Exiting the European Union and Global Trade

Debate between Hannah Bardell and Lord Vaizey of Didcot

Thursday 6th July 2017 Commons Chamber

[Mr Vaizey]

And Russian. So everything is now in place for progress to be made.

I have to say that I am sceptical about the future. May I quickly add that I do not work for the BBC? However, I want to use this opportunity to say that I am a huge supporter of the BBC and of BBC news, which is respected all around the world. Those people who question the BBC’s patriotism or declare that it is somehow biased in this debate are absurd. You can see me on YouTube, when I defended George Osborne’s Brexit emergency Budget debate, being torn apart by Andrew Neil. He cut me no slack as a remainer coming on his programme. The BBC is not biased or partial, and people who claim that it is have simply lost the argument.

Let me get back to the main point of the debate, which is trade. I confess that I find this country in a confusing position. We are leaving the European Union free trade area that gives us access to 500 million consumers in order to trade with them on the basis of the World Trade Organisation rules. That seems to be the only position that we are taking. At the same time, we will negotiate a free trade deal with the United States because we do not like trading with that country on a WTO basis, so I am completely unclear as to what our position is on free trade and why we are walking away from 500 million consumers. I also find it odd that we want to have no deal rather than a bad deal.

It is quite clear from Michel Barnier’s speech this morning that we cannot pick and choose which sectors might benefit from access to the single market. It is also clear that having access to the single market and being a member of the European Union enables us to have free trade. The European Union has negotiated 60 free trade deals. The House approved a free trade deal with Canada this week, and another has seen exports to Korea rise by 54%. The EU has just started negotiations with Japan, and it is through no fault of the EU that we do not have a trade deal with the United States.

Trade deals are not necessarily nirvana. Ministers and others say that we will be able to have free trade deals from the day we leave the European Union, but I caution them as to the nature of those free trade deals. My hon. Friend the Member for Stone (Sir William Cash) talked about the virtues of free trade, with which I agree, and the opportunity to reduce import tariffs, but he has to be aware of the reaction of the British public and different sectors of the British economy if we simply reduce tariffs against their competitors. Not every free trade deal will be plain sailing, which is why it has taken seven years to negotiate the free trade deal with Canada.

[Hannah Bardell]

Is the right hon. Gentleman aware of the research by the University of California, Berkeley showing that the average time taken to negotiate a free trade agreement is 28 months? That means it would take the UK 91 years of cumulative negotiation to get to where we are. Does he think that will be a problem?

[Mr Vaizey]

That is the point. The idea that we can take free trade deals off the shelf and not face lobbying from different sectors of our economy on the possible threats to their position from a free trade deal—the idea that all sectors of our economy are crying out for free trade deals—is a misconception. These are extremely complicated arrangements. [Interruption.] My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) says that we do not have a free trade deal with the EU, but at least we have access to the market without quotas, tariffs or non-tariff barriers.

Remember that free trade deals are constructed by human beings. This week I met a former US trade negotiator who is well plugged into the entire scene and who told me that the US trade representative organisation is already at full stretch and is demoralised by President Trump canning the Trans-Pacific Partnership. It has to renegotiate the North American Free Trade Agreement, and the Transatlantic Trade and Investment Partnership has been put back on the agenda. When President Obama said that we were at the back of the queue, the language may have been unfortunate but we should be realistic about where we are in the line with the US and realistic about the capacity of the US Administration to negotiate with us.

I have a few asks of the Minister, who is free to reply in German or Russian, as he sees fit, to show his capacity, for which I have nothing but admiration. Which countries are we targeting, and why have we chosen them? I know that we have 10 trade groups. I would like to hear his thoughts on a timetable for free trade deals with those countries. Is there any economic analysis of what the growth of GDP will be once those free trade deals have been negotiated?

I am a great supporter of the work of the Secretary of State for International Trade, who mentioned the welcome inward investment we have seen in the past year or so. As a former Minister with responsibility for the digital industries, I particularly welcome the investment by companies such as Facebook and Google. There are many, many issues, but we welcome their inward investment. Does the Minister agree that that inward investment is predicated on their ability to recruit people with specialist abilities?