Draft EU-Canada Trade Agreement Order

Greg Hands Excerpts

Tuesday 26th June 2018 Commons Chamber

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

I rise to speak very much in favour of ratifying this agreement, and I welcome the opportunity to support my right hon. Friend the Secretary of State for International Trade and President of the Board of Trade, and to record my thanks to him for doing so much good work in the last two years to establish the Department for International Trade. I also thank the superb officials at the Department, who have worked tirelessly to get our independent trade policy up and running and heading in a successful direction. I also congratulate my successor as Minister for Trade Policy, my hon. Friend the Member for Meon Valley (George Hollingbery), who I think will be leading the next debate. I welcome him to his position and wish him every good fortune in his important role, in which he has a lot coming up in the next couple of weeks.

I want to reflect on the extraordinary contribution by the shadow Secretary of State. It was an abuse of procedure to speak for 35 minutes in a 90-minute statutory instrument debate and to leave others, who actually want to speak about the content of the agreement and its implications, with just four minutes each. I listened to his explanation of what happened, or did not happen, in 2016, and I thought it not really in his interests, as we could also go back to his position in 2016 and 2017, when I think he said that staying in the customs union, which I believe is now his party’s policy, would be a disaster for the country. I should have thought he was the last person to want to draw attention to what people said two years ago.

Most importantly, we heard the shadow Secretary of State speak for 35 minutes but never got a straight answer as to what his position on the agreement actually is. I think he said he would like to renegotiate it. Now, not only would that have implications for an agreement that is already in place—the provisions have been in place since September—but is he also saying he would renegotiate all the other 40-plus EU agreements, rather than seek their transition into UK agreements? [Interruption.] I think he is saying from a sedentary position that he would like to renegotiate the whole lot.

[Geraint Davies]

rose—

[Greg Hands]

I will not take any interventions because there is no time.

I want to say three things. First, CETA itself, on its own merits, is a very good deal. It could be worth as much as £1.3 billion per annum to the UK economy. It removes all tariffs on industrial products and wines and spirits, and eliminates customs duties on ciders, wines and spirits. On the investment provisions, we must remember, as the Secretary of State laid out, that the UK is the fourth-largest source of investment into Canada and the UK is the second most popular destination for Canadian investment. It is also important for the EU’s trade agenda, as it will be the first EU trade agreement to be ratified since that with South Korea some six years ago. The UK is supportive of the EU’s trade agenda, partly because we believe in breaking down barriers ourselves, and partly because the UK will seek to maintain the substance of these agreements as we go forward after Brexit.

Last time around on CETA the official Opposition split three ways. We look forward to seeing what the official position of the Opposition is and what the practical position is of their various MPs.

Foreign Affairs Council (Trade): 22 May 2018

Greg Hands Excerpts

Thursday 7th June 2018 Written Statements

[The Minister for Trade Policy (Greg Hands)]

The EU Foreign Affairs Informal Council (Trade) took place in Brussels on 22 May 2018. I represented the UK at the meeting. A summary of the discussions follows:

Commissioner Malmström provided an update on her latest contact with Wilbur Ross on US tariffs on steel imports. A further temporary exemption was not expected. I supported the outcome of the leaders’ discussion the previous week and emphasised active UK engagement with the US in support of the EU position.

Ministers adopted the conclusions on the negotiation and conclusion of EU trade agreements. These follow the CJEU decision on competence boundaries in May 2017. They note the Commission’s proposal to pursue EU-only trade agreements, with the option of separate mixed investment protection agreements, and assert the role of the Council in deciding on a case-by-case basis whether to open negotiations in this manner (or to split existing agreements which are yet to be signed). The conclusions make clear that investment protection agreements and association agreements containing provisions of shared competence will remain mixed agreements and will continue to require ratification at the national level. Among other things, the Council conclusions also state that member state Parliaments, civil society and other interested stakeholders should be kept duly informed from the beginning of the trade agreement negotiation process, and that member states should continue to involve their Parliaments in line with their respective national procedures.

Ministers thanked the Commission for its work on the EU-Japan economic partnership agreement along with the EU-Singapore free trade agreement and the EU-Singapore investment protection agreement (IPA). Commissioner Malmström confirmed the IPA would not be provisionally applied, coming into force only when all member states had ratified.

Ministers adopted mandates for negotiations with Australia and New Zealand, which would be launched during Commissioner Malmström’s visit to the region in June.

Commissioner Malmström debriefed Ministers on her recent engagement in the World Trade Organisation (WTO). Ministers agreed that the EU should continue engaging with the US and discussed the extent to which significant WTO reforms should be considered. I cautioned against portraying the WTO as being in “crisis” and urged maximising the opportunities including the “joint statement initiative” on e-commerce and encouraged further consideration of WTO reform.

[HCWS741]

Foreign Affairs Council (Trade)

Greg Hands Excerpts

Thursday 17th May 2018 Written Statements

[The Minister for Trade Policy (Greg Hands)]

The EU Foreign Affairs Council (Trade) will take place in Brussels on 22 May 2018. I will be representing the UK.

The substantive items on 22 May will be: adoption of the negotiating mandates for free trade agreements with Australia and New Zealand, adoption of conclusions on the negotiation and conclusion of EU trade arrangements, and follow-up to the 11 World Trade Organisation ministerial conference (MC11). There will also be an exchange of views on the EU-Japan economic partnership agreement, the EU-Singapore free trade agreement and the EU-Singapore investment protection agreement.

[HCWS688]

Oral Answers to Questions

Greg Hands Excerpts

Thursday 17th May 2018 Commons Chamber

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

2. What steps he is taking to ensure that UK trade with developing countries promotes women’s rights after the UK leaves the EU.

[The Minister for Trade Policy (Greg Hands)]

The UK is committed to promoting equality and women’s rights in trade in the UK and around the world.  We have taken decisive steps to recognise the role of trade in promoting gender equality by signing the WTO’s joint declaration on women’s economic empowerment.  We also launched at the Commonwealth Heads of Government meeting last month the SheTrades Commonwealth programme, which will boost participation of women-owned businesses in trade.

[Stuart C. McDonald]

I very much welcome that answer because a well-designed trade policy can positively transform women’s social and economic rights in developing countries. If that is not the case, that can destroy livelihoods, undercut wages and damage vital public services. Will the Minister commit to publishing an assessment of the impact on women of every trade deal that he signs with developing countries?

[Greg Hands]

I agree with the thrust of the hon. Gentleman’s question. I commend the work of some key non-governmental organisations in this space, particularly ActionAid UK. The matter of impact assessments is one for future trade policy and future trade agreements. However, we are not waiting on that to make a difference on ensuring that women can participate fully in trade. I point him to a recent study by McKinsey that showed that, if women participated in the economy on an equal basis to men, there would be an increase of 26% in world GDP—the equivalent of an economy the size of the US and China put together.

[Sir Desmond Swayne (New Forest West) (Con)]

We drove this agenda in the EU. Is not the danger rather that, bereft of our influence, the EU will backslide?

[Greg Hands]

My right hon. Friend is quite right: the UK has been a key driver of that agenda. He is also right that the EU27 may well take a different approach. However, the UK approach remains strongly and resolutely in favour of promoting gender equality in trade and making sure that trade works particularly for women entrepreneurs, who make up a disproportionate part of the online entrepreneurial community.

[Hannah Bardell (Livingston) (SNP)]

This will be my last outing as the Scottish National party trade spokesman; I will be moving to pastures new in Digital, Culture, Media and Sport. I want to put on the record my thanks to the Secretary of State and his team. While we do not always agree—in fact, rarely—our discussions and exchanges are always respectful and lively.

The 2013 Rana Plaza disaster is a prime example of how growth in export industries can have devastating results, particularly for women and girls. Jobs were created that were unsafe and had exploitative conditions for the largely female factory workers. Can the Minister assure the House and indeed everyone across the UK that any trade deals he does will not result in the exploitation of anyone, in particular women and girls?

[Mr Speaker]

May I say to the hon. Lady that I hope in her new role the sky will be just as blue?

[Greg Hands]

May I first commend the hon. Lady for the constructive role she has taken? She and I have worked together particularly to try to benefit certain businesses in Livingston, her constituency, and in terms of her wider brief.

Yes, of course, we are absolutely committed that future trade agreements will pay heed to the importance of gender rights and a whole series of other rights in those agreements. What we can do, however, in the meantime is make sure that the trade agenda fully recognises gender equality, particularly, as I have mentioned, in relation to the Commonwealth and the WTO. We were one of the 120 WTO members at Buenos Aires in December that adopted the joint declaration on trade and women’s economic empowerment.

[Judith Cummins (Bradford South) (Lab)]

The Minister often remarks that trade has pulled millions of women out of poverty, but in the Trade Bill Committee the Government voted against ensuring that future trade deals fully comply with the convention on the elimination of all forms of discrimination against women. Has he changed his mind on this and, if so, will he ensure that future trade deals contain effective mechanisms that protect women in the global supply chain from exploitation, poverty wages and the suppression of trade union rights?

[Greg Hands]

I gently remind the hon. Lady that she of course voted against the Trade Bill in its entirety on Second Reading, which I think is always worth remembering. Secondly, I would say that we will take no lessons from Labour in this space because the UK has been a leader, over the last eight years, in making sure that this agenda is taken up at the WTO, at the European Union and at CHOGM. When it comes to future trade agreements and future trade policies around those trade agreements, that will be a matter for future proposals, as she well knows.

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[Stephen Hammond (Wimbledon) (Con)]

6. What assessment he has made of the potential benefits to the UK arising from third-country trade deals after the UK leaves the EU.

[The Minister for Trade Policy (Greg Hands)]

Leaving the EU means, for the first time in over 40 years, we will from next March be able to sign and ratify new trade deals. We are currently party to about 40 international trade agreements and are committed to securing continuity of those agreements. We have also established 14 trade working groups in major markets to explore the best ways of developing new trade and investment relationships post Brexit.

[Stephen Hammond]

I thank my right hon. Friend for that answer. He will know, as I do, that international regulatory standards are what fuel international trade. For the continuation of those deals and opportunities, does he agree that regulatory alignment will be necessary to secure the best British deals post Brexit?

[Greg Hands]

As my hon. Friend will know, we have some good news for him about the implementation period. The UK will be party to those deals up to the end of December 2020. He is also right that there is a very important read-across between what is agreed with the EU on standards, rules of origin and so on. Our commitment remains absolute to have high standards and to encourage the use of broad international global standards of the highest quality.

[Kate Green (Stretford and Urmston) (Lab)]

10. Ministers have said that trade with Commonwealth countries will be important after Brexit and the Minister will be aware that currently our trading arrangements with many African and Caribbean Commonwealth countries are by virtue of the Cotonou agreement, which is due to be renegotiated during the transition period. Will the Minister say what trade arrangements he expects we will have with those countries once the new agreement with the EU takes effect?

[Greg Hands]

As I say, up to the end of 2020, the UK will remain party to those agreements as they stand. We are also putting in significant efforts to make sure that the substance of those agreements rolls over beyond that. That is why we have signed memorandums of understanding with, for example, the South African Development Community—the South African customs area—CARIFORUM and the eastern and southern African economic partnership agreement group. That is work that is making good progress.

[Alex Cunningham (Stockton North) (Lab)]

7. What steps he is taking to ensure that the UK maintains preferential market access to those countries with which it currently has such access as a member of the EU after leaving the EU.

[The Minister for Trade Policy (Greg Hands)]

The Government are committed to securing continuity of existing EU trade agreements and other preferential arrangements as we leave the EU. The draft withdrawal agreement confirms EU international agreements continue to apply to the UK during the implementation period. We are working to ensure continuity of those arrangements after that.

[Alex Cunningham]

The REACH—registration, evaluation, authorisation and restriction of chemicals—regulations that govern production and other standards are critical to countless chemical companies in my Stockton North constituency and beyond for trade across the world. Will the Minister update the House on the progress to retain them when we leave the EU?

[Greg Hands]

I met the chemicals industry earlier this week—in line with other industries—in a very useful roundtable at the Department for Business, Energy and Industrial Strategy. That work to make sure that the UK benefits from the best possible rules as we go forward is ongoing.

[Steve Double (St Austell and Newquay) (Con)]

Does the Minister agree that one of the big opportunities from leaving the EU is that we can negotiate trade deals that best suit the UK, rather than being tied into the other 27 member states?

[Greg Hands]

My hon. Friend makes a very important point. That is why we have these 14 trade working groups with major markets around the world. We are in active discussions with those counterparts and we have the benefit, from March next year, of the ability to negotiate, sign and ratify trade agreements with them.

[Barry Gardiner (Brent North) (Lab)]

First, the Government said that they were simply rolling over these agreements on precisely the same terms. Then they admitted that they would have to amend the agreements with Norway, Turkey and Switzerland to avoid rolling over such things as the customs union or the four freedoms that they would rather avoid, but the Minister has still not explained what process this sovereign Parliament will undertake to ensure that these important new agreements are subjected to proper democratic scrutiny. When will he?

[Greg Hands]

We had significant exchanges on this during the Trade Bill Committee and the scrutiny arrangements are enshrined in that Bill, which I note again that the hon. Gentleman voted against. He will also know that these agreements have already been scrutinised in this House under existing EU scrutiny procedures, and there are precise arrangements set out in the Bill for how we go forward from here.

[Mr Bob Seely (Isle of Wight) (Con)]

8. What progress he made on potential trade agreements with Commonwealth countries at the Commonwealth Heads of Government Meeting in April 2018.

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[The Minister for Trade Policy (Greg Hands)]

Since the draft withdrawal agreement confirms that international agreements continue to apply to the UK during the implementation period, common rules of origin will remain until the end of 2020.  We are keen, of course, to avoid disruption to supply chains, so we are working to secure continuity after this.

[Kerry McCarthy]

I am sure the Minister has met motor manufacturers who have warned that they will simply not be able to meet the 60% local content requirement under rules of origin if EU components cannot be included. At present, the UK content is between about 40% and 44%. How will the Minister address that?

[Greg Hands]

I think the hon. Lady is referring to the EU’s current set of more than 40 agreements with more than 70 counterparts. That is a matter for active discussions. We are obviously trying to secure the best possible deal for UK motor manufacturers, not only those involved with the finished product but those who provide the components, as part of our talks with third parties.

[Alex Cunningham (Stockton North) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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[Mr Virendra Sharma (Ealing, Southall) (Lab)]

T5. What is the Secretary of State doing to secure more trade with India?

[The Minister for Trade Policy (Greg Hands)]

It was my pleasure to address the hon. Gentleman’s all-party group on India only last week, and we have a huge success story. My right hon. Friend the Secretary of State has talked about the trade audit—the trade review—that we have done with India. I can also report that bilateral trade has increased by 15% over the last year, and we remain the largest G20 investor in India, with British companies currently employing around 788,000 people in India.

[Ross Thomson (Aberdeen South) (Con)]

It was a pleasure to welcome the Secretary of State to my constituency last week where he could see that, from food and drink to oil and gas, Aberdeen is best placed to take on the opportunities of Brexit. I thank my right hon. Friend’s Department for promoting Aberdeen’s £150 million Queen’s Square project this afternoon. Will my right hon. Friend update the House on the benefits to Scotland of extending the high potential opportunity scheme, and does it not show that Scotland is better off in the United Kingdom?

Leaving the EU: Future Trade Remedies

Greg Hands Excerpts

Tuesday 17th April 2018 Westminster Hall

[The Minister for Trade Policy (Greg Hands)]

I congratulate my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on securing the debate. As you will know, Mr Hollobone, it is relatively rare, so far, for the Department for International Trade to be in Westminster Hall, so I welcome this opportunity to set out some of our proposals on trade remedies. I thank my hon. Friend for his kind words about recent UK trading success, the record levels of investment and the UK’s role in supporting the global rules-based system of trade, which is extremely important at the moment—it is important that we get that on the record right away.

I know well that my hon. Friend is passionate about his constituency and about defending manufacturing in Stoke. He was the first MP from the region to approach me, very soon after his election in June 2017, to talk about the importance of trade remedies to his constituents. He also introduced me to the British Ceramic Confederation, whose representatives I have now met three times in connection with trade remedies, as well as the Manufacturing Trade Remedies Alliance.

I also thank the other Members who have contributed to the debate. I will get through as many of the points that were made as I can. I thank them all for their contributions in a short debate—perhaps it could usefully have been longer. I will try to reply to the hon. Member for Scunthorpe (Nic Dakin), even though he is no longer here, but first let me say a few things about the actual contributions.

My hon. Friend the Member for Gordon (Colin Clark) made a number of important points. He of course is passionate about oil and gas in Scotland—as are we in the Department for International Trade—and about the capabilities and the future of fisheries exports from his constituency. We are working very closely with the Department for Environment, Food and Rural Affairs to pursue that. I heard his call for a DIT office in Aberdeen. I can tell him that the majority of DIT’s oil and gas team is based in Glasgow and spends significant time in Aberdeen. I agree with my hon. Friend that there are significant opportunities in the future. Only yesterday I was speaking to Wood Group, which, as my hon. Friend will know, is headquartered in Aberdeen, about the significant opportunities that the Commonwealth markets offer them, which he also referred to.

My hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) is an active member of the International Trade Committee. I gave evidence to her Committee—it must have been in early March—on the Trade Remedies Authority. It is a little bit early to say exactly how big this new organisation will be. We have yet to appoint the chair, let alone any members of it. However, I think an early indication of the sort of budget we are looking at is in the region of £15 million to £20 million a year. I referred at the Committee hearings to the size of the EU’s operation, which is about 100 people working on trade remedies within DG Trade. That will give some early indication of the sort of size we are thinking about for that body.

I thank the hon. Member for Livingston (Hannah Bardell) for her kind words. We have worked together on two or three issues with companies in her constituency. I have worked for their interests abroad, particularly on recent cases. She and I have a constructive relationship. I will answer a few points she made upfront. We talked about representation across the UK during the Bill Committee. She will know that the important thing is for the up to nine members of the board to think about how trade remedies work right across the UK and not to be beholden to any particular nation, region, interest group or company anywhere in the UK, but to have an expert view on how trade remedies might work throughout the UK.

[Hannah Bardell]

I take on board the point that the right hon. Gentleman makes, but I fail to understand why somebody from Scotland, Wales or Northern Ireland would be any less able to understand the distinct nature of the economies of their country as opposed to taking a wider view. The two need not be mutually exclusive. In the spirit of co-operation, and doing the right thing and what is best for the UK as a whole, why not have representatives and offices across the UK?

[Greg Hands]

I very much agree with the hon. Lady. It is perfectly possible and quite likely that of those nine members, one or more will originate from the devolved nations. The point is, however, that they should be appointed for their expertise in assessing some of these quite technical aspects, such as the determination of dumping, the calculation of injury and so on. The point is not to appoint them to represent a nation, region or particular stakeholder of the UK, but to have an interest across the board. She mentioned the possibility of satellite offices. I gave an indication of the likely size of the body.

[Bill Esterson]

I am puzzled by the Minister’s answer, as I was when he said the same thing in the Bill Committee. I do not understand why he does not see the benefit of having a mixture of independent members, who quite rightly have the expertise that he sets out, and a number drawn from different interest groups. There could be a balance of the two to reflect the needs of the different parts of the economy and the United Kingdom.

[Greg Hands]

I feel that I have already answered this. We want a set of people who have expertise in the subject matter, rather than who come from a particular perspective, body, nation or region. That is the most important thing. Returning to the question of location, I think satellite officers would add cost, but I stress to the hon. Member for Livingston that we have yet to make a decision on where the location of the body should be. Again, that will be driven by where we can access the expertise that would be needed for this Trade Remedies Authority. I mentioned earlier that the Department for International Trade has placed a significant part of its operation in Scotland, for example through the oil and gas team in Glasgow, so as a Department we are not averse to placing something in one of the devolved nations of the UK.

I do not want to labour the point, but the hon. Member for Sefton Central (Bill Esterson) goes on about his reasoned amendments. Mr Hollobone, given your long years in the House, you know perhaps better than anybody that when you put down a reasoned amendment, it normally means that you wish to vote for the reasoned amendment, because you wish to propose some way in which to improve the legislation, but you would not normally vote for a reasoned amendment and then vote against the Second Reading of the Bill. My point is that by voting against the Second Reading of the Bill, the hon. Gentleman showed that he disagreed with the central core of the Bill, part of which, of course, is to set up the Trade Remedies Authority.

This Government firmly believe in the benefits of free trade—I will come back to some of the other points raised in a moment—for consumers, earnings and jobs. My hon. Friend the Member for Stoke-on-Trent South spoke powerfully about the importance of the ceramics industry for his constituency, which is a huge UK success story as an industry. Other hon. Members have spoken about their own local industries as well. Our manufacturers benefit from trade. Manufacturing makes up 8% of our economy, but most of our exports. I think we all agree that free trade does not mean trade without rules, whether product safety or IP protection; some of the most important rules will be our system of trade remedies.

WTO members are permitted to take action where their domestic industry is suffering harm as a result of unfair trade practices such as dumping, where foreign companies sell their products in the UK for less than they are sold at home, or subsidies, which let foreign companies sell goods in the UK at a lower price than they would otherwise be able to. Members can also act in response to harm caused by unexpected surges in imports. In such cases, members can introduce safeguard measures to give industry time to adjust against unexpected surges in imports. Well-functioning trade remedies can level the playing field for domestic industry, by counteracting any unfair subsidies, dumping or unexpected import surges. They can also deter dumping and unfair subsidies from happening in the first place. It is important to have these first and foremost as a basic matter of fairness. Our industries should not lose contracts and our workers should not lose jobs because a foreign company has gained an unfair advantage. It would also be unfair if jobs were lost that could have been saved if only industry had been given time to adjust. That is why we are introducing a rigorous and robust system of remedies, which provides for the full suite of powers offered under WTO rules.

My hon. Friend the Member for Stoke-on-Trent South raised points about existing EU trade remedies. He should bear it in mind that we have just finished a call for evidence on the existing EU trade remedies. That call for evidence closed on 30 March. The response was good. We will be looking at our response to that in due course. We have been clear that when we operate our own trade remedies system, we will transition those measures in the EU system that matter to UK business. We received over 70 responses from producers and other interested parties in that consultation. Most importantly, I can assure hon. Members there will not be one day when a UK industry that needs protection from unfairly traded imports will be left alone.

I will quickly answer the point made by the hon. Member for Scunthorpe about a transparent approach. The Government will use secondary legislation to set out the details of the TRA’s framework. That is very important. Mr Hollobone, you will know from your years in the House that secondary legislation is not on the face of it particularly welcomed by legislators, but it is important in this case to be able to have a dynamic body of law that particularly reflects recent WTO case law, rather than write all of these details on to the face of the two Bills that are currently passing through the House of Commons. In particular this secondary legislation will include the different dumping methodologies and the level of remedy required to address injury to UK industry. We are meeting trade bodies in the coming days to talk about some of those details. In the future, the TRA will set out the way in which it has carried out its calculations in any investigation as part of a commitment to transparency.

My hon. Friend the Member for Stoke-on-Trent South asked about the de minimis threshold. At what level would an investigation simply not be taken on, because the amount of product produced in the UK was below a particular amount? If UK producers have a negligible share of the total UK market, the TRA would not initiate an investigation, as it would be unlikely to result in measures. For example, a company could be the only producer of widgets in the UK and therefore meet the WTO requirements to bring a case, but if that company produced a negligible proportion of the widgets actually bought in the UK—in other words, the total market that is there—putting duties in place would have a disproportionate effect on the rest of the market, much of which would not necessarily be consumers, but could be other businesses and industries purchasing that product. That is why we will have a de minimis threshold.

In special cases, the TRA could choose to waive the threshold, which, by the way, we have not yet set. That would help to avoid a scenario in which an industry’s market share is negligible precisely because of the impact of dumped imports, or in cases involving an emerging UK industry struggling to establish itself in the face of dumped or subsidised imports. I assure my hon. Friend that it will reflect a de minimis level, but there will be exceptions. The TRA will be able to overrule.

My hon. Friend asked whether EU measures will be transitioned for the full five years. We have agreed that EU trade remedy rules and regulations will continue to apply during the implementation period. We will assess which EU measures matter to UK industry, which the call for evidence that closed last month did, and maintain those measures at their current level until the TRA reviews them.

My hon. Friend the Member for Gordon mentioned agricultural imports. Our trade remedies framework will enable the TRA to investigate unfairly subsidised imports where they are injuring UK agricultural producers and to take action where appropriate. The Secretary of State for Environment, Food and Rural Affairs is working on a safeguards regime for agricultural products to address the issues that my hon. Friend identified.

My hon. Friend the Member for Hornchurch and Upminster asked whether the TRA should consist of two bodies. There are, of course, always different views. There is not an exact parallel. We have looked at systems across the world, as she knows from the evidence I gave to the Committee. However, I believe that we are setting up the TRA with the right level of independence to allow it to reach informed and objective conclusions, which includes clear projections for the TRA’s independence, impartiality and expertise. Other countries that use a single-body trade remedy system include Australia and New Zealand.

It is standard practice for the chair and the non-execs to be ministerial appointments. The other members would typically be appointed by the chair. That is the practice we have followed in relation to the Trade Remedies Authority.

[Hannah Bardell]

Will the Minister give way?

[Greg Hands]

No, I am going to finish. I have perhaps not been able to answer every single point. Obviously, this is a matter for legislation that is still continuing its passage through the House. I hope that I have outlined some of the strengths of the trade remedies regime. We look forward to further engagement during the passage of the Bills.

Oral Answers to Questions

Greg Hands Excerpts

Thursday 29th March 2018 Commons Chamber

[Thangam Debbonaire (Bristol West) (Lab)]

2. If he will hold discussions with the Secretary of State for Digital, Culture, Media and Sport and representatives of the creative industries on trade in that sector with EU countries after the UK leaves the EU. [R]

[The Minister for Trade Policy (Greg Hands)]

Yesterday the Government announced the creative industries sector deal. With a strategy and new money committed to boost our creative industries, trade and investment is a key part of that deal. Exports are booming in the sector, with £9.6 billion in services and £2.7 billion in goods in 2015, making this country a global leader.

[Thangam Debbonaire]

I refer the House to my entry in the Register of Members’ Financial Interests.

I thank the Minister for his answer, but the clock is ticking. Representatives of the live performance part of the creative industries tell me of their worries, based on current experience of touring theatre, dance and music outside the EU. Will he, like the DCMS Minister, the hon. Member for Stourbridge (Margot James), agree to meet representatives of the creative industries to discuss those significant challenges so that this massive growth sector of our economy can continue post-Brexit?

[Greg Hands]

My colleagues and I are always happy to meet representatives of the sector. The sector’s export growth, and its activity both in the European Union and beyond, is actually growing. Only 34% of the sector’s total global exports are to the EU. A huge amount is already being done outside the EU and, when it comes to things like music, DIT has committed to make about £3 million of grant support available to help music small and medium-sized enterprises to be able to export up to 2020.

[Bob Blackman (Harrow East) (Con)]

One of the biggest growth markets is in the film and creative industries: one of the biggest areas now, apart from Hollywood, is Bollywood in India. What relations has my right hon. Friend established to build that market up so that we can exploit opportunities with our good friends from India?

[Greg Hands]

My hon. Friend, who has impeccable trade connections with India, makes a strong point. Film, TV and broadcasting as a sector in the UK grew by 6.6% last year, and a large part of that is in co-operation with India. Total spend in the UK on film production reached a 20-year high, and global UK-qualifying films enjoyed 21% of global box office success, including a lot of success in India.

[Judith Cummins (Bradford South) (Lab)]

British audiovisual exports are worth £7.4 billion a year, with more than £3 billion of that coming from trade with the EU. The industry has raised major concerns that its ability to export into the European market will be undermined, unless there is frictionless access for broadcasters and creative industries. Will the Minister reassure the sector and the House that this will be the case—or is this yet another area where the Government are failing to listen to British businesses?

[Greg Hands]

I will take no lectures from the hon. Lady on listening to British businesses, on which this Government have an impeccable record. We are seeking frictionless trade—as frictionless as possible—with the EU. We are seeking a free trade agreement of much greater scope than any before, and it will cover services—including creative industries, which are such a key part of our export offer.

[Mark Pawsey (Rugby) (Con)]

3. What steps his Department is taking to support small and medium-sized businesses to export.

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[Christine Jardine (Edinburgh West) (LD)]

4. If he will take steps to facilitate parliamentary scrutiny of future trade agreements.

[The Minister for Trade Policy (Greg Hands)]

The Government believe strongly that Parliament has a vital role to play in the scrutiny of future free trade agreements, as it always has in the past. The Government are currently in the process of designing our future trade agreement policy. No decisions have yet been taken, as stakeholder consultations are ongoing.

[Christine Jardine]

When there is a new EU trade treaty, the European Scrutiny Committee can review it and the European Parliament can veto it; when there is a new UK treaty, all this House can do is delay its ratification by 21 days. Far from taking back control, does the Minister agree with the Commons Library that post-Brexit Britain

“may be seen as diminishing democratic accountability in relation to trade treaties”?

Will he fix that by supporting the inclusion of new clause 3 in the Trade Bill?

[Greg Hands]

I will take no lessons from the Liberal Democrats in this regard. The hon. Lady voted against the Second Reading of the Trade Bill, which will allow this country to transition its 40 or more existing EU trade agreements into UK law. Those agreements have already been scrutinised in Parliament. As I say, future trade agreements will be a matter for future proposals.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Is it not the case that, under current plans, the British Government will be able to sign off UK-wide trade deals without the consent of the devolved Parliaments, meaning that the Belgian region of Wallonia will have more power over EU trade deals than Wales, Scotland and Northern Ireland will have over UK trade deals?

[Greg Hands]

I think the hon. Gentleman is confused. Existing trade deals have been scrutinised in this Parliament, with input from the Welsh Government in the usual way—more than 40 EU trade deals have already been scrutinised in this Parliament. He has confused those with future trade deals. We will, of course, work closely with Parliament and the devolved Administrations to make sure that their voice is heard on those future trade deals.

[Patrick Grady (Glasgow North) (SNP)]

It is important that the Minister tries to clarify this issue. Brexit is supposed to be about regaining sovereignty and taking back control, so what is actually going to happen? Are this House and the devolved Assemblies simply going to be consulted, or are they going to have to consent to new trade deals?

[Greg Hands]

Again, I think the hon. Gentleman is confusing existing trade deals, which are what the Trade Bill is all about, with the prospects for future trade deals. We have been absolutely clear on future trade deals. Trade policy is of course a reserved matter, but Ministers have engaged with the Scottish and Welsh Governments frequently, including at official level, and we recently did a deep dive with the devolved Administrations on what future trade policy might look like.

[Alberto Costa (South Leicestershire) (Con)]

5. What recent assessment he has made of trends in the level of education exports.

--- Later in debate ---

[Rachel Maclean (Redditch) (Con)]

12. What assessment he has made of the potential economic benefits to UK businesses and consumers of securing trade agreements with non-EU countries after the UK has left the EU.

[The Minister for Trade Policy (Greg Hands)]

As part of its preparations for future trade negotiations, the Department for International Trade has established 14 trade working groups and high-level dialogues with key trade partners beyond the EU to explore the best ways of progressing our trade and investment relationships.

[Martin Vickers]

Many businesses in my constituency, particularly in the seafood sector, are reliant on the free flow of supplies. Does the Minister share my confidence that new arrangements can be made to ensure that, particularly in the seafood sector, supplies are maintained without any undue delay?

[Greg Hands]

My hon. Friend is a passionate advocate for the fish and seafood sector in his constituency. Those sectors already contribute £1.3 billion to the UK economy. I am concerned about reports of problems at Five Star Fish in Grimsby, next door to his constituency, but I can tell him that leaving the common fisheries policy presents the opportunities to boost exports, expertise and fish-related services.

[Rachel Maclean]

Last week I visited the innovative company, Mission Resources, in Abbots Morton. It has invented the home energy resources unit, which generates energy from household waste to reduce fuel consumption, furthering climate change reduction and the Government’s clean growth strategy. Given that the company is looking to expand to powerhouses such as China and India, what assurances can the Secretary of State give to my constituent about the opportunities for trade with non-EU countries?

[Greg Hands]

Over the last seven years, this Government have made significant resource investments into clean energy and renewable technologies. We have put in a huge amount of effort to ensure that those capabilities are now exportable. The UK has the world’s largest offshore wind sector and quite a significant sector in resources such as solar. We need to take advantage of export opportunities, and that is where the Department for International Trade plays its role.

--- Later in debate ---

[Bill Esterson (Sefton Central) (Lab)]

GKN has total sales of £10.4 billion, £9 billion of which are outside the UK. Profits from its operations in 30 countries around the world are repatriated to the UK. It will not be much of a global Britain if the Secretary of State’s approach is to stand idly by while a business like GKN that is so vital to our international trade is allowed to be subject to a hostile takeover that can lead only to its break-up and sale. Why has he stayed so silent on such a crucial issue for our trading prospects?

[The Minister for Trade Policy (Greg Hands)]

The allegation that anybody has stood idly by is utter rot. On Monday—perhaps the hon. Gentleman has not been following the news—my right hon. Friend the Business Secretary issued an open letter to Melrose, the company that is doing the bidding, to request certain safeguards for employees, and so on, if the bid was successful. Melrose has responded, agreeing to give those very assurances. We took action on this days ago. He needs to keep up with the news.

--- Later in debate ---

[Mary Glindon (North Tyneside) (Lab)]

T7. The north-east is a net gainer from the EU, and 60% of our exports are to EU countries, but the region is set to be worst off after Brexit. How will the Department make sure we do not lose out as part of the Government’s global north vision?

[Greg Hands]

As my right hon. Friend the Secretary of State just said, we are working for all parts of the United Kingdom, by working with DExEU on our future trading relationships with the European Union and, as importantly, making sure that we open up trading possibilities beyond the EU. I mentioned earlier that we have 14 trade working groups working with major markets, and exports from the north-east will be right at the centre of that work.

[Mr Peter Bone (Wellingborough) (Con)]

Can the Secretary of State tell the House what he will be doing in 365 days’ time?

Informal Trade Foreign Affairs Council

Greg Hands Excerpts

Friday 16th March 2018 Written Statements

[The Minister for Trade Policy (Greg Hands)]

The EU Foreign Affairs Informal Council (Trade) took place in Sofia on 27 February 2018. I represented the UK at the meeting. A summary of the discussions follows:

On follow up to the 11th WTO ministerial conference held in December 2017, Ministers discussed the lack of negotiated outcomes at the multilateral level. Nonetheless, there was a broad welcome for the new joint initiative statements at MC11. The objective was for a critical mass of interested WTO members to make progress in the areas addressed by the joint statements. These discussions should be open to everybody to join. Developments around the WTO appellate body were also discussed.

Commissioner Malmström updated the Council on the state of play of the EU’s free trade agreements, stating that Japan and Singapore would be presented to Council imminently, and that negotiations with Indonesia and Chile were ongoing. Negotiations with Malaysia were set to resume in the near future.

Discussion revolved around Mexico and Mercosur, which were both reported to be in the end game but with a number of issues remaining to be resolved. I called on the Commission to show ambition on data flows in the Mexico agreement.

Under AOB, and after I had had to leave, the Commission gave an update on EU-US relations, and assessed that the US’s likely imposition of import tariffs or quotas on steel and aluminium on national security grounds was unjustified. The Commission and member states agreed to continue to engage the US Government and Congress in order to argue against any measures, highlighting the knock on impact of safeguards on global markets. Since the President’s announcement on 1 March that he intends to impose tariffs, discussions with the EU have continued and the UK will stay closely engaged on this live issue.

[HCWS551]

Point of Order

Greg Hands Excerpts

Wednesday 14th March 2018 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Gentleman for giving me notice that he wished to raise this matter. It is obviously unsatisfactory that he has had to wait for such a long time to receive a response, but I am sure his concern has been heard on the Treasury Bench and will be conveyed to the Home Office.

[The Minister for Trade Policy (Greg Hands)]

indicated assent.

[Madam Deputy Speaker]

Thank you.

Meanwhile, the hon. Member for Edinburgh East (Tommy Sheppard) has obviously made his dissatisfaction clear, and it is now on the record.

European Affairs

Greg Hands Excerpts

Wednesday 14th March 2018 Commons Chamber

[The Minister for Trade Policy (Greg Hands)]

I beg to move,

That this House has considered European Affairs.

I welcome the fact that we are having this debate, which is perhaps a return to the tradition of a pre-European Council debate in the House of Commons. I used to take part in those twice-yearly debates. When I checked my last contribution, which was in June 2008, I was reminded that I, like so many other Conservative Members, called for a new approach in Europe in the immediate aftermath of the Irish rejection of the Lisbon treaty. The purpose of today’s debate, however, is not to dwell on missed opportunities in the past, or to reflect on what might have been had the EU reformed itself; we are here to look to the future, and the Department for International Trade is at the very centre of that bright future.

Before I turn to the future of our trade with Europe and the negotiations under way, it is important to take stock of what we have achieved so far. The joint report issued in December sets out a financial settlement that honours commitments we undertook as EU members, just as we said we would. It agrees to avoid a hard border in Ireland, while respecting the UK’s integrity, which was and is one of the Government’s priorities for these negotiations. Very importantly, it safeguards the rights of EU citizens living in the UK and of UK nationals living abroad, which the Prime Minister has always said was her first priority. Some 17% of my constituents in Chelsea and Fulham are nationals of other EU countries; indeed, my wife is an EU national. I have put in a lot of time and effort in outreach to them, and I can report to the House that the December agreement landed very well among EU nationals there. Ireland, the budget and citizens’ rights—these are strong foundations for the ongoing negotiations, and we should all welcome the progress that has been made on them.

[Emma Reynolds (Wolverhampton North East) (Lab)]

I have listened very carefully to what the Minister has said. Will he acknowledge that there are still very serious concerns about what needs to happen to preserve an invisible border on the island of Ireland—one that does not have any physical infrastructure—and that there is seemingly a misunderstanding in some parts about what is actually meant by the fall-back option of full alignment?

[Greg Hands]

We have been absolutely clear that we will of course abide by the December agreement in full. Let me remind the hon. Lady that the three priorities we laid out include a strong commitment to avoid a hard border, but also to preserve the integrity of the UK market—I remind her that having access to the UK market is very important for the people of Northern Ireland. No UK Prime Minister could accept a new border down the Irish sea.

We are also making strong progress on our trading relationships outside the EU, which is my primary responsibility as Minister for Trade Policy.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

To follow on from that point, my right hon. Friend has repeated two points from December, and at Prime Minister’s questions the Prime Minister repeated her full commitment to the December agreement on Ireland. When he says there will be no hard border, I assume that means there will be no physical infrastructure. I of course recognise that we will not have a border down the Irish sea, but does he accept that, if there is no other way of achieving it, we are going to have the full regulatory convergence to which the Government signed up in the December agreement?

[Greg Hands]

I reiterate that what the Prime Minister said at Mansion House and at Prime Minister’s questions this week still stands. I refer my right hon. and learned Friend to the papers published last summer by the Department for Exiting the European Union on how a proper border between the two parts of Ireland can be effectuated through the two possible types of customs agreements between the UK and the European Union.

[Karin Smyth (Bristol South) (Lab)]

I asked the Prime Minister during her statement, and I have written to her, about paragraph 47 of the December agreement, which mentions the mapping exercise on north-south co-operation. Will the Government commit to publishing that mapping exercise?

[Greg Hands]

The Government are undertaking analyses of so many different factors involved in this particular arrangement and question. We have always made clear our commitment to ensuring that the House is properly apprised of all the relevant facts when it comes to examine the actual withdrawal agreement in due course.

As we prepare the ground at the Department for International Trade, its Ministers have made more than 100 overseas visits in the past year and a half. We have set up 14 trade working groups, covering 21 countries with a substantial market size. None of that would have been possible without the excellent work of our Department for International Trade staff, both at home and in post in 108 countries around the world. I put on the record my thanks for their hard work, professionalism and invaluable expertise.

[Chuka Umunna (Streatham) (Lab)]

The Minister is right to pay tribute to his Department’s staff. First, has he noted the comments of the Department’s recent former permanent secretary to the effect that, if we are to leave the European Union, non-EU trade will not make up for the loss of trade that we currently enjoy with the EU? Secondly, the Secretary of State was part of a campaign that promised that we would start negotiating new trade agreements with other non-EU countries as soon as we voted to leave. How many of those new trade agreements are being negotiated right now?

[Greg Hands]

The hon. Gentleman knows full well that this is not an either/or situation: it is not a choice between having trade with the European Union or with the rest of the world. The Government’s objectives are clear, namely, to secure a deep and comprehensive partnership with the European Union while still being able—crucially, outside the customs union—to pursue an independent trade policy and to secure those agreements with the rest of the world.

On what was said during the campaign, the Department for International Trade has the capability in place and we have built up the Department. I have mentioned the 14 trade working groups. We are clearly not able to carry out a trade negotiation while we are still members of the European Union, but the hon. Gentleman seems to be demanding that we have those negotiations while at the same time saying that we should stay in the EU, which would prevent us from having the negotiations in the first place.

[Vicky Ford (Chelmsford) (Con)]

Does my right hon. Friend agree that, given the incredible depth and complexity of the UK’s trade with Europe, there is no off-the-shelf solution available from any other trade relationship? Does he also agree that, if we are to have as frictionless trade as possible, there clearly needs to be some form of agreement for what will happen at our customs, such as a partnership or another type of agreement?

[Greg Hands]

My hon. Friend is right on both counts. There is no off-the-shelf agreement that would be suitable in this case. We are clear that we are seeking a bespoke arrangement between the United Kingdom and the European Union. Neither something like the comprehensive economic and trade agreement nor something like the European economic area would be suitable. On co-operation, we are clear that we seek a good agreement with the European Union that creates as frictionless trade as possible across all our borders, not just the internal border on the island of Ireland.

[Sir Desmond Swayne (New Forest West) (Con)]

May I take the Minister back to the former permanent secretary? When Mr Donnelly was interviewed on the “Today” programme that morning, so keen were the presenters to get his soundbite about the packet of crisps that they gave no analysis whatsoever of his figures, which were about 10% awry from those issued by the national statistics office. Has the Department done any digging into where his figures came from?

[Greg Hands]

My right hon. Friend tempts me down a path which I think I ought to resist. I am not exactly sure what figures the former permanent secretary used, but the figures are clear: European Union trade is extremely important to this country, but it is none the less a declining part of our overall trade, down from 56% in 2006 to just 43% today.

[Anna Soubry (Broxtowe) (Con)]

Will the Minister give way?

[Greg Hands]

I am going to make a bit of progress.

We are not working purely on non-EU trade. A common misconception is that the DIT is a purely Brexit Department. Our ongoing work of encouraging investment and exports is equally important, and that applies just as much to trade with Europe as it does to trade outside it. DIT has over 300 staff across continental Europe. I myself have made 16 European visits to 10 countries while in this position, as have all our ministerial team, including the Secretary of State. We have brilliant teams in commercial centres right the way across Europe.

[Anna Soubry]

I am very grateful to my right hon. Friend for giving way. It is very good, kind and generous of him. May we just return to the comments made by Sir Martin Donnelly, because I do not think the record will be accurate? We have heard mention of a bag of crisps. What he said was that, based on his experience of 15 years and beyond in the specific area of trade, our country was in effect embarking on a course that was the equivalent of swapping a three-course meal for a bag of crisps. Has my right hon. Friend seen the Government’s own analysis of the various options available to us that show that, even if we get a trade deal with every single country with which we do not have one by virtue of our membership of the European Union, which is about 50, we will still not be as prosperous as we are now by virtue of our membership of the European Union?

[Greg Hands]

I thank my right hon. Friend for her lengthy intervention. What I would say is that there is no such analysis of the kind she describes. What I am clear on is that it is our objective to maintain frictionless trade with the European Union as we go forward. It is our objective to conduct an independent trade policy and to seek, when the time is right, trade agreements with those partners. It is also our objective to seek the continuity in existing EU trade agreements for the UK, which I note the Labour party voted against on Second Reading of the Trade Bill. Labour is actually opposed to us seeking the continuity of existing trade agreements.

[Antoinette Sandbach (Eddisbury) (Con)]

Going back to the analysis published by the Government and the risk presented by non-tariff barriers, it was clear in that analysis that, even if we had an EEA-style agreement, there would still be damage to the UK economy. Is the Minister saying that he wants EEA-plus?

[Greg Hands]

I think I understand my hon. Friend’s intervention, but the Government have been clear for more than a year, since the Lancaster House speech, that our objective is not to seek an EEA-style agreement. Nor is it our objective to seek a CETA-style agreement. It is our objective to seek a deep and comprehensive agreement with the European Union, the like of which, I remind my hon. Friend, who I know studies these matters very carefully, was not modelled in those analyses. That is the most important point.

[Christian Matheson (City of Chester) (Lab)]

rose—

[Greg Hands]

I am going to make a bit of progress.

I am going to give a few examples of our work around Europe. I promoted the UK’s defence industry in Sweden, visiting Saab, whose new generation Gripen fighter jet could be worth £1.1 billion to UK industry. I and my colleagues engaged with the Polish Government directly on behalf of UK companies to discuss high-value retail opportunities in the Czech Republic—in Czech, I might add, Madam Deputy Speaker. I and my colleagues from DIT and the Department for Exiting the European Union have addressed chambers of commerce right the way across the European Union—in Austria, Hungary and Bulgaria, among many others. I enjoyed making use of my language skills when I gave speeches in German to senior business leaders in Munich, Düsseldorf, Osnabrück, Tegernsee and so on.

DIT’s relationship with Europe does not just extend to export and investment promotion. The vote to leave the EU was not a vote to undermine the EU. It is very important to understand that it is in this country’s interest to have a strong and effective EU. We continue to engage constructively in ongoing EU trade policy, as we currently are a full and equal member of the EU. As the House heard on Monday, we are working closely with our European partners as well as bilaterally to respond to President Trump’s decision to impose tariffs on imported steel and aluminium.

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[Greg Hands]

I will make a bit more progress. We are committed to ratifying the CETA agreement with Canada, which provisionally came into effect in September. I was delighted that we were joined by 86 Labour MPs—many of whom are in the Chamber at the moment—who, in defiance of their Front-Bench team, supported the EU’s trade agenda in making sure that CETA was passed. In defiance of the party Whip, they voted for that important agreement with Justin Trudeau’s Canada.

We are supportive of the EU’s work to sign third-country trade agreements in future, and I have attended four Trade Ministers’ Foreign Affairs Councils, which included discussion of these. The Commission has been particularly focusing on agreements with South America’s Mercosur union and with Mexico. We continue to support the ongoing negotiations for both free trade agreements. On Mexico, we would like to see progress made wherever possible in the negotiations, although we recognise the complexity of North American Free Trade Agreement renegotiations running in parallel. We will continue our support for EU-Mercosur trade negotiations and would like to emphasise the urgent need to progress the trade components. It is essential to keep momentum and to achieve a swift political agreement.

Another high-profile agreement is the EU-Japan economic partnership agreement, which the Commission is strongly pushing to fast-track, so that it can be signed during Japan’s Prime Minister Abe’s visit to Brussels in July 2018. As a champion of free trade, the UK has been one of the strongest advocates—actually, I believe the strongest advocate—of this EPA, and we warmly welcome the work of both sides to reach this agreement, which will support global prosperity. We continue to engage constructively on EU business and with our European partners, and we continue to push UK trade and investment to businesses on the European continent. It is important that our trade engagement includes Europe, because our trade with Europe—our nearest and largest neighbour—will always be of great importance.

I often hear the criticism that trade deals outside the EU cannot make up for a loss in EU trade—that has already been referred to in a couple of interventions—but, as I say, this is not an either/or choice. I can assure the House that the Government fully understand the importance of European trade. The EU is our largest trading partner, accounting for 43% of our exports and 54% of our imports. Complex and integrated supply chains across the UK and EU show the importance of making cross-border trade as free and frictionless as possible, and that is why it is important that we get our relationship with Europe right.

[Phil Wilson (Sedgefield) (Lab)]

On frictionless trade, will the future be better than what we have now or worse?

[Greg Hands]

As I said, we are seeking a good, comprehensive, deep and wide trade partnership with the EU that is as frictionless as possible. That is why the right relationship is this deep, comprehensive and unique free trade agreement with Europe, based on the principles the Prime Minister set out throughout 2017 and in her speech a fortnight ago. We should oppose Labour’s latest Brexit policy of apparently keeping the UK in the, a, or perhaps any customs union with the EU. We want the greatest possible tariff and barrier-free trade with our European neighbours, as well as to negotiate our own trade agreements around the world.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

In the pursuit of this future relationship, will the Minister update the House on what progress has been made on the continuity of trading terms for our food and drink producers, especially in relation to the protected designation of origin and protected geographical indication schemes? Last week, the Secretary of State for Scotland guaranteed that there would be absolutely no change, but yesterday the Minister for Agriculture, Fisheries and Food said that absolutely nothing could be guaranteed. Who is correct?

[Greg Hands]

It is a bit rich for the right hon. Gentleman to vote against the European Union (Withdrawal) Bill and then to call for something that would be a consequence of that Bill: creating a new geographical indication scheme—by the way, we will be doing that in consultation with the devolved Administrations—to make sure that we continue to protect the UK’s 84 registered GIs within the UK. That is the Government’s objective, which I would hope he would support.

[Hilary Benn (Leeds Central) (Lab)]

Will the Minister give way?

[Greg Hands]

No, I will make a little more progress.

We have heard questions about why we would want a bespoke trade agreement rather than taking one off the shelf, which, the argument goes, would involve easier negotiation. I remind the House of the Government’s reasons for choosing this approach over existing models, such as the EEA or CETA, and why whatever model we choose must involve leaving the customs union. A Norway-style deal might seem superficially attractive, but we would be subject to any new rules that the Commission chose to enact, automatically and in their entirety, with no endpoint. Most importantly, we would have little influence over those rules and no vote, which would be too much of a loss of democratic control, and also no guarantee—far from it—that whatever the EU27 did would also be in the interests of UK businesses and consumers.

Nor should we look to a Canadian-style agreement for the answer. Even if it were easier to achieve a CETA-style deal, we start from a unique position of regulatory alignment with the EU. Unlike other countries, we start from the position that our systems are already the same. It is precisely because the Government recognise how important EU trade is that we must look to an ambitious deal, rather than starting our relationship from scratch with something like CETA.

As important as trade with the EU is, however, we must also look outside Europe. The IMF—this statistic is also on the Commission’s website—estimates that over the next decade or so, 90% of global growth will come from beyond the EU. China adds an economy the size of Switzerland every year. There will be over 1 billion middle-class African consumers in 2060, and Commonwealth GDP is predicted to hit $13 trillion in two years. These represent unprecedented opportunities, yet they are harder to reach from behind the EU’s customs wall. Only once we can sign our own independent trade deals can we take full advantage of them.

Signing those deals means being outside the customs union. We need look only to Turkey to see that being in the customs union, in whole or in part, can sometimes be the worst of all worlds.

[Several hon. Members rose—]

[Greg Hands]

I want to make progress—it is very important that Members understand the point that I am making.

The EU is currently negotiating a deal with Japan. If it finalises that deal, of which, as I say, we are strongly supportive, Turkey will need to reduce tariffs on Japanese imports, but it will not get reciprocal access to the Japanese market. It will have to negotiate its own access, but those negotiations will be more difficult because Turkey will already have reduced its own tariffs and therefore will not have as much to give in return. As the Prime Minister has set out repeatedly, we are looking for a bespoke agreement. For goods, this will be based on a comprehensive system of mutual recognition, so that products need be approved only once. On services, we have an opportunity to establish a broader agreement than ever before.

[Anna Soubry]

My right hon. Friend is being very kind and generous in giving way, especially as I am really not helping him. With the greatest respect, he knows, as everyone else does, that we will and can achieve all these deals with countries such as China as a member of the EU. By way of example, I have met the Australian ambassador, and while he would of course want to do a trade deal with our great country, Australia will look first to do a trade deal with the EU, with its 500 million customers. Is it not important that we make all these things very clear to the British people? We do trade deals at the moment by virtue of our membership of the EU, and the only reason why we are leaving the customs union is to chase unicorn deals, but we can get deals with the EU.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. It was quite in order for the Minister to give way to the right hon. Lady, but she knows that her intervention was too long, because she said so the last time—I heard her.

[Greg Hands]

It was a long intervention, Madam Deputy Speaker.

With all due respect to my right hon. Friend—she and I served alongside each other in government—the British people have made the decision to leave the European Union. That was the crucial decision made in June 2016. The Government’s purpose is now to ensure that we have the best possible frictionless trade deal with the European Union, while still being able to take advantage of trade opportunities beyond the EU. As I have stated repeatedly during this debate, that is the Government’s objective.

[Stewart Hosie]

Will the Minister give way?

[Greg Hands]

No. I have already used up 25 minutes, and I am going to make a little more progress.

On services, we have the opportunity to establish a broader agreement than ever before. Of course we recognise that we cannot have the rights of single market membership, such as passporting for financial services, just as we understand that we cannot have all the benefits of single market membership without the obligations, but that does not mean that we should be shackled by existing precedent.

I know that some Members will ask how we can be sure that the EU will agree to our approach. The main point to bear in mind is that it is strongly in EU countries’ interests—economic and otherwise—to sign and agree such a deal. On the day we leave, the United Kingdom will overnight become the EU’s second largest trading partner—larger than China, Japan or India. The Commission estimates trade between the UK and the EU27 to be worth €812 billion. That is only 8% behind the EU27’s main trading partner, the United States, but it is 60% more than with China, which comes third.

Given the effort that the EU has put into deals with the likes of Mexico, Vietnam and Singapore—all of which, crucially, we support, but each of which is significantly less important to the EU than ours—it would be odd indeed for it to reject proposals from us. Furthermore, both the EU and the UK need to send a loud and clear message that we are strong believers in free trade. What message would be sent if we could not reach a free trade agreement?

However, even that underestimates our importance to the EU, because it is the type of trade that matters, not just the volume. Our strongest comparative advantages are in the business, professional and financial services that other businesses need to grow, and in the pharmaceutical goods that no one wants to exclude. For an advanced economy, good financial infrastructure is just as important as physical infrastructure, even if it is not as obvious. Restricting Europe’s access to the City’s financial infrastructure would be the act of a latter-day Beeching—although this time the main line would be closed, not the branch. Yes, the rest of the network could try and pick up the slack—the Frankfurts or Parises—but as I know, because I have worked in the sector, that network has less capacity and is less efficient, and EU businesses and manufacturers could not connect with the capital market that they need. The EU talks about a capital markets union, but how tenable is that without access to Europe’s main capital market?

Our relationship goes beyond mutual economic interest, however. Our membership of the EU is only one part of our relationship with Europe. We can still be neighbours when we leave: we are 30 km from the coast of France. We have cultural ties from before the EU was founded. We will still be in the same core organisations that the EU or its members are part of, from the European Court of Human Rights to the UN to NATO, and from the International Monetary Fund to the World Trade Organisation—the economic, security and humanitarian firmament that holds the international system together.

[Vicky Ford]

Will my right hon. Friend give way?

[Greg Hands]

No. I am about to finish.

Nevertheless, the Department for International Trade is preparing this country for life outside the EU. We are proceeding with trade and customs Bills that will give us a functioning customs regime on day one. As one would expect, they have been designed to prepare us for every eventuality, although they will be needed regardless of the outcome of our negotiations with the EU. They will give us a strong trade remedies regime. Free trade does not mean trade without rules, but Labour opposed these new powers when they were considered on Second Reading. Our independent trade remedies regime will allow us to protect UK industry from unfair dumping or subsidy, while balancing its interests against the interests of UK consumers and other UK businesses. It will be delivered through an independent trade remedies authority, so that businesses have the confidence they need that it will be impartial and will not act against the interests of wider industry. I want to make sure that this new regime works as well for business as it should from the start. We are consulting on which existing EU trade remedies we should carry over, and I encourage any business with an interest to respond before the consultation closes at the end of this month, and any Members with producer or consumer interests to help to publicise this.

The Taxation (Cross-border Trade) Bill will also allow us to create a UK unilateral trade preferences regime for developing countries. Shockingly, this was also opposed by Labour, the Scottish National party and the Liberal Democrats on Second Reading. The UK is a proud advocate of supporting developing countries to reduce poverty through trade, and I hope that Labour will reconsider its stance. This Bill will let us continue the UK’s existing system of preferential access for developing countries, which reduces or removes import tariffs from a number of countries, while also allowing us to explore improvements on the EU’s current system.

Leaving the European Union will allow us to negotiate trade deals across the world, but at the same time, this Government understand the importance of EU trade. That is why we seek a deep and special partnership with the EU. This is the only appropriate option. Members of all parties should be optimistic that that can be achieved.

[Several hon. Members rose—]

Oral Answers to Questions

Greg Hands Excerpts

Thursday 22nd February 2018 Commons Chamber

[Catherine West (Hornsey and Wood Green) (Lab)]

2. What estimate his Department has made of the number of new institutions required to replicate the terms of existing trade agreements with the EU after the UK leaves the EU.

[The Minister for Trade Policy (Greg Hands)]

The Government are committed to seeking continuity in our trading arrangements to minimise disruption to businesses, consumers and our trading partners. We will ensure that the institutional provisions of existing agreements are met as the UK begins to operate its independent trade policy.

[Catherine West]

What parliamentary shared goals do the Government have in mind for the new arrangements that will come into place?

[Greg Hands]

To be absolutely clear, if the hon. Lady is referring to the Trade Bill, what we are looking at is the transitioning of existing trading arrangements with the EU. All those agreements have already been through parliamentary scrutiny. If she is referring to future trade agreements, we will bring that subject back to this House in due course.

[Julia Lopez (Hornchurch and Upminster) (Con)]

One of the new institutions we shall need to set up as we leave the EU is a trade remedies authority. I recently travelled to Canada and the US with the International Trade Committee. They are two countries that have robust trade remedies authorities whose impartiality can be critical in reaching economically sound judgments. What assurances can the Minister offer the House that the UK Government are similarly committed to an independent TRA that will be free from undue political interference?

[Greg Hands]

I congratulate my hon. Friend and the other members of the Committee on their recent visit to the United States and Canada. Those are two of the countries whose trade remedy systems we have studied, along with Australia and, in fact, the European Union system itself. As my hon. Friend says, it is common, although not universal, for the investigation process to be independent of the Government, but there is still a political decision at the end of the process by a Minister who is accountable to Parliament. It is worth pointing out, by the way, that all the Opposition parties voted against the creation of the trade remedies authority in the first place.

[Patrick Grady (Glasgow North) (SNP)]

I do not know whether a bridge counts as an institution, but I wonder whether the policy of the Department for International Trade, like that of the Foreign Office, is that a new fixed link between Britain and France is required to continue to improve trade after Brexit.

[Greg Hands]

We have been absolutely clear throughout this process about the importance of maintaining our trading relations with the European Union. That is why we are seeking to ensure that trade is as frictionless as possible, and why we are seeking a comprehensive free trade agreement with the EU.

[Mr Philip Hollobone (Kettering) (Con)]

The EU does not have comprehensive free trade agreements with some of the world’s major economies. Does the Minister believe that the United Kingdom is likely to strike such deals more quickly than the European Union?

[Greg Hands]

We remain supportive of the European Union’s negotiations with some of those trade partners while we are still a member of the EU, because we are strong believers in free trade. We have also set up 14 trade working groups with many of the leading economies, including China, India and the United States, and we look forward to making further progress with those arrangements in due course.

[Judith Cummins (Bradford South) (Lab)]

Our current trading relationships with many partners ranging from Switzerland to Mexico are overseen by joint committees of the EU and those other states. Will the Minister tell us how many of the committees will be replaced by UK equivalents after Brexit, and what progress his Department has made in establishing those institutions? Will he also tell us where the staff and expertise will be sourced from, and at what cost to the taxpayer?

[Greg Hands]

Let me say first that the UK played a leading role in establishing the European Union arrangements with countries such as Mexico and Switzerland in the first place. As for the question of where we go from here, our priority is to maintain continuity in our trading relations, ensuring that all the 40-plus trading agreements we have with 70-plus countries become UK arrangements as we leave the European Union. The precise format of the further discussions that we will have with those partners will be a matter for future arrangements.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

3. Whether he plans to replicate the terms of EU free trade agreements in trade deals with Switzerland, Norway and Turkey after the UK has left the EU; and if he will make a statement.

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[Colin Clark (Gordon) (Con)]

4. What steps he is taking to strengthen UK trading relations with Australia, New Zealand and other Commonwealth countries in the Pacific.

[The Minister for Trade Policy (Greg Hands)]

We have the opportunity to enhance our global trading relationships, including those with the countries with which we share bonds of history and friendship. My right hon. Friend the Secretary of State travelled to Australia and New Zealand in November to promote free trade and deepen those trading relationships. The April Commonwealth summit here in London will provide an opportunity for us to continue that work with all member states.

[Colin Clark]

Has my right hon. Friend considered how UK agriculture will compete with our Commonwealth cousins when we agree a free trade deal after leaving the customs union?

[Greg Hands]

I praise my hon. Friend for his distinguished business career in the sector before coming to this House; it means he brings real expertise to the House. He will know that we have established trade working groups with both Australia and New Zealand to explore possibilities in trade and investment. They will include agriculture, but it is too early to be sure how it will be covered in those and other future trading arrangements. The New Zealanders are very interested in this—the New Zealand High Commission recently wrote to the International Trade Committee saying:

“Given the complementarity of our two economies and our deep bilateral ties,”

they want to do something with us, and we very much agree.

[Chris Elmore (Ogmore) (Lab)]

On negotiations with New Zealand, the Minister will be aware that Wales has a large lamb industry—it is one of the great prides of the United Kingdom—so can he give an absolute assurance that in his negotiations with New Zealand he will not put any Welsh farms and the Welsh lamb industry at risk?

[Greg Hands]

I am keenly aware, as are my right hon. Friend the Secretaries of State for International Trade and for Environment, Food and Rural Affairs, of the importance of British agriculture in all parts of the United Kingdom and of making sure we have the necessary protections in place on animal welfare standards and so on, and also of promoting the opportunity to export our excellent British goods. Food and drink is one of our fastest-growing export sectors, and we want people to take advantage of opportunities across the UK.

[Mr Gregory Campbell (East Londonderry) (DUP)]

What importance does the Minister attach to deepening and broadening our trade relationships with countries such as India, which has a widening middle class among its population of 1.25 billion?

[Greg Hands]

The Prime Minister’s first bilateral trade visit in November 2016 was to India, accompanied by the Secretary of State and myself. We have recently completed a trade audit with India that looks at all the barriers. India is at times a difficult market for British exporters to crack. We have a lot of advantages in doing business there, and the trade audit and the joint economic trade committee talks led by the Secretary of State last month are taking us in the right direction.

[Joanna Cherry (Edinburgh South West) (SNP)]

5. What recent assessment he has made of the effect on UK trade of the UK leaving the EU single market and the customs union.

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[Mr John Hayes (South Holland and The Deepings) (Con)]

8. What recent estimate he has made of the UK’s trade deficit in goods and services.

[The Minister for Trade Policy (Greg Hands)]

In 2016, the UK had a trade deficit with the EU of £70.97 billion, and a trade surplus of £39 billion with non-EU countries, up from £33.6 billion in 2015. The latest trade figures show that in 2017, the UK’s trade deficit in goods and services narrowed by £7 billion to £33.7 billion.

[Mr Hayes]

Balance of trade figures were once regarded as pivotal. They were even thought to win or lose elections. Given that we are now going to escape from the constraining clutches of the European Union, will my right hon. Friend invest again in old friends and rejuvenate our relationships in the realm with allies such as Australia and New Zealand? What steps has he taken to ensure preferential arrangements with such old allies?

[Greg Hands]

My right hon. Friend asks a very good question. First, I should like to put on record my thanks to him for leading various Government trade delegations in recent years, including one to Colombia. I know that he takes a strong interest in this subject. As I said earlier, we have set up trade working groups with Canada, the United States, Australia and New Zealand, and, unlike Opposition Front Benchers, we also voted for the comprehensive economic and trade agreement, the EU’s free trade agreement with Canada. The Secretary of State has been in all four of those markets in the past year, leading efforts to break down trade barriers and to seek new trade agreements.

[Mr Speaker]

I am sure that the right hon. Member for South Holland and The Deepings (Mr Hayes) enjoyed going to Colombia. Quite what Colombia made of the right hon. Gentleman is not recorded.

[Thangam Debbonaire (Bristol West) (Lab)]

The creative sector in Bristol West—particularly the music industry—is important, and trade in that sector is a service industry. What steps are the Government taking to ensure that the creative industries, particularly the music industry, are supported as we leave the EU?

[Greg Hands]

The hon. Lady is quite right to point out the importance of services to our trade. Overall, services represent 80% of our economy and 79% of jobs. My right hon. Friend the Secretary of State and the whole team are working closely with the Department for Digital, Culture, Media and Sport to ensure that we continue to grow exports from our creative sector and that investment from abroad continues to come into the sector. We often visit places such as Tech City UK and techUK, and we are working closely with them to ensure that we have a flourishing future for our creative industries.

[Martin Vickers (Cleethorpes) (Con)]

Last week, as co-chair of the all-party parliamentary group on Kosovo, I visited a British company in Pristina that has a £20 million investment there. What opportunities does the Minister foresee for widening our trade in goods and services with Kosovo and the neighbouring western Balkan countries?

[Greg Hands]

This is a very good opportunity. That is a part of the world that I know well, and I think that the company to which my hon. Friend refers is called Fox Marble—a highly appropriate name for this particular Question Time. It finds top-quality marble in Kosovo for export, and it should be congratulated. In regard to the wider region, we work closely with the Foreign and Commonwealth Office to promote trading opportunities throughout the region.

[Rehman Chishti (Gillingham and Rainham) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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[Edward Argar (Charnwood) (Con)]

T6. Further to his earlier answer, does my right hon. Friend agree that the prospects for future trade with our close friend and economic partner India remain very bright?

[The Minister for Trade Policy (Greg Hands)]

Yes, my hon. Friend is right. I mentioned the India trade audit that has just been published. The Secretary of State met his Indian counterpart, Minister Prabhu, during our Joint Economic and Trade Committee meetings in January, and they agreed that bilateral work will now explore addressing barriers in four recommended sectors: food and drink, life sciences, information technology and services.

[Mohammad Yasin (Bedford) (Lab)]

The UK remains a major transit hub for illegal wildlife trafficking, and we rely on Border Force to prevent that trade. Will the Minister tell his colleagues in the Home Office to ditch their dangerous plan to replace Border Force staff with volunteers?

[Greg Hands]

Actually, this Government have made enormous efforts to stop wildlife trafficking. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs made it a major part of his visit to south-east Asia last week, and he made particular reference to the pangolin, which at the moment is the world’s most trafficked animal. This Government are leading global efforts in combating this horrendous trade.

[Chris Philp (Croydon South) (Con)]

T7. Does my right hon. Friend agree that free trade helps consumers by lowering prices and that free trade has been one of the biggest contributors to combating global poverty over the past 100 years? Will he embrace the opportunities created by Brexit to do free trade deals that will help consumers and British businesses?

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[Eddie Hughes (Walsall North) (Con)]

T8. How can the many excellent manufacturing businesses in the Black country benefit when we leave the customs union?

[Greg Hands]

My hon. Friend is a fine and upstanding voice for the Black country. He will know that manufacturing experienced a 2.8% growth rate over the past year. Leaving the customs union provides an opportunity to enhance that growth, particularly as manufacturing exports outside the EU are growing so fast.

The Minister for Women and Equalities was asked—