EU-US Trade and Investment Agreement

Guto Bebb Excerpts

Thursday 18th July 2013 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to contribute to this debate, and I congratulate the right hon. Member for Wentworth and Dearne (John Healey) on securing it through the Backbench Business Committee. I am also very pleased to be involved with the all-party group on European Union-United States trade and investment, because it is important that we debate this issue sooner rather than later, as the House should take responsibility for what is potentially a very important treaty.

My hon. Friend the Member for Stone (Mr Cash) raised the important issue of scrutiny. That starts by having a debate on the Floor of the House in which Members can highlight important issues of concern. We have already heard a great variety of comments, which shows this House is making an important contribution to the scrutiny of this issue.

The debate has also been memorable because it marks the first time I have ever heard my hon. Friend the Member for Skipton and Ripon (Julian Smith) described as a member of the Tea party. It is a shock that that description should be applied to him because if I were asked to identify the Conservative Member who would be least likely to be a member of the Tea party it would be him. I think the comment was made in jest, however.

There are issues to be discussed in respect of this trade and investment deal between the EU and the US. I was intrigued by the comment of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) that small countries could negotiate such deals better than the EU. That would be worthy of discussion, and I am sure the all-party group would be delighted if my hon. Friend were willing to contribute to our discussion by debating that issue.

[Jonathan Evans]

Specifically on that point, does my hon. Friend think it might be useful to invite the minister-counsellor from the US embassy in London, who has already made it clear that the concept of some separate UK-US trade deal is a non-starter?

[Guto Bebb]

That comment has indeed been made, and the all-party group could have a good debate on these issues. I am happy to have this argument. That is why we wanted to establish the all-party group and to have this debate. We need to ensure all the views in this House are heard.

I am a believer in free trade as I think it is beneficial. The concerns raised by some Members on the Government Benches are not about free trade, however: they are about whether the agreements would enhance free trade. That is a reasonable concern to have, and it needs to be scrutinised by this House. If we are to negotiate a free trade agreement between the EU and the US, we need to make sure it is a genuine free trade agreement.

The main town in my constituency is Llandudno, and the largest secondary school in Llandudno is Ysgol John Bright, which is named after an individual who believed strongly in free trade. To have concerns about whether this agreement would enhance free trade is not to oppose the treaty; it is more about making sure that what we create will benefit not just the economy of the UK, but the global economy. I say that because I agree that a genuine free trade agreement between the EU and the US will not just have an impact on the states in Europe and the United States; it will have a global impact as well. These issues are worth discussing, therefore, and that is why it is important that we have this debate at this point in time.

I have concerns about the time scale of two years for this agreement. I had the good fortune last night to be in discussions with one of the Canadian Prime Minister’s advisers, because one concern that must be expressed is that for a long period—certainly since I have been elected to this place—we have been involved in discussions between the EU and Canada in an attempt to reach a satisfactory trade agreement between those two trading blocs. Unfortunately, as yet, despite promises on numerous occasions that we were very close to an agreement, no agreement has been reached. We are being told by some individuals involved on this side of the pond that the issues are all to do with concerns about Canadian farmers and agriculture, yet when I was discussing this issue last night with that representative of the Canadian Prime Minister the concerns were all about the demands of the EU in terms of our agriculture. This two-year time frame presents a real challenge for us, therefore. If an agreement cannot be secured after so much time between the EU and Canada, there is a real question about whether the EU-US agreement can be secured within two years.

The two-year time frame should be applauded for its ambition, however. We should go into all negotiations with an ambitious timetable, but we also need to be realistic and acknowledge that that agreement with Canada is not yet in place. It would be a great achievement if we could have that agreement in place to show the way forward for a genuine free trade agreement between the EU and the US.

[Julian Smith]

Does my hon. Friend agree that pace is important, however, lest lobby groups and trade groups—especially very dynamic ones in America—get their act together and start slowing things down to the point of halting progress?

[Guto Bebb]

I thank my hon. Friend for making that excellent point. It is one of the key concerns in relation to the fact that we are still waiting for a Canada-EU agreement, because the more the issue is highlighted, the more it seems that the opponents come forward with further concerns about why the agreement should not go ahead. As I have said, I do believe we should support this ambitious target, but I highlight the fact that the experience in relation to Canada has not as yet been particularly positive.

I also think we should express concern at the ability of some countries in Europe to highlight their protectionist views in relation to this proposed agreement. It is a concern that the audio-visual sector has been excluded from negotiations. That is also a positive issue in many ways, however, because the decision to move ahead with talks has been made despite the fact that the European side has excluded that sector. We are aware of why that specific area has been excluded, but it is encouraging to see that one problem has not necessarily resulted in a decision that the whole negotiations should be stopped.

That shows a pragmatic attitude, which we saw when I was in Washington last year. People on the Hill felt that this was an opportunity to create a genuine agreement between the EU and the US. That is noticeable, because there was a feeling when we were there that the time to strike on such an important issue is when people can see the advantages. When the economies of the western world are doing well, the need for such an agreement is perhaps less.

Last summer in Washington, it was very apparent that people felt that the States still required fundamental changes to their economy. They saw the opportunity for freer trade with the EU as important and thought that it would lead to a much better agreement on much better global trading. An important point about free trade between the EU and US that has not been made this afternoon is that we would end up with an agreement on regulations, for example, that would be acceptable in many parts of the global economy. If the EU and the US were to agree on certain consumer protection standards that were acceptable to those two large trading blocs, they could be the basis for agreements on a raft of other issues that would allow other parts of the global economy to aspire to enjoy the benefit of global free trade and of an EU-US trade agreement by working to the same standards rather than undercutting them.

[Mr Cash]

I want to make a simple point. Some of the commentators—I would include myself—are slightly concerned that the objectives from the European point of view are driven less by the question of free trade and more by the idea of becoming a linchpin of the moves towards political union so that they can stitch up deals all over the world under the Lisbon treaty, which would then result in a greater opportunity for political union. Does he agree that that is a possibility?

[Guto Bebb]

I would be reluctant to agree with that rather negative view of the reasons behind the trade agreement. Again, one of the reasons I was keen to be involved in the all-party group was to ensure that we discuss such issues openly. If there are significant concerns of that nature, it is important that they are aired and that we instigate a public discussion.

Let me finish on the issue of whether such a trade agreement will have an effect on our relationship with the European Union. I am often made despondent by the behaviour of the EU and I believe that we need to renegotiate the relationship between it and the UK. We need to show the people of this country once more that the EU could benefit us, rather than being problematic, a drag on economic growth and a cause of deep frustration. As someone who represents a constituency that is dependent on small businesses, I see that small businesses clearly feel frustrated by much of what comes out of Europe.

The agreement is a hugely important opportunity for the EU to show the people of the UK that the EU can provide us with much more trade, which is what we want from our relationship with our European partners, and much less of the other stuff, which is so problematic. This is a challenge to not just the United Kingdom but our European partners to show that we can create something in the EU that will benefit the economies of Europe and the rest of the world. That is the challenge that the EU needs to stand up to. If it fails, it will make a huge problem for the future of our relationship with the EU.

--- Later in debate ---

[Paul Blomfield]

The Conservative party’s alliances when the hon. Gentleman was in the European Parliament were better than those it has made subsequently.

[Guto Bebb]

Will the hon. Gentleman give way?

[Paul Blomfield]

Let me make some progress, My point is that the Prime Minister did not understand that the more red meat he threw to those on his right, the more they would want. We find ourselves being pushed towards the exit door of the European Union at a time when the case for membership has never been stronger.

Let me turn to the trade deal and the comments made earlier by the hon. Member for Stone (Mr Cash), who sadly is no longer in his place, when he sought to diminish the importance of our trade with the European Union. The EU is the UK’s main trading partner and comprises around 52% of the UK’s total trade in goods and services. Of course growing markets in China and India are important, but those two markets account for 5.6% and 1.6% of our current trade. Through the Department for Business, Innovation and Skills, the Government estimate that 3.5 million jobs in Britain are linked, directly or indirectly, to our trade with EU member states.

Let us look to the future. It has been estimated that by 2020 the UK will have fallen to the ninth largest economy in the world. In contrast, the EU is the largest economy in the world, home to 7.4% of the world’s population and accounting for almost 20% of world GDP. The EU is not important to the UK simply for that reason, but also because of the access it provides to other markets. The EU is the top trading partner for 80 countries and currently has free trade agreements with more than 40. That process is continuing, and the EU is currently negotiating agreements with more than 70 countries, including important UK partners such as India and Japan, as well as growing economies such as Brazil. According to the CBI, the European Union has negotiated trade agreements that cover around 30% of trade outside the EU area, and it is in the process of raising that figure to 70%.

It has been estimated that the deal we are considering today will generate around €119 billion of benefits to the EU and create 2 million jobs. As my right hon. Friend the Member for Wentworth and Dearne pointed out in his opening remarks, that could benefit the UK economy by up to £10 billion a year. My hon. Friend the Member for West Bromwich West (Mr Bailey) was right to point out that current tariffs averaging around 4% are quite low, but given the volume of trade, the benefits are significant. Even more significant—my right hon. Friend the Member for Wentworth and Dearne referred to this—is the alignment of regulatory standards and the opportunity that offers not only for trade between these two important blocs, but in raising standards internationally.

My right hon. Friend was also right to highlight concerns about the potential privatisation of public services—a threat that has been targeted wrongly at this deal. It is important that we reassure those who are worried about the impact of this deal on public services, and the health service in particular, which might disappoint some Conservative Members who would like to see much greater privatisation.

In the free trade agreements that the EU has negotiated, public services exemptions are provided in two ways: first, by provisions that refer to

“services exercised under Government authority”—

the police, for example, and the justice system—and, secondly, by provision for public utilities, which would cover health care. The former provisions are automatically excluded from all trade agreements. The latter are not automatically excluded but reservations are attached that allow EU member states to maintain public provision or limit access to a certain number of providers—both domestic and foreign—in those sectors.

It is important that we send a clear message that the EU-US trade agreement in itself cannot lead to further privatisation of health care in this country. The policies of this Government will do that—or perhaps not, if they are successfully defeated. The trade agreement could, however, lead to a significant boost to the UK economy. It would be the most significant bilateral agreement, and our combined economies are worth almost 40% of world GDP. We must be honest when responding to comments made by some Government Members who are no longer in their seats, and recognise where we stand internationally. The UK alone would not have the negotiating clout of the EU in striking the sort of deal that would benefit all member states, including the UK. As with so many other things, we are stronger together in Europe, and this deal is yet another reason why we must be at the centre of the European Union.