EU-US Trade and Investment Agreement

Gordon Banks Excerpts

Thursday 18th July 2013 Commons Chamber

[John Healey]

Investment is already an EU competence. The deal is not about controlling the flow of investment, but about creating the conditions in which greater investment can flow across the European Union, including to Britain. All the impact assessments, including the one that the hon. Gentleman cited earlier, suggest that that would happen if we secured a comprehensive agreement.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Does my right hon. Friend agree that the UK economy would benefit from an opening up of the US economy, and that the Government should seek to gain access to that marketplace for our small and medium-sized enterprises to provide a stimulus to the UK economy?

[John Healey]

I suspect that in my hon. Friend’s area, as in mine, many of the important and good small and medium-sized companies depend on trade and export for their success. The agreement certainly has the potential that he mentions, but realising it requires the Government to ensure that it does benefit small and medium-sized firms.

One or two of my friends have said to me recently, “Look, you are a Labour politician on the centre left. Why on earth are you supporting a deal that looks set to reinforce the cause of global capitalism?” I have three answers to that. The first, quite simply, is jobs. The success of many good south Yorkshire firms depends on increasing opportunities for export and trade. This deal could bring that boost to jobs and the economy in south Yorkshire, as well as the whole of Britain.

Secondly—this may break the sense of cross-party unity—I see the deal as a way of regulating global capitalism. It is indisputable that the EU and the US have some of the highest standards of consumer safeguards, environmental protection, employment rights, legal process, trade rules and regulations. Together, as the two biggest economies, we have the opportunity to set standards and regulations that could become the benchmark, or gold standard, of any bilateral and multilateral deals.

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[Gordon Banks (Ochil and South Perthshire) (Lab)]

I consider this to be a very important issue. I want any new trade agreement between Europe and the United States to have a substantially positive impact on the economy of Britain and, indeed, that of Scotland. I think we can all agree that international trade deals are vital to the creation of long-term economic growth and jobs in a world that is becoming smaller and smaller.

I was pleased to note that the negotiations on this agreement were formally launched, at Lough Erne on 17 June, under the UK presidency of the G8. When the G8 last met in the United Kingdom, it was hosted by Gleneagles, which is in my constituency and which is perpetually linked with our attempts to deliver improvements in the world through the millennium development goals. I hope that Lough Erne may be remembered for playing a massive role in the equalising of access to the United States market for United Kingdom and, indeed, European Union businesses.

I congratulate my right hon. Friend the Member for Wentworth and Dearne (John Healey) on securing the debate. As he told us earlier, the United States and the European Commission have suggested that the deal could be completed by the end of 2014. As we know, it is a very complex deal. I may be a pessimist, but I rather fear that at some point we may be dragged into the 2016 presidential election campaign if we hit a road block, and I hope that matters do not stagnate during 2014 and 2015. I assume that, once the deal is done, it will have to be ratified in this place and in another 28 national Parliaments—including the United States Congress—as well as in the European Parliament, and I am also slightly concerned about the time that will be taken by its journey through 30 Parliaments.

Free trade agreements are very important to Scotland. For instance, the agreements between the European Union and Singapore and between the EU and Colombia and Peru are vital to the Scotch whisky industry, which exported £4.3 billion worth of whisky last year. The United States is the top whisky export marketplace: more than £700 million-worth was exported to it in 2012. It goes without saying that there is no expectation that the negotiations will have any damaging effect on Scotch whisky exports, but I have given that example to demonstrate how important and valuable such agreements can be when UK businesses seize the opportunity to promote the best of British around the world.

It is possible that at the time the agreement is approved, Scotland will be facing an independence referendum. I fear that, if Scotland votes for independence, we shall be very short-term beneficiaries of this piece of work. Perhaps the Minister will tell us at some point whether he has received any representations from the Scottish Government about the challenges that Scotland would face if it became independent and, being outside the European Union, could not benefit from the agreement. Indeed, one has to wonder what would happen to all the benefits of all the other free trade agreements negotiated by the EU if Scotland became independent. What would be the impact on, for instance, Scotch whisky production, exports and jobs?

Let me now return to more mainstream arguments. As my right hon. Friend pointed out, it is important for us to be able to explain the benefits of the deal to the population of the United Kingdom so that our constituents understand what it means to them in their daily lives.

The deal has the potential to be the largest trade deal of all time because the building blocks of trade between the EU and the US are already in place. As my right hon. Friend the Member for Wentworth and Dearne said earlier, one major British car manufacturer has already told Danny Lopez, the British consul general in New York, that it will save about £130 million annually from the elimination of tariffs as part of this deal. There are real gains and benefits for the UK and UK manufacturing from this difficult set of negotiations, therefore. The Government must ensure there is a road map that allows British SMEs to reap the benefits of this deal, because we will get real growth in this economy from the manufacturing and exporting SMEs.

It is difficult to conclude without referring to an issue that has hung over this debate: our membership of the EU. I do not always agree with the statements of Ministers in this Government, but I was pleased to hear the Minister without Portfolio say it would be very difficult for a trade agreement of this sort to continue if the UK left the EU. He might want to remind some of his party colleagues of the benefits of being part of the world’s largest trading bloc. That is important to the UK.

[Mr Jenkin]

What is the basis for this assertion? The evidence is that small countries find it easier to do trade deals and big trading blocs find it very difficult. I think of Switzerland, for example, and the EU’s trade deal with Korea.

[Gordon Banks]

I fundamentally disagree. The Minister without Portfolio will tell the hon. Gentleman where he is wrong in his thinking. There is no doubt that if he speaks to the Scotch whisky industry it will tell him about the benefits of being in a large trading bloc. The Scotch whisky industry has benefited, and if the hon. Gentleman will not take cognisance of that, he will not take cognisance of anything.

This is a really important opportunity for the UK. I want it to be important for Scotland, and I want it to be important for Scotland in the UK and in the EU.