Exiting the European Union and Global Trade
Debate between Bernard Jenkin and Barry Gardiner(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Barry Gardiner
The point I would make to the hon. Gentleman is that the triggering of article 50 was setting precisely the timeframe in which he was to buy the car. It said that within two years either we had to negotiate a deal, or we would be trading on World Trade Organisation terms. He makes my point precisely.
Barry Gardiner
I am sorry, but I will not give way again, because I have given way many times and I am conscious that more than 20 Members wish to participate in the debate, and we have to be fair to colleagues.
My party has consistently said that economic logic should dictate the outcomes of the Brexit negotiations. Certainly we must not jeopardise a positive new trade deal for some arbitrary immigration targets set for political reasons. We need a new trade deal with the EU. It must maintain the supply chains and business relationships that link us to the EU and that are so critical for jobs and economic wellbeing.
Let us remind ourselves just what is at stake. The European Union currently accounts for 44% of our exports. The EU remains our closest trading partner, in terms of the volume of trade and geographical proximity. The top 10 Commonwealth trading partners combined account for just 8% of our exports, and the entire Commonwealth—all 52 countries—accounts for just 9%. The Secretary of State once referred to protectionism as a class A drug. If he really thinks that his current round of trade dialogues could possibly make up for the shortfall in goods exports of leaving the EU without a new free trade agreement in place, then protectionism is not the only class A drug he has been smoking.
Labour, business and the trade unions are united in prioritising the best possible access to the single market once we have left the EU. That means continued tariff-free access, no new non-tariff barriers to goods or services and, if necessary, a transitional arrangement to avoid any cliff edge.
It seems that we might lately have recruited the Chancellor to our cause. His Mansion House speech certainly seemed to have swallowed the Labour party playbook whole: fair and managed migration; a Brexit for jobs; and no deal being a very, very bad deal. Securing a trade agreement with the EU must remain the Government’s No. 1 priority. Leaving the EU without a trade agreement would be a significant failure by the Government, and the British public will remember that they were repeatedly told—we heard it repeated today—that it could not happen because the EU countries traded with us more than we did with them. Without an early and comprehensive deal with the EU, there will be substantive tariff and non-tariff measures, which will cause friction in trade between the UK and the EU, whether in customs duties, customs checks, visa processes for service providers or renewed VAT procedures.
The Government are to bring in the great repeal Bill to get rid of the European Communities Act 1972, which incorporates European legislation into domestic law and grants it supremacy over domestic law. Therefore, European legislation currently in place will be converted into ordinary repealable legislation. On the face of it, that appears to mean that the UK will be able to legislate without any regard to EU law. However, if we are to maintain a high level of access into the single market and preserve the supply chains currently in place, our exports will still have to meet European standards and requirements.
Much of the current legislation will have to remain as is. Our future legislative framework will need to be aligned to that of the EU in order to maintain the mutual recognition and equivalence necessary to trade into the European market. This is something that many British and foreign companies, including Toyota, BMW and the Confederation of British Industry, have been calling for. We will no longer have a seat around the negotiating table that decides on product and other standards, but we will be forced to accept them if we wish to continue trading into the single market. People might think that this is a rather hollow way of returning sovereignty to the UK.
In any free trade agreement that the UK negotiates after we have left the EU, we will have to make some compromises on our sovereignty. The UK will continue to be subject to some supranational court system—if not the European Court of Justice, we will be subject at least to the World Trade Organisation dispute settlement procedures. Importantly, modern free trade agreements often involve the harmonisation of national standards to match those of the partner country in order to be able to trade freely. This is not necessarily negative. International trade agreements provide an opportunity to promote higher standards across the world, rather than a race to the bottom, if they are negotiated correctly.
There is no dichotomy between trade with the EU and trade with the rest of the world—that is simply absurd—but our global trade opportunities will be shaped by our future relationship with the EU, whatever that is. Prospective trade agreement partners will want to know what trading bilaterally with the UK will mean for access onwards into the EU.
Barry Gardiner
My hon. Friend is absolutely right to point out that, were we to go on to WTO terms—from memory, the tariff rate for sheepmeat is about 44%—we would absolutely destroy the capacity of our hill farmers in particular to compete with foreign imports.
The Government need to come clean and give clarity to the British food and farming industry on our future trade policy options and what that means for the industry. It is not good enough to tell farmers that the status quo will be maintained until 2020 and then leave an abyss as to what options are available for their future. These people need a comprehensive international trade policy, and they need to know what it is.
Beyond Brexit, as the United Kingdom once again assumes competence for its own independent trade agreements, the Secretary of State must set out how he is pursuing agreements that share the benefits of globalisation more equitably. One can only wonder that this Government thought it sensible to embark upon a new industrial strategy without first publishing a White Paper on trade, so will he publish a trade White Paper? He has introduced a trade Bill in the Queen’s Speech but, as of this moment, he has not set out to Parliament or to business any policy on which to base it.
The Secretary of State has been travelling around the world holding preliminary talks with his counterparts. In fact, he has recently returned from a visit to the USA. When the Prime Minister first announced the start of preliminary talks with the USA, the American Farm Bureau Federation wasted no time in confirming that it would seek food hygiene changes in any UK-US deal, namely to end restrictions on US exports of chlorine-washed chicken and hormone-grown beef. Will the Secretary of State confirm to us that, in any talks about future trade deals, the sovereignty of our food safety and environmental protection standards will be not be sacrificed in the name of regulatory harmonisation?
An industrial strategy and international trade White Paper should have come together precisely because of the interdependence of trade, job creation, and economic growth. That makes Labour Members fearful that the Government have not done the proper assessment of the danger that future trade arrangements could pose for job losses and wage depression. The Government have put the cart before the horse. A trade White Paper should set out what the UK’s future policy on trade defence instruments will be. The EU currently has in place a series of trade defence measures, such as anti-dumping measures against China—and, to a lesser degree, India and Malaysia—on steel, other metals, and solar panels. The UK has famously opposed such measures at the EU. Now that we will be able to set our own trade policy, the Government must tell us whether they will stick to that line. If they do not plan to introduce trade defence measures, they need to set out whether and how they will protect and support sensitive sectors such as the steel industry and the solar panel industry from cheap imports.
The Government must also weigh whether they can afford to take a tough stance with countries like China and India with which they will be looking to conclude trade deals—or will they sell out our steel sector and others? The UK steel sector is in an existential crisis. My hon. Friend the Member for Middlesbrough South and East Cleveland, who chaired the all-party parliamentary group on steel, and my hon. Friend the Member for Aberavon (Stephen Kinnock), who launched the “Steel 2020” report earlier this year alongside my hon. Friend the Member for Redcar (Anna Turley), expressed outrage at the Government’s leaked memo that suggested steel would not be a priority industry post Brexit, threatening to destroy the very livelihoods of communities across England and south Wales. Similar concerns were raised by my hon. Friend the Member for Stoke-on-Trent Central, as the ceramics industry in the Potteries faces increasing competition from Chinese dumping on world markets. The British Government have for the past number of years been blocking efforts by the EU to introduce the sort of anti-dumping measures employed by the US by repeatedly exercising a veto and actively encouraging a blocking group of other nations. One official in Brussels is reported as saying:
“The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade.”
It is right that we reach out to our international counterparts, but travelling around the world to hold “pre-negotiations” is no substitute for clear policy that sets out what our negotiating armoury is. An international trade White Paper should set out the Government’s principles—a clear plan of what the UK intends to achieve through future trade negotiations.