Future Free Trade Agreements

Barry Gardiner Excerpts

Thursday 21st February 2019 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

There is a saying that the longest journey begins with the first step. I have always thought that very foolish. Surely the longest journey begins with deciding upon one’s destination. Without a destination, one is simply wandering about aimlessly. Of course, the other part of key journey planning is knowing what we want to do when we get there. Well, it seems to me that today’s debate shows that, when it comes to trade, the Secretary of State has identified the countries that he wants to visit—New Zealand, Australia and the United States—but that he is not really sure what he wants to do when he gets there.

The Secretary of State must persuade the House today that he has a clear itinerary and agenda. What are his objectives in securing these new trade agreements? What are the attack sectors in the markets that he has particularly identified as ones where we need to secure liberalisation and access for our suppliers and exporters? Which are the defensive sectors in our own markets that these other countries may seek to attack in response? What are the measures that he is proposing to use to defend those sectors in the UK?

My right hon. Friend the Member for Warley (John Spellar) intervened on the Secretary of State to elicit a clear statement of his firm intention to safeguard our NHS. Perhaps the Secretary of State would confirm that he was not actually quoting from the CETA, but from its non-legally binding interpretive side document. What sacrifices is he prepared to make in the negotiations to secure his objectives? How do his objectives sit alongside the objectives of his colleagues in the Department for Environment, Food and Rural Affairs? Do they compromise our food standards or producer capacity? In the Department for Business, Energy and Industrial Strategy, do they fit alongside the plans for a low-carbon transition of our economy to net zero? A successful strategy is one that has thought through all these questions beforehand.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) exposed how only this week we have seen an announcement by Honda, whose future in the UK has been sacrificed as a result of Japan now being able to export Japanese-made cars tariff-free to Europe. The Secretary of State said, “Well, of course, they’re still going to be able to do that after we’ve left the EU, and we’d have no way of changing it inside.” We have no way of changing it outside, because Honda will still be able to export those cars to Europe tariff-free; the Secretary of State knows that. The point that my hon. Friend was making so powerfully was that the relevant impact assessment was not done and that this Government had therefore not insisted that the relevant protection was made for our industry in the EU-Japan agreement.

[Angus Brendan MacNeil]

I have a philosophical question. There are two schools of thought regarding what is to blame for the Honda situation. It is either Brexit and the anticipation of trouble at the borders either now or in 21 months’ time as the Prime Minister kicks the can down the road and we leave the customs union and the single market; or, as the hon. Gentleman has just postulated, it is the EU-Japan free trade agreement. If it is the latter, is it not negligent for a country within the EU not to raise this issue as a defensive interest and ensure that this situation does not happen? It would seem to be extreme UK negligence for a country within the EU to have burned its car industry on the basis of getting a free trade agreement.

[Barry Gardiner]

The hon. Gentleman makes two distinct points. Of course, he is right to talk about the impact of Brexit on the automotive sector in the UK. All Members in this House should be concerned about that. The point that my hon. Friend the Member for Bishop Auckland quite rightly made was that Honda said, as the Secretary of State mentioned, that there was no imputation that this decision was made as a result of Brexit, but there was a clear indication that it was as a result of Japan now being able to import tariff-free to Europe—including the UK, but the whole 28 member states. At the point when this Government should have been making representations during the negotiations on that agreement, they were not doing so.

[Dr Fox]

The Labour party’s position is that it would be inside the customs union, where it would inherit the very agreements it says it does not like—it did not vote for CETA and it does not like the Japan economic partnership agreement. It would not only be bound by those agreements but would have no say in any future policy because it would be applied by the EU through the customs union.

[Barry Gardiner]

It is always the way with the Secretary of State: when he sees that a valid point has been made and that he is vulnerable to it, he tries to go on the attack. It does not work. It is a pathetic response when he knows and should, with some humility, accept that the proper impact assessments were never made.

[Mr Marcus Fysh (Yeovil) (Con)]

Is the hon. Gentleman aware that there is some concern among Japanese car manufacturers about whether the US will end up imposing tariffs on EU products and that that might make exports from the EU to the US very uncompetitive? Is that not potentially a much better reason why, in this case, sad though it is of course, they are consolidating low-volume production models back to Japan?

[Barry Gardiner]

The hon. Gentleman makes a fair point, and I will address it because he has done so in an open spirit. It could well be the case that the risk of America doing as he has suggested could have had that impact. I think he will concede that it is more likely to have been the case in the high-value sectors of our automotive industry, such as Jaguar Land Rover, where we export prestige vehicles to the United States, than in the bulk sector—the Nissans, Hondas and Toyotas that form the bulk of our domestic production and of our exports to Europe. He is partially right. It could well have affected their decision making, but it is more likely to have been at the high end of the market than the low.

[Geraint Davies]

Does my hon. Friend think it is a cruel irony that Margaret Thatcher was instrumental in creating the single market and getting Japanese car companies to come here as a platform to access that market? The EU-Japan trade deal is one of the reasons they have gone there. The other imperative is that, had we not been Brexiting, those car manufacturers would in all probability stay in the EU, in Britain, where they are already. Given that car workers who voted to leave are now finding that they voted to leave their jobs, should they not have a final say on whether we leave at all? They certainly did not vote to lose their jobs. It is completely farcical.

[Barry Gardiner]

My hon. Friend tempts me into a discussion about Brexit, but I am sure that if I were to be tempted, Madam Deputy Speaker, you would be on my case in a flash, urging me to deal with the matter of future free trade agreements instead.

This debate was originally promised at the last International Trade oral questions on 7 February, but anyone reading Hansard will not have been blind to the fact that the commitment was made as a response to an entirely different question. We did not ask for a general debate on putative trade deals with specific countries. What was asked was when the Government would bring forward a debate about the scrutiny of trade deals. Even if the Secretary of State has not yet got round to reading my eight-page letter of 21 January on the subject—there are many copies on this side of the House if he wants a spare—he cannot have been unaware of the matter, because, to his embarrassment, the Trade Bill’s progress in another place has been delayed as the Government lost a crucial vote.

Their lordships required the Government to set out their proposals for the process, the consultation, the mandate and scrutiny of making international trade agreements in the first place, including:

“Roles for Parliament and the devolved legislatures and Administrations in relation to both a negotiating mandate and a final agreement.”—[Official Report, House of Lords, 21 January 2019; Vol. 795, c.506.]

The House will note that no such proposals have yet been brought forward, so perhaps the Secretary of State will tell us what progress he has made in this respect and when he intends to introduce such a debate.

Today’s debate certainly cannot be considered to constitute that important discussion. It is a general debate on a Thursday, in a week that was intended to be recess, talking about potential agreements before Parliament has even debated the whole process of consultation, impact assessment, negotiating mandate, parliamentary debate, transparency of negotiation, ratification and subsequent review and periodic appraisal that should constitute a framework within which the Government intend to bring such agreements into being.

Furthermore, people watching today’s debate will be incredulous that, given that just last week the Secretary of State was forced to come to this House and admit that he had thus far failed to replicate the 40-odd trade agreements that he promised would be ready to sign one second after midnight after Brexit, last week only five had been agreed, nine were off track, 19 were significantly off track, four were said to be impossible to complete by 29 March and two were not even being negotiated. If there has been progress since then, I will happily give way to the Secretary of State if he wishes to advise the House. No. In that case, I take it that his silence is an acceptance that that is the state of play of the agreements that we currently have. Indeed, the fact that we are instead discussing a host of entirely new trade agreements when we have yet to secure trade continuation with all the countries with which we already enjoy a trade agreement by way of our EU membership rather calls into question the Government’s priorities at a time when businesses are screaming for certainty, clarity and continuity.

[Chi Onwurah]

I thank the shadow Secretary of State for giving way and for the excellent speech that he is making. When I asked the Secretary of State earlier whether, given the different sizes of the UK market and the EU market, the UK could succeed in negotiating a better deal than the EU, his response was that the EU had yet to negotiate a deal, seeming to imply that no deal could not be worse than a bad deal that he might negotiate. Does my hon. Friend agree that this is contradictory to the Brexiteers’ position, and that a bad deal for us negotiated with the United States of America could have a really devastating impact on our agriculture and automotive trades specifically?

[Barry Gardiner]

I certainly do agree with my hon. Friend. Some in the Secretary of State’s party have been claiming that no deal would be better than a bad deal. Others have been claiming that going on to no deal would be no problem at all, that we would be trading on WTO terms. I am sure that she also wonders, if working on WTO terms is as good as those Conservative Members believe it to be, what the green sunlit uplands are that the Secretary of State is speaking about in terms of getting rid of the WTO terms in all these new trade agreements. I think he was the one who referred to having it both ways earlier, but it rather seems to me as if he is doing just that.

[Catherine West (Hornsey and Wood Green) (Lab)]

The Secretary of State’s reference to the sunny uplands of post-Brexit trade rather prompts the question why the Government Benches are not a little fuller today. Would my hon. Friend like to comment?

[Barry Gardiner]

There is no need for me to comment. The empty Benches are screaming my hon. Friend’s point louder than I could amplify it.

[Angus Brendan MacNeil]

Will the hon. Gentleman give way?

[Barry Gardiner]

I will make a little progress.

The Government’s primary focus must be securing a deal with the EU, which accounts for 44% of all our exports. The Department for International Trade’s primary focus must be to secure the so-called roll-over agreements—a promise repeatedly made by the Secretary of State, which he has now only 35 more days to deliver. Thousands of businesses depend on the ability to continue to operate their just-in-time supply chains, and thousands of jobs in this country depend upon the same.

Questions have repeatedly been asked of the Government’s capacity to handle even the volume of work required to get these deals over the line—more so given the UK’s relative lack of trade negotiation experience after some 40 years of not being able so to do under the EU’s common commercial policy—yet today’s debate is to consider a number of potential new free trade agreements with Australia, New Zealand and the United States, and the potential accession of the UK to the comprehensive and progressive agreement for trans-Pacific partnership.

The Opposition want to see progressive, positive trade agreements that benefit the UK, help to grow our export potential and further enhance the UK’s attractiveness as a destination for investment, but we have been clear from the outset that the priority must be securing a deal with the EU and ensuring continuity of trade for British business, including with respect to trade agreements that the EU has with third countries. There is a good reason for that, which is that any major trading partner will want to know what trading arrangements we have with the EU before concluding a trade agreement with us in future. That seems self-evident. If we are not able to conclude the free trade agreement with the EU, perhaps right into the transition period, that will substantially impair our ability to secure a new trade agreement with any of the three countries that we are considering today.

The Secretary of State is like a general who fails to secure his rear before charging off in search of a new enemy to fight, but that is not his only embarrassment. The letter written to the Prime Minister this week by the chief executive of the British Ceramic Confederation is excoriating about the total lack of understanding displayed by the Secretary of State of the impact of the proposals he favours for a move to zero tariffs in as many areas as possible. The chief executive sets it out in surgical detail:

“Removing import tariffs gives a leg up to foreign competitors, thus threatening British manufacturing jobs.”

She continues:

“Our manufacturers would still be paying other countries’ import tariffs including, in the event of no deal, EU MFNs and other countries’ MFNs where we will have just lost our preferential access. The net effect across all sectors could be to increase imports at the same time as exports are being put under pressure with a resulting adverse effect on balance of payments.

No tariffs makes the UK’s emerging trade remedies system ineffective from the outset by lowering the cumulative duty paid on the distorted imports, for example, by 12% in the case of dumped Chinese tableware.

It would weaken the UK’s hand in making free trade deals with other countries. If we give away access to Britain for free, why would anyone need to do a trade deal with us?”

[Helen Goodman]

Will my right hon. Friend give way?

[Barry Gardiner]

I will, but my hon. Friend has promoted me.

[Helen Goodman]

I am grateful; my hon. Friend is making an exceptionally important point. I have had the ceramics industry in touch with me because I have a brick factory, Wienerberger, in my constituency. Zero tariffs would also be catastrophic for farmers. Does he not agree that if the Secretary of State is planning to bring forward a statutory instrument in this form next week, he should have had the decency to announce it at the Dispatch Box today?

[Barry Gardiner]

I do not know whether my hon. Friend was in the Chamber just prior to the debate starting, but I raised a point of order with Mr Speaker—obviously, you were not here, Madam Deputy Speaker— to say that the fourth written statement due to be laid before the House today had not been made available prior to this debate. I thought that was a great shame. Mr Speaker expressed his view that, of course, these things sometimes happen inadvertently. If it was advertent, he deprecated it. But of course, there is a pattern here, and my hon. Friend is right to point to that pattern. I share her hope that we will not find next week that there are further documents that either would have been vital for today’s debate or are being produced at exactly the wrong point for Parliament to have the maximum opportunity to scrutinise what the Government are doing.

The British Ceramic Confederation letter continues:

“Some members thought if we are importing, say, a raw material, that was not manufactured or quarried in the UK a liberalisation might be acceptable. Our members are clear this should be an exception rather than a general rule and comprehensive consultation would be needed.”

Of course, the chief executive rightly also points out that most other sectors have not had the same level of discussion with officials that ceramics has had, and so are largely unprepared for the potential impact of a unilateral snap move to zero most favoured nation tariff rates. There has been no comprehensive formal consultation, no comprehensive impact assessment and no prolonged transition proposed. Such a significant decision would have far-reaching consequences for the UK economy and would demand full parliamentary scrutiny.

Consultation, impact assessments and parliamentary scrutiny—those are all the things their lordships are still waiting for before returning the Trade Bill to this House, and all the things this debate ought to have been about, rather than putative future agreements whose working groups have been mired in secrecy and which the Secretary of State sees as his vanity project of restoring the Anglosphere.

The letter continues:

“In a no deal Brexit, already highly damaging and disruptive for our sector, the shock of zero tariffs would be devastating, affecting businesses, jobs and communities across the country as well as affecting UK manufacturing more generally.”

Of course, it is not just the ceramics industry that is horrified by the Secretary of State’s proposals. The Manufacturing Trade Remedies Alliance, which is made up of eight national trade associations, as well as three trade unions, only yesterday put out an equally strong press release damning the folly of a wholesale reduction to zero tariffs, saying that

“the move could ruin the home market for many sectors. Increased imports would flood the market, jeopardising tens of thousands of jobs and fundamentally changing the British economy.”

Ian Cranshaw, head of international trade at the Chemical Industries Association, said:

“The idea of a new tariff regime is something which should be subject to proper consultation. With less than 40 days to Brexit, British manufacturers already dealing with Brexit uncertainties are now having to assess how their business might be impacted by an increase in non-EU competition should the government remove MFN tariffs on key chemical products.”

Finally, Jude Brimble, GMB national secretary, said:

“Zero tariffs in the event of a no-deal Brexit is a short-sighted move. While it may lower prices in the short term, it will ultimately put thousands of British manufacturing jobs at risk.”

[Dr Fox]

Will the hon. Gentleman give way?

--- Later in debate ---

[Barry Gardiner]

In a moment. Jude Brimble continued:

“Manufacturers are often based in the heart of their communities and supporting many more indirect and supply chain jobs.

Zero tariffs could destroy the proud history of making and manufacturing”

in this country.

Is this really what the Secretary of State intends? I will happily give way to him now if he will rise to confirm that he has abandoned that folly.

[Dr Fox]

The need to produce a new tariff policy would be required only in a no-deal scenario. I voted for there to be a deal to avoid that—will the hon. Gentleman?

[Barry Gardiner]

I have two points. First, of course I will vote for a deal, but I will not vote for the Secretary of State’s bad deal. That is why we have put forward our own proposals for a good deal that would protect manufacturing in this country. Secondly, he says that new tariffs will be necessary only if there is no deal. Why then have he and his departmental officials been talking to industry about his proposals for zero tariffs? I will very happily give way if he will come back to the Dispatch Box and explain that. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Gentleman cannot sit down. He has to keep going.

[Barry Gardiner]

I was seeking an intervention, Madam Deputy Speaker.

According to the Office for National Statistics, Australia was our 16th biggest export market over the past 20 years, with machinery, Scotch whisky and particularly motor vehicles being among our primary exports. House of Commons Library data suggests that we exported £10.8 billion of our goods and services to Australia in 2017, representing 1.8% of our total exports. In turn, we are Australia’s primary EU market, with primary imports consisting of metals, including precious metals, as well as gems, wine and agricultural products.

The UK Government have recently announced that a UK-Australia mutual recognition agreement has been agreed alongside an agreement on trade in wine. [Interruption.] This is not a glass of Australian wine that I am drinking. That agreement is intended to replicate the terms of existing agreements between Australia and the EU. Australia maintains a number of trade co-operation agreements with the EU, and the current state of play on the UK Government’s progress in rolling over these agreements remains unclear. Although Australia does not currently have a free trade agreement in place with the EU, discussions towards an agreement began last June. Australia has repeatedly made it clear that the EU agreement remains its priority agreement, and that any trade agreement with the UK will not be possible until Brexit is settled.

The European Parliament approved the negotiating mandate for the trade agreement, but noted that there must be

“special treatment for some sensitive agricultural products, for example, through tariff-rate quotas or transition periods, and a request that consideration should be given to the exclusion of the most sensitive sectors; and the preservation of governments’ right to regulate with a view to achieving legitimate policy objectives.”

Furthermore, the European Parliament called on the Commission

“to conduct negotiations as transparently as possible”,

and said that

“the role of the Parliament should be strengthened at every stage of the FTA negotiations.”

I ask the Secretary of State whether the UK Government will be adopting the same mandate in the negotiations. Where they are not adopting the same mandate as the EU-Australia agreement, will he will set out precisely where it will differ?

In the same year, our exports to New Zealand totalled £1.5 billion, representing 0.2% of our total exports. The ONS statistics for the period show that New Zealand was our 54th biggest export market over the past 20 years. Again, our biggest goods exports to New Zealand were primarily motor vehicles and machinery, with agricultural products and wine constituting some of our major imports. The US was our primary export destination in that period, and of course it continues to be our biggest trading partner, discounting the EU. We record a trade surplus with each of these countries, so it would be fair to imagine that it is in their interests to ensure that any future trade agreement grows their own export base.

The EU and New Zealand also commenced negotiations towards a free trade agreement last year, with the mandate again being presented for a vote in the plenary of the European Parliament. Concerns were raised about the impact of agri-food imports on farmers, and the European Parliament requested

“that due consideration should be given, for instance, either to the inclusion in the FTAs of transitional periods or appropriate quotas, or to the exclusion of commitments in the most sensitive sectors.”

It said that the negotiations should seek to ensure

“the inclusion of a specific chapter devoted to generating business opportunities for micro-enterprises and SMEs; special treatment for some sensitive agricultural products, for example, through tariff-rate quotas or transition periods, and a request that consideration should be given to the exclusion of the most sensitive sectors; and the preservation of governments’ right to regulate with a view to achieving legitimate policy objectives.”

The European Parliament called on the Commission

“to conduct negotiations as transparently as possible,”

and MEPs stressed that

“the role of the Parliament should be strengthened at every stage of the FTA negotiations.”

Again, I ask the Secretary of State whether, in pursuing the trade agreement with New Zealand, he will be adopting a mandate that is similar to the one already adopted by the EU. If not, will he now set out precisely where it will differ?

With that in mind, we must be clear about what the opportunities and threats are in respect of further liberalisation of trade with these countries by way of a free trade agreement. It would therefore have been helpful had the Government set out their priorities for each of the trade agreements we are talking about. I had hoped that this would be an opportunity for the Secretary of State to come to the House and do precisely that—to set out the sectors of attack, the sectors of defence and exactly what trade-offs he might foresee.

The hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) and his colleague who speaks on trade for the SNP, the hon. Member for Dundee East (Stewart Hosie), both challenged the Secretary of State by saying that neither the contribution to GDP nor the volume of trade secured in these future trade agreements would compensate for the loss of trade with the EU. When they intervened on him earlier to do so, they gave figures and statistics, but the Secretary of State did not do so.

What impact assessments have the Government done on the specific rises in GDP and volume of trade that the UK seeks to secure from the agreements his working groups have been working towards? With those assessments we might be able to hold him to account in the future. For example, given that motor vehicle exports make up our largest goods exports to Australia and New Zealand, it would be helpful to know what assessment the Government have made of recent market developments, or of our ongoing capacity to export motor vehicles to those countries.

[Angus Brendan MacNeil]

I hesitate to intervene to make a discordant point, because the hon. Gentleman was being generous. However, on balance I think I should say that if we have a customs union only and are not in the single market, which is the Labour party’s policy, that itself will probably mean a hit to GDP of about 4%. If we need about 30 agreements at 6%, then we would need about 20 similar agreements—20-ish such American agreements—to make up for the damage his policy would bring in loss of trade to the European Union.

[Barry Gardiner]

Yes, indeed. That is why I have consistently said that I believe that Brexit will do economic damage to this country. Unlike the hon. Gentleman, however, I believe in democracy. I believe that, after the referendum took place, this Parliament had an obligation to do what the British people said we should do.

There is also the question of geography to overcome, with the traditional trend towards trade being with one’s nearest geographical neighbours. That is called trade gravity. While we may share a common history, have cultural relationships and even share a legal system—in trade terms, that is critical and very helpful—there can be no avoiding the significant logistical challenges of shipping goods right around the world to the Pacific. It is worth our considering that these countries are all major agri-food producers and exporter nations, with Australia and New Zealand being members of the Cairns Group bloc at the WTO.

The Cairns Group is an interest group committed to the abolition of agricultural subsidies and the elimination of tariff and non-tariff barriers to trade for their agricultural exports. Other members include Canada, Chile, Malaysia, Peru and Vietnam, which, alongside Australia and New Zealand, make up of seven of the 11 CPTPP countries and seven of the 19 Cairns Group members. There may well be potential to grow our exports to those markets, and the ask on their side is clear. It goes precisely to part of the question posed earlier by my hon. Friend the Member for Bishop Auckland.

The ask on their side is clear: “Open up your markets to our food products.” The impact on our domestic agricultural sector could be substantial as our farmers find themselves struggling to compete with an influx of cheaper food products.

The Secretary of State has repeatedly welcomed the perceived benefit to UK consumers of cheaper New Zealand lamb, and today he again dismissed—I was glad to hear him be so robust—safety concerns over things such as GMO foods or chlorine-washed chicken from the United States. In response to one of his colleagues, he said that there will be no lowering of either sanitary or phytosanitary standards or of animal health and welfare regulations in this country. I welcome that, and we will hold him to it.

If a trade agreement between our countries requires the removal of all tariffs on such goods and the abolition of tariff rate quotas, that could well mean the end of our livestock and poultry sectors. We already know that there has been a big push by the agricultural lobby in those respective countries to seek greater market liberalisation, and some of those countries, including New Zealand and the United States, have slowed the progress of our accession to the Government procurement agreement. It is likely that some countries have also voiced objections to the lodging of our WTO schedules and that the Government have had to agree to a number of future concessions to smooth the road. Again, I would happily give way to the Secretary of State if he wanted to come to the Dispatch Box and deny that is the case, or to set out any concessions or commitments he may have given, but he appears unwilling to do so.

The farming sector in this country is extremely nervous about the impact on its ongoing viability should the UK open up market access for imported agri-food, particularly from the United States. Concerns over production standards, animal welfare, sanitary and phytosanitary standards have not been put to rest by the Environment Secretary’s repeated assurances that our domestic standards will not be lowered. At no point have the Government ruled out allowing access to our markets for goods produced to lower standards than our own. Indeed, the latest rumour is that the Government will seek to counter the impact of the importation of such goods with tariffs. The Secretary of State did not rule that out in his earlier remarks—again, I would give way to him if he sought to intervene, but he does not.

Where a trade agreement is in place, such tariffs are likely to be removed and therefore will do nothing to defend our farmers from cheaper imports from those countries. The argument that that will benefit consumers must be demonstrated credibly, with a proper impact assessment and economic modelling that fully considers the effect on our domestic producers and jobs in that sector. Lower prices will not benefit consumers who find themselves out of a job as a consequence of our producers going to the wall. Concerns have been similarly raised about the chapter on sanitary and phytosanitary measures in the CPTPP, which are referred to by some academics as “SPS minus” and are significantly lower than the EU’s current sanitary and phytosanitary rules that the UK will inherit as retained EU law. Acceding to that agreement and allowing products that have been produced to lower or differing standards than our own to enter our markets could further compound the threat to our domestic farmers and undermine any future relationship with the EU and the standards alignment that we need.

Sanitary and phytosanitary standards are one of the most sensitive aspects of trade policy and they have, for good reason, been a major point of contention in discussions about our relationship with the EU post Brexit. It is not only our farming sector that is concerned about the impact of those agreements. Last week, we saw reports that the US steel-producer lobby has been petitioning to block or restrict access for UK producers to Government procurement contracts in the United States under the terms of any potential trade agreement. Indeed, President Trump has been abundantly clear with his America first agenda that he will not countenance any trade agreement that he views as being counter to American interests—namely, domestic protectionism and ensuring a US trade surplus with trading partners.

President Trump has publicly stated that the US is

“losing billions of dollars on trade”

and would find a trade war “easy to win”. Such rhetoric should be alarming to British businesses as Trump is clearly not out to do a good deal for us. President Trump stands on an America first platform and believes that by forcing trade partners into submission and competitor companies out of business, he can restore manufacturing in the United States. In truth, those tariffs are hurting US businesses who participate in global supply chains and face countervailing tariffs overseas. As part of his trade war, President Trump has also refused to endorse nominations to the WTO appellate body, thus blocking the progress of dispute resolutions and the enforcement of the rules-based system. We should be very wary of doing a trade deal if we cannot seek enforcement at the WTO for any actions taken in violation of those rules by another country, and the US is blocking that possibility.

A recent report by a number of right-wing think-tanks—many linked to the Secretary of State, who is understood to favour the report—suggested that a US-UK free trade agreement should “enshrine” the “negative list” approach to liberalisation across goods, services, investment and Government procurement, which is conducive to faster, broader and deeper economic integration. The Secretary of State will know that the negative list system, which has been adopted in some trade agreements that we have already entered into, means that future sectors—some of which we cannot currently even conceive—would automatically be liberalised, no matter what the public policy consequences would be. That is extremely dangerous, and it would be good if the Secretary of State assured the House that when he considers future trade agreements, he is mindful of that point and would not wish to have a negative list system that could expose us in that way.

The Secretary of State has established a number of trade working groups, including with Australia in 2016, New Zealand in 2017, and the US in July 2017. To date, we have precisely no information about what has been discussed in those working groups, what progress has been made towards a future trade agreement with those nations, what assurances have been sought and concessions agreed, or what representations have been made on those issues. The Secretary of State has made no secret of his desire to fast-track these agreements and have them ready to go after the UK withdraws from the EU, but it is not at all clear that his counterparts share quite the same ambitions.

Australia has repeatedly stated that its priority is securing a trade agreement with the EU, and the American President has suggested that a trade deal with the US is all but impossible with the Government’s preferred approach to Brexit, as set out in the Prime Minister’s proposed deal. Just this week, Simon Birmingham, Australia’s Minister for Trade, Tourism and Investment, poured cold water over any idea that the UK could quickly accede to the CPTPP noting

“obviously it’s a statement of fact that the UK is not within the Pacific.”

[Interruption.] That is not me; that was Simon Birmingham. He went on to say that

“some of the other TPP members would think that there are some nations within the Asia Pacific region who might be earlier starters in terms of coming in.”

Does the Secretary of State believe that he can confidently conclude these agreements with the same speed and ease with which he promised he would secure the roll-over agreements?

Has the Secretary of State had conversations with CPTTP member countries about the UK’s accession to that agreement, and what commitments has he received or given in respect of the same? He will no doubt be aware that New Zealand has sought, through a series of side letters with other members of that agreement, to disapply the investor-state dispute settlement provisions of that agreement. I would be delighted if the Secretary of State said that he is going to do the same. Will the UK be seeking ISDS provisions in trade agreements with Australia, New Zealand and the United States, despite the fact that, as he said, the Secretary of State believes they should not be necessary

“under systems such as the UK’s”?—[Official Report, 7 February 2019; Vol. 654, c. 385.]

Many colleagues will be extremely concerned that a number of those issues will already have been discussed privately through the trade working groups and that assurances and commitments may already have been exchanged. We are here debating potential agreements that may well already be loosely drafted. This debate can hardly be considered to be a meaningful say from Parliament on the terms of those trade agreements. The Government’s approach to trade agreements has been little more than warm words and window dressing. Public consultations were opened by way of an online survey on the Department’s website on July 2018 and have since closed, but we have yet to have any report on the findings of those consultations.

This approach does not constitute a proper consultation and oversight framework that ensures the best agreement possible for the entire country as we withdraw from the European Union. Key stakeholders are concerned that they are being invited to give views merely as a tick-box exercise, with no real say on helping to shape trade talks and with no capacity to feed back on any complications that concessions during negotiations may present. That is why my party has repeatedly called for a proper consultation structure that would require formal engagement with affected stakeholders, civil society, trade unions and the devolved nations.

Such a process must also ensure that Parliament has a role in the approval of mandates, impact assessments and reviews of trade agreements. The Government voted down every amendment to the Trade Bill to that effect. We have also been clear that consultation alone is not enough. A comprehensive, independent sustainability impact assessment needs to be conducted in advance of the launch of new trade and investment negotiations to establish the potential social, economic and environmental consequences for all sectors and regions of the UK.

To conclude, we in the Labour party would welcome trade agreements that grow our export base across all regions of the United Kingdom and that help maintain and elevate rights and standards. If the Secretary of State could show that these potential trade agreements could achieve those objectives, we would of course welcome them. However, we are extremely concerned at the lack of information presented to Parliament on the prospective benefits and on the potential threats to our domestic producers, which are clearly evident. The Government must ensure that proper assessments are carried out and must ensure that Parliament has a proper say in future trade agreements that are ultimately to be concluded between our nations.

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[Chi Onwurah]

I do not know whether the hon. Gentleman was in his place when I started speaking, but I acknowledge that Honda’s decision is not entirely based on Brexit. However, as we have been discussing, the uncertainty in the business environment caused by Brexit has an impact on investment. The Minister stated that investment was not down, but investment in the automotive industry has gone down by almost 50% in the last year. At the same time, components worth £35 million are delivered from the European Union every day. That partly reflects the way in which our supply chains are integrated.

Government Members, many of whom pride themselves on their business experience, seem to fail to understand that supply chains—as a chartered engineer, I have been involved in many supply chains—such as the automotive supply chain are highly integrated and highly just-in-time. We have automotive supply chains that cross the channel backwards and forwards multiple times—for example, a crankshaft can be made in France, go to the west midlands to be drilled and milled and then sent to Munich to be put in an engine, which then comes back to Oxford—and the channel would be a tariff border. Such integration requires not only frictionless borders, but agreed standards to define everything from the acceptable frequency of electromagnetic radiation to the atomic composition of a given chemical. In leaving the European Union, what the Government apparently want is not less regulation, but simply more duplication, setting up new regulatory bodies to recreate existing European agencies and regulations. Far from Brussels imposing regulation on the European Union, it was often acting as an outsourcer for regulation that we would need in any case.

The automotive industry delivers not gig economy or minimum wage jobs, but good, well-paid jobs, and we in the north-east, particularly as the only region in the country that still exports more than it imports—we are very proud to have the most productive Nissan plant in the world in our region—refuse to envisage the future that the Government seem to desire, whereby our manufacturing is undermined by taking us out of the biggest free trade area in the world, one which is absolutely essential to us.

[Barry Gardiner]

It pains me to advise my hon. Friend of this, but in the last quarterly set of figures, that honourable exception of the north-east being the only region that exports more than it imports is no longer the case. I know that, as a doughty fighter for the north-east, that is not what she wants to hear, but it is testament to what happens under this Government.

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[Graham Stuart]

First, I should say that parliamentarians will continue to be able to inform the negotiations. Parliament will be updated regularly as the negotiations progress, and it will be Parliament, through the process set out in the Constitutional Reform and Governance Act 2010, which was passed by the Labour party, that will ultimately play its role in the ratification of any new FTA.

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

I will not.

Both Houses will be fully involved as we balance meaningful scrutiny with the security necessary to protect sensitive negotiating positions and market-sensitive data. Having reflected on the contributions in this debate, including those of the hon. Member for Dundee East (Stewart Hosie), we will return with more detailed proposals shortly, ahead of the next stage of the Trade Bill.

As I said, we have had interesting contributions from Government and Opposition Members. I shall pick on some. The right hon. Member for Warley (John Spellar) noted in an intervention that he fully accepts that there is no threat to the NHS from the potential trade deals. He has accepted that we are not going to let that happen. I hope that Opposition Members, who have, like me, heard the concerns of many constituents on that front, can not only bring those concerns to the House but help to allay them. If there is a genuine issue, it is worth looking at it, but if there is not, we do not want false fears. There are enough real challenges facing us without spectral ones being introduced as well.

The issue of developing countries and what more we can do was touched on by Members on both sides of the House. One Opposition Member—I cannot remember who it was—sounded rather sceptical, saying that we might go backwards in that regard. I think that there is a real opportunity to go forward. As the Secretary of State has said, bringing trade and development together is really important if we are to help people out of poverty. Ultimately, trade, not aid is the way out of poverty. Therefore, the issues that have been raised here, not least about coffee and other such products, are about making sure that poorer countries can add value in their country and then sell into the UK. That is the kind of forward-looking policy that we have in mind.

Market access was also touched on. While we are talking about these big flagship trade deals, more advantage could well be had by targeting smaller market access issues. We heard about the pork industry earlier, and we could mention the opening up of Taiwan and China to pork. It has made an enormous difference to the pork industry in this country. There is an opportunity to do much more in many other areas, not least in the new digital and data-related areas as well.

The hon. Member for Swansea West (Geraint Davies) did his usual gloom routine. I really do not understand how such a dynamic and forward-looking area as Swansea can be represented by someone who is so down on this country and its future prospects. I really hope that, at some point, he will cheer up and recognise that there is an upside, and that every cloud does have a silver lining.

The hon. Member for Brent North (Barry Gardiner) mentioned differences between the EU mandate and our own. We will set out our plans and a scoping document in due course. As I have said, we really are committed to making sure that this House and, as broadly as possible, civil society and certainly the devolved Administrations can be included, and we will be having that inter-ministerial forum as well.

[Barry Gardiner]

rose—

[Graham Stuart]

I will give way to the shadow Secretary of State.

[Barry Gardiner]

I just wanted to say thank you.

[Graham Stuart]

Excellent. That is delightful.

I have been speaking for eight minutes so far, and will seek to stay within the time. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) was informative, fascinating and interesting when he talked about the scale of farms. Agriculture was raised in the debate. There is a balancing act to be done between looking after consumers and making sure that we look after the beautiful countryside, not least in the north-east of England, but in the rest of the country as well. If there are to be any changes—liberalisation, for example—they need to be done in a sensible way that maximises the potential upsides and minimises any downsides to any losers.

The Chairman of the Select Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), said that we needed to carry Parliament with us, and he is absolutely right. In talking about winners and losers, he mentioned compensation for areas that lose out. By having a central Treasury, this country makes sure that we provide a counterbalance between those areas that do less well and those areas that do better. I point to the behaviour of the Department for International Trade. As the Minister responsible for investment, my job is to lead the investment team. [Interruption.] Well, the shadow Minister, the hon. Member for Sefton Central (Bill Esterson), seems to invent facts rather than actually access them. If he looks at the latest numbers from the United Nations Conference on Trade and Development, probably the most respected ones globally, he will see that they suggest that, while global foreign direct investment fell markedly last year, that in the EU fell even more, and the UK—despite that—went up by 20%. So there is little truth in the suggestion, which we hear so often from the Opposition, that somehow things are going downhill. We have more people in work than ever before, more disabled people in work than ever before, rising wages and lower inflation. The truth is that we have fewer unemployed young people than at any time in our history. This is good news. Trying to talk the country down about both its future and its present may be a standard Opposition tactic, but, in the current circumstances, it is, frankly, disingenuous.