CPTPP

Greg Hands Excerpts

Wednesday 21st April 2021 Westminster Hall

[Greg Hands (Chelsea and Fulham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. This has been one of the finest Westminster Hall debates that I have attended in 16 years as a Member of Parliament. It is a genuine pleasure to be able to respond to it.

I pay tribute to my hon. Friend the Member for Wycombe (Mr Baker) for securing the debate. He made an excellent speech that made my case for CPTPP as well as I could. He gave a brilliant exposition of the benefits. He rightly points out that he was an early enthusiast for joining the CPTPP. Over the years, he has been a forceful advocate for a sovereign, independent trade policy. I know he has welcomed the FTAs that we have already agreed with 67 countries, with Serbia added to the list this week, and with the EU itself, as he pointed out.

I hope to cheer him further by outlining our plans to unleash even more of Britain’s trading potential through accession to the comprehensive and progressive agreement for trans-Pacific partnership. That is quite a mouthful and comes with the world’s hardest-to-pronounce acronym, the CPTPP—in trade, the longer the term, often the more important the content, and that is true of this agreement.

We know that 2020 was a time of unprecedented challenge on every level, but CPTPP is going to be part of the future of this country. Our accession to CPTPP will be central to our endeavour to build back better and to assist our economic recovery, and our preparations are advancing at pace. As colleagues know, on 1 February we submitted our notification of intent to begin the accession process. That was the first formal step before formal negotiations start later in the year. Joining CPTPP would give British firms access to a free trade area worth £9 trillion, made up of 11 like-minded nations that share our commitment to free trade, international co-operation and the rules-based system.

Britain is the first new country to apply to join this trade partnership since it was established in 2018, with big economies such as South Korea, Thailand and Taiwan. A good point was made by my hon. Friend the Member for Gloucester (Richard Graham), who knows the region incredibly well, as the Prime Minister’s trade envoy to Malaysia and the Association of Southeast Nations region. All of those also show interest in membership.

It is a high-standards agreement between sovereign nations, which together account for 13% of global GDP. UK membership would increase that share by nearly 20%, to 16% overall. As my hon. Friend the Member for Wycombe pointed out, we are not a small nation. Equally, nothing in CPTPP will impinge on our domestic right to regulate, which was one of his key questions.

This is very much a business-focused agreement, removing tariffs on 95% of goods traded between members and reducing other barriers to trade. The UK already does more than £110 billion-worth of trade with individual CPTPP members, and the average growth rate is 8% per annum. Some of our closest trade allies—Japan, Canada, Australia, New Zealand and Singapore—are there, as are big actual or potential markets, such as Mexico, Vietnam and Malaysia, but our membership would take those trade ties to another level, opening up even more opportunities for businesses of all kinds and all sizes across the United Kingdom, spurring growth, generating jobs, delivering prosperity the length and breadth of our country and helping us to level up opportunity nationwide.

This is good news for all regions and nations of the UK, which can strengthen their already lucrative trade ties with these markets. In 2019, for example, more than £3 billion-worth of goods were exported to CPTPP nations from the east midlands alone, together with £2 billion-worth from the north-west of England and £2.4 billion-worth from Scotland. With accession, those bonds of prosperity are set to strengthen and deepen in the years ahead.

To look at specific benefits for Britain in cutting-edge sectors that are shaping the world of tomorrow, from digital trade to tech and automation—these points were made by my hon. Friends the Members for Wycombe and for Milton Keynes North (Ben Everitt)—accession would allow us to work even more closely together with other members on the development of modern digital trade rules that facilitate free and trusted cross-border trade flows and remove unnecessary barriers to business. That point was also made extremely well by my hon. Friend the Member for East Surrey (Claire Coutinho), who spoke first in the Back-Bench contributions.

The depth and breadth of the CPTPP’s e-commerce chapter provide a platform for the UK to help to shape, together with big global players in the sector, the emerging digital trading rulebook. These markets offer exciting new opportunities for British tech innovators as we seek to bind the UK, which is after all Europe’s tech capital, ever more closely with the dynamism of the Asia-Pacific region, unlocking ever greater digital trade potential between us as we build on the nearly £19 billion-worth of digitally delivered services that the UK exported to CPTPP countries in 2019. Those points were localised really well by my hon. Friend the Member for Milton Keynes North in his “Global MK” speech, which I think will have gone down very well in his local area.

Accession would also make it easier for British business people to travel between member countries via the potential for faster and cheaper business visas—a point made very well by my hon. Friend the Member for Don Valley (Nick Fletcher). To return to a key question from my hon. Friend the Member for Wycombe, access to the agreement’s dedicated chapter on small and medium-sized enterprises will ease barriers to trade for small firms by cutting tariffs and reducing red tape, giving thousands of British SMEs greater access to these vibrant markets. A really important feature of modern free trade deals is the SME chapter. A free trade agreement can seem incredibly forbidding—a typical free trade agreement has 700 or 800 pages. Someone running an SME will not have the time, let alone perhaps the inclination, to read a 700 or 800-page agreement. The idea of the SME chapter is that it allows a company to navigate the free trade agreement and take advantage of things such as Government publicity about what is available there; it eases the passage for an SME and particularly a first-time exporter.

In addition, there is the potential for swifter elimination of tariffs on key British exports, including whisky. I look over to my friend from the Democratic Unionist party, the hon. Member for Strangford (Jim Shannon). There is that potential on whisky tariffs. Of course, everybody likes to think about Scotch, but what about Irish whiskey? I have a very good relationship with the Irish Whiskey Association, and we also always promote Irish whiskey—as well as cars, a point of particular relevance to my hon. Friend the Member for Dudley North (Marco Longhi), and the automotive industry.

We could also benefit from the rules-of-origin provisions, which mean that goods produced in any country within the CPTPP will be classed as originating in the free trade area. To give just one example, cars made in the UK could use more Japanese-made parts, such as batteries, and still qualify for tariff reductions when the completed cars are exported to other CPTPP members—for example, Canada. They would count as being of qualifying CPTPP origin. That is a win-win scenario for the British economy.

On parliamentary scrutiny, which has been raised a couple of times, this Government are committed to transparency and we will ensure that parliamentarians, UK citizens and businesses have access to information on our trade negotiations. On 7 December last year, the Secretary of State for International Trade made a written statement outlining the transparency and scrutiny arrangements that will apply to our new FTAs. I am pleased to confirm that those will also apply to the CPTPP negotiations. Before the launch of formal negotiations, we will publish our objectives, alongside a response to the public consultation that has already been held, which the Opposition Front-Bench spokesman, the hon. Member for Sefton Central (Bill Esterson) referred to, and an initial economic scoping assessment, which the Chair of the International Trade Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), referred to. He seems, however, already to have made up his mind about what will be in the economic assessment, but I shall see him later, when I appear before his Committee, and perhaps we will continue the discussion at that point.

We will continue to keep Parliament and the public informed of the progress of negotiations via regular updates, working closely with the relevant Committees in both Houses. My hon. Friend the Member for Wycombe sought an explainer. That is exactly what a lot of the documentation is intended to do—to explain the potential and actual benefits from the free trade agreement. As to the point that the hon. Member for Strangford made about a full debate, I would welcome one. I welcome this morning’s debate, and in the Department for International Trade we welcome the opportunity to explain and expand on Britain’s free trading future.

Most of the questions raised by the hon. Member for Sefton Central will, I think, be answered when we publish the negotiation objectives shortly, but to deal with one of his points—the idea that CPTPP will be a back door for a trade deal with China—I cannot make it clearer that there are no plans or intentions for a UK trade deal with China. It is very unlikely that China would meet the requirements for the CPTPP at the moment, and it is worth not forgetting that it is subject to the veto of existing CPTPP members, which, as the hon. Gentleman pointed out, do not yet include the UK. However, we might ask whether China would be welcomed by the existing members of the organisation.

We heard some rather tired, familiar arguments from the SNP Front Bench. I think that the party is always much more interested in debating Brexit than the UK’s trading future. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) did not like CPTPP, and I was not the least bit surprised, because the SNP has never supported any trade agreement negotiated by either the European Union or the United Kingdom. The hon. Gentleman may have a nice backdrop, but as to the content of his speech, it expounded the virtues of EU trade agreements, not a single one of which the SNP ever supported. The SNP voted against the Canada deal and it failed to support the Japan deal and the Singapore deal. Those deals were negotiated by the EU, which the hon. Gentleman now praises; so I do not think we will take any words from him. I did not for a moment expect him to support the CPTPP trade deal. The SNP is anti-trade, anti-Scotland and anti-Scotland’s best economic interests.

The hon. Member for Strangford raised an important point about ISDS. I should point out that ISDS procedures are already in place in 90 bilateral UK trade deals. We have never lost a case. We strongly believe that we have nothing to fear from ISDS, but we will shortly publish our negotiation objectives, which will include that important question.

[Richard Graham]

On the point from the SNP about what is really in Scotland’s best interests, does my right hon. Friend agree that it is curious that at this time, when those of us who are trade envoys to the south-east Asian region are doing so much to push for greater access for some of our great drink and food products, including Scotch whisky, the hon. Gentleman cannot see the advantages of the dialogue partner status with ASEAN and the TPP arrangements that the Minister is pursuing?

[Mr Philip Hollobone (in the Chair)]

Minister, you have three minutes.

[Greg Hands]

Thank you, Mr Hollobone. I will not need three minutes, but I will answer my hon. Friend’s excellent intervention. I am always shocked by the insular nature of the SNP’s approach to trade and the fact that, by the look if things, it does not see any of the advantages of any trade agreements with anyone, but particularly with the far east. The potential for growth for Scottish produce, in particular, in the far east is huge—not just whisky, but also Scottish seafood produce and so on—but the SNP failed at each available opportunity, even when we were members of the European Union, to support any of those trade deals.

I go around the world battering down barriers, particularly to Scotch and Irish whiskey. I have been in Peru and engaged on its metal test. I have been in Taiwan and engaged on its lack of requirement for a lot code on bottles, which incites the counterfeiting of alcohol, and so on. We as the UK Government engage all the time on behalf of Scottish goods and services exports right the way around the world, and we make sure that Scotland’s voice is heard around the world and Scottish exports are boosted.

We have been consistently clear that the terms of UK accession to CPTPP must be right for British companies, right for British consumers and right for British farmers. We will negotiate firmly but fairly, and our red lines are well known. The NHS remains off the table, as do our world-class standards, from food and animal welfare to the environment—a data protection point brilliantly raised by my hon. Friend the Member for Ynys Môn (Virginia Crosbie).

Accession to CPTPP gives the UK the ability to foster stronger diplomatic and trading links with nations in the Indo-Pacific region, which is at the vanguard of change in the global economy and will be the engine of growth for decades to come. Joining this agreement will help us to harness the export and investment opportunities that lie before us as the world resets, recovers and returns to growth in the wake of the pandemic, and as we build back better, greener and more sustainably.

I hope my remarks have given a flavour of the vast potential that our membership of the CPTPP promises to bestow during this exciting time; its geostrategic importance, which was raised by my hon. Friends the Members for Wycombe and for Gloucester and others; the Indo-Pacific tilt, and the fact that we are doing this with some of our best friends; and the huge markets that are involved, with great potential. I thank my hon. Friend the Member for Wycombe again for securing this invaluable debate.