade and investment agreements, not just between the EU and the United States but across the globe. It is because of that vision and that prospect that we need to do everything we possibly can to ensure that these negotiations are successful.