Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Baroness Laing of Elderslie Excerpts

Thursday 24th June 2021 Commons Chamber

[Dr Fox]

The right hon. Gentleman is quite right that we should ensure that as much is made in the United Kingdom as possible. The point is that consumers should be free to choose what they buy with their own money. If we can manufacture goods and services in the United Kingdom of the appropriate quality, and at the appropriate price, I am quite sure that British consumers would choose to buy those, but I do not believe in restricting the choice for British consumers because we are unable in certain sectors to produce those things.

Another important element of policy outside the European Union is our ability to help rebalance the global trading economy. That is why CPTPP is so important. The CPTPP, were the United Kingdom to join it, has about the same proportion of global GDP as the European Union minus the UK. It will provide us with an ability to rebalance within that. Why does that matter? It might help us get momentum in some of the areas that matter, where we were unable to get traction inside the European Union. We might get traction on a global agreement on e-commerce, for example, or an agreement on environmentally friendly goods—the environmental goods agreement—which is barely in existence or has any life at the moment. In this era, if we cannot agree to take tariffs off solar panels or wind turbines, what can we agree at a multilateral level? Putting our energies into groupings that may drive that forward is extremely important, not just for the UK, but beyond.

The final point that I want to make is that the real advantage of CPTPP is not what proportion of GDP it adds in value; it is strategic. CPTPP is primarily, in my view, a strategic alliance, and it relates to how we think about the issue of China. China promotes its agenda of state capitalism—though “state capitalism” is an oxymoron; capitalism has to be independent of state control—but, at present, sits inside the World Trade Organisation without having made the adjustments to market mechanisms that are required for the proper functioning of members inside the organisation. The measures that we have tried have not been successful in bringing China into a more acceptable position. The WTO has been unable to cope effectively with the abuse of state subsidies. The OECD has done a lot of work studying the data available across borders and looking at measurements of production, which offer some help, but the WTO seems incapable at present of dealing with the China question.

The United States was unable to deal with the China question through tariffs. All that President Trump’s tariffs on China did was reduce the trade deficit with China, but it did not reduce America’s trade deficit overall, because when consumers did not buy Chinese goods because they were too expensive in the United States, they bought them from elsewhere. The use of tariff policy to drive global trade in a particular way only results in trade distortion and diversion, exactly as we discovered.

If we were able to join CPTPP, there would be another prize, which the Secretary of State did not mention but I am sure she believes in: the ability to attract the United States back to the partnership. The decision by the Trump Administration to leave the trans-Pacific partnership was, in my view, a completely wrong decision. If we are able to get United Kingdom membership, the United States joining CPTPP becomes a lot more attractive to Members across the parties in Congress. The UK plus the United States joining CPTPP would take us to about 40% to 43% of global GDP, which is a much better counterbalancing measure to China than anything that we have seen so far.

I am therefore 100% behind my right hon. Friends the Secretary of State and the Minister for Trade Policy in taking this policy forward. Five years ago, we were on different sides of the debate in the European Union referendum, but there is nothing like the zeal of converts to take us forward. I congratulate the Secretary of State and the Minister of State—one of the finest Ministers I ever worked with—on taking this agenda forward. It is the right thing for the United Kingdom and, much more importantly, it is the right thing for global trade and to ensure that the developing world has a chance of finding a sustainable way out of poverty in the long term.

[Madam Deputy Speaker (Dame Eleanor Laing)]

After the spokesman for the SNP, I will come directly to the Chairman of the Select Committee. At that point, there will be a time limit of five minutes, but that will then reduce to three minutes.

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[Drew Hendry]

I absolutely concur with my hon. Friend the chair of the Scotch whisky all-party parliamentary group. The past four months have been devastating. In that same period, Scottish fishermen have been sold out, Scottish farmers have been betrayed, and powers to protect our regulations and standards—and even our NHS—have been steamrollered by this Government. The agreement does nothing to rectify that. That is why more people every day are realising that Scotland needs to be an independent country to make the right choices to protect our food and drink industry, our farmers, our crofters, our NHS and our people.

[Madam Deputy Speaker (Dame Eleanor Laing)]

With a time limit of five minutes, I call Angus Brendan MacNeil.

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[Angus Brendan MacNeil]

The right hon. Lady makes that point in her own way, and I do not want to go into it too much given that the clock is still ticking.

The comprehensive and progressive agreement for trans-Pacific partnership is not actually as comprehensive as it seems. Only seven out of the 11 countries have actually ratified it. Malaysia, Chile, Peru and Brunei have not. When we take out their GDP contributions, the figure goes down to 0.5% of GDP, or 5p that is available from the CPTPP to recover the £4.90 that has been lost by Brexit.

That is as far as we can go with the good news. I am now going to have to give the House some bad news. This morning, Neale Richmond, the Irish TD, who is never off our screens and is a fantastic representative of Ireland, brought to my attention in a tweet that the Republic of Ireland now has, for the first time ever, a trade surplus with the UK, as UK exports to the Republic of Ireland are down 47.6%. That is £2 billion of trade gone. Remember that the UK was talking about a £1.8 billion increase from the CPTPP. With Ireland alone, the damage of Brexit has wiped out what could be gained from the CPTPP.

There may be some good news in Ireland, depending on people’s constitutional stance. North-south exports are certainly up and are making for a far more integrated economy, with a 22.4% increase in exports to Northern Ireland from the Republic and a 44.2% increase in imports to the Republic from the north. That is against the background that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) pointed out of the 33% fall in trade that has been truly damaging the economy. The Secretary of State said earlier that we were putting our eggs in one trade basket. It looks as though we do not have any eggs in any trade basket, the way it is going at the moment. Certainly, from my talks with the British Egg Industry Council and the British Poultry Council, it is very much a real-life chicken-and-egg situation as to which way this is going.

I also want to point out some privacy issues. I have had correspondence from constituents that I want to bring to the Government’s attention, and I am sure that they know what I am talking about—making sure that people’s data is actually safe and is not traded around to second, third and fourth parties in a global context.

I also want to raise the issue of patent attorneys. UK patent attorneys are a fifth of the number of patent attorneys in the European patent convention, and they do a third of the work at a value of about £746 million. Let us take that away from what is left of the CPTPP—the 0.5%, or £1.1 billion. If this damages the UK patent attorneys’ relationship with the European patent convention, it would just about negate everything from the CPTPP, and there is a very real possibility that this could happen. UK patent attorneys are flagging this up constantly. The Government should be well aware that we are now talking about not a 0.8% or a 0.5% gain from GDP, but perhaps only a 0.2% gain. So we are down to 2p after throwing away the £4.90 that I referred to earlier.

What are we left with? We have thrown away £2 billion with Ireland, and might gain a few hundred million with the CPTPP. We are risking our farming and crofting trade with Australia and much else. We have walked away from our partners next door, as my hon. Friend pointed out. It might be strategic, but what do we say to people who are losing their jobs and to the businesses that do not grow because of this economic damage? I do not think the Government have an answer. This appears to be a Government wanting to come back waving bits of paper, much like Neville Chamberlain, and shouting “Trade deals in our time”. It is not good enough for anybody who is trying to make a living up and down the nations of the current UK.

[Madam Deputy Speaker (Dame Eleanor Laing)]

With a time limit of three minutes, I call Craig Williams.

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[The Minister for Trade Policy (Greg Hands)]

We have had a good debate, if a little short. Joining the great global partnership of CPTPP promises to unleash a wave of trade-led growth in our country, generating jobs and delivering prosperity to every part of the UK. The launch of negotiations for our accession is an important moment for Britain as an independent trading nation. It shows that, once again, major economies want to do more business with the UK and that it is possible to strike ambitious trade deals that go further than those negotiated by the EU. The CPTPP is a free trade area comprising 11 nations that account for 13% of global GDP, worth £9 trillion, with a combined population of 500 million across four continents. By welcoming the UK into its fold, the CPTPP will become even stronger, its share of GDP rising to 16% and gaining an even louder collective voice on the world stage in pursuit of its shared priorities. The strategic case for this was well made by my right hon. Friend the Member for North Somerset (Dr Fox), my hon. Friend the Member for Gloucester (Richard Graham) and others as being important for the UK not just in trade but also in terms of wider strategy.

As the Secretary of State said earlier, it shifts the UK’s economic centre of gravity towards faster growing parts of the world such as Asia, where 65% of global middle-class consumers are expected to live by 2030, and the Americas, and there are great opportunities in this for UK agrifood, a point well made by my hon. Friends the Members for Ynys Môn (Virginia Crosbie)—I was delighted to meet her farmers a couple of weeks ago—and for Montgomeryshire (Craig Williams) and the hon. Member for Upper Bann (Carla Lockhart). It is also a great opportunity for Staffordshire gin, a point made by my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell).

Britain would become the first new member of CPTPP since it was established in 2018, and other significant economies such as the Philippines, Thailand, Taiwan and South Korea are looking to follow suit. My hon. Friend the Member for Wycombe (Mr Baker) mentioned Taiwan and he will know that I am a 30-year-long enthusiast for Taiwan; we have Joint Economic and Trade Committee talks later this year, but I am always open to better trading links with Taiwan. This is a high-standards agreement between sovereign nations—a point made by my hon. Friend the Member for Newcastle-under-Lyme—and a business-focused deal that removes tariffs on 99.9% of the goods we export to CPTPP members and reduces other barriers, particularly for our vital services industry.

Turning to the content of the debate, the shadow Secretary of State, the right hon. Member for Islington South and Finsbury (Emily Thornberry), spoke for twice as long as the Secretary of State but it was all the usual doomsaying and talking the country down. As my right hon. Friend the Member for North Somerset said, she is the shadow Secretary of State against international trade. She has had three years to consider whether Labour supports this deal—three years—and she still has not made up her mind. Perhaps, however, we should not be surprised, because Labour could not make up its mind on deals with the component countries—the members. Labour abstained on Japan, is opposed to the Australia deal and against Singapore, and split three ways on the Canada deal. The right hon. Lady talked about the NHS, food safety and animal welfare; nothing in the CPTPP threatens our standards and it is clear that there will be no compromise on our standards from our manifesto.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) again went on endlessly about Brexit, as did his party colleague the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), but he and the SNP have never supported any trade deal ever so I do not think that whatever I say to him today is going to make him support it. He said that the UK had not agreed to join the investor-state dispute settlement. First, the UK has never lost an ISDS case and, secondly, I recommend having a look at the details. Labour put out a press release a few weeks ago saying that it decries the ISDS provisions in the Australia deal, but there are no ISDS provisions in the Australia trade deal. We heard a very considered contribution from my hon. Friend the Member for Folkestone and Hythe (Damian Collins); he spoke in favour of the deal, and I agree with him that we would not sign up to the provisions that are included in the United States-Mexico-Canada agreement. Turning to the Lib Dems, Vince Cable was all in favour of these deals when he was in the coalition Government and the Minister for Trade, and he was actually in favour of ISDS proposals as well.

There are specific benefits for the cutting-edge sectors that are shaping the world of tomorrow such as AI, services and technology, and the deal will allow us to work closely with CPTPP members on modern digital trade rules, business travellers, slashing red tape, agrifood and more. When negotiations conclude, the UK’s accession will be subject to the Constitutional Reform and Governance Act 2010 scrutiny process alongside the statutory Trade and Agriculture Commission report and I commend UK accession to CPTPP to the House.

Question put and agreed to.

Resolved,

That this House has considered the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I will now suspend the House for three minutes in order to make arrangements for the next item of business.