UK-Japan Comprehensive Economic Partnership Agreement

Emily Thornberry Excerpts

Wednesday 25th November 2020 Commons Chamber

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

Before I begin my response, I feel obliged to say two things. First, my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson)—Nissan is based in her constituency—wanted to be involved in this debate, as did my hon. Friend the Member for Leeds North East (Fabian Hamilton) and another of my hon. Friends, who has extensive experience in this area and an important constituency interest, but who understandably does not want his name to be mentioned. He says this is an affront to democracy. All of them wanted me to put on record that they were keen to take part in this important debate, but unfortunately were excluded from doing so by the Leader of the House and his current rules for virtual participation.

Secondly, I feel that I should inform the House of an important development overnight on the issue of international trade deals, which somehow the Secretary of State did not see fit to announce. I can tell colleagues that the news was slipped on to her Department’s website this morning that no continuity agreements are expected to be agreed with Algeria, Bosnia and Herzegovina and Serbia, which means that our current EU trade deals with them will expire on 31 December and not be replaced. Our trade deals with those three countries were worth £3.5 billion last year. To put that into perspective for those on the Government Back Benches, the growth in UK exports achieved by the deal with Japan is forecast to be £2.6 billion in 15 years’ time.

Nevertheless, turning back to the subject of today’s debate, let me make clear at the outset, as I did 10 weeks ago, that I congratulate the Secretary of State on securing this enhanced continuity agreement with Japan. During a time of great economic turmoil, it provides an important measure of certainty for all those British and Japanese companies that would otherwise have lost their current terms of trade on 31 December. I congratulate the Secretary of State, and I also thank her for holding today’s debate and vote in Government time.

Let me pause for a moment on an important issue of parliamentary scrutiny and approval. As colleagues will know, under the current Constitutional Reform and Governance Act 2010 rules, a new trade agreement must be laid before Parliament for 21 sitting days before it can be ratified in law. The only way that Parliament can block that agreement is through an Opposition day motion, but only if an Opposition day is granted during the 21-day period. We are now on day 15 of ratification for the Japan agreement, and no Opposition day has been granted in that period, nor is one scheduled. If it had not been for the Government’s act of great generosity today, Parliament would have no right and no power to debate and approve this important agreement. It is not an isolated case: of the 20 continuity agreements signed by the Government since 2019, 15 of them have completed their 21 days of ratification with no Opposition day debates granted during those periods, including all 11 agreements signed by the current Secretary of State.

[Catherine West]

Will my right hon. Friend accept an intervention?

[Emily Thornberry]

I will rattle through a bit of my speech, because I have the beady eyes of Madam Deputy Speaker on me. Once I know I am definitely halfway, I will take interventions.

The same situation with Opposition day debates is set to be true of the continuity agreements recently reached with Ukraine, the Ivory Coast, Kenya, Canada and, of course, the 11 other continuity agreements that the Government still need to secure in the next five weeks—or 14, if we are still counting Algeria, Bosnia and Serbia.

In other words, the process for parliamentary scrutiny and approval that the Government are relying on for our future deals as an independent trading nation is failing repeatedly at the very first hurdle, through the denial of Opposition day debates. I therefore greatly welcome the Secretary of State’s decision to grant this debate and vote in Government time, and hope that she will amend the Trade Bill, because she will now have realised that this simply will not do; the right to debate and approve future trade agreements should be a matter of law, not just a matter of discretion. That brings me to the main theme of my remarks: the importance of the Japan agreement as a precedent for other trade deals to come, in terms of both substance and the way in which they are presented to the world.

Let me start with some of the positives. I welcome the Secretary of State’s dedicated chapter on the role of women in our economy. That is definitely an important precedent. I hope that her friend Tony Abbott will study it closely to appreciate that female empowerment means more than just plugging in the iron. I welcome the new ground broken in this agreement on trade in digital services and data—a vital area of future growth for exports and investment—and hope that the Government’s stated principles, particularly on net neutrality, will be precedents for our future trade deals with Australia and the United States. But I am afraid that there are many other areas in which I hope that the Japan deal does not set a precedent.

Beyond digital, there is a disappointing absence of any new measures to support the vital role of Japanese companies as investors in our economy and creators of British jobs—something that is especially important in the current climate, as we look to safeguard the jobs provided by companies such as Nissan. There is also a lack of any new, enforceable commitments on climate change and the environment. That is another wasted opportunity and one that does not bode well for the ongoing negotiations with Australia. There is the absence of any progress on workers’ rights, coupled with the failure to consult trade unions on the deal, as well as the rolling back of commitments on civil society dialogue. I am afraid that this is all consistent with a Secretary of State whose official trade union advisory group contains just four members, one of which is the British Medical Association.

When it comes to deeply unfortunate precedents, there is also the sheer extent to which the Secretary of State has exaggerated, oversold and misrepresented the benefits of a UK-Japan deal compared with the EU-Japan deal that it replaces. Let us take a single example: agriculture and food. She tells us that 70 new British products will be protected by GI status thanks to her deal, but that will only be true if they are approved by Japan’s Ministry of Agriculture—a process that takes at least five months and which resulted in the rejection of 85% of applications last year. She tells us that our farmers and food producers will benefit from lower Japanese tariffs, but that will only be true if they are exporting to Japan ostrich feathers, dried eggs or 180 proof alcohol, which none of them currently does.

The Secretary of State tells us that we will benefit from continued access to the EU tariff rate quotas for exports to Japan of products such as soft cheese and cake mix, but that will only be true if the EU does not use up those quotas itself. She tells us that British farmers will have access to Japan’s quota for imports of malt, which, I am delighted to tell colleagues, is true. It is true! But she did not mention that it is actually a global quota to which every farmer in the world has access—so I do not know why she is looking so pleased with herself—and which can be withdrawn by Japan at any time. Finally, her Department’s Twitter feed tells us—during an episode of “The Great British Bake Off”, no less—that imports of Japanese soy sauce will be cheaper, which, as thousands of people pointed out, is not true in the slightest.

In one area after another, the spin from the Secretary of State and her Department does not match the substance, and her concern for how the deal will be presented appears to be more of a priority than the deal that she will actually deliver. That is a hugely damaging precedent, and one that I hope will not be followed—for example, in the Canada deal signed last weekend—particularly when it comes to our cheese exporters. After all, if it is the case that, like the Japan deal, we will only get access to the EU’s quota on exports of cheese to Canada if the EU has not used up the quota itself, that is deeply worrying for our dairy industry.

[Elizabeth Truss]

I assure the right hon. Lady that we have access to the EU reserve on equal terms with the EU.

[Emily Thornberry]

So there is a cake of a certain size—the tariff quota—and the EU and Britain will have access to that cake. Who gets what bit first? What happens if the EU gets the cake first—what does Britain do then? Is it first come, first served? Or is the cake already cut up in pieces? I wonder whether the right hon. Lady could help us with that.

[Elizabeth Truss]

I am happy to furnish the right hon. Lady with a letter about the details of the licensing procedures, but it is important to understand that, in a situation different from that for the tariff rate quota with Japan, the UK reserve is applied for on an equal basis with the EU.

[Emily Thornberry]

Given the time, I will with your leave, Madam Deputy Speaker, take some other interventions at this moment, as I am halfway through my speech.

[Catherine West]

My right hon. Friend mentioned workers’ rights; does she agree with the now sadly deceased Senator John Lewis that, had workers’ rights been more at the heart of a proper consultative process, the Transatlantic Trade and Investment Partnership negotiations may have ended better than they did?

--- Later in debate ---

[Emily Thornberry]

I agree with my hon. Friend. I have to say that trade deals generally are better when we consult properly and extensively and put trust in Parliament, which unfortunately the Conservative party does not seem to have at this time.

[Jonathan Edwards]

Also missing from the Secretary of State’s comments were the Government’s own figures, which indicate that Japanese imports to the UK will benefit at a level four times greater than that for UK exports to Japan. Does that not indicate that it is actually a very good deal for Japan?

[Emily Thornberry]

I am grateful to the hon. Gentleman; I am coming to that.

When it comes to the exaggeration of benefits and the misrepresentation of the Japanese trade deal, one crucial issue is left unresolved, and it is a vital precedent to get right. By my count, I have now asked the Secretary of State a very simple question three times on the Floor of the House, twice in letters and once in a written parliamentary question and—she knows what is coming— I ask it again now: in pounds and pence, what is the forecast increase in UK exports and growth resulting from the UK-Japan deal compared with the EU-Japan deal that it replaces?

I fail to see why the Secretary of State gets so indignant about this question; after all, she is the one who has repeatedly claimed over the past 75 days that the deal she has negotiated with Japan goes “beyond and above” the EU-Japan deal, goes “further and faster” than the EU-Japan deal and delivers “additional economic benefits” compared with the EU-Japan deal. Indeed, when I pressed her last week simply to confirm that the forecast for exports and growth was higher under her deal than under the EU-Japan deal, the Secretary of State told the House, “Yes, it is higher”, so why has she continually refused to quantify that difference? Why will she not provide the figures, in pounds and pence, to back her claims?

All is not lost, though: we might be able to make some progress on this point today. I went back to the Department’s original impact assessment, published in May 2018, of the effects of the EU-Japan deal. It is a detailed 51-page document, signed and authorised on the front cover by the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands). I have to say that I do not think it is the right hon. Gentleman’s best piece of work—the assumptions and baselines are pretty sketchy, and my hon. Friend the Member for Brent North (Barry Gardiner) was pretty scathing about it during the debate in 2018—but, nevertheless, it is what we have to go on; we do not have anything else.

On page 2, after the Minister’s signature, it says in black and white:

“The analysis assumes that the UK continues to trade…after EU exit…with Japan on an equivalent preferential basis to the EPA.”

In other words, this is what we have been asking for and what the Secretary of State has repeatedly refused to provide—an analysis by her Department, authorised by her closest ministerial colleague, of what would happen if we had just stuck to the terms of the EU-Japan deal.

I remind colleagues—I wonder whether my hon. Friend the Member for Harrow West (Gareth Thomas) wants to write this down, because it might be worth coming back to—that in the final assessment produced last month by the Department of the long-term impact of the UK-Japan deal, the forecast increase in UK exports to Japan was £2.6 billion, and the forecast increase in UK GDP was £1.5 billion. Let us compare those figures with the Department’s assessment of the long-term impact of the EU-Japan deal. Under that assessment, the forecast increase in UK exports to Japan was not £2.6 billion but £4.3 billion, and the forecast increase in UK GDP was not £1.5 billion but £2.6 billion. I do not know about you, Madam Deputy Speaker, but that does not sound like further and faster, above and beyond, additional or higher to me. It sounds like smaller, slower, lower and lamer.

I have no doubt that the Secretary of State will tell me that the 2018 forecasts were inaccurate, the methodology was flawed and the Minister for Trade Policy was having a bad hair day, although he did put his name on it. All those things may be true, but here is the problem: unless and until she can produce an assessment of how the UK-Japan deal compares with the EU-Japan deal in terms of the forecast for UK exports and growth, that is all we have to go on. The two assessments produced by her Department in 2018 and 2020 show that her historic, groundbreaking, British-shaped deal has left our country worse off than if we had simply rolled over the provisions in the EU-Japan agreement. My suggestion to the Secretary of State is that, until she can provide her own assessment of the difference between the two deals, she should stop making exaggerated claims about the “additional economic benefits” of her deal, because quite frankly, she does not have the figures to back them up.

That is why this issue really matters, and that is why it is important that we get this precedent right before the Secretary of State goes off to negotiate any more trade deals on our country’s behalf. It does not matter whether it is an issue as small as soy sauce imports from Japan or as big as car exports to Europe. We gain nothing in international credibility if we overstate what our trade deals have achieved. Indeed, we risk misleading the British people and undermining their confidence in the importance of trade if we claim benefits from the agreements we negotiate that are simply not borne out by the facts.

I welcome the trade agreement with Japan—all of us on the Opposition Benches do—but the Secretary of State has done herself no favours and done our country no service in the way in which she has presented this agreement and oversold its benefits. I hope she will learn the right lessons from this when it comes to negotiating our new trade deals with the US, Australia, New Zealand, the rest of CPTPP and the Mercosur countries in the coming years. More importantly, I hope that a renewed focus on substance over presentation and the chastening loss of our trade deals with Algeria, Bosnia and Serbia will encourage her to get her head down over the next five weeks and do the hard, unglamorous work of sorting out the other 11 continuity agreements worth £55 billion in trade with Mexico, Singapore, Ghana and others before the clock runs out and before any more of the free trade agreements we already have are carelessly and needlessly thrown away.