Japan Free Trade Agreement

Emily Thornberry Excerpts

Monday 14th September 2020 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I thank the Secretary of State for advance sight of her statement and congratulate her on reaching this agreement. It is a much-needed relief for all those UK companies that would have seen their trade with Japan revert to World Trade Organisation terms if the agreement had not been reached by the end of the year. It is also a welcome benefit at a time of great economic uncertainty for the UK’s digital and tech sectors, and for other key exporters, which will benefit from greater access, faster tariff reductions or stronger geographical indication protections under this agreement than they enjoyed under the previous EU-Japan agreement. In the absence of a treaty text and a full updated impact assessment, there is much about the UK-Japan agreement that we still do not know and will not know until those documents are published. Nevertheless, I hope that the Secretary of State can answer some initial questions today.

First and foremost, will the Secretary of State tell us, in billions of pounds and percentages of growth, what benefits this agreement will produce for UK trade and GDP over and above the forecast benefits of simply rolling over the existing EU-Japan deal? I was glad to hear her refer to consultation with the farming sector. Can she tell us what benefits the sector will derive from this deal if the EU reaches its tariff rate quota limit for agricultural products, and how that will compare with the benefits that the sector was forecast to derive from the EU-Japan deal? Will she also tell us what the impact of Friday’s agreement will be on the UK aerospace sector relative to the impact of the EU-Japan deal?

Let me turn to three specific issues. Given that there has been lots of discussion about Stilton, can the Secretary of State tell us exactly how the treatment of Stilton differs under the deal that she has agreed compared with its existing treatment under the EU-Japan deal? Given the current debate on state aid, can she confirm that the provisions on Government subsidies that she has agreed with Japan are more restrictive than the provisions in the EU-Canada deal, which No. 10 has said is the maximum it is prepared to accept in any UK trade deal with Brussels? On a similar subject, what provisions, if any, are included in the UK-Japan agreement relating to public procurement, and are they also consistent with the Government’s current negotiating position on an EU trade deal?

On the subject of Brexit, will the Secretary of State simply agree with me that, as welcome and necessary as this deal with Japan is, it is nothing like as important in terms of our global trade as reaching a deal to maintain free trade with the European Union? Our trade with Japan is worth 2.2% of our current global trade. That does not come anywhere near the 47% of trade that we have with Europe under the Government’s best-case scenario. The deal they signed on Friday will increase our trade with Japan by a little less than half in 15 years’ time. That is nothing compared with what we will lose in just four months if we do not get the deal with Europe that this Government have promised. That is why Nissan and every other Japanese company operating in Britain have told us that the deal that will determine the future of the investment and the jobs that they bring to our communities is not the one that we signed with Japan, but the one we sign with Europe.

I am glad that the Secretary of State has committed to a further debate on the agreement, given that there are many more questions to ask, but frankly there is no point in having that debate if Parliament does not have the right to vote. Will the Secretary of State guarantee today that once the treaty text and all the impact assessments have been published for proper scrutiny, she will bring the agreement back for a debate and vote, in Government time, just as will be done in the Japanese Parliament? It surely cannot be the case that this House will have less of a right to vote on a self-proclaimed historic deal agreed by the Secretary of State than will be enjoyed by our counterparts in Japan. May I ask her today to guarantee a vote, and to make it a precedent that will apply to all the other historic agreements she mentioned in her statement and that we hope are still to come?

[Elizabeth Truss]

After the right hon. Lady’s congratulations to me on securing this important deal, it is perhaps a bit churlish of me to point out that she did not vote for the original EU-Japan deal, so none of the original benefits she talked about would have come into existence had we followed the steer given by the Labour party at the time. The deal we have secured goes significantly beyond the EU-Japan deal in areas that are important to the United Kingdom. For example, the data and digital chapter in some cases goes beyond the CPTPP and sets new precedents for a high-quality deal. On business mobility, financial services, geographical indicators and rules of origin, there are advances in all parts of the negotiation that benefit all parts of the UK and all parts of business.

The right hon. Lady asked about the impact assessment. No doubt she has read the scoping study, which shows a £15 billion increase in trade under this deal, but of course we will conduct another impact assessment following the finalisation of the details of the deal, which we will indeed publish. It will also cover the deal’s environmental impact, social impact and impact on agriculture. [Interruption.] From a sedentary position, the hon. Member for Harrow West (Gareth Thomas) asks when we will publish it. The answer is that we will do so when we have completed the full legal scrub of the documents and signed the agreement.

The right hon. Lady asked me about agriculture. I am pleased to hear that she shares my strong interest in improving exports of Great British products around the world. The vast majority of agricultural products such as beef and pork are not subject to tariff rate quotas, and we have secured the full liberalisation of those products under this agreement, which is a tremendous boost for British farmers. There is a limited number of areas where there are tariff rate quotas, and that represents about £1 million worth of business versus just over £150 million for the remainder of agriculture, but in those areas we have fought hard to ensure that British exporters continue to get the benefit of exports into the Japanese market at lower tariff rates, including but not limited to Stilton. We have also secured an agreement on malt barley, and we are the second largest exporter of malt into Japan, so that is a significant benefit for British farmers. We have also succeeded in getting more liberal rules of origin on many food and drink products, which will mean that more producers are able to export into Japan tariff-free.

As the right hon. Lady knows, under the Constitutional Reform and Governance Act 2010, Parliament can refuse to ratify trade deals. Parliament has the power that other Parliaments have. If there is not a majority in this House for this trade deal, which I do not think will be true because it sounds like she has changed her mind since she voted against the Japan deal last time, it will simply not be ratified.

The right hon. Lady asked me all kinds of questions about the details of the agreement. Obviously, as we, first of all, share it with the International Trade Committee and then with Parliament, she will be able to see the details, but I assure her that the subsidies chapter is the standard kind of chapter you get in an FTA. It is vastly different from what the EU is trying to do with us, which is essentially impose the EU state aid regime in Britain. As David Frost has made clear, that is simply not acceptable.

The right hon. Lady tries to compare and contrast the EU and Japan. We can have both deals—we are global Britain. We want to have deals with CPTPP, with the United States, with the EU and with Canada, and I believe that that is absolutely possible. I am afraid to say that the right hon. Lady still seems to want to relitigate the EU referendum. In 2016, the people of Britain decided. It is time for her to get behind it.