Trade Bill (Seventh sitting)

Barry Gardiner Excerpts

Committee Debate: 7th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Barry Gardiner (Brent North) (Lab)]

Does that explain why the Government were so backward in making representations to the US International Trade Commission with respect to Bombardier? The Minister said that it would be inappropriate to lobby such an organisation. Is it the Government’s position that it is inappropriate for lobbying to take place when a trade remedies authority is considering whether dumping has taken place or what remedies might be appropriate? Is that his approach to defending British industry when it faces trade defence measures abroad?

[Greg Hands]

The hon. Gentleman is confusing different processes. The British Government made extensive representations to the parties and the ITC during the investigation process in the United States. That is the key difference. Of course people will be expected to make representations during the investigation process in the UK, but my point was about publication of the TRA’s recommendations between the investigation process and the Secretary of State’s pronouncement.

In any case, I dispute the hon. Gentleman’s point. The UK Government have put in enormous efforts: my boss, the Secretary of State for International Trade, spoke at length with Wilbur Ross, and the Business Secretary also made representations. Very extensive and successful representations were made to US authorities, to Boeing and other companies, and to the US Administration.

Amendment 25 could lead to unnecessary disruption of the market in the key period between the TRA’s recommendations and the Secretary of State’s decision.

[Barry Gardiner]

Will the Minister give way?

[Greg Hands]

Let me make a little more progress.

Amendment 25 could delay the Secretary of State’s decision. The evidence base for the TRA’s recommendations should be made available to the public after, not before, the Secretary of State accepts or rejects them, as required by World Trade Organisation agreement. That is the right time for the evidence base to be put in the public domain.

[Barry Gardiner]

rose—

[Greg Hands]

I will take a late intervention from the hon. Gentleman.

[Barry Gardiner]

It is only the one he deferred a few moments ago. I am grateful to the Minister, because he has engaged in debate and the Committee has been the better for it. However, he mentions the appropriate point for intervention. The American situation involved two decisions: the US Department of Commerce made an initial determination and then the US International Trade Commission had to look at whether any damage had been caused and recommend any appropriate charges. The situation was somewhat akin to a recommendation being made to the Secretary of State and the Secretary of State deciding what to do about it. There is a real parallel here that the Minister is denying. As I am sure he acknowledges, amendment 24 would not set an arbitrary deadline; it would ensure that the Secretary of State laid the report before Parliament in a timely fashion.

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[Greg Hands]

I accept the hon. Lady’s intervention, and she makes a case, but my point is that it is not necessary to have the review. These are existing agreements that, in a huge number of cases, are already in place. Some have been in place for a long time. The hon. Member for Kilmarnock and Loudoun says that an additional review process will be simple and effective, but I am not quite so sure. For example, the amendment makes neither reference to the intended product of such a review—how the review process would work—nor to the continued role of the devolved Administrations in the review after it has been reported.

I think it is much better that we stick with our position of consulting frequently and engaging with the devolved Administrations, without an extra review of agreements that are already in place. We have been clear that we will continue to engage with the devolved Administrations as we transition these agreements, therefore we do not need to commit this kind of review to legislation. I therefore ask the hon. Gentleman to withdraw the clause.

[Barry Gardiner]

It is appropriate to once again read out the long title of the Bill:

“To make provision about the implementation of international trade agreements”.

Everything that the Minister is saying ignores that the scope of the Bill precisely admits that we should be able to put into statute the procedure that the hon. Members for Livingston and for Kilmarnock and Loudoun have suggested.

The Minister has told the Committee that the Government

“will continue to engage with the devolved Administrations as we transition our current agreements”

and that:

“The Department for International Trade engages regularly with the devolved Administrations”.––[Official Report, Trade Public Bill Committee, 25 January 2018; c. 128.]

It is therefore surprising that the Government have not proposed any formal engagement procedure to ensure a statutory footing for consultation on the issues presented by the Bill—particularly given the Government’s approach to consultation thus far, which has been little more than lip service and press releases. An example of that was when the consultation for the Bill closed on 6 November and the Bill was published a few hours later on the morning of 7 November.

Modern trade agreements have extensive coverage, with chapters setting out substantial provisions in a range of areas, many of which might well be considered to touch upon matters that otherwise would be within the competence of the devolved authorities. We have gone over this ground in previous sittings, when we considered how trade agreements impact on our fishing industry, food standards, services regulation, agriculture, public services, procurement and so on. The day-to-day oversight and administration thereof may be wholly within aspects of devolved competence; however, the obligations that arise from a trade agreement might require changes to the way that those matters are managed. A question might then arise regarding when such a matter ceases to be a trade matter within the exclusive competence of the UK and becomes a matter within the competence of the respective devolved Administration.

That is why many other countries have set out formal consultation frameworks with their own constituent administrations, which may also have a degree of devolved competence. Indeed, the United States has such an engagement process to ensure that state-level representations can be fed into the negotiating process—albeit it is a process that is subject to controversy in various states that have sought to implement a much more robust consultation process, and have derailed the extension of the fast-track trade negotiating authority.

Canada has a similar process in order to ensure that, once an agreement has been concluded using the federal Government’s exclusive competence, it does not come unstuck at implementation stage. In his response to questions about the need for stakeholder engagement as early as possible in trade negotiations, our witness, Nick Ashton-Hart, noted that

“the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that…People know that you have to get to a sustainable deal also, and sometimes you have to do a concession at the right time to solve a problem in a domestic constituency for your counterparty”.––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 10, Q12.]

The hon. Member for Kilmarnock and Loudoun touched on the concerns raised by another of our witnesses, Professor Winters of the UK Trade Policy Observatory, who noted that we cannot have a situation in which a trade agreement might be unpicked once it had been concluded. Therefore, he said,

“Parliament and the devolved Administrations need to have an important role in setting mandates, and there need to be consultation and information during the process.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 58, Q111.]

The United Kingdom is clearly not unique in facing this matter; that is also the experience of other countries, many of which the Secretary of State is alleged to have identified as prospective gold trading partners. Those very countries may well wish to see a similar framework formally constituted in the UK before we come to the negotiating table. The European Union levelled that request at Canada prior to commencing negotiations on the comprehensive economic and trade agreement. The JMC appears to be an entirely appropriate forum for such consultation in the UK’s case. It would provide us with an off-the-shelf committee with the express purpose of seeking to avoid such complications.

The memorandum of understanding between the UK and the devolved Administrations notes that the four respective Administrations agreed

“to alert each other as soon as practicable to relevant developments within their areas of responsibility, wherever possible, prior to publication”—

of course, the GPA, which the Minister did not refer to, is one such case that is quite specifically about implementation within the devolved Administrations’ competence—

“to give appropriate consideration to the views of the other administrations; and…to establish where appropriate arrangements that allow for policies for which responsibility is shared to be drawn up and developed jointly between the administrations.”

Furthermore, in recognition that a commitment to engage may not be sufficient in certain cases, the memorandum of understanding sets out provisions for a formal consultation framework to ensure that engagement on such matters is more than just lip service.

Acknowledging that there will, of course, be matters relating to international issues that will touch on devolved matters, the memorandum of understanding requires the fullest possible engagement on such matters and sets out the framework for the Joint Ministerial Committee. Its terms of reference are

“to consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities…where the UK Government and the devolved administrations so agree, to consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom…to keep the arrangements for liaison between the UK Government and the devolved administrations under review; and…to consider disputes between the administrations.”

The Government could have considered their own appropriate framework or forum for a proper consultation process with the devolved authorities and other key stakeholders in advance of beginning trade negotiations. The Secretary of State has, for example, reconvened the Board of Trade, of which he has appointed himself the president. Of course, for the Board of Trade to be effective, it would likely require significant expansion of its membership. Currently, I believe it has the sum total of one person—namely, the Secretary of State himself.

The creation of a formal consultation forum is essential before and during the negotiating process. In that respect, we will support the new clause. Of course, I wish to draw the Committee’s attention to our new clause 11—I hope it will be considered in a later sitting—which seeks to ensure that the JMC is convened for all trade agreements, including new trade agreements that correspond to existing EU agreements.

I hope that Government Members recognise from the Committee’s deliberations that this Bill contains a serious threat to the powers of the devolved Administrations, and that the installation of an appropriate consultation procedure to address such matters will assist Ministers in concluding agreements. Although this amendment seeks to mitigate any complications that might present at implementation stage after an agreement has been concluded, the Bill still fails to address the very serious concerns about the dilution of the devolved authorities’ powers in matters that may be considered within their devolved competence. In that respect, I ask the Government to address this matter either by supporting the new clause or by way of their own amendments to the Bill before it proceeds, with such amendments making clear that powers afforded to Ministers of the Crown under the Bill will not, and cannot, be used to undermine the rights and powers of the devolved Governments. If the Government do not seek to do that before the Bill progresses to its next stage, I assure the Minister that the Opposition will.

[Greg Hands]

Very briefly, in response to that long speech I have only three points to make. First, there is no serious threat to the devolved Administrations. What we are talking about is the transition of existing free trade agreements. The hon. Gentleman’s points—his parallels with the United States and so on—seemed to relate entirely to future trade agreements and not to the continuity of existing trade agreements. I also point out to him that the Secretary of State for International Trade has not appointed himself President of the Board of Trade. The Prime Minister has appointed him President of the Board of Trade.

Most importantly, the Bill is all about continuity and the technical transition of existing free trade agreements. The hon. Gentleman’s points seem to relate to future trade agreements, which will be a matter for another day.

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[Greg Hands]

I am surprised that the official Opposition do not have anything to say to this clause. I thought that they took quite an interest in the application of the implementation period, but it appears not.

In any case, new clause 9 would require the Government to report to Parliament on how the Bill will be applied during the implementation period. I recognise the desire for clarity on how an implementation period will work and, specifically, how the powers in the Bill will be used in that period.

Irrespective of the exact terms of the implementation period, which need to be negotiated with the EU, as it stands the UK will no longer be part of existing EU FTAs or the government procurement agreement on leaving the EU. We will need the powers in the Bill to ensure continuity in our trading arrangements.

I also recognise the desire for clarity specifically on how trade remedies will work during an implementation period. We want to provide continuity to British industries, including retaining meaningful access to trade remedies.

Parliament will have plenty of opportunity to scrutinise an agreement between the UK and the EU, including on an implementation period. We have already committed to a vote on the final deal, and major policies in the withdrawal agreement will be enacted through primary legislation in the form of the withdrawal agreement and implementation Bill. I therefore ask the hon. Member for Kilmarnock and Loudoun to withdraw his new clause.

[Barry Gardiner]

The idea that the official Opposition have nothing to say on the matter is entirely wrong, but we have little to say because we agree with the new clause that is being proposed. We believe that it is eminently sensible. We are entering into a transition period, and it is right that Parliament should be brought up to date with what the Government’s intentions are. The new clause would do that. It is perfectly sensible.