Future Free Trade Agreements

Catherine West Excerpts

Thursday 21st February 2019 Commons Chamber

[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.

--- Later in debate ---

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

What a pleasure it is to speak in this debate with so many other antipodeans: the hon. Members for Mole Valley (Sir Paul Beresford), for Yeovil (Mr Fysh) and for Edinburgh North and Leith (Deidre Brock). The words “Australia” and “New Zealand” were in the longer title of the debate and therefore we seem to have been attracted out the woodwork. I cannot promise to compete with the knowledge of the hon. Member for Mole Valley about New Zealand sheep farms, but having grown up in Sydney I have a bit of a feel for some of the topics discussed, and it is a pleasure to be serving on the International Trade Committee and looking into the debate on this.

There are not many debates in the House where we go for three hours without a woman speaking. It took three hours for us to get there today, so I will try to set the tone by being brisk—

[Angus Brendan MacNeil]

Quality not quantity.

[Catherine West]

Exactly.

We are in the bizarre position of not having a proper agreement with our main trading partner, the EU, with which we do almost half our trade, or a little bit more than half, depending on which academic work one reads. The question of Brexit remains unsettled and not at all a done deal, yet at the same time, because of the Government’s rather interesting negotiating style, there remain big questions about tariffs. My hon. Friend the Member for Brent North (Barry Gardiner) hit the nail on the head when he said that the written statement on tariffs that will be published later really should have come in advance of this debate, so that the debate could have been possibly shorter and more meaningful.

We know that right now goods are on their way to Korea and Japan and their exporters do not know what tariffs will be charged on arrival, because in under 40 days Brexit could happen and there could be no deal. That is leading to a great deal of concern, not only about exports but about imports. The hon. Member for Yeovil said that he felt the farming sector was perhaps being a bit frightened, or need not be so worried or scared, but every time one opens a newspaper, one finds that reliable titles such as the Financial Times are citing extreme concern about what tariffs will be put on to goods coming into the UK.

The National Farmers Union spokesperson has been eloquent in expressing the union’s concerns. As a Member representing a London seat I would not want to say that I could be any more knowledgeable than she, and she is presenting some very important concerns from the agricultural sector and about our lovely countryside. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) made a good point about whether the sector could be more efficient without our losing the wonderful beauty of the countryside. A move toward an agribusiness model could have a big effect on the countryside.

I can describe the position we face today only as neither in nor out—halfway. With under 40 days to go, that is a dereliction of duty. I feel that to some degree industry is being let down, doubly so after Honda’s announcement this week. It is not just about industry but, of course, about the people who work in industry and all our partners.

Let me briefly set out some principles, because that is far as we can get today, given that we do not really know what is going to happen in the next 34 days. First, liberalisation may sound fine as a principle, but we know that there are problems. Members have mentioned issues relating to the ISDS provisions in various free trade agreements. A famous example is the tobacco companies in Australia taking the Australian Government to court for loss of profit because of changes in Government policy. People find the idea deeply anti-democratic and think we should be very careful in how we proceed. Furthermore, when the International Trade Committee visited Canada, we heard about the Dow v. Canada case, in which the US chemicals giant Dow sued Canada for attempting to ban the pesticide 2,4-D. The full details of the settlement were unclear, but it is likely that some concessions for the company were agreed, despite the environmental impacts of pesticide use. Those two examples show why, if we embrace a form of trade liberalisation, it is extremely important to remain vigilant about the long-term impacts.

The second principle is scrutiny. The Select Committee heard about some impressive best practice in Canada, where there had been regional consultations and the debates around equalities and human rights were an element of the consultation. That is a good way of engaging the regions in discussion about consultation and scrutiny. We need to look more closely at that. Given that the Government are trying to bring forward an industrial strategy—it is difficult to tell right now whether that has been successful—we should look at the best practice in that area.

The third principle is preparedness for our future, depending on what happens with Brexit. In the Select Committee’s evidence sessions on the Trade Remedies Authority, I have been concerned about the sense of unpreparedness. I felt that when questioned, the chief executive was not familiar with our current tariff levels with different countries. When questioned on her views about various trade matters, she seemed rather unprepared. That suggests that the Department desperately needs to do more work. Furthermore, on Member engagement, although I welcome today’s debate, there needs to be more in-depth consideration. It is a pity that Members had to look on the Swiss Government website to see details of the Swiss agreement, when we had asked as a Committee for more information and were not given it—and that is Committee members, who are interested in trade, let alone Members of Parliament as a whole. It is disappointing not to see more interest on the Government Benches in today’s debate and what our future is going to be.

The fourth principle is human rights. My fear is that we will lack clout with some of the big players, such as China. Put simply, China is more likely to countenance a dialogue about human rights with a partner with the clout of 500 million people than with the UK. We will struggle to maintain our integrity and what we believe to be important at the same time as managing our twin concerns about national security and trade. The three principles of trade, national security and human rights are hard to get right as a smaller country. It is easy to discount such a country, particularly when we may be giving off a whiff of desperation right now, with our debates and the sense that we need them more than they need us. We need to take that into account.

The fifth principle is standards. We currently have the EU’s gold standard for goods. Other Members have mentioned the challenges relating to animal welfare standards, particularly in respect of a US deal and sanitary and phytosanitary standards. That throws up a wealth of questions. I am convinced that the US would like agriculture to be a sectoral element of any future free trade agreement. Again, we need to get the balance right between protecting what we have, the beauty of our landscape and our traditions, and being open-minded about new ways of doing things.

The hon. Member for Yeovil mentioned the NHS and seemed relaxed about how the US health system might be able to “improve”—I hope I am not misquoting him—it. My right hon. Friend the Member for Warley (John Spellar) intervened earlier to emphasise the fact that our national Government set the tone for the NHS and any intervention in it or other public services, but in respect of an interface with the NHS, we must be aware that the US healthcare system is among the most expensive and unequal healthcare systems in the world.

[Angus Brendan MacNeil]

I wish to echo and strengthen the hon. Lady’s point. Bernie Sanders—I wish him the best of luck in his attempt at the presidency of America—made the exact same point. The idea that co-operating with America on health is going to make anything any cheaper is far from the truth.

[Catherine West]

I thank the hon. Gentleman for his intervention and for his leadership of the Select Committee. It is a very interesting Committee that he manages very well, given the breadth of views among its members.

I have a further point to make on TTIP, or what I call trip-up. Many of the TTIP proposals were quite anodyne, but they were politically mishandled. When the Select Committee visited the US Senate and the House of Representatives, the famous Democrat John Lewis said to us that had labour rights been raised much earlier in the discussions around NAFTA, there may not have been quite the problems that arose when Mr Trump first became President. Had labour rights been much more at the forefront and given much more scrutiny, and had everything been much more open and debated much more freely, perhaps messes might not have been got into. That applies to TTIP or any form of agreement. Any sense that the public are being kept out, that it is secret or that the trade unions or civil society groups are not involved can lead to a trip-up.

[Matt Western]

My hon. Friend is making some important points. I am sure that she will agree that one of the great lessons that we have learned through the Committee is that the EU approach—and the approach of countries such as Australia—of involving civil society and other groups ensures that, when it comes to setting the agenda for any negotiation, those points are very much on the table and are clear.

[Catherine West]

I agree, particularly in relation to some of the really sensitive things such as human rights. We are represented at an EU level, which means that we have our MEPs there in the room. Equally, though, very sensitive discussions can be held on our behalf, without our personally having to make a comment. Perhaps the Secretary of State for Defence might have appreciated a bit more “arm’s length” recently, especially when he was asked in a rather cheeky way yesterday by an interviewer on the radio whether he should button his lip. Again, we have to learn diplomacy if, indeed, Brexit happens and if, indeed, we end up having an independent trade policy. We cannot just go round opening our mouth and saying what we like.

I wish briefly to talk about an element of our future arrangements with Australia. I am not talking so much about the goods side. On agriculture, as those of us on the International Trade Committee know, Australia does not currently meet its quota for the Asia market—Asia in this case is the far east—and so that is less of an issue for our own agriculture here in the UK. However, there are areas around services—for example, equivalence on education, diplomas and degrees—where an already healthy relationship could be enhanced by improving mutual recognition of degrees, diplomas and professional standards. As the Secretary of State and the shadow Secretary of State have said, some of these things will be easy wins.

I will briefly touch on developing countries and fair trade. Many of us are very optimistic that more can be done in this area. I would be very grateful if the Minister, in his closing remarks, talked about how leadership can be shown in intra-Government and intra-country arrangements. For example, he will be aware that coffee in some African countries comes to Europe to be prepared and is then exported back at a higher price to Africa. Perhaps opportunities exist there to erase some of that cost by ensuring that those products can be much more effectively consumed locally and by ensuring that they do not have to come via Europe. African nations should be able to do that themselves and have their own trade agreements.

We are in a very difficult national position. Geopolitically, it is not a great time to be starting a big free trade discussion. The situation in the EU has its instabilities as well, with the upcoming elections this spring possibly producing more member states who have an aversion to free trade.

With regard to the US—one of the purported wins on free trade—there are many question marks on future business, particularly given some of the more protectionist statements by the President. In China, we are seeing a changing internal situation, which is having an effect on big infrastructure decisions. China is also possibly overstretched on the Belt and Road initiative. Some commentators suggest that some of these huge infra- structure projects may be overstretching China’s reach to some degree, which means that entering trade agreements in the current climate may be quite difficult. Similarly with Japan, there is a need not just for Ministers, but for Whitehall to have another look at preparedness for a very big challenge.

Once things calm down, it would be helpful if we could find some way of looking at how prepared the Foreign and Commonwealth Office, the Department for International Development, the Ministry of Defence and all the different silos are and consider how they could work more effectively together. Such a review exercise could gain a lot of traction and help us to achieve a more slimline approach—not so much to do with people; more to do with a greater sense of direction. I suspect that that lack of direction comes from the different Departments. Furthermore, the reduction in the number of language experts in the Foreign Office, and in expertise in some other Departments, needs to be reviewed. I am sure that the Minister will mention that in his closing remarks.