Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Greg Hands Excerpts

Report stage
Tuesday 19th March 2024 Commons Chamber

[Gareth Thomas]

My right hon. Friend is absolutely right. Ministers will have heard his point; whether they will act on it remains to be seen, but I certainly hope they do. If we are lucky enough to be elected at the next general election, we will certainly work with the ILO to try to drive better adherence to its conventions.

Last but not least, I share the ambition of my hon. Friend the Member for Walthamstow, who made a powerful speech, for a much more open dialogue on trade and the axing of more of the red tape, bureaucracy and barriers to trade with European markets thrown up by the poor negotiating skills of the last Prime Minister but two.

There remain, in particular, serious concerns about scrutiny of trade agreements and about the damage that ISDS provisions could do, so we will, with the leave of the House, press new clauses 4 and 5 to a vote.

[The Minister for Trade Policy (Greg Hands)]

I thank colleagues for their contributions to the debates on this important Bill. Let me begin with the new clauses relating to new accessions to the CPTPP: new clause 1, tabled by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith)—who always demonstrates his passion on this important matter—new clause 4, tabled by the hon. Member for Harrow West (Gareth Thomas), and new clause 11, tabled by the hon. Member for Chesham and Amersham (Sarah Green).

As the House may know, there is no rule within the CPTPP that requires new applicants to be dealt with on a “first come, first served” basis. Rather, it has been agreed within the group that applicant economies must meet three important criteria—called the Auckland principles—and it is on those key principles that applications will be assessed. Applicants must: first, be willing and able to meet the high standards of the agreement; secondly, have a demonstrated pattern of complying with their trade commitments; and thirdly, be able to command consensus of the CPTPP parties. Those strong criteria will be applied to each accession application. It is right that we in the United Kingdom, as a new member of the CPTPP group, work within the principles of the group to achieve a consensus decision.

I remind the House that while the UK rightly participates in discussions on this topic with CPTPP parties, we will only have a formal say over an application post-ratification and entry into force of the agreement. It is therefore crucial that we ratify the agreement and become a party, so that we can work with CPTPP members decisively on each current and future application. With that in mind, it would not be appropriate for the Government to give a running commentary on individual applicants, not least because to be drawn on individual applicants now, ahead of the UK becoming a party to the agreement, could have an impact on our ability to achieve that important goal of ensuring that the CPTPP enters into force. I should also make it clear that our own accession process has set a strong precedent. The robust experience that the UK has undergone has reinforced the high standards and proved that the bar is not easy to meet for any aspirant.

Regarding the scrutiny of any hypothetical future accession, I can assure the House that any accession of a new party to the CPTPP would require an amendment to the terms of the CPTPP. Therefore, as with the UK’s accession protocol, our firm intention is that such a future accession would be subject to the terms of the Constitutional Reform and Governance Act 2010—the CRaG process. I assure the House that CRaG is applicable to plurilateral agreements such as the CPTPP. The Act makes no distinction between bilateral, plurilateral or multilateral treaties as outlined in section 25 of CRaG.

[Liam Byrne]

The Minister is being characteristically generous in giving way. We obviously sought a debate under CRaG for this treaty. The Secretary of State, who is now in her place, told our Committee that she supported that, but the Leader of the House then refused to make Government time available for that debate. What further assurances can the Minister give us that there would indeed be a debate if the treaty was changed in the way that he described?

[Greg Hands]

The Government’s position is unchanged. It is always the desire of the Government, as expressed by the Secretary of State in writing to the House and to the right hon. Gentleman as Chair of the Select Committee, to urge and to ask for there to be a debate, but that will always be subject to the availability of parliamentary time. In a little bit, I will discuss the opportunities that there have been to scrutinise the CPTPP, which have been manifold in recent years.

[Lloyd Russell-Moyle]

Will the Minister give way?

[Greg Hands]

I will give way a little later.

The Act makes no distinction between bilateral, plurilateral and multilateral treaties. In addition to Parliament being able to make its views clear through the CRaG process, let me remind the House that, as a dualist state, any legislation necessary to implement the treaty—such as alterations to tariffs legislation, to take a hypothetical example—would need to be fully scrutinised and passed by Parliament in the usual way. It is the long-standing policy of His Majesty’s Government not to ratify international agreements before all relevant domestic legislation is in place. Were Parliament to refuse to pass any necessary implementing legislation, ratification of an agreement would be delayed.

I thank my right hon. Friends the Members for Chingford and Woodford Green and for North Somerset (Sir Liam Fox) for their opening speeches. Both are strong supporters of the UK joining the CPTPP. Indeed, my right hon. Friend the Member for North Somerset, who is the former Secretary of State, initiated these talks back in 2017 with me at his side, and successive Secretaries of State have given maximum priority to doing so. I am now in my fourth stint in this role, and it is fantastic to see his and my vision in 2017 now nearing fruition and being very close to UK ratification.

My right hon. Friend the Member for Chingford and Woodford Green and I know that Parliament is perfectly capable of expressing a view on an international agreement and whether a country might join it, and the Government of the day would be very likely to take notice. In debates in this House over some years now, he has made clear his views on trade with China, has gained support and attention, and been effective in doing so. Indeed, he has helped to achieve changes in policy in relation to supply chains in Xinjiang, and I agree with his support for Taiwan —a full member of the World Trade Organisation—as an important trade partner for the UK. We are positive about this kind of debate in the House.

The right hon. Member for Birmingham, Hodge Hill (Liam Byrne), who chairs the Select Committee, mentioned the scrutiny that there has been in this House for the CPTPP agreement, and he doubted whether there had been four debates. I had a slightly nagging feeling that I may actually remember each of the four debates, so I went back and checked the four debates, which started with the very first one that I responded to in April 2021. There have been four debates in this House and in the other House on the CPTPP. There have also been two oral ministerial statements and 16 written ministerial statements, and five separate Select Committees have taken evidence from Ministers and senior officials on the matter. There has been a Trade and Agriculture Commission report and a section 42 report. This is not an under-scrutinised trade agreement—rather the opposite. As has always been clear, we want the CPTPP to expand to fast-growing Asia-Pacific economies. I also agree with the Auckland principles.

[Liam Byrne]

rose—

[Greg Hands]

Of course I will give way—if the right hon. Gentleman first concedes that this has been a well-scrutinised trade deal.

[Liam Byrne]

Not quite. I am grateful to the Minister for setting out the full history, but will he accept that the Secretary of State believed that we should have had a debate, under the CRaG principles, on the full treaty? This Bill covers only three of 30 treaties. It is a matter of disappointment to many of us in the House that even though the Secretary of State no doubt argued vigorously and passionately for the debate, the Leader of the House was unable to grant us time. That is not necessarily the precedent that we want to establish for further trade treaty scrutiny.

[Greg Hands]

Of course, the right hon. Gentleman was a Minister in the last Labour Government, and he will remember that there are the vagaries of time available. Making an application to say that we would like there to be a debate is not the same as those who run the parliamentary timetable agreeing to there being one.

Let me move on to the new hon. Member for Kingswood (Damien Egan), who made a very accomplished and well delivered maiden speech. He spoke fondly of predecessors whom I know and like, such as Roger Berry and Rob Hayward. He won a keenly contested by-election—I have been to a few by-elections in recent years, and I was grateful to be given a bit of time off and to not go to Kingswood. None the less, I have great admiration for those who win by-elections. I have seen at close hand that they are a different kind of contest.

The hon. Gentleman spoke of his support for free trade and for rewarding hard work, and expressed sympathy for the Government, who have faced the challenges of covid and Ukraine. I agree with him on all of those issues, and the Government do too. I look forward to his continuing the tradition of an independent-minded Member for Kingswood—but please do not tell the Labour Whips Office.

As ever, my hon. Friend the Member for Totnes (Anthony Mangnall) spoke passionately about trade and CPTPP. He is always probing on those issues.

Various amendments and new clauses that have been tabled ask for additional impact assessments. Before addressing some of those amendments directly, I would like to reassure the House that the Government will publish a biennial monitoring report and a comprehensive evaluation report of the agreement within five years of our accession.

Amendment 1 and new clause 12 would introduce commitments to publish impact assessments on the performers’ rights provisions in this Bill, and I will set out why we consider them to be unnecessary. The impacts of the rules depend in large part on how they are applied in particular cases through secondary legislation made under the Copyright, Designs and Patents Act 1988. That secondary legislation may restrict or extend particular rights to particular countries. Wherever the Government intend to make significant changes to the secondary legislation, we will engage with affected industries and carry out an impact assessment. The Intellectual Property Office has done that recently with its consultation and its assessment of the impact of potential secondary legislation on the broadcasting and public playing of recorded music. A commitment to assess the impacts of the measures in this Bill is therefore unnecessary, and risks overlooking the effects of the secondary legislation.

I will now turn to new clauses 2 and 6, which broadly focus on environmental and other standards. I can provide assurance that the UK will continue to uphold our high environmental standards in respect of all our trade agreements, including CPTPP. As I have previously mentioned, the Government intend to publish a comprehensive ex post evaluation of the agreement within five years of the UK’s accession, and I can confirm that this evaluation will include an assessment of the environmental impacts of our accession. In addition, the independent Trade and Agriculture Commission was asked to scrutinise the UK’s accession protocol and produce a report. The TAC concluded in its advice, published on 7 December 2023, that

“CPTPP does not require the UK to change its levels of statutory protection”

in relation to the aforementioned areas.

[Lloyd Russell-Moyle]

It is very welcome that there will be a five-year report. Will it include numbers on unsustainable palm oil and rainforest wood to ensure that we are not exploiting more than we are at the moment?

[Greg Hands]

That is exactly the sort of thing that I would expect the report to do. I must say that I am delighted that the hon. Gentleman has mentioned the Government’s record when it comes to palm oil, because 86% of UK imports of palm oil were certified as sustainable in 2022—up from 16% under the last Labour Government in 2010, when we took office. Deforestation related to palm oil in Malaysia has fallen by 60% since 2012, according to the latest available figures, and we will keep working with countries such as Malaysia to build on that work.

As soon as parliamentary time allows, the Government will be tabling their forest risk commodities legislation under the Environment Act 2021, which will make it illegal for larger businesses operating in the UK to use key forest risk commodities produced on land illegally occupied or used. The Government have confirmed that palm oil products would be included under the regulated commodities. Additionally, I once again refer to the report of the independent Trade and Agriculture Commission, which concluded that

“it is unlikely that CPTPP will lead to an increase in palm oil being grown on deforested land”.

Moving on to new clauses 3 and 5, relating to ISDS, the UK’s accession to CPTPP will benefit UK investors. I do not think the Opposition understand how business works. We support British businesses operating overseas. They create jobs in this country—jobs that the Labour party does not seem to like.

[Dominic Raab (Esher and Walton) (Con)]

I thank my right hon. Friend for progressing CPTPP with all his usual energy, because it will boost trade and be of huge strategic significance. It is an opportunity of Brexit that must be grasped. On investor-state dispute resolution, he is absolutely right that we must not give way to the naysayers. It will be overwhelmingly in the UK’s interest, given the protections for UK businesses and exporters and the certainty it will provide in the massive growth region of the Indo-Pacific.

[Greg Hands]

My right hon. Friend also played a really important role in getting CPTPP through. I remember our joint visit to Vietnam in 2021, when we argued for Vietnamese support. He is right to say that it is important to remember that the UK has never lost an ISDS case. Equally, it is important for us to protect UK businesses operating abroad. They provide jobs and secure livelihoods at home. I find it astonishing that the Opposition, as they lurch ever leftwards, seem to forget that the whole time.

I can assure the House that the UK already has investment agreements containing ISDS provisions with around 90 trading partners, including seven of the 11 CPTPP parties. The UK provides a welcoming investment environment with a non-discriminatory regime, strong rule of law and good governance. We are clear that, where we negotiate ISDS, we will not hinder our inherent right to regulate in the public interest, including in areas such as the environment and labour standards.

I turn to new clauses 7, 9, 10 and 13, which focus on the impacts that this deal will have on our businesses and our economy. The Government want UK businesses to benefit from the ambitious provisions in the CPTPP as far as possible after we accede, and we are working to raise awareness of the agreement and ensure that businesses have the knowledge they need to take advantage of the opportunities that CPTPP will present when it enters into force for the UK.

New clause 8, tabled by the right hon. Member for Hayes and Harlington (John McDonnell), focuses on labour standards. I notice that there is no official Labour amendment focusing on labour standards. Maybe Labour does not care about labour any more, but I know that the right hon. Gentleman does. The CPTPP labour chapter includes binding provisions on fundamental labour rights and on hours of work, health and safety, and minimum wages. It reaffirms CPTPP parties’ obligations as members of the International Labour Organisation and requires that parties do not waive or derogate from their domestic labour laws in order to encourage trade or investment.

Amendment 2, also tabled by the right hon. Member for Hayes and Harlington, relates to the conformity assessment regulations referenced in the Bill. The amendment would allow changes to the conformity assessment regulations only following a motion to resolve against the ratification of the UK accession protocol first. I just think it would be unwise for us to pass an amendment to resolve against the ratification of UK accession in advance.

This has been a wide-ranging debate, and we have debated important issues. I particularly want to minute my thanks to my right hon. Friend the Member for Chingford and Woodford Green, who has rightly raised important questions about our trade with China, and to other right hon. and hon. Friends who have supported the process of the UK acceding to CPTPP.

I do not want to tempt fate, but this might be my last chance to speak on our accession in this House before the UK formally ratifies joining CPTPP. I and, I believe, the whole Government passionately believe that CPTPP offers a great future for the UK, and I have seen our accession through from being a novel idea in 2017 to ratification, and hopefully accession, in 2024. Not many of us in this place have been able to do that over a seven-year period, and I am grateful to all my ministerial colleagues, successive Prime Ministers who have supported CPTPP and my excellent Department for International Trade and Department for Business and Trade officials for being with me on this very exciting journey.

[Sir Iain Duncan Smith]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 4

Report: accession of new states to the CPTPP

“(1) Before any decision is made by the Government on the accession of a new state to CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the potential benefits and impact of the accession of that candidate state on the United Kingdom.

(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”—(Gareth Thomas.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.