draft Cat and Dog Fur (Control of Import, Export and Placing on the Market) (amendment) (EU Exit) Regulations 2019
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The Minister for Trade Policy (George Hollingbery)
I beg to move,
That the Committee has considered the draft Cat and Dog Fur (Control of Import, Export and Placing on the Market) (Amendment) (EU Exit) Regulations 2019.
The regulations are necessary to maintain the ban on trade in cat and dog fur following withdrawal from the European Union. Without them, the legislation imposing the ban would be inoperable. The regulations were laid before Parliament on 4 March and are made under the powers in the European Union (Withdrawal) Act 2018. The Committee knows, given the context, that the powers are limited. All that they allow us to do is to correct technical deficiencies in existing EU law that, by the operation of the Act, will be retained in UK law following withdrawal.
Sir Greg Knight (East Yorkshire) (Con)
Most of us would welcome the continuation of the ban, but is the Minister looking to widen the issue in any way? There is a growing campaign against the consumption of dog meat and I wonder whether he has given any consideration to banning the import or consumption of dog meat.
George Hollingbery
The simple fact is that today we are able to deal only with the legislation before us. We are bringing the regulation across operably into the UK context. In fact, we are specifically prohibited under the withdrawal Act from considering further policy implications. That does not mean that the Government do not have an interest in the area, although policy judgments on that front would fall not to the Department for International Trade but to the Department for Environment, Food and Rural Affairs. I am sure that my right hon. Friend’s remarks will have been heard in the right quarters and I will ensure that I mention them to the Secretary of State when I see him next.
As I was saying, the regulations will correct such deficiencies, for example, by replacing references to the European Union, its institutions and its legislation with the appropriate UK references. To ensure that the ban on the trade in cat and dog fur is maintained, I commend the regulations to the Committee.
George Hollingbery
Exactly. I will briefly answer one or two of the questions that I was asked. The hon. Member for Sefton Central asked about an impact assessment. I can do an impact assessment in front of this Committee instantly: if we do not transfer these regulations today, there will be no control on the import of cat and dog fur into the UK, and the impact will therefore be that it is lawful to import cat and dog fur to the UK for sale at any time by anybody, wherever they wish. I suspect that the Opposition would not particularly want that to happen.
The hon. Gentleman asked about the Secretary of State’s right to bring forward a statutory instrument to allow importation for education and taxidermy—indeed, that is part of the current EU legislation. The Secretary of State taking on the duty has taken that away from the slightly complex solution in which countries report to the European Commission, and so on. I confirm that the Secretary of State has no plans to bring such exceptions forward. We will not be using that part of the legislation, but it is brought through simply because we cannot change policy through the powers in the European Union (Withdrawal) Act that allow us to do what we are doing today.
Policing of the importation of cat and dog fur is done through DNA analysis. Her Majesty’s Revenue and Customs conducts inspections at the border under the powers in the 2008 regulations. That will continue to have effect. HMRC will continue to have the same role that it had previously. It can seize goods and start criminal proceedings, and so on.
I have made no particular assessment about the World Trade Organisation and any potential challenge, but if I stood in front of the Committee today and said that there has never been—
Gareth Thomas
Can the Minister give us any indication of the number of investigations being undertaken by HMRC in this area and the extent to which it has asked for additional resources post-Brexit to cope with a potential increase in the need for inspections?
George Hollingbery
The straight answer is that I do not know. Plainly, that is in the hands of the Treasury and HMRC. If the hon. Gentleman wishes me to write to HMRC to make such an inquiry, I would be very happy to do so. All I can say finally is that I welcome the Opposition’s support for the motion.
The Chair
Who would have thought that Delegated Legislation Committees could be such fun?
Question put and agreed to.
Oral Answers to Questions
George Hollingbery Excerpts(5 years, 2 months ago)
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Mohammad Yasin (Bedford) (Lab)
The Minister for Trade Policy (George Hollingbery)
I am grateful for the whip on Ministers having been imposed for as long as it was, otherwise I should not be standing here, but credit of course goes to my right hon. Friend the Member for Chelsea and Fulham (Greg Hands).
When we leave the EU, we will maintain our current domestic standards. We will keep our existing UK legislation, and the European Union (Withdrawal) Act 2018 will convert EU law into UK law as it applies at the moment of exit. This includes the regulatory regimes for environmental, food safety and animal welfare standards. Without exception, of course, imports must continue to meet all relevant UK product rules and regulations, as they do today.
Mohammad Yasin
What assessment has the Department made of the impact of the tariff barriers introduced yesterday on the farming sector?
George Hollingbery
The tariff package announced yesterday is a balanced package. It is a temporary package. It is a response to the potential effects of leaving the EU without a deal. There are sectors that are vulnerable to competition from imports, are not as nimble as others and cannot change as quickly—farming is one of those. We believe that the balanced package we have put together will sufficiently protect farming interests in the UK.
Sir Desmond Swayne (New Forest West) (Con)
If regulatory alignment with the EU is maintained in these goods, to what extent will that constrain our ambitions for wider trade deals?
George Hollingbery
I thank my right hon. Friend for his question. Of course, if the Prime Minister’s deal is passed through this House in its third iteration, it will provide for regulatory alignment not to continue and therefore we would be able to pursue trade deals internationally. Of course we can do so in any event, as not all trade deals are to do with goods.
Tim Farron (Westmorland and Lonsdale) (LD)
During the BSE crisis of the 1990s, the foot and mouth outbreak of 2001 and the scare of 2007, even some members of the European Union took advantage of these crises to ban British meat imports, even long after any risk had expired. If we leave with a bad deal, such as the one Parliament has now rejected twice, countries will not need an excuse to act with opportunistic protectionism in that way. So how will we make sure that our farmers are protected in the deals we strike in future?
George Hollingbery
Of course, the hon. Gentleman has a real constituency concern and interest in this. The simple fact is that the UK intends to operate within the World Trade Organisation and subscribe to the world’s rules-based order on trade, and that gives us a great deal of protection. We are always able to bring disputes if we feel that WTO rules are being flouted inappropriately.
Bill Esterson (Sefton Central) (Lab)
In the United States, pork is produced using ractopamine, which causes heart disease, and it is not treated for trichinosis, which can lead to stomach upset. The US National Pork Producers Council wants its standards included in the US-UK trade deal, and it has the support of its Government in that demand. This threat to food safety is completely unacceptable, so will the Minister rule out any reduction in food standards in international trade agreements?
George Hollingbery
I repeat what we have said from this Dispatch Box and this Department many, many times: we absolutely agree with the hon. Gentleman that our food standards should be maintained. As for the requirements the US has laid out in its provisional negotiating strategy for its agreement with the UK, if he looks carefully at previous such agreements and previous such outline mandates from the US, he will find that they are almost exactly the same in every respect. That does not mean to say that they are delivered in that form.
Sandy Martin (Ipswich) (Lab)
Tim Loughton (East Worthing and Shoreham) (Con)
The Minister for Trade Policy (George Hollingbery)
The Government announced details of the temporary tariff yesterday in a written statement to the House. This is a balanced tariff policy that aims to minimise costs to businesses and mitigate price impacts on consumers, while also supporting UK producers as far as possible.
Tim Loughton
Now that the details have been published at last, I noticed that slippers are going to be charged at 17% less under these tariffs. Given the disorientation of some ministerial colleagues last night, perhaps a few might like to invest in a pair and retire early. On a more important point, can we get away from the obscene nonsense whereby, in the past, we have given international aid money to countries such as Ethiopia to encourage cocoa farmers to produce agricultural products—quite rightly—only for the EU obscenely to charge them tariffs of 30% when they try to sell the products of their hard labour back to us?
George Hollingbery
My hon. Friend is right. The temporary arrangements that we are putting in place recognise that there are developing countries that we have long supported and have agreements with, and which require tariff-free access to our markets to ensure that they can sustain themselves through trade. Sections within the proposal keep tariffs on certain lines to allow those countries preferential access to the UK market to their advantage.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The National Farmers Union is profoundly concerned that it has only two weeks to prepare for the new tariff regime, particularly in view of the fact that cereals and egg producers will have no protection whatever. What discussions has the Minister had with the appropriate Ministers in other Departments to ensure support and compensation for those farmers?
George Hollingbery
Of course, the farming community is protected by a commitment to the payments they were expecting through to 2020. As the hon. Gentleman will know and would expect, we consulted widely with colleagues across Government, so this is a collectively agreed decision. We have placed tariffs on quite a large number of vulnerable agricultural products, and we hope that the mix is the right decision not just for producers, but for consumers.
I remind the House that, for people in the bottom 10 percentage points of income in this country, food is a very real cost every single day; some 20% of their weekly income is spent on food. If we allowed inflation to roar away on products of this sort, people at that end of the income scale would find it very hard to feed themselves, and we believe that we have to mitigate that situation for them, as well as for farmers’ incomes.
Martin Vickers (Cleethorpes) (Con)
Hundreds of my constituents work in the fish processing industry in the Grimsby-Cleethorpes area, and the supply of fish from Iceland is essential to them. Can the Minister give an assurance that no decisions on tariffs will be detrimental to those supplies?
George Hollingbery
There are two points on this. First, we have transitioned the free trade agreements the EU has with the Faroes—something that Opposition Members have derided us for as to the scale of the deal. To certain communities, particularly in my hon. Friend’s part of the world, these fish products are extremely important to keep people in work and keep people in the country. Secondly, we are having extensive discussions with the European Free Trade Association countries and European economic area countries about transitioning the free trade deal, and we would hope to be able to get some news on this to the House in due course.
Jim Shannon (Strangford) (DUP)
Only yesterday, trade arrangements were announced between the Republic of Ireland and Northern Ireland, and they give us some concessions. However, the Ulster Farmers Union has indicated that it has some concerns over the arrangements that have been made. What discussions has the Minister had with the Ulster Farmers Union in Northern Ireland to discuss this?
George Hollingbery
The hon. Gentleman identifies an extremely important issue. I am not going to sidestep the question—I will give him an answer—but of course in the end this is a matter for the Department for Exiting the European Union and, indeed, for the Government more widely. There is no doubt that the choices that have been made for the position on the border in Northern Ireland were made against an extraordinarily difficult backdrop. There were no easy decisions. The decision we have made is temporary. We believe that it is World Trade Organisation-compliant. We recognise that there are real difficulties. I spoke to representatives of the agricultural community in Northern Ireland only yesterday and explained this. While very disturbed by what was going to happen, they understood why the decision had been taken.
Will Quince (Colchester) (Con)
Informal Trade Foreign Affairs Council
George Hollingbery Excerpts(5 years, 2 months ago)
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The Minister for Trade Policy (George Hollingbery)
The informal EU Foreign Affairs Council (Trade) took place in Bucharest on 21 and 22 February 2019. The formal agenda covered the World Trade Organization (WTO) and EU-US trade. I represented the UK at the meeting. A summary of the discussions follows:
WTO modernisation
Commissioner Malmström highlighted that the risk to the multilateral system was real, but was not sufficiently appreciated by much of the WTO membership.
Discussion focused on the need to keep the US engaged and anchored within the multilateral system while addressing US concerns about the appellate body. I stressed the seriousness of the current situation. Commissioner Malmström mentioned the recent launch of e-commerce negotiations as a positive development.
US trade
Commissioner Malmström said the Commission was focused on delivering the outcomes of the July 2018 Juncker-Trump meeting. She did not know the contents of the US 232 report into cars and reiterated that €20 billion (£17.2 billion) of EU “rebalancing measures” had been prepared. She called on member states to endorse the mandates.
In discussion, the mandates were endorsed by an overwhelming majority of member states. I urged the importance of moving forward at pace, emphasising the significant UK interests. Discussion revolved around timing. The Commission highlighted their commitment to moving forward as quickly as possible. The presidency offered an extraordinary Council meeting if needed to facilitate this.
[HCWS1375]
Oral Answers to Questions
George Hollingbery Excerpts(5 years, 3 months ago)
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Bob Blackman (Harrow East) (Con)
The Minister for Trade Policy (George Hollingbery)
India is an important part of our future trading arrangements. The UK-India joint trade review has enabled us better to understand the bilateral trade relationship by examining trade flows and barriers that could be jointly addressed. Collaboration is continuing to address barriers in the food and drink, life sciences and information and communications technology sectors. The appointment of Her Majesty’s trade commissioner in 2018 also provides a joined-up and co-ordinated Government effort to promote UK trade and prosperity in India.
Bob Blackman
I thank the Minister for his answer. He will be aware that the UK is the third biggest investor in India and India is the third biggest investor in the UK. What more can we do to ensure that we increase the trade as we leave the European Union and set out on our own free trade mission across the world?
George Hollingbery
I thank my hon. Friend for his question. Crispin Simon, the aforementioned HMTC, is leading the Department’s network to grow trade in key sectors. UK exports to India grew by 28%, to £7.9 billion, in the year ending quarter 2 2018, making that seven consecutive quarters of growth. Goods exports increased by 38% in the same period. Following the launch of the UK-India technology partnership by the Prime Minister and Indian Prime Minister Modi in April 2018, there have been many successes, including the healthcare AI catalyst programme. We have worked closely with many companies, such as BT, Rolex, Diageo, GlaxoSmithKline, Marks & Spencer and G4S.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister might know that, in the Leeds city region, which includes Huddersfield, we have many brilliant businesspeople from an Indian background and they of course have very good partnerships with India. They are totally demoralised at the moment, partly because of this Secretary of State. I would not wish him to go into hell, but they have no confidence in him and they have no confidence in shrinking the potential market for India from 650 million to 65 million people.
George Hollingbery
All I can say is that the hon. Gentleman is entitled to his opinions, but I happen to disagree with him fundamentally. We have a close trading relationship with India, and we are working extremely hard to grow trade there. The figures I have already given him this morning demonstrate that there is potential in India, which we are exploiting and will continue to exploit if and when we leave the EU.
Greg Hands (Chelsea and Fulham) (Con)
India of course is in the EU’s generalised scheme of preferences, whereas nearby countries such as Pakistan and Sri Lanka are in GSP+, with Bangladesh probably soon to join them. Does my hon. Friend agree that, if we were to adopt Labour’s customs union policy, we would have to accept EU trade preference policy without any say in its formulation? Does he also agree that that would lead to a big decline in UK foreign policy influence in south Asia and among diaspora communities in the UK?
George Hollingbery
One reason why the Prime Minister has put forward the deal that she has to the House is that it allows the flexibility for us to engage in the ways in which my right hon. Friend expects us to be able to —actively with the south Asia region, and India in particular—and to prescribe our own preference schemes such that we can control our own rules.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Is it not the case that the priority for the Indian Government is a trade deal with the EU and that the best way for the British state to have a trade deal with the EU is to stay in the EU customs union?
George Hollingbery
The Indian Government’s priority is likely to be trade with anybody with whom it suits. The hon. Gentleman simply needed to listen to the answer I gave a little earlier: there has been a 28% increase in UK exports to India, to £7.9 billion, in the year to quarter 2 2018, and a 38% increase in goods exports. We can conclude from that there is plenty of attention in India on UK trade.
Danielle Rowley (Midlothian) (Lab)
The Minister for Trade Policy (George Hollingbery)
The UK’s intellectual property regime is consistently rated as one of the best in the world. The Government are reviewing their future trade policy as we leave the EU. We will continue to consult widely with stakeholders on intellectual property provisions in future trade agreements to support inventors, creators, consumers, and food and drink producers.
Danielle Rowley
Scotland is one of the fastest growing regions in the UK’s creative industries, which are world leading and currently worth £91.8 billion to the UK economy. Can the Minister therefore reassure the creative industries in Scotland, and indeed across the UK, that professional equipment such as musical instruments will not be subject to the disruption of additional documentation requirements and tariffs at the border after Brexit?
George Hollingbery
Plainly, if the Prime Minister’s deal is accepted in the House of Commons, including by being supported by the Labour party, that will not be an issue. If we leave the EU without a deal, the regimes will be what they are. What I can say is that we are working incredibly hard on copyright, patents and enforcement to make sure that the creative industries, which are vital to the prosperity of this country, will be protected in the event of the UK leaving the EU.
Douglas Chapman (Dunfermline and West Fife) (SNP)
Nic Dakin (Scunthorpe) (Lab)
Thank you, Mr Speaker.
The steel industry is confronted with the possibility that the trade defence instruments currently in place at European level to prevent Chinese dumping will not come forward at UK level. We also face having to compete against quotas to sell steel into the EU when we are outside the EU. What is the Secretary of State doing to make sure that that does not happen?
The Minister for Trade Policy (George Hollingbery)
I can say straightforwardly that the anti-subsidy and anti-dumping measures that are currently in place in the EU have been widely consulted on with British industry, and particularly with the steel sector, as the hon. Gentleman will appreciate. We will be transitioning the measures that are important to those industries. The same process has been gone through for safeguarding, and the same result will occur.
Greg Hands (Chelsea and Fulham) (Con)
Will the ministerial team update us on progress in seeking continuity of some of the other EU trade agreements, particularly those in Canada and in Africa, many of which, of course, the Opposition opposed in the first place?
George Hollingbery
I simply say what I have said to the House on a number of occasions: we are making good progress on many of those agreements. I have already signed three of them very recently and deposited them with the House. We will continue to update the House as progress is made, and we will bring forward a report in the next week or two, which will help elucidate the matter further.
Rachael Maskell (York Central) (Lab/Co-op)
EU Free Trade Agreements
George Hollingbery Excerpts(5 years, 3 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
(Urgent Question): To ask the Secretary of State for International Trade if he will make a statement on maintaining EU free trade agreements after the UK leaves the EU.
The Minister for Trade Policy (George Hollingbery)
As a member of the European Union, the UK currently participates in around 40 free trade agreements with more than 70 countries. These free trade agreements cover a wide variety of relationships, including economic partnership agreements with developing nations; association agreements, which cover broader economic and political co-operation; and trade agreements with countries that are closely aligned with the EU, such as Turkey and Switzerland. Of course, more conventional free trade agreements are also part of the package.
Businesses in the UK, EU and partner countries are eligible for a range of preferential market-access opportunities under the terms of the free trade agreements. Those opportunities can include, but are not limited to, preferential duties for goods, including reductions in import tariff rates across a wide variety of products, quotas for reduced or nil payments of payable duties, and quotas for more relaxed rules-of-origin requirements; enhanced market access for service providers; access to public procurement opportunities across a range of sectors; and improved protections for intellectual property.
For continuity and stability for businesses, consumers and investors, we are committed to ensuring that the benefits I have outlined are maintained, providing a smooth transition as we leave the EU. The Department for International Trade, the Foreign Office and the Department for International Development are working with partner countries to prepare to maintain existing trading relationships.
Mr Leslie
With just 64 days to go, will the Minister confirm that not only is there the well-known Brexit risk of catastrophic disruption to 44% of our country’s trade, but now, on top of that, a further 12% of our trade could be thrown into chaos because of the Government’s failure to roll over our 40 trade agreements with 70 countries around the rest of the world in time for exit day?
Does the Minister recall the promise made by his Secretary of State at his party conference in October 2017, when he boasted:
“I hear people saying, ‘Oh, we won’t have any’”
free trade agreements
“‘before we leave.’ Well, believe me, we’ll have up to 40 ready for one second after midnight in March 2019”?
Was that bragging not made worse when the former trade Minister Lord Price tweeted falsely in October 2017:
“All have agreed roll over”?
Will the Minister explain why expectations were raised so high back then, when today’s reality is so dangerously disappointing? Can he confirm that the leaked memo reported in the Financial Times was accurate, and that he has been warned by his officials that most of the deals Britain is covered by will lapse because there is no transition period to keep Britain under the EU umbrella once Brexit occurs? Does he agree with the Government official quoted in the FT that
“Almost none of them are ready to go now”?
As well as the 40 free trade agreements, there are more than 700 other trade-related treaties and mutual recognition agreements, so when will we get an accurate update from the Government on how many of those will lapse in March as well? Some 2% of our trade is via the European economic area free trade agreement, with Norway and Iceland, which has still not been settled for roll-over; Canada accounts for 1.4% of our trade; Turkey, with which we currently have a form of customs union, accounts for 1.3%; South Korea accounts for 1%; and Switzerland accounts for 3.1%. All these and more add up to £151 billion of export and import markets. Will the Minister confirm that if we do not roll over the trade arrangements we enjoy by virtue of our EU membership, the full range of World Trade Organisation tariffs will start to apply?
What is the real situation in respect of Australia and New Zealand? Are the press claims that a full free trade agreement has been signed accurate, or are these just mutual recognition agreements being passed off as FTAs? On Switzerland, can the Minister place full details of the allegedly initialled agreement in the Library of the House? It is still not clear which aspects of the existing UK-Swiss relationship are due to be replicated. Will UK-based firms continue trading into Switzerland on exactly the same basis, including the free movement of people, or are there differences? For example, can he rule out tariffs on imported Swiss goods from March?
If British cars are exported, could they face 10% WTO tariffs? What will the tariffs be on Norwegian salmon, Canadian maple syrup, and food and veg from Turkey? When will the Government start telling Parliament about these things? Is it not the truth that all these countries first want to know what the UK’s relationship will be with our largest trading partner, the EU, and that we have little hope of pinning down brand new agreements until we have pinned down that agreement? Will the Minister face reality, slay these fantasy unicorn promises, and admit that Brexit is not going well and presents a clear and present danger to the free trade agreements our economy desperately relies on?
George Hollingbery
That was a pretty long shopping list, and I am not in a position to answer all the hon. Gentleman’s questions, but I will make one point. I told him in Committee back in November that there was a wide range of reasons why some of these agreements had been challenging in many instances. For example, there have been changing incentives. If this House cannot make up its mind on what Brexit looks like, it will obviously be difficult for some of our interlocutors to decide whether we will be leaving the EU on 29 March. That said, a responsible Government make plans for any eventuality, and we are working extremely hard to make sure that the 40 agreements we have in place are available to those companies that use the preferences they guarantee.
I told the hon. Gentleman earlier that I believed the majority of these agreements would be in place by 29 March, and I continue to believe that, but it would not be appropriate to go into further details on an individual country basis, because these conversations are necessarily confidential, and our partners wish them to be confidential. To go into them, therefore, would not be proper. I am very happy to tell the House, however, that I believe we will have the majority of agreements rolled over, and it is absolutely our objective to have them all rolled over.
Finally, one small detail worth clearing up—it has been a matter of some press speculation—is that the Swiss agreement does not include any provisions on free movement.
Greg Hands (Chelsea and Fulham) (Con)
It has always been very likely that the counterparties to these deals would want to keep them operable, as it is in their interests to do so, but may I highlight the stinking hypocrisy of the Labour party on this? It voted against adopting many of these deals in the first place—it voted against adopting the comprehensive economic and trade agreement in February 2017 and against adopting the EU-Singapore agreement in September 2018—and now Labour Members complain that the deals will no longer be operable next month. Does my hon. Friend agree that this shows the Labour party at its absolute worst on Brexit, with its members unable to agree among themselves, and unable to do what is in the UK national interest?
Mr Speaker
The Minister at least pays obeisance to, and I think has genuine respect for, etiquette, protocol and the principle of parliamentary courtesy, so it would not occur to him for a moment to descend into the swamp, disregard his ministerial responsibility to the House, and start prating on about the policy of the Opposition, but let us put it to the test and hear from the Minister.
George Hollingbery
First, let me pay tribute to my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) for all the work that he did in preparing this country for striking new trade deals, and indeed in maintaining the continuity of our existing free trade deals. He points out an inconsistency in the Opposition’s position on this matter. I agree with him that it is a fairly pointed one, and ask them to contemplate a bit. Yes, he is correct in his assessment.
Mr Speaker
The tiger that was previously in the library has now been removed, and the immediate danger has been averted. I think the Minister will be familiar with the Merchant Ivory film in which that exchange occurs. [Interruption.] It is fairly obvious, if one applies one’s mind to it.
Bill Esterson (Sefton Central) (Lab)
My hon. Friend the Member for Nottingham East (Mr Leslie) asked a very simple and sensible question. The Minister’s long and rambling answer had a simple summary—clearly, it was no. The Secretary of State repeatedly told us that it was a simple matter to roll over deals on trade with approximately 70 countries, which constitutes 13% of our exports and 12% of our imports—it would be a cut-and-paste job. The Government would be ready on day one after Brexit, he told us. That was never true, was it? Those deals are entirely separate and independent from any deal that we may have with the EU.
If we leave with no deal, can the Minister confirm that these arrangements with third-party countries will fall away, as we have consistently warned? Will he confirm that, without new agreements in place, we could, in the absence of a deal with the EU, have no basis of trade with these countries after 29 March, and would fall back on World Trade Organisation rules? That is an argument for taking no deal off the table if ever there was one.
Will the Minister confirm that many of the terms of those agreements will need to be amended, and could be changed substantively as countries seek to improve on the terms that they have with the EU? Will he also confirm that agreements with countries that have economic partnership agreements are often regarded as being not fit for purpose and are alleged to have been signed under economic duress? The Minister will do well to listen to some of this, as this is the reality of what is going on in his Department. For example, North African countries want to sell their oranges and olive oil to us in far greater quantities than is allowed by the EPAs with the EU, which protect southern European producers.
In the Trade Bill debate in the Lords yesterday, the Minister conceded that the Department had no idea how many countries were ready to roll over their free trade agreements, how many would not, how many would have to adjust their constitutional arrangements, and how long that might take. Will the Minister for Trade Policy confirm that his colleague was right to say so?
The Secretary of State is busy socialising in Davos. Is that not a reminder of the incompetence and overconfidence that he has shown over the past two and a half years?
George Hollingbery
The hon. Gentleman opened his question by expressing his view that I had given a long and rambling answer. I am pretty confident that the question was longer and more rambling than my previous answer.
Will there be no basis of trade if we fall out without an agreement? No. There will continue to be the basis of trade that exists for everybody, which is the World Trade Organisation. [Interruption.] Indeed, I do confirm that. That is why we are putting such an enormous amount of effort into transitioning these agreements. Will the terms be amended? Yes; plainly, the bilateral partners with whom we are negotiating have different motivations. That is something that I have made very clear to members of the International Trade Committee when I have talked to them. That has led to some extension of the discussions that we are having, but many of those discussions are going extremely well. I reiterate to the House that I am confident that the majority of these trade arrangements will be put in place by the time we leave the European Union.
The hon. Gentleman also treated us to his analysis of EPAs, saying that they were not fit for purpose. He gave us the example of oranges. The last time I stood opposite him in a debate, he gave us the example of the difficulty that EPAs cause Ghana and its chicken, and indeed Tanzania and its fish. On the Ghana agreement, the fact is—I remember this—that chicken had been completely excluded from the EPA. The point about Tanzania and fish is not entirely relevant to EPAs, as there is no EPA with Tanzania.
My confidence is strong on this issue. I believe that we will have the majority of these arrangements in place. Yes, some of them are challenging. One or two of them are even more than challenging; they are close to impossible. Turkey has clearly been identified as an area where the issue of a customs union makes a deal with it very difficult indeed. I have made these things absolutely plain to the House before. However, I believe that we will have the vast majority of these other arrangements in place. We will protect our consumers and our businesses, which will be able to carry on using preferences.
Justine Greening (Putney) (Con)
Obviously, behind the debate about the concept of trade are jobs. What assessment has the Minister made of the number of jobs at risk if these agreements are not put in place? Has he identified the companies that will struggle? Is he working with the Department for Work and Pensions on contingency plans for those communities that might be particularly affected by any failure to roll over the agreements?
George Hollingbery
We are in constant contact with all the businesses that trade on these preferences; we have written to them many times. We have issued technical notices advising businesses on the steps they need to take to ensure that they are prepared for that scenario. Plainly, it is much better to have these agreements in place than not, but as I have just discussed with the hon. Member for Sefton Central (Bill Esterson), a change in the arrangements does not mean that trade with those countries will stop; it simply means that the terms will change. I believe that we are doing all we can and should to prepare businesses for some of the deals potentially not being passed, and we continue to do that.
Stewart Hosie (Dundee East) (SNP)
The EU has 14 service agreements with third-party countries and blocs, which UK professional services companies benefit from. Notwithstanding potential tariffs, non-tariff barriers and other regulatory burdens, can the Minister confirm for professional services companies whether there is even the legal basis for that trade with third-party countries and blocs to continue?
George Hollingbery
I am sorry to duck the question, but that matter should be referred to the Department for Exiting the European Union.
Sir Desmond Swayne (New Forest West) (Con)
We trade very successfully with our largest bilateral partner, the United States. We do not need trading agreements, do we?
George Hollingbery
As we have already made clear, it is entirely possible to trade on WTO terms. However, it is far more preferable to reach trade agreements with third parties, because then we can trade on a preferential basis that allows us access to markets, the lowering of tariffs and the reduction in non-tariff barriers behind the border, which makes life much easier for our companies.
Hilary Benn (Leeds Central) (Lab)
I want to ask the Minister a very simple question, to which I would appreciate a direct answer. How many of the 40 or so agreements on which an arrangement has been reached to roll them over have been signed as of this morning?
George Hollingbery
The answer is that there is not much more that I can say at this stage. [Interruption.] There are no deals that have yet actually been signed, but I want to make it absolutely clear—
Mr Speaker
Order. A question has been asked. The Minister is an unfailingly courteous fellow, and we must hear his answer.
George Hollingbery
I want to be absolutely clear with the House that although it is possible to interpret my last answer as meaning that there has been absolutely no progress on the agreements, that would be an entirely, completely and utterly unfair interpretation of where we find ourselves. There are agreements that have had initialling; there are agreements that are very close to having initialling; and there are very many agreements that we believe will have a signature at the appropriate time. There is not an agreement that has had a formal signature yet, but to focus only on that is to misunderstand, or at least mispaint, how these agreements work. I have said to the House that we believe that we will transition the majority of the agreements by exit day, which necessarily means that they will have a signature, and I have every confidence that they will.
Tim Loughton (East Worthing and Shoreham) (Con)
To put this into perspective, is it not right that just five countries—Switzerland, Canada, Korea, Norway and Turkey—account for three quarters of UK exports to the 70 countries that the Minister mentioned? Does he agree that it is just a little tiresome that the Opposition are always revelling in highlighting problems and it might be more constructive if they wanted rather to help to work on some of the solutions?
George Hollingbery
My hon. Friend is correct in his analysis of the scale of these deals, and of course we are putting the most resource into the deals of the largest size. However, I want the House to be clear that we are also signatories to a great many development agreements—EPAs. While those agreements may not be of the greatest importance to the UK economically, they are enormously important to the participant countries with whom we have signed them, and we are putting effort into making sure that they are also transitioned.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I think that people outside this place listening to the Minister’s remarks will be troubled to hear him refer to a “shopping list” of countries. Many people’s livelihoods in this country rely on those countries. People will also be very concerned to hear that he has not today committed to honouring the promise that was previously made on each of these 40 trade agreements. Will he now confirm to the House that he will not be able to honour the promise of every single one being signed by exit day?
George Hollingbery
I am sorry that this is slightly like “Groundhog Day”, Mr Speaker, but I will repeat what I have said before. We are confident that we will roll over a majority of these agreements. We are working to try to ensure that they are all rolled over by exit day. There are clear indications that in some cases that is going to be challenging. Let me be absolutely clear: if I used the term, “shopping list”, and that was deemed in any way pejorative about any of these important deals, I wish to withdraw and rephrase it. It was simply shorthand for saying that there are a great many of them and they are all important to us. As I just said, EPAs are as important to us as the largest deals, simply because we understand that we have a role in the world in development and understand the importance of these deals to those countries. We also understand the number of jobs and businesses that rely on these preferences. That is another reason why we are so keen to get as many of the transition deals across as we can.
Michael Fabricant (Lichfield) (Con)
Shopping lists are actually quite important, as are people’s livelihoods. Is it not the case that these 40 roll-over countries represent just 12% of our trade? Can I tell the Minister that we are the biggest nation in Europe, and second in the world only to China and the United States, for investment, and we are the largest export market in the world for German cars and for French agriculture? Unlike remainers, who tend to be rather pessimistic sorts, I and most people are very optimistic about our future outside the European Union.
George Hollingbery
I thank my hon. Friend for his question. It is interesting to observe, and the House should understand, that a good proportion—I do not have the exact number in my head—of the 12% of trade that is represented by the countries with which the European Union has existing free trade deals is not carried out under preferences in any event because the particular lines in which they trade are not covered by the agreements, so the figure is actually quite a lot less. [Interruption.] The hon. Member for Huddersfield (Mr Sheerman) says from a sedentary position, “So it’s all just fine.” No, of course that is not the case. I have tried to make the point again and again that we regard this as extremely important.
On my hon. Friend’s reference to inward investment, Deloitte recently pointed out that the UK is the leading location in Europe for foreign direct investment. In the three years from 2015 to 2017, we enjoyed £140 billion-worth of direct investment from overseas—more than France, at £44 billion, and Germany, at £50 billion, combined.
Mike Gapes (Ilford South) (Lab/Co-op)
What is the Minister’s definition of the term, “majority”, which he has used several times? Does he mean 21 out of 40 or 39 out of 40?
George Hollingbery
Perhaps I am being stupid, but I do not really understand the last part of the question. A majority is more than half; we can be clear about that. I do not think I have anything more to add.
Dr Sarah Wollaston (Totnes) (Con)
We now know that we will not have 40 of these deals ready to roll over on the stroke of midnight. Some of these deals will be worth proportionately more than others, so it could be said that we have a majority ready to go, but they might be ones of very low value. Can the Minister give us more clarity about the most valuable of these trade deals?
George Hollingbery
I can report to the House that we are making good progress on a whole range of these deals, including those of high value and those at the other end of the scale.
Tom Brake (Carshalton and Wallington) (LD)
Donald Rumsfeld’s words spring to mind in relation to roll-overs. We have the known knowns: the countries that are up for a deal, such as Switzerland. We have the known unknowns: the countries that have said yes to a roll-over, but the Government will not give us their name. And we have the unknown unknowns: the countries that will not tell our Government whether they will roll over the deals. For the sake of clarity, is the Minister willing to publish the names of countries that fall into those three categories?
George Hollingbery
To publish an unknown unknown seems challenging. I regard the Department’s job as putting all the effort it can into rolling these deals over. That is one of the many things we do, but it is a very important part of what we do. It is equally important that we allow British businesses to understand when and if there may be a real and present danger to the preferences that they use. When we judge that we are in a situation where that information needs to be disseminated, we will do so.
Jeremy Lefroy (Stafford) (Con)
The hon. Member for Liverpool, Wavertree (Luciana Berger) was quite right to point out the seriousness of this issue. I am most grateful to the Minister for tackling this with equal seriousness. Can he clarify whether it makes a difference to the roll-overs if we leave with a deal, as I very much hope we do, or without a deal, which I could never support?
George Hollingbery
The Government policy, as my hon. Friend knows, is to leave with a deal, and I very much agree with that; it is by far and away the most sensible thing to do. I think most of the House will understand that if we have a deal and an implementation period, it takes the time pressure off and allows us to negotiate these deals in a more orderly fashion. Order has been created, and we are making progress, but if we have a deal and an implementation period, which is crucial to that, it will make negotiation of these deals a great deal more straightforward.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I feel sorry for the junior Minister. This must be one of the worst cases of neglect of duty since Nero fiddled while Rome burned. His boss is in the fleshpots of Davos, rubbing shoulders and having a lovely time, while he is slaving here at the Dispatch Box, on a day when the media tell us that many more companies are fleeing to Holland, Ireland and France. He is not trying to mislead the House—I am not saying that—but he is being very careful with his answers in terms of how many of these agreements have been signed. He is not giving any information to the House or our constituents, while his boss is having a lovely time in Davos.
George Hollingbery
I anticipated that that subject might arise, and I speculated that the timing of this urgent question was quite deliberate, for that very purpose. Let me tell the hon. Gentleman exactly what the Secretary of State is doing in Davos. Believe me, he has not taken his ski suit; he has taken his business suit. He met yesterday with the Israeli Government, from whom he elicited an agreement that our arrangements with Israel will be rolled over. He met the Egyptians, from whom he had a very positive reaction. He met with the Peruvians and the Colombians, and he further met with the South Korean Government. Today he will meet with the Ecuadorian Government, the Canadian Government and the South African Government, and later today—[Interruption.] The hon. Gentleman pretends to be playing a violin; I suppose he is saying that it is a sob story.
George Hollingbery
What I am trying to tell the hon. Gentleman is that the Secretary of State is in Davos doing exactly what this House would want him to do. He is at the negotiating coalface, ensuring that our partners in these countries who have not necessarily taken a no-deal Brexit seriously do so. He is incentivising them to sit down around the negotiating table, and he is making good progress. Later this afternoon, he will attend the trade stewards committee, where he will meet nearly every single trade Minister in nearly every single jurisdiction where we are attempting to create continuity in our trade agreements. I hope the hon. Gentleman will withdraw his implication that the Secretary of State is not doing his job, because that is exactly what he is doing.
Rachel Maclean (Redditch) (Con)
There is a deal on the table that the Government have negotiated with the EU, and it provides a transition period that would provide certainty for all these trade agreements to be completed in time for our exit. It is my understanding, although I have not checked his voting record, that the hon. Member for Nottingham East (Mr Leslie), who has posed this urgent question, voted against that deal.
Rachel Maclean
The hon. Gentleman voted against having a transition agreement because he voted against the deal. Does the Minister agree that it might be better for the hon. Gentleman to pose his urgent question to the leader of his own party and ask him why he did not engage in talks with the Prime Minister to get through the deal that would provide certainty for our businesses?
George Hollingbery
I thank my hon. Friend for her question, and as we have already discussed, there is plainly some very real inconsistency in the Opposition position. I point out to my hon. Friend that the hon. Member for Nottingham East (Mr Leslie) is a champion of free trade and actually spoke in this House in the debates on the EU-Japan EPA and CETA back in June, when I have to say he voted with the Government and, indeed, for the deals in that case, unlike his Front Benchers.
Kerry McCarthy (Bristol East) (Lab)
Businesses, including one in my constituency, are already moving operations to mainland Europe because of doubts about whether they will have market access to places such as South Korea. There are hints that we will focus on the higher value trade agreements and at least get them in place come Brexit day. However, if an SME’s trade is with one of the smaller countries, that is every bit as important for it and for the people it employs as the trade deal with South Korea. We need all 40 in place, and the Minister did assure us that that would happen. Has he not completely let down those people?
George Hollingbery
We have staff in post in all the markets where we are attempting to transition these deals. An enormous amount of internal resource has been applied to what we in the Department call TAC—trade agreement continuity. Indeed, we have taken resource out of parts of the other workstreams we do to concentrate on exactly this issue. We have been negotiating on all these agreements, not just the larger ones. There is of course a financial incentive to concentrate on the larger ones, for the sake of our own businesses and for the sake of employees and families who want to put food on their table. At the same time, however, there are small businesses, as I know perfectly well, that trade under the preferences enjoyed through EPAs. There are also developmental reasons why we want to continue those arrangements, because it is the right thing to do, and the hon. Lady may be reassured that we are putting effort into all these agreements.
Kevin Foster (Torbay) (Con)
I must say that I welcome the work the Secretary of State is doing out in Davos to push forward the UK’s trade policy. His work is certainly far more welcome than the pontification of the former Member for Sedgefield there. To put these deals into perspective, will the Minister confirm that the Swiss trade deal on its own is worth 21% of the value of all trade done under these 40 agreements?
George Hollingbery
Indeed, I can: that is the correct figure. There are two or three other agreements that will add substantially to that if we manage to transition them, and I am very hopeful that we shall be able to do so.
Chris Ruane (Vale of Clwyd) (Lab)
The Minister waxes lyrical about foreign inward investment into the UK. May I remind him that, in north Wales alone, we have had two devastating announcements in the past seven days? Last week, Hitachi said that it is pulling out of Wylfa Newydd, a £16 billion project in north-west Wales, and today, Tom Enders, the CEO of Airbus International, said that it will pull out of the UK, including out of its Airbus factory in north-east Wales, if there is a no-deal Brexit. What type of message does it send out to current and future international trading partners and investors when the UK Government cannot successfully engage with some of the most successful businesses in the world?
George Hollingbery
It is a complex web we weave, and there are clearly incentives in many different directions for many different companies. I have every sympathy with workers in Wales and others who find their jobs threatened by the decisions that companies make. The UK Government continue to engage with those companies, and to try to mitigate any moves they may make. We engage widely through POST with the parent companies of many of those organisations, and we are doing everything we can to ensure that foreign direct investment continues in the UK. Indeed, the United Nations Conference on Trade and Development announced a week or two ago that the UK remains Europe’s primary choice for foreign direct investment.
Bob Blackman (Harrow East) (Con)
For the avoidance of doubt, will my hon. Friend confirm at what point we will be able to sign our own independent free-trade agreements with countries around the world?
George Hollingbery
The withdrawal agreement and political declaration are clear: we will be able to negotiate with third-party countries once we have gone through the process of withdrawal and after Brexit day, but we will not be able to sign and implement those agreements until the end of the implementation period.
Clive Efford (Eltham) (Lab)
Some 24 countries have lodged their opposition to the schedules on goods and services that we have placed with the World Trade Organisation. Does that indicate how complex it is to deal under WTO rules, and was it always misleading to suggest that it would be easy to have 40 trade deals ready on the day we leave the European Union?
George Hollingbery
There are, give or take, some 165 members of the World Trade Organisation, and if 24 object to new schedules laid by a new partner, that is a relatively small number and there is a well-understood formal process through which those objections will be dealt with. Most objections are on the basis of loss of privilege through the existing relationship with the EU—and therefore access to the UK—being changed, and such things are not unusual. Indeed, the EU operated on uncertified WTO schedules from 1995 until the present.
Peter Grant (Glenrothes) (SNP)
The Minister tries to reassure us by saying that a majority of these deals will rollover on Brexit day, but that is as reassuring as knowing that the majority of my constituents will not lose their jobs, or that a majority of businesses in my constituency will not shut down. For every deal that stops on 29 March, a business or businesses somewhere in these islands will suffer, and each deal that does not continue in its entirety after Brexit means that businesses lose money and go bust, and people lose their jobs. Is that the cost of this chaotic Brexit?
George Hollingbery
Nobody wants any family to be affected or anybody to lose their job as a result of us not being able to transition these free-trade deals, and that is why we are making every possible effort to ensure that all deals are transitioned. I have explained to the House why, in some cases, that is extremely difficult, but the Department is ensuring that every effort goes into ensuring as few adverse consequences as possible, and I am confident that the majority of the deals will be passed. It would help to ensure smooth continuity if Opposition parties were not so resolute in trying to vote down the Trade Bill.
Nick Smith (Blaenau Gwent) (Lab)
Previously, the Secretary of State said that he would robustly defend the UK steel industry, yet a bombshell report today says that only half the steel bought by the UK Government comes from Britain. What is the Department doing for the UK steel industry, given that there is insufficient support from the Government at home?
George Hollingbery
The Department for International Trade will be responsible for the Trade Remedies Authority, when established. As the hon. Gentleman knows, the principal job of the TRA will be to ensure a level playing field internationally for products where there is potential for unfair international competition, as there is from several source countries. We are clear that the TRA must be in place as soon as possible, and as I said previously, it is not helpful for the terms of the Trade Bill to be blocked by all sorts of manoeuvres in both Houses. The Bill will allow us to establish the TRA, which will produce a robust defence of our industries, and particularly those that are most vulnerable, such as steel. I encourage him and his colleagues who represent areas of steel manufacturing, or indeed car manufacturing and ceramics, to get behind the Bill and put the TRA on a statutory footing, as it is there to help exactly those industries.
Jim Shannon (Strangford) (DUP)
Bearing in mind that the EU has 36 other free trade agreements with non-EU countries, coupled with the £40 billion divorce settlement we look set to pay, could the Minister outline why he believes that we will not have access to those free trade agreements, other than some of the bitterness we have heard in this Chamber today, and how does the Minister intend to turn this bitter lemon into sugar-free lemonade?
George Hollingbery
I will be completely straight with you, Mr Speaker: I am not entirely sure that I totally understand the hon. Gentleman’s question, but I shall give it a go. There are a number of agreements that are negotiated exclusively between the European Union and third-party countries. Those are between the European Union and those countries, and we will not be a member of the European Union, and therefore will not be able to benefit from their preferences. The whole point of the trade agreement continuity programme is to transition those into a UK-only form, such that we can continue to benefit from those preferences.
Oral Answers to Questions
George Hollingbery Excerpts(5 years, 4 months ago)
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Kerry McCarthy (Bristol East) (Lab)
The Minister for Trade Policy (George Hollingbery)
I add my Christmas wishes to you, Mr Speaker.
Both issues have been covered recently in discussions with World Trade Organisation members. For example, agricultural global value chains were considered at the recent G20 trade and investment working group. As a supporter of the rules-based multilateral trading system, we believe that WTO members must continually look for ways of strengthening the system.
Kerry McCarthy
I understand that a number of important WTO member states have objected to the UK and EU splitting tariff rate quotas post Brexit. At the end of October, the Secretary of State announced that the UK would be entering into general agreement on tariffs and trade negotiations. Is that another illustration of the fact that we cannot unilaterally negotiate trading arrangements post Brexit with other countries, and that it requires agreement? It looks like it will be an incredibly lengthy and tortuous process that will not have quick results.
George Hollingbery
The hon. Lady will know that the vast majority of nations represented in the WTO accepted the deposit of our schedules. Some did not and we are entering article 28 negotiations with them, as is completely normal. We can trade on those schedules as deposited until then—the European Union has been trading on uncertified schedules since 1995, so it should not impede our trade. Yes, negotiations will continue to agree those tariff rate quotas.
Mr Richard Bacon (South Norfolk) (Con)
You have had a bit of a week, Mr Speaker—we all have. May I take this opportunity to wish you a very restful Christmas and a happy new year?
Does the Department for International Trade accept that what one needs for international trade is willing buyers and sellers? Has the Department made any estimate of how much lower food prices will be to British consumers if we leave the European Union without the withdrawal agreement?
George Hollingbery
The situation after a hard Brexit— a no-deal Brexit—is a complex one and will rely on a large number of factors. Some Government policies have yet to be absolutely finalised. The pricing of goods in the UK market, particularly for food, is regarded as extremely sensitive, as indeed are the incomes and livelihoods of farmers throughout the UK who rely on selling those products.
Nick Thomas-Symonds (Torfaen) (Lab)
Merry Christmas, Mr Speaker.
The memo published by the European Commission yesterday was clear that, if the UK leaves with no deal and ends up trading on WTO terms, customs declarations and other checks will be required on exports into the EU. Have the Government estimated how much that will cost UK business?
George Hollingbery
The Prime Minister has brought back a deal from Brussels. I believe it is the right deal for this country. If it is put in place, what the hon. Gentleman describes will plainly not be an issue.
Rebecca Pow (Taunton Deane) (Con)
Happy Christmas to you from Taunton Deane, Mr Speaker. [Interruption.] I thought I would get that in.
The EU is the largest trading partner for agriculture and food for this country and, under our relationship with the EU, agriculture has blossomed. Margins are very tight. Will the Minister give assurances that, in the worst-case scenario, agriculture will not suffer under WTO rules? In the best-case scenario, does he agree that accepting the deal is by far the best option for our farmers?
George Hollingbery
I apologise, Mr Speaker—I was not listening carefully to the question. I am told by my Front-Bench colleagues that the answer is yes and yes.
Mr Speaker
I think we appreciate the Minister’s candour. There was no dissembling there, and we thank him for that.
Nick Smith (Blaenau Gwent) (Lab)
Merry Christmas to everybody.
Will the Minister confirm that any future trade agreements will not undermine current environmental and animal welfare standards?
George Hollingbery
On this occasion I was listening and have the question in my mind. I deeply apologise to my hon. Friend the Member for Taunton Deane (Rebecca Pow)—she is listed as having another question.
My right hon. Friend the Secretary of State has repeatedly made it clear in the House that we will not lower our standards in pursuit of free trade agreements. To reassure the hon. Gentleman, apart from anything else it would be business madness to do so. A lot of our exporters rely on Britain’s reputation abroad for quality, and undermining it would simply not work. Further, large numbers of Labour Members did not vote for the comprehensive economic and trade agreement, which contained specific chapters—chapters 5, 23 and 24—that pursued exactly what he wants. Labour Front Benchers did not support it.
Kevin Foster (Torbay) (Con)
Chris Elmore (Ogmore) (Lab)
The Minister for Trade Policy (George Hollingbery)
This Government are committed to working closely with all nations and regions to deliver a future trade policy that works for the whole of the UK, and we will continue to engage with the devolved Administrations. I visited Cardiff on 15 October, where I discussed this topic with Assembly Members. The Board of Trade will also ensure that the benefits of free trade are spread throughout the UK.
Chris Elmore
A very merry Christmas to you, Mr Speaker. I am grateful to the Minister for his answer. However, will he elaborate on his work with the Welsh Government to ensure that when trade agreements are made, regional investment happens across the south Wales valleys, north Wales and mid Wales and benefits the whole of Wales rather than focusing, for example, on cities, so that valley communities like mine can really benefit from the economic development that comes from trade agreements?
George Hollingbery
We are currently working on a concordat with the Welsh Government, through which they can contribute directly to the process for free trade agreements. I would expect them to make those points to us and tell us where the industries that matter to them are. We can therefore construct our free trade policies around that input.
Martin Vickers (Cleethorpes) (Con)
Increased trade inevitably leads to more business for our major ports, such as Immingham in my constituency. Does the Minister agree that free trade zones and free ports are worthy of serious consideration post-Brexit?
George Hollingbery
All I can say at the moment is that anything that can be done to increase free trade in the future should be looked at. Indeed, free ports have been looked at and I know that my hon. Friend has been a great champion of the idea. We will continue those discussions.
Judith Cummins (Bradford South) (Lab)
Supporting our regional economies through trade agreements is about more than just growing exports and opening markets to our producers; trade agreements should also be used to unlock and encourage investment across the UK. A recent report by the Centre for Towns shows that in 2017 nearly 60% of foreign direct investment went to the UK’s biggest cities, that 70% of that went to London, and that towns and communities elsewhere have seen FDI decline or remain flat. When will the Government listen to Labour and take the action needed to rebalance the economy and attract FDI right across the country?
George Hollingbery
I thank the hon. Lady for her question and, indeed, the whole Labour Front-Bench team for our associations and discussions during the year, which have, on the whole, been friendly and constructive.
The hon. Lady will be glad to hear that the Government absolutely understand the issue. Our foreign direct investment programme has begun to look at pre-packaging offers out in the regions, particularly in smaller towns, which quite a lot of major potential investors will not know of—they will not know about the skillsets there or about the availability of land and so on. They have been pre-packed into larger blocks so that foreign direct investors can be presented with them as places where they can take their investment outside London and the major cities.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Minister for Trade Policy (George Hollingbery)
I am not aware of the exact statistic for cost, but I will happily admit to the House that our record on freedom of information requests in the past has not been good enough. However, a great deal of effort has been put into trying to ensure that we respond on time, and in the latest quarterly report from only yesterday we managed to reach 90%, which is what we were trying to achieve. If the hon. Gentleman wishes, I will happily write to him with an answer.
Nigel Huddleston (Mid Worcestershire) (Con)
The UK Israel Tech Hub estimates that the tech partnerships that it has created have an economic impact on the UK of around £800 million. What can we do to continue to grow this mutually beneficial relationship?
Draft Trade Barriers (Revocation) (EU Exit) Regulations 2018
George Hollingbery Excerpts(5 years, 5 months ago)
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The Minister for Trade Policy (George Hollingbery)
I beg to move,
That the Committee has considered the draft Trade Barriers (Revocation) (EU Exit) Regulations 2018.
This statutory instrument revokes the European Union’s trade barriers regulation, which sets out a process by which businesses, trade associations and member states can report trade barriers to the European Commission. If a request passes a particular threshold, the regulation obliges the Commission to make a report. It can then take appropriate action, such as raising it in bilateral discussion or at the World Trade Organisation, but it is not obliged to do so. It should be noted that this applies only to unlawful barriers outside the EU.
After we leave the EU, tackling trade barriers will become the UK’s own responsibility, and it is important that we get this right. Trade barriers cost our economy billions of pounds every year, so it is crucial that businesses can continue to report them after Brexit, but that only makes it more crucial that the system for reporting them works as effectively as possible. The current EU system has a number of issues: it is complex and time-consuming and, in practice, has already been superseded. Those issues cannot be resolved without making policy changes to the regulations, which would take them outside the scope of our powers under the European Union (Withdrawal) Act 2018. The only course available to us in this circumstance is to revoke the regulation.
The Government have decided not to replicate the EU’s trade barriers regulation, but to use an alternative, non-statutory system instead. Why is that? First, the process in the regulation is drawn-out and complex. There are five steps: a complaint is submitted; the Commission has 45 days to decide whether to investigate; the Commission announces the decision in the Official Journal of the European Union; the Commission investigates; and a report is submitted to the trade barriers committee. Unsurprisingly, that process takes a long time, during which businesses could be losing exports, thanks to unfair rules. In addition, businesses are required to submit lengthy reports involving complex and often expensive economic and legal analysis. That is a barrier for any business, but particularly for small businesses. I will give an example. In the EU’s own evaluation of the regulation, one organisation said that it had wanted to bring a case but decided not to do so simply because of the amount of information that the Commission had requested—and that was only at the pre-initiation phase.
Secondly, the current process is superfluous. All the regulation does is commit the Commission to writing a report; there is no requirement for the Commission actually to take any action. Unsurprisingly, businesses are already voting with their feet. About 70 new barriers were reported to the EU last year. In only one case did the business involved choose to use the statutory process; the rest of the complaints were submitted informally. There is no evidence that the informal complaints were any less likely to be resolved than those submitted through the regulation. Therefore, in practice, the regulation has been almost entirely superseded. In fact, the process has been used only 28 times in the 25 years for which it has existed, and the majority of those cases were in the first three years. The number declined rapidly thereafter, which speaks volumes about the experience of the process for business. Only one case has been brought in the past 10 years.
Our new, non-statutory process will be an improvement. It will be accessible and user-friendly, with a simple online form at gov.uk for businesses to fill in. The process is already well under way and will be ready for 29 March. Because the process is non-statutory, it will also be flexible. Businesses will be able to tell the Government about the full range of barriers that they face, whether they breach the letter or the spirit of an international agreement. The Government will use the full range of tools available to tackle those barriers—tools ranging from economic diplomacy, to regulatory dialogues, to WTO dispute settlement and committees.
This will be a two-way process: as well as being easier for businesses to use, the new approach has been designed to let the Government better understand the barriers faced by businesses, so that we can target our resources more effectively. Much of this happens already. The Department for International Trade and its posts, our network overseas, are already extensively involved in that sort of activity. The new system is designed to improve on the existing network and formalise it.
We will of course provide reports to businesses and to Parliament, within the bounds of confidentiality. The Government will in due course be able to share information with businesses on where barriers exist or have been removed, to help inform business decisions.
Hannah Bardell (Livingston) (SNP)
The position of the Scottish National party is clear—we want to stay in the EU—but, having said that, we recognise that if we are to leave, having regulation is important. Will the Minister speak a little about how the devolved nations and the businesses there will be represented and resourced appropriately so that the interests of all parts of the UK will be properly represented?
George Hollingbery
Clearly, under the auspices of the draft regulations, we are looking at trade barriers. The Scottish Government have their own trade policy and trade exporting teams, and I have no doubt that they have a network overseas. Indeed, that network works closely with the UK network. There will therefore be avenues into this process for anyone from any devolved nation who wants to make a representation on any issue about a trade barrier. I hope that satisfies the hon. Lady.
Furthermore, we are expanding the market access team at the Department for International Trade to support that work. Our new Her Majesty’s trade commissioners overseas will spearhead and champion action on market access across our nine overseas regions. We are upgrading our capability to deal with market access barriers, including our IT infrastructure, better to enable collaboration and work not only within DIT and across posts but across all Departments, for which many trade barriers will be relevant.
As the UK delivers an independent trade policy for the first time in 40 years, the Department for International Trade is here to ensure that our businesses have as many exporting opportunities as possible. Part of that is to resolve trade barriers as effectively as possible. I am confident that the Government’s approach is the right one.
George Hollingbery
I will start by addressing the point made by my right hon. Friend the Member for West Dorset and by the shadow Minister. Given the rather complex circumstances, and to ensure that I get this right, I think it only wise for the Department to back up what I say by writing to the Committee. However, my understanding is that we need to pick between trade remedies and trade barriers. As far as trade remedies are concerned, we will be named as a co-sponsor or co-worker—whatever we call it—when any complaint is brought by the European Union during the implementation period. I will need my officials to write to the Committee to confirm that point absolutely, because I do not wish to mislead the Committee.
As far as trade barriers are concerned, I see no reason why we would need to work particularly with the EU on that front. We will have our own independent trade policy and we will be able to move forward and make the sorts of approaches that we need to make. We will have established our WTO schedules, both for goods and for services, and should therefore be in a position to make our own complaints on that basis. Indeed, we will absolutely be able to make our own representations to individual Governments and bilateral partners, as we do already.
I am not sufficiently confident in my answer about the trade remedies side to assert my righteousness today, but I will clear that up. On trade barriers, I believe that we will be able to carry on with our new regulations, or rather lack of regulation, under our non-statutory system. If I am incorrect about that point, I will make it clear in my note to the Committee.
Bill Esterson
I am grateful for the Minister’s comments on both trade remedies and trade barriers. He spoke about the confidence he has in our ability to lay our own schedules at the WTO. He will know, as will other Members, that there are countries that are suggesting that they may object. It only takes one country to do so. What sort of indications and discussions have been had in very recent times—in the last few days—that suggest that those objections have been removed? Without that, this would be very difficult to achieve.
George Hollingbery
I absolutely would not agree. We have laid our schedules at the WTO. The EU has been operating on uncertified schedules since 1995. It is in the midst of dealing with that non-certification, with up to 25 members, not 28. It is absolutely the case that, at the moment, the EU is operating on uncertified schedules.
We are quite clear that, from a WTO point of view, it is entirely proper for a nation to lay its schedules and then operate on them, and in the meantime negotiate with anybody who may have problems with those schedules. That is exactly what we are engaged in doing. The Secretary of State has talked about operating an article 28 procedure, in which the statutory route in WTO law is dealt with, and there is a very well understood path through which one then negotiates with bilateral partners on the objections they have to the schedules. That does not mean that a country cannot work at the WTO or have representation at the WTO on those schedules. They are there and they are laid.
I will answer one or two of the other questions asked by the hon. Member for Sefton Central. As I hope I have reasonably demonstrated in the debate, the current regulation is complex, inaccessible and, in particular, locks out small business. Is it a success? No, we can say absolutely without any question that it is not a success. There have been 70 complaints this year, despite the fact that there is a trade barrier regulation within the European Union. That demonstrates to me that there are still issues and barriers.
There is not this magical soft power idea that the hon. Gentleman suggests—that somehow because the trade barrier regulation exists, people are not contravening trade barriers. They plainly are: 70 complaints have had to be dealt with. We see plenty in the Department for International Trade from the UK point of view; I have been involved in several. I absolutely do not take his point that this is somehow a piece of soft power that prevents trade barriers arising.
Bill Esterson
It is important to clarify exactly what I said. I did not say that they were not arising; I said that they were resolved, without the need for recourse to the statutory part of the procedure. That is a very different point to the one the Minister appears to have answered. I accept that he may have misinterpreted my words, but that is not what I was saying.
George Hollingbery
Quite plainly, all I can tell the hon. Gentleman is that we deal with a great many of these issues outwith the UK and outwith the EU; we have issues with trade barriers with third-party countries that are nothing to do with the EU. They arise; we solve them. That says to me that the regulation is not required and, in fact, what exists at the moment is pretty much what we intend to do in the future. We intend to improve upon it, systematise it and make sure that there is an easily accessible route into it, and an easily accessible stream of information coming out of it to both small and large businesses, so that their business decisions can be informed by the information we have received and/or the information about what has been achieved in terms of getting rid of the trade barrier. I do not accept his contention at all. Dealing with such issues informally seems to work perfectly well for us already. I think it can work better, the Department thinks it can work better and we are progressing to make it work better.
The hon. Gentleman asked about the financial impact on UK businesses. To be absolutely clear, the explanatory memorandum attempts to estimate what the regulation would cost UK business, not what non-compliance is and how it operates and whether somebody is already complaining through it. In essence, if one is repealing a regulation, it is unlikely to put any particular cost directly on business because of the legislation.
We consulted widely with stakeholders who have engaged with us on trade barrier issues. There was no great enthusiasm among them for retaining the regulation. One of our correspondents said that they had used it in the past and it had worked for them, but my experience of this user is that they use the non-statutory route far, far more often and had not used this route in a long time. They seem to us to be sanguine about the fact that we chose to do this through a non-statutory route and improved the way that we were doing it.
The hon. Gentleman asked what the TRA might do in this regard, to take over the TBR regulatory powers. The answer is that the Trade Remedies Authority is there to deal with trade remedies and not trade barriers. It is there to deal with subsidies, dumping and safeguarding. Likewise, he asked about the progress of statutory instruments that are required on subsidies, dumping and safeguarding, which are clearly to do with the Trade Remedies Authority, rather than trade barriers. They will come to the House in due course.
Regarding the non-statutory route that we currently operate, we have extremely good relationships with business about the way we represent them overseas, in all theatres and on all issues. In the admittedly short time that I have been in post, I have found nothing but praise for our network overseas and how it represents businesses. Every time I meet with businesses out in the field, they say to me that they have excellent relationships with the staff on the ground in different countries and that if they raise an issue about trade barriers, it is dealt with. Of course, it is not always solved, but out in post and indeed here in London, in DIT, we follow up every one of those issues. We address the third-party country, we attempt to resolve the issues, and in rare cases where we do not manage to solve the issue, we take further action. Currently, that is done through the Commission, but later it will be through our own seat at the WTO.
The hon. Gentleman asked about industry associations and an appetite for feeding into Government on this issue. We believe there is a case for consulting with industry. Clearly, it would be strange if we did not, particularly in steel and ceramics where there are lots of issues to be dealt with. There are a lot of resources across Government, where forums already exist, and we are looking at using those more as a Department. As yet, how we will do that is undefined and not scoped, but we recognise that there is a resource there and the appetite of industry to contribute.
There is a narrow point to make on the devolved authorities, which will have access to the Department for International Trade’s database on all of these ongoing issues and all the actions that are being taken to try to resolve all the potential barriers.
I promise to write to the Committee to clarify the position on what we will do with trade remedies and trade barriers post-exit, but before the end of the implementation period.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Trade Barriers (Revocation) (EU Exit) Regulations 2018.
Post-Council: EU Foreign Affairs Council (Trade)
George Hollingbery Excerpts(5 years, 5 months ago)
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The Minister for Trade Policy (George Hollingbery)
The EU Foreign Affairs Council (Trade) took place in Brussels on 9 November 2018. I represented the UK at the meeting. A summary of the discussions follows.
WTO modernisation
Member states unanimously supported the Commission’s approach to modernising the World Trade Organisation (WTO).
The discussion focused on the blocking of new appointments to the WTO appellate body and what this meant for its ability to function as the most urgent and serious issue. The functioning of the WTO more generally was also discussed. I highlighted the significance of these issues, and the need for political engagement to support the international rules-based system. I also highlighted the importance of engaging developing countries in the process of reforming the WTO.
Legislative files
The presidency provided updates on foreign direct investment screening and the bilateral safeguard regulation. The Commissioner is seeking political agreement on both files by the end of November. The Commissioner also called on Council to agree a mandate for the recast of the existing EU dual-use regulation by the end of 2018.
Ongoing trade negotiations
The Commissioner updated the Council on the state of play of ongoing EU trade negotiations. On EU-Vietnam, the Commission had adopted and published the English language text for Council decisions on the signature and conclusion of the free trade agreement (FTA) and the investment protection agreement (IPA). The Commissioner also informed Ministers that the European Parliament was due to vote on the EU-Japan economic partnership agreement (EPA) in December and on the EU-Singapore FTA and IPA in early 2019.
The Commission hoped to conclude negotiations with Mercosur and to present the Mexico agreement at the earliest opportunity ahead of the European Parliament elections in spring 2019.
Negotiations were also progressing with Chile, Indonesia, Australia, New Zealand and Tunisia, and on a multilateral investment court (MIC).
Implementation of EU FTAs
The Commissioner presented the EU’s second annual implementation report. She highlighted how FTAs remove trade barriers and open markets, while allowing protection of sensitive products. She also noted that insufficient preference utilisation rates can leave some of the potential from FTAs untapped.
Member states welcomed the report. I highlighted the UK’s ratification of CETA on 8 November and suggested that more could be done to demonstrate the development impact of economic partnership agreements.
[HCWS1092]
Oral Answers to Questions
George Hollingbery Excerpts(5 years, 5 months ago)
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Daniel Zeichner (Cambridge) (Lab)
The Minister for Trade Policy (George Hollingbery)
The Government have been clear that future imports to the UK must meet UK food safety, animal welfare and environmental standards. We will not compromise our standards in pursuit of a trade agreement.
Daniel Zeichner
The Minister knows full well that UK consumers expect safe, high-quality food. The Secretary of State has assured us that he has 40 trade deals ready to go at the drop of a hat. Can the Minister tell us how many of those trade deals embed the exact same high food standards?
George Hollingbery
The 40 deals to which the hon. Gentleman refers are, of course, the deals that the EU currently has with partners. Our ambition is to transition those trade deals exactly as they are—or at least as closely as possible—and they contain the current measures.
Neil Parish (Tiverton and Honiton) (Con)
We not only have really high welfare and hygiene standards, but reduce much antibiotic use by producing good-quality food. Can we be assured that food that does not meet those standards will not come into the country and that those standards will not be frittered away in an agreement on service industries?
George Hollingbery
I can say to my hon. Friend the Chair of the Environment, Food and Rural Affairs Committee that we absolutely have that intention. It is very straightforward. When I am abroad, I find on a regular basis, as the Secretary of State has said, that it is the commitment to high standards in the UK market that so motivates consumers to buy our products. Not only is having these high standards the right thing to do, but there is no rational commercial incentive to do otherwise.
Emma Little Pengelly (Belfast South) (DUP)
The so-called backstop would trap Northern Ireland in a common regulatory area under EU rules for our key export industries of manufacturing, agriculture and agri-food. What assessment has the Department made of the impact of that on Northern Ireland’s ability to participate in UK-wide trade deals in relation to those key exports?
George Hollingbery
The Government have only just published the withdrawal agreement, which will be before the House shortly, and the Department will assess all issues of that sort in the context of the proposed agreement.
Bill Esterson (Sefton Central) (Lab)
The Secretary of State spoke earlier of how highly regarded UK goods are. That is true of successful exports such as dairy, smoked salmon and vegetables. I noticed that the Minister made a commitment in his initial answer to not dropping our food standards. Given that the United States has made it clear that that is exactly what has to happen to agree any future trade deals, will he now rule out any trade deals, including with the United States, that see any drop in our very high and successful food standards?
George Hollingbery
I can only refer the hon. Gentleman to the answer I gave moments ago. We are scoping potential trade deals with all the partners with whom we have announced that we are seeking to do free trade deals, and our position on these standards remains exactly the same: we will not be changing UK law in this regard.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Kerry McCarthy (Bristol East) (Lab)
The Minister for Trade Policy (George Hollingbery)
My ministerial colleagues and I regularly meet our counterparts from the Department for Environment, Food and Rural Affairs to discuss a range of issues. When it comes to products imported to the UK, quality, safety and performance will continue to be paramount. Without exception, imports must meet all the relevant UK product rules and regulations.
Kerry McCarthy
We have heard quite a few times this morning that there will be no lowering of standards when it comes to imports under future trade deals, but the Government rejected an amendment to the Trade Bill to include a non-regression clause. Will they now support an amendment to the Agriculture Bill, which we will be discussing in Committee later today, that would allow for the same so that we can be sure that our food and our safety standards are protected?
George Hollingbery
I have noted some of the discussions on the Agriculture Bill, which I read earlier today, and I have noted the discussions on this. I have to say, and the hon. Lady should take some real encouragement from this fact, that the standards on these issues in the UK are already higher than they are in the EU. That, I think, should give the House confidence as to the UK’s intention on this. I will repeat one more time: there is absolutely no intention that the Government will reduce their standards in this area.
Liz McInnes (Heywood and Middleton) (Lab)
Mrs Kemi Badenoch (Saffron Walden) (Con)
The Minister for Trade Policy (George Hollingbery)
As my hon. Friend will know, the Government have outlined to the House the progress that new free trade deals will make, and consultations on four potential deals were in the public realm from July to October. Those potential deals include the US, Australia, New Zealand and the comprehensive and progressive agreement for trans-Pacific partnership, and we are currently in the process of analysing the extensive responses that we received.
Christian Matheson (City of Chester) (Lab)
Pre-Council: EU Foreign Affairs Council
George Hollingbery Excerpts(5 years, 6 months ago)
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The Minister for Trade Policy (George Hollingbery)
The EU Trade Foreign Affairs Council will take place in Brussels on 9 November 2018. I will represent the UK.
The substantive items on 9 November will be:
Legislative items: information from the presidency about the regulation on foreign direct investment screening; information from the presidency about the regulation on implementing horizontal bilateral safeguards in certain agreements.
Non-legislative items: the state of play of World Trade Organisation modernisation, and an update on the state of play of the ongoing EU trade negotiations. The Commission will also present a report on the implementation of free trade agreements.
[HCWS1067]