Australia and New Zealand Trade Deals

Gareth Thomas Excerpts

Monday 14th November 2022 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

After a decade of economic mismanagement, with the chaos at the top of the Conservative party and the kamikaze Budget backed so enthusiastically by so many Government Members, and with so many entrepreneurs worried for the future of their businesses, millions facing rising energy bills, weekly shops shooting up in price and rocketing mortgage costs, it was striking that there was not one word of apology in the opening speech from the Minister on the Front Bench, the right hon. Member for Chelsea and Fulham (Greg Hands).

This has none the less been a fascinating debate, not least for the contribution of the right hon. Member for Camborne and Redruth (George Eustice), who made a powerful and devastating speech that blew away the bluster and complacency that has characterised Ministers’ descriptions of the benefits of the Australia free trade agreement. He said that it was

“not actually a very good deal for the UK”,

and that Ministers had given away

“far too much for far too little”.

He underlined those criticisms by going on to point out that unless we recognise the failures of the Department for International Trade, we will not learn the lessons necessary for negotiations with other countries over other free trade agreements, such as, importantly, the CPTPP accession discussions. He rightly noted, as many others did—I will come back to the contributions of others—the weaknesses of the scrutiny process and crucially how it weakens the hand of British negotiators, which is a point we made during the passage of the Trade Bill back in 2020.

We on the Opposition Benches will table amendments on Report of the Trade (Australia and New Zealand) Bill to reflect some of those concerns and to give the House the opportunity to begin to put right some of the weaknesses in the CRaG process.

[George Eustice]

In my contribution, I also pointed out that article 32.8 was a very strong clause in the agreement. It gives any British Government the unbridled right to terminate and renegotiate this agreement at any future point. Can the hon. Member say whether it is his party’s position to trigger article 32.8 and renegotiate the agreement?

[Gareth Thomas]

We will always want to get a better deal and to seek better trading links between our country and Australia, and I will come on to that point a little further on in my speech.

Let me reiterate that this debate is happening only because all sides of the House have voiced consistent frustration with the failure to have proper scrutiny of the Australia free trade agreement in particular. That point was made by my hon. Friend the Member for Rochdale (Tony Lloyd), my right hon. Friend the Member for Warley (John Spellar) and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), as well as by the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), for Totnes (Anthony Mangnall), for Chesham and Amersham (Sarah Green) and for Tiverton and Honiton (Richard Foord).

Back in 2020, the Minister of State, the right hon. Member for Chelsea and Fulham, who is not in his place, said “Watch my lips” in the Trade Bill Committee as he opposed more robust scrutiny rules. His approach was one of, “You can trust us to give Parliament proper opportunities for scrutiny.” Not surprisingly, his assurances quickly turned to dust. The previous Secretary of State, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), ducked scrutiny by the International Trade Committee eight separate times. The Government, as my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) set out in his opening remarks, triggered the scrutiny period of 21 sitting days for the Australia FTA before the International Trade Committee had even had the chance to publish its assessment, and despite Ministers regularly assuring us that this would not happen.

We know, too, that the last Secretary of State was not alone in wanting to avoid tough questions. The architect of the deal, the right hon. Member for South West Norfolk (Elizabeth Truss), cancelled meetings with farmers during her leadership campaign to avoid feeling their wrath about the deal she had negotiated. Let me reiterate that we support increasing trade with Australia and New Zealand. With two progressive Labour Governments, who would not want to support stronger ties with both? They are crucial allies and our ties have always been deep. We share security interests, and our culture and values are similar—enhancing our partnerships with both is only to be welcomed.

As my right hon. Friend the Member for Warley underlined, free trade agreements carefully negotiated can open up new opportunities for British business, creating jobs for our constituents and generating vital tax revenues to fund our public services. Well-negotiated FTAs open new routes for supply chains, create better access to crucial raw materials and encourage innovation, but they are not zero-sum games. Time after time, Minister have failed to be open and honest about which parts of the economy will benefit under their negotiating priorities and which will not.

Under the previous Labour government, trade grew by 10% and exports almost doubled. After 12 years of the Conservatives, trade has grown by just 3% and growth in UK exports is lagging behind virtually every other major nation. We and, given the widespread concern, the country expected better than Ministers delivered on these FTAs. Ministers do not get a free pass. These deals have gradually exposed a Department for International Trade whose Ministers have lost sight of what is best for Britain.

Exports are fundamental to delivering economic growth and the good jobs that are crucial to tackling the cost of living crisis, yet Ministers pushed through cuts to business groups that support British exporters and prioritised Instagram photos on trade missions over meeting British businesses. We on the Opposition Benches hear time and again the frustration of British businesses, which note the greater help that other Governments give their businesses to export—a point that the former Exports Minister, the hon. Member for Finchley and Golders Green (Mike Freer), made this summer. During the recent evidence sessions of the Trade (Australia and New Zealand) Bill Committee, business bodies repeatedly raised their concerns. To underline those concerns, figures for Germany, one of our biggest export markets, from January to September this year, compared with the same period in 2019, show a 27% increase in US exports to Germany, a 23% increase in EU exports, and just a 2% increase in British exports.

Instead of addressing those concerns and others about the FTAs, Ministers were busy attacking each other. Even for a Conservative party as disunited as this one, it was a new low when the previous Secretary of State for International Trade toured the TV studios accusing the then Minister of State for International Trade, the right hon. Member for Portsmouth North (Penny Mordaunt), of being lazy and not up to the job. We can only hope that the new ministerial team is willing to learn lessons from how these recent trade deals have been negotiated.

I have to say, however, that the opening speech was not encouraging. It was a speech that Arthur Daley would have been proud of at his best. Apparently the greatest deal in Britain’s trading history has been secured against all the odds, yet the reality is that the New Zealand FTA will increase our GDP by just 0.03% and the Australian one by just 0.08%. Given the Conservative Government’s disastrous handling of the economy, any help to improve our chances of economic growth is welcome. In particular, progress on digital trade, locking in customs and trade facilitation arrangements that minimise paperwork and the somewhat easier rules of origin for manufacturing goods, notably car parts, are welcome.

The sad truth, however, is that in the rush to get a deal—any deal—signed with Australia, Ministers did not push crucial British interests. Once again, the interests of the Conservative party took priority over the needs of the British people. The National Farmers Union said that the deal does “little for farmers” and

“simply opens up UK markets for Australian produce, whether or not produced to the same standards that are legally required of UK farmers”,

and that

“the UK government has missed the opportunity to reach a genuinely innovative and world-class FTA with Australia”.

The huge giveaway to Australian farmers led Australian negotiators to boast of their success. It is as if Ministers have turned their backs on rural communities and decided that farmers did not matter in these negotiations. There is little on labour rights, even less on human rights and, as my right hon. Friend the Member for Torfaen, the hon. Member for Inverness, Nairn, Badenoch and Strathspey and others have pointed out, little on climate change.

The Opposition have been struggling to find things to praise the new Prime Minister for. After all, his is far from an impressive record: billions of pounds-worth of fraud on his watch as Chancellor, and huge tax rises and cuts to public services coming. However, his argument that the Australia deal was one-sided might briefly risk some consensus across the House.

There were other points of detail that Ministers did not bother to prioritise getting right. There is nothing substantive on securing protection for great British brands such as Whitstable oysters, Scotch whisky and Cornish pasties. On steel, the rules of origin that Ministers agreed mean that unlike most modern FTAs, Britain cannot import semi-finished project, roll it in the UK and export it tariff-free to Australia, making it harder for steel made in Britain to be sold to Australia. All the while, there are no similar restrictions on Australian steel entering our markets.

As we heard from the right hon. Member for Camborne and Redruth and many other Members across the House, this deal could have been much better and Ministers need to learn the lessons from these FTA negotiations.