Future Free Trade Agreements

Geraint Davies Excerpts

Thursday 21st February 2019 Commons Chamber

[Dr Fox]

The UK as well as the EU have been at the forefront of improving the investor-state dispute settlement system and its transparency; in particular we supported the UNCITRAL—United Nations Commission on International Trade Law—rules on transparency that became effective in 2014. We have always seen this as being a necessary part of agreements, but we do absolutely agree that transparency is one of the ways to give greater public confidence in the system itself.

It is predicted that the share of global GDP of the seven largest emerging economies—Brazil, China, India, Indonesia, Mexico, Russia and Turkey—could increase from around 35% to nearly 50% by 2050, which would mean that they would overtake the G7, although of course even with more mature economies the International Monetary Fund has predicted that the United States will grow over 50% faster than the euro area this year, at 2.5%. This historic shift in global economic and demographic power will reshape the opportunities of international trade in the years to come, perhaps faster than many expect.

We cannot wish away this change and nor should we. Providing the employment and economic growth the UK needs means navigating this shift successfully. Happily, the United Kingdom is well placed to take advantage of these new opportunities. British businesses are superbly positioned to capitalise on this new environment, as both established and growing economies drive demand in precisely those sectors in which the UK excels. Anyone who has travelled widely will have seen how impressed global businesses and consumers are by the high quality of British goods and the professionalism of British services.

[Geraint Davies (Swansea West) (Lab/Co-op)]

But surely Team EU collectively, with Britain in it, would have much more negotiating leverage against those very large emerging markets. An extreme example would be China. We are dwarfed by China but, as the EU, we can negotiate the best deal. The EU is negotiating deals with Singapore, Japan and others. Surely the Secretary of State must agree that we would get a better deal as part of the EU than isolated as a dwarf outside it.

[Dr Fox]

I really find it quite insulting that the United Kingdom, the fifth biggest economy in the world, should be described as a dwarf by the hon. Gentleman. We are one of the most successful global economies. It is also worth pointing out that the European Union does not have a trade agreement with China or with the United States because it was too difficult to get an agreement with the 28 nations in those negotiations. He is right to suggest that economies of scale have a role in trade agreements, but so also does the ability to conclude those agreements and to ratify them. That has shown itself to be easier when dealing with single nations, which is why Australia has a trade agreement with China but the European Union does not.

--- Later in debate ---

[Geraint Davies]

Does my hon. Friend think it is a cruel irony that Margaret Thatcher was instrumental in creating the single market and getting Japanese car companies to come here as a platform to access that market? The EU-Japan trade deal is one of the reasons they have gone there. The other imperative is that, had we not been Brexiting, those car manufacturers would in all probability stay in the EU, in Britain, where they are already. Given that car workers who voted to leave are now finding that they voted to leave their jobs, should they not have a final say on whether we leave at all? They certainly did not vote to lose their jobs. It is completely farcical.

[Barry Gardiner]

My hon. Friend tempts me into a discussion about Brexit, but I am sure that if I were to be tempted, Madam Deputy Speaker, you would be on my case in a flash, urging me to deal with the matter of future free trade agreements instead.

This debate was originally promised at the last International Trade oral questions on 7 February, but anyone reading Hansard will not have been blind to the fact that the commitment was made as a response to an entirely different question. We did not ask for a general debate on putative trade deals with specific countries. What was asked was when the Government would bring forward a debate about the scrutiny of trade deals. Even if the Secretary of State has not yet got round to reading my eight-page letter of 21 January on the subject—there are many copies on this side of the House if he wants a spare—he cannot have been unaware of the matter, because, to his embarrassment, the Trade Bill’s progress in another place has been delayed as the Government lost a crucial vote.

Their lordships required the Government to set out their proposals for the process, the consultation, the mandate and scrutiny of making international trade agreements in the first place, including:

“Roles for Parliament and the devolved legislatures and Administrations in relation to both a negotiating mandate and a final agreement.”—[Official Report, House of Lords, 21 January 2019; Vol. 795, c.506.]

The House will note that no such proposals have yet been brought forward, so perhaps the Secretary of State will tell us what progress he has made in this respect and when he intends to introduce such a debate.

Today’s debate certainly cannot be considered to constitute that important discussion. It is a general debate on a Thursday, in a week that was intended to be recess, talking about potential agreements before Parliament has even debated the whole process of consultation, impact assessment, negotiating mandate, parliamentary debate, transparency of negotiation, ratification and subsequent review and periodic appraisal that should constitute a framework within which the Government intend to bring such agreements into being.

Furthermore, people watching today’s debate will be incredulous that, given that just last week the Secretary of State was forced to come to this House and admit that he had thus far failed to replicate the 40-odd trade agreements that he promised would be ready to sign one second after midnight after Brexit, last week only five had been agreed, nine were off track, 19 were significantly off track, four were said to be impossible to complete by 29 March and two were not even being negotiated. If there has been progress since then, I will happily give way to the Secretary of State if he wishes to advise the House. No. In that case, I take it that his silence is an acceptance that that is the state of play of the agreements that we currently have. Indeed, the fact that we are instead discussing a host of entirely new trade agreements when we have yet to secure trade continuation with all the countries with which we already enjoy a trade agreement by way of our EU membership rather calls into question the Government’s priorities at a time when businesses are screaming for certainty, clarity and continuity.