EU Free Trade Agreements

Debate between George Hollingbery and Chris Leslie

Thursday 24th January 2019 Commons Chamber

[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.