Negotiating Objectives for a Free Trade Agreement with India

Earl of Caithness Excerpts

Tuesday 6th September 2022 Grand Committee

[The Earl of Caithness (Con)]

My Lords, I thank the noble Baroness, Lady Hayter of Kentish Town, and her committee for producing the report we are discussing and for their hard work in assessing the situation—which is opaque, to say the least. I also thank the Government for their intention to get a free trade deal with India as quickly as possible. That is highly commendable.

It is true that the eyes of the country are not on us at this moment, but I know that all the ears of the Committee listened carefully to the noble Lord, Lord Kerr of Kinlochard, when he said that he wished there could be a grown-up relationship between Parliament and the Government when discussing trade deals. I hope my noble friend takes that message back firmly to whoever is the new Secretary of State. Is the limit of our discussion on trade with India really this so-called debate? What further thoughts does my noble friend have on discussing this, because there is so much to discuss about trade with India that this debate cannot, in any way, be passed off as “We have consulted Parliament”?

I agree with my noble friend Lord Hannan of Kingsclere about the orientation of India. To me, this is probably more important in the long term than the orientation of China, which will certainly not change for some time. There is a huge role for Britain and the West to play with India, and it must be pointed out to them that it is also in their and not just western interests that that orientation is as close as possible. This potential free trade agreement is therefore an integral cog in that development.

I will slightly change the tone of the debate and refer to the report, because that is what we are discussing. I was particularly interested by paragraph 64, on our old friend the investor-state dispute settlement. I see the noble Lord, Lord Purvis, and others and remember the Trade Bill of 2020, on which we very nearly defeated the Government on ISDS. I cannot understand why the committee thinks this is such a good idea: I dislike ISDSs and do not think they help. Not only are they a blunt instrument but they can be used as a lever to distort trade before it gets to the court system. However, I totally agree with the committee in its final sentence of paragraph 64:

“Whichever mechanism is put in place, it must be independent and enforceable.”


Can my noble friend confirm that that will be the intention?

It will not surprise your Lordships that I turn now to the environment, climate change and farming. Not much is said about this in the Government’s objectives, but it is another area where a free trade agreement could be beneficial to both sides. It is hugely important, as the committee rightly points out in paragraph 86, that

“The Government should consider how it can support India’s decarbonisation efforts.”


If the importance of climate change did not register on Indians’ Richter scale until now, surely the devastating floods in adjacent Pakistan must have. If something is not done about it, there will be huge catastrophes throughout the world, particularly in India. India must surely realise that help in combating climate change will not come from Russia; armaments might, but that help will come from the West. That is so important in getting this free trade agreement right.

Farming is not even mentioned, but is crucial, because British farmers have nothing to fear in a free and fair level playing field of trade, as the NFU put it. I hope my noble friend confirms that that is the Government’s ambition.

My noble friend Lord Hannan of Kingsclere mentioned tariff barriers, but I want to mention non-tariff barriers, because they are equally detrimental to trade. I shall give your Lordships a couple of examples. There are 230 sanitary and phytosanitary measures on UK exports, compared with four that the UK applies to Indian imports. India applies 193 technical barriers to trade, compared to 54 applied by the UK. So it is not just tariff barriers that are important; equally important are non-tariff barriers.

Then there is the difficulty of doing business in India, which many of your Lordships have mentioned. For those in the farming and environmental world, there are seven Indian government bodies and authorities for agriculture and trade. That is something that I hope India will change, but it is also something that we can help it change for the better, with our experience.

Going into more detail—because of course the devil will be in the detail—I look forward to seeing what the free trade agreement has to say about eggs. I note the condition in which hens are kept in India, in cages which were banned in this country many years ago. Why should our farmers be subject to imports produced on a basis that would be illegal in this country? That is fundamental to how the free trade agreement will be judged.

In conclusion, I hope that my noble friend will confirm that agriculture and the environment will not be sacrificed on the altar of this free trade agreement, as they were with the Australian free trade agreement, and that considerably more importance will be put on these matters in the future.