Trade Bill (Eighth sitting)

Debate between Gareth Thomas and Stewart Hosie

Committee stage & Committee Debate: 8th sitting: House of Commons
Thursday 25th June 2020 Public Bill Committees

[Stewart Hosie]

I have benefited from the national health service; indeed, it has probably saved my life on a number of occasions.

I have no doubt that some of the drugs purchased are still under patent by private companies. Some of the diagnostic testing machinery was made in Germany. Nobody, but nobody, is talking about restricting any of our health services in terms of purchasing. We are talking about marketisation, which has failed when it comes to the health service.

The new clause has a specific carve-out for the NHS and all health-relevant services regulation, making it illegal for the Government to conclude a trade agreement that altered the way NHS services are provided, liberalised further or opened up to foreign investment by dint of a trade agreement—not by a policy change, not by part of the NHS somewhere on these islands saying it would be a good thing to do, but by dint of a trade agreement being forced on us from somewhere else.

On negative listing, these clauses—we know this from other examples—require all industries to be liberalised in trade agreements unless there are specific carve-outs. The reason this is an issue is that it is not always easy to define what services count as health services and what are more general. For example, digital services may seem irrelevant to health, but NHS data management and GP appointments are increasingly digital. Negative lists therefore make it harder for Governments to regulate and provide health services for the common good. No-standstill clauses are ratchet clauses, because these provisions mean that after the trade deal has been signed parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature. That can make it difficult to reverse NHS privatisation.

Let me give an example of where had a standstill or ratchet clause been in effect, it would have caused real harm. In Scotland, cleaning in hospitals was historically carried out by private contractors, and the rate of hospital-acquired infections rose dramatically. The SNP Government took the decision to return it to NHS cleaners, and the rate of those infections fell dramatically. Imagine if an investor-state dispute settlement had been in place, if a ratchet clause had been in place—we would have been unable to do that, and if people had died from hospital-acquired infections because the Government were not allowed to take the public health measure of returning cleaning to the public sector, it would have been an absolute scandal.

I mentioned ISDS. There should be no ISDS clauses in trade agreements which only allow private investors to challenge Government policy when, for example, it affects their profits. Failure to abide by those clauses can result in legal challenge from trade partners or, if there is a separate ISDS clause, a challenge from private investors. I have used a number of examples on a number of occasions, and I will use another today very briefly. It is from April 1997. The Canadian Parliament banned the import and transportation of the petrol additive MMT because of concerns that it posed a significant public health risk. The Ethyl Corporation, the additives manufacturer, sued the Canadian Government under chapter 11 of the North American free trade agreement, an ISDS-type arrangement, for $251 million to cover losses of what it called the expropriation of both its production plant and its good reputation. That was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid that corporation $15 million in compensation. That was over a petrol additive that was deemed to have a negative impact on public health. We believe it is quite wrong for large corporations to use these ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of citizens or for simply enacting public health measures which they believe to be right and for which they may well have an electoral mandate.

The new clause also instructs that there should be no changes to drugs pricing mechanisms. We know that the US, for example, has stated that it wishes to challenge the drug pricing model which keeps prices low for ordinary people in the UK. This could also happen through intellectual property and non-patent exclusivities. We need to be very alive to that. It would be bad news for patients, taxpayers, health boards and trusts around the country. In our judgment, trade agreements should never be used to facilitate that.

Our new clause 13 is an adjunct; we simply sought to add a different degree of protection for the health services in the nations, and to ensure that the Government would not be able to lay before Parliament a trade agreement that would have an impact on the provision of healthcare services without the consent of the devolved Administrations. That is secondary to the substantial points we are trying to make and the protections that we wish to put in place with new clause 12.

[Gareth Thomas]

Given the extra protections that new clause 12 would lock into law to keep the NHS safe from future trade agreements’ effectively pushing higher pharmaceutical prices or further marketisation of the NHS, we will happily support the new clause tabled by the hon. Member for Dundee East. Indeed, his new clause supplements the protections that amendment 12, had it been agreed to earlier in our proceedings, would have put in place to protect our public services more generally.

We, too, are aware of the leaked documents that the hon. Gentleman referred to, revealing that discussions have already taken place in the UK-US trade talks about possible measures that the American pharmaceutical industry might want, clearly supported by Donald Trump’s chief negotiator, that would effectively push prices up. Given that we have substantially lower pharmaceutical drug costs than the US, the fact that the Americans are continuing to push such measures is profoundly worrying.

Ministers have said that the NHS is not on the table in the UK-US talks and, like the hon. Gentleman, I take that at face value, but it is worth saying that until the text of a trade agreement is published, we will have no way of knowing for sure what is in it. The precedent of the EU-Canada deal does not give reassurance in that respect, as it used the negative list approach to services liberalisation, to which he referred. The Minister will remember the considerable concern that Germany had chosen to add in carve-outs for the whole of its national health service, whereas the UK had not taken such a comprehensive approach.

The NHS Confederation and The BMJ have both published a series of concerns, setting out the ways the NHS could be undermined by a UK-US trade deal. One concern that is highlighted, which again the hon. Member for Dundee East referenced, was the use of ISDS—investor-state dispute settlement—provisions. Again, investor-state dispute settlement provisions were included in the EU-Canada deal, which Ministers count as a roll-over deal.

It would be helpful if the Minister would embrace the spirit of these new clauses, support new clause 12 being added the Bill and, in his wind-up remarks, confirm that he will not push a negative listing approach in a UK-Canada specific deal and that there will not be ISDS provisions in such a deal.

Trade Bill (Sixth sitting)

Debate between Gareth Thomas and Stewart Hosie

Committee stage & Committee Debate: 6th sitting: House of Commons
Tuesday 23rd June 2020 Public Bill Committees

[Gareth Thomas]

I do not intend to press the matter to a vote, in the interests of time. I am not convinced by the Government’s argument, and we may return to the matter at Report stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Stewart Hosie]

I beg to move amendment 8, in clause 2, page 2, line 33, at end insert—

“(6A) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Scottish Ministers (within the meaning given in paragraph 6 of Schedule 1), unless the Scottish Ministers consent.

(6B) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of the Welsh Ministers (within the meaning given in paragraph 7 of Schedule 1), unless the Welsh Ministers consent.

(6C) No regulations may be made under subsection (1) by a Minister of the Crown, so far as they contain provision which would be within the devolved competence of a Northern Ireland department (within the meaning given in paragraph 8 of Schedule 1), unless a Northern Ireland devolved authority (within the meaning of paragraph 9 of Schedule 1) gives consent.”

This amendment would ensure that the consent of a devolved government is required for regulations under section 2(1) if those regulations contain matters which are within the remit of the devolved government.

Trade Bill (Fourth sitting)

Debate between Gareth Thomas and Stewart Hosie

Committee stage & Committee Debate: 4th sitting: House of Commons
Thursday 18th June 2020 Public Bill Committees

[Stewart Hosie]

The effect of this amendment is clear: to provide a more precise definition of an international agreement and achieve greater clarity in the Bill. The amended wording would provide a clearer definition of an international trade agreement than is currently provided for in the Bill. That is in line with the Government’s own intention, as set out in the explanatory notes. Paragraph 31 states:

“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”

The principle of certainty is central to good law making. In clause 2(2), an international trade agreement means “a free trade agreement”, but that is further defined in paragraph (7). Subsection (2)(b), as it currently stands, refers to

“an international agreement that mainly relates to trade, other than a free trade agreement.”

We had a discussion on Second Reading about that. These modern trade agreements have little to do with quotas and tariffs and far more to do with other things, as I said in my introductory remarks earlier this afternoon. The phrase “mainly relates to trade” does not grant sufficient certainty in terms of interpretation.

As I have said, the explanatory notes give the following definition:

“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”

I consider that definition to be clearer than the multi-part definition currently in the Bill. This amendment does not reduce the scope of what might be deemed to be in a trade agreement, but it provides it with a purpose: to reduce the barriers to trade in services and goods. In that sense, I think it a helpful amendment, which I am sure the Government will want to look at positively as we proceed with our deliberations.

[Gareth Thomas]

I rise in sympathy with the spirit of the amendment moved by the hon. Member for Dundee East, but I wish to speak specifically to amendment 15, which seeks to insert at clause 4, page 3, line 26:

“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.

I join the hon. Gentleman in wanting to see good law making and, therefore, proper definitions of what constitutes a trade agreement that would be covered under the Bill. The hon. Gentleman’s amendment refers just to an agreement on trade in goods and services. Our amendment includes the Government’s definition, but expands it to make it crystal clear that it includes a range of other trade related agreements, including investment agreements.

My hon. Friend the Member for Brent North (Barry Gardiner), speaking on an amendment similar to this one at the Committee stage of the Bill in January 2018, noted the lack of detail about what constitutes an international trade agreement and worried about whether trade agreements, or agreements that had substantial trade elements, would be brought to the House for even the limited scrutiny that the Minister proposes.

Mutual recognition agreements are crucial in terms of scrutiny; many of them help to minimise unnecessary regulatory non-tariff barriers. However, they potentially have implications for phytosanitary standards, food standards and environmental obligations. Strategic partnership agreements can add social and political conditionalities to accompany the more commercial aspects of trade agreements. For example, one wonders whether there might be strategic partnership agreements with some developing countries, perhaps to provide aid for trade support as they seek to implement new trade agreements with us.

Investment treaties are returning to being a UK competence, having left our responsibility in 2009. One of the most significant investment treaties that the European Union has been negotiating—the negotiations on it have not yet concluded—is with China, where there have been 28 rounds of negotiations. I suspect that there would be considerable interest in the UK, including within this House, if the Government sought an investment treaty with China. Surely, it is right to make sure that such an agreement would fall within scope, and it would also need to receive proper scrutiny.

Trade Bill (First sitting)

Debate between Gareth Thomas and Stewart Hosie

Tuesday 16th June 2020 Public Bill Committees

[Stewart Hosie]

Q Allie, I have one question for you. In your introduction, you said that while there are some concerns about future trade agreements, you are broadly supportive of this Bill because it delivers continuity. However, in clause 2(6)(a), it does allow the Government to modify primary retained EU law. Are there any anxieties among IoD members that those modifications, made in order to get some kind of a deal, may mean that we end up with a worse arrangement than we currently have with one or more countries?

Allie Renison: You are very right to raise that point. On the modification issue, I suppose we do not know to what extent that will become an issue, as it depends on where we get to with the roll-over process. I cannot speak for other countries’ priorities, but I think there is a distinct feeling that when the roll-over process was happening during the article 50 period, the time pressure certainly meant that it was a choice between either having an agreement and rolling it over or not having it in place. That may have helped get the agreement over the line. There may be some scope for increased modification.

That probably becomes a bigger negative issue for some of the agri-producers, depending on whether, for example, quotas are changed to get a deal over the line. It depends on the level of quota, it depends on the sector and it depends on the sensitivity of that sector. That is probably the only example, and it is not a particularly prominent one. We have far more members in the processing industries when it comes to agri-food retail and wholesale, rather than actual producers. Their priority is making sure that you are able to get the agreement over the line in the first place.

Just to wrap up my answer, when I say that there is some concern about future trade agreements, I should probably clarify that that means they wanted to understand what the purpose of the Bill was and whether it laid out enough scope for engagement with other devolved Administrations. That is an important point to put on the record: we do not want to get to a situation on the one hand where a future trade agreement can be easily held up, with the Walloon experience in Belgium in the rear-view mirror. However, it is very important that we see it. We do not think that the current CRAG provisions are sufficient for future trade agreements, simply because we want to see the devolved Administrations more involved from the outset, rather than coming in as a blocker at the end. That is why I should clarify the delineation between the concern over future trade agreements and the split in process.

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

Q Allie, I apologise for putting it like this but can you speak a little slower? I was up last night with two very young children, so my brain is taking a bit of time to get going this morning. One of the areas of contention about the Bill is the extent to which it should cover the future free trade agreements that we might want to enter into. I just want to get a sense of your two organisations’ understanding of the offensive and defensive interests for deals with the US and Japan.

Allie Renison: I am happy to begin on that, and I will slow down, rather than speeding up to get more information in. Keep in mind that that deal is a future trade agreement, rather than what is covered under the Bill. On future trade agreements, although I think the Government can do both, if you were to look at it in terms of priorities, the EU negotiations are four times as important as new trade agreements for our members.

With that in mind, however, when it comes to the US market, it is difficult to compare this with members’ views on the US negotiations with the EU, because there were not triangulation issues to the same effect. We do not know to what extent liberalisation with the US will impact on our relationship with the EU, so we simply do not have that triangulation problem. The triangulation issue rears its head more often now. If you think about it purely from a tariff perspective, a number of people in Great Britain who are trading in Northern Ireland simply want to know how it is going to work with the Northern Ireland protocol and how the tariff will operate. I do not think many members at this point have an offensive/defensive point of view. They want to know how the tariff changes will intersect with the EU negotiations. That is probably where the majority of our members are.

From a defensive point of view, some businesses have an eye on what changes there will be from an inward procurement perspective. There are some concerns about how standards will feature, without knowing how they are being discussed. I would not say that standards—chlorinated chicken and hormone-treated beef, for example—are big-ticket concerns for our members, because we do not have a lot of them in our membership.

From an offensive point of view, several big things unite our whole membership. First, there are the changes to delivering services physically—not immigration policy, but temporary labour mobility and the ability to go and provide services in the US. That is a big-ticket item for many members, who do not know whether that will be part of the trade agreement discussion. Secondly, e-commerce and facilitating digital commerce will probably be an even bigger offensive interest for both sides in the light of the pandemic.