Trade Bill (Third sitting)

Debate between David Johnston and Matt Western

Committee stage & Committee Debate: 3rd sitting: House of Commons
Thursday 18th June 2020 Public Bill Committees

[David Johnston]

Q Sam, this is a question I asked some of the witnesses earlier in the week, when we heard from representatives of the steel and chemical sectors and elsewhere. Do you think there are there particular countries with which it is especially important that we achieve continuity agreements, and particular sectors for which it is particularly important we achieve them?

Sam Lowe: Yes. In terms of countries that require continuity, Turkey is quite a good example: we currently have supply chains that run out of the UK into Turkey and back. I think particularly the automobile industry has some exposure here. This is a really tricky one, in that we are currently in a customs union with Turkey via our membership of the EU and, unless we are in a customs union with the EU, which is obviously not Government policy, we are going to be unable to replicate that relationship with Turkey. When it comes to the future trade agreement with Turkey, at least on the tariffs level, the most we can expect is for it to match what we have agreed with the EU. That, of course, would be better than not having a trade agreement; but the benefit of being in a customs union is you do not need to worry about rules of origin. So all of a sudden this becomes a slight issue with Turkey, and it is why I put it in my second box earlier, of being a continuity agreement but with big changes.

Of course the other ones that really do, probably, matter are Switzerland and the EEA countries—Norway, Iceland—in that we have quite deep trade relations with them now, as we are part of the single market. That will obviously, again, change quite substantially because of our decisions over our relationship with the EU.

Another country that does matter, and I believe it has been resolved—I do not want to say certainly, because I do not have a list up in front of me—is South Africa, in that we actually have automobile supply chains that run through South Africa. There we have a different problem, in that it does not achieve the same for the companies as now; we currently export products to South Africa—inputs to South Africa under the EU-South Africa agreement— that are put into, say, a car there and then sold back into the EU under the preferences of the agreement, because the UK-based inputs can qualify as local to South Africa under something called bilateral cumulation. That will cease to exist under the new agreement.

The point I would make is that all the agreements are going to change. I have just, in my head, got three different categories.

[Matt Western (Warwick and Leamington) (Lab)]

Q On the TRA, what is your view in terms of what structure it should be—you mentioned the two chairs that we have lost in a fairly short period of time—in terms of the make-up and the origin, and who approves their appointment?

Sam Lowe: Having read the Trade Bill, I think the approach seems broadly sensible. I do not have it in front of me at the moment, but I believe the Secretary of State approves the chair; and then the chair makes a recommendation on the chief executive, subject to sign-off of the Secretary of State, unless the chair is not there, in which case the Secretary of State does it. I understand it is an independent body to the Government, but it obviously needs to have close ties with the Department for International Trade.

--- Later in debate ---

[David Johnston]

Q In conclusion, despite what you see as its limitations, you would rather see us accede to it than not do so.

Nick Ashton-Hart: Certainly.

[Matt Western]

Q Nick, I just want to concentrate on the digital sector and e-commerce. Do you think there any omissions from the Bill in those areas? I am thinking particularly about what has happened in the last 24 hours with regard to the US pulling back, and about some of the challenges being faced by the WTO on this front. Should there be something in the Bill on that?

Nick Ashton-Hart: We are, as you know, one of the world’s powerhouses in services. Part of the reason we are a powerhouse in services is because, in the digital realm, we are also a great power in terms of innovation and firms that have had a lot of international success. Something like 60-plus per cent. of UK trade is underpinned in one way or another by digitalisation, so we are highly sensitive to any barriers to services through regulation, as well as through things such as the free flow of data and data protection.

We know that the agreements will not be duplications, because they are already not exactly the same. To the extent that we can, we should try to ensure that there are liberalising measures associated with at least the fundamentals of digital trade—some arrangements on data protection and on mutual recognition. Of course, that would also require us to stay quite close to the EU regime on data protection, which I and the industry have strongly argued in favour of. It is difficult, because if you are a negotiator and say, “I want to replicate this agreement, but I want to change one thing,” the other side is quite naturally incentivised to say, “Okay, then I want to change another thing.” The reality is that everyone will come to this with some changes, because—for many reasons, only one of which I covered—you cannot just copy and paste.

To the extent that we can put in digital measures, we should. It should be a part of the negotiating mandate for those agreements. It may be; I speak to DIT people quite frequently and have not heard whether it is, so I would not like to say whether it is, one way or the other.

Trade Bill (Second sitting)

Debate between David Johnston and Matt Western

Committee stage & Committee Debate: 2nd sitting: House of Commons
Tuesday 16th June 2020 Public Bill Committees

[David Johnston]

Q Nick, in your first answer you said that even continuity agreements provide opportunities. I wonder what opportunities for farmers these continuity agreements create.

Nick von Westenholz: I guess I am thinking about some of the continuity agreements that are not quite continuity agreements—for example, the Japan agreement, which is being renegotiated. Certainly, we would hope that there is the opportunity for UK farmers to open up more markets in the far east.

Really what I was saying was that, as farmers, we want to be ambitious about increasing the markets, whether at home or overseas, for our produce. If we are going to increase them overseas, we have to recognise that that assumes a degree of free trade, international trade and imports. We certainly want to expand those overseas opportunities, and it may be that some of those continuity agreements, which are being looked at again, provide particular opportunities.

[Matt Western]

Q Hi, Nick. Good to hear from you again. I just want to pick up the point about standards and get your views on mutual recognition agreements and how they will play for the farming sector. Do you have concerns about them? Can they hide a multitude of sins? On the Trade Remedies Authority, do you have any concerns about the Bill? Are there any omissions that might leave the farming and agri-food sector exposed?

Nick von Westenholz: I got the second question. Could you repeat the first question, sorry?