EU-Japan Economic Partnership Agreement

Debate between Barry Gardiner and William Cash

Tuesday 26th June 2018 Commons Chamber

[Barry Gardiner]

Clearly, while we remain a member of the EU, we have a seat at the negotiating table of any deals. If we are outside the EU, we will not have that, but, equally, we will not have the benefit of being part of a 500 million-strong consumer market that would enable us to negotiate better deals. I am sure that the hon. Gentleman appreciates that being in a new customs union with the EU, as the leader of my party set out in a speech he gave in Coventry a little while ago, would mean that we would be co-decision makers with the EU in that relationship—a customs union not such as the one we currently have with the EU, but one much more like Mercosur, where each of the countries has equal sway.

[Sir William Cash]

rose—

[Barry Gardiner]

I will make a little progress and then, of course, I will very happily give way to the hon. Gentleman, because his Committee has raised a number of questions on the EU-Japan deal that we need to explore further. The Committee insisted, in fact, that the Government bring the deal to a debate on the Floor of the House before the EU Council. Interestingly, in the light of the absurdly tight timeframe that the Government imposed on themselves, the Committee also instructed them to publish their impact assessment on the EU-Japan EPA no later than 4 June.

The first question that the Minister must answer then is why the Government failed to meet that deadline. The impact assessment was published a week late, on 11 June, on the same day that this debate was announced. It is an extraordinary document. Its own authors openly acknowledge that the assessment cannot be taken as an accurate guide to the future impacts of the agreement. It failed to calculate the specific effects on individual EU member states. The assessment admits that it cannot know what proportion of any aggregate gains from the EU-Japan EPA might come to the UK or to any other EU member state. There has been no proper independent assessment of the impacts on the UK, and the authors—these are the authors of the assessment—say that they have just had to assume proportionate outcomes in line with the UK’s projected share of EU trade with Japan.

[Sir William Cash]

I thought I might try to lift this enormous pile of documents to show the House what we are actually considering today; it is really quite formidable. I want to make one point regarding the single market. Does the hon. Gentleman deny that, in relation to our trade with the other 27 member states, we run a deficit of £82 billion a year—these are figures from the Office for National Statistics—whereas our external growth, our external surplus, is growing exponentially and, of course, 90% of all future trading will be outside the EU?

[Barry Gardiner]

I am grateful to the hon. Gentleman on two counts—first for showing us precisely what we are talking about. I know that he will have read the full EPA assessment, as I have done. I am equally grateful to him for raising the issue of the balance of trade surplus and deficit that we currently run. I am just about to come to that point, so I hope that he can hold off with his remarks.

It is perhaps most damning to quote from the impact assessment document itself, which states:

“Figures presented here reflect the long run impacts per annum and should be treated as a magnitude of change and not a forecast…It is important to note the results below are not based on the final EU-Japan EPA text and are therefore subject to a degree of uncertainty…Estimates are produced against a baseline of 2008 and reflect a world in which the Doha trade round and EU-Korea FTA are un-concluded.”

So there we have it. The baseline is 10 years out of date and fails to take account not only of the EU-South Korea FTA, which has been applied ever since July 2011 —seven years ago—but of the terms of the final agreement text that it is supposed to be assessing.

The European Scrutiny Committee was absolutely right to demand in its report

“a clear breakdown of how different UK sectors and stakeholders are expected to win or lose from the agreement.”

All the independent projections made of the EU-Japan deal calculated that the gains accruing to Japanese firms would be far higher than those seen by European businesses. All the forecasts spoke of major increases in Japanese exports, and the potential loss of jobs and businesses in Europe as a result. The Government assessment has at least picked up on these forecasts, recognising that the UK’s balance of trade with Japan will take a serious hit when this agreement comes into force. Voting to approve this motion will allow the Government to rush ahead and sign a deal that the Government’s own figures show will result in a decline in our trade balance with Japan of between £2.2 billion and £2.9 billion, so the hon. Member for Stone, who chairs the European Scrutiny Committee and asked for the impact assessment to be published, will now see that the effect of this deal is, in fact, to increase our problems in terms of our balance of payments with Japan.