EU Trade Agreements: Replication

Debate between Jacob Rees-Mogg and Liam Fox

Wednesday 13th February 2019 Commons Chamber

[Dr Fox]

If we get an agreement via the withdrawal agreement with our European Union partners, that is exactly what will happen: those agreements will roll over. Let me explain to the House why: the United Kingdom will be deemed by the European Union to continue to be party to those agreements. We will get continuity, but we will not get the same continuity if we do not get an agreement with the EU. Those who continue, by their actions, to make no deal more likely will have to be responsible for the consequences.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

I congratulate my right hon. Friend and Somerset neighbour on achieving a deal with Switzerland so effectively. Does he share my enthusiasm that this is the beginning of an opportunity for this country to trade more freely, to be able to cut the cost of goods coming into the country and to stop acting as a protectionist racket for inefficient continental European companies?

[Dr Fox]

I am grateful to my parliamentary next-door neighbour for his comments. Indeed, we have a great opportunity as we leave the European Union and as we take up our independent seat at the World Trade Organisation to be champions for global liberal free trade at a time when the voices of protectionism are rising. That is important not only for the United Kingdom or, indeed, for the economic wellbeing of the trading world, but for the wellbeing of those we have managed to take out of abject poverty as a result of a liberal global trading environment.

US Steel and Aluminium Tariffs

Debate between Jacob Rees-Mogg and Liam Fox

Monday 4th June 2018 Commons Chamber

[Dr Fox]

I am grateful to the hon. Gentleman. He is right that there is an issue of global overcapacity and that, as I have said, that must be tackled on a multilateral basis because it cannot be effectively tackled on a bilateral basis with the use of tariffs. That will not be a successful way of dealing with it. What it has resulted in is a great deal of energy being spent on blue on blue activity, rather than on dealing with the issue at source. However, he is wrong about the support to the steel industry. As of 8 November 2017, the Government have, for example, paid more than £207 million in compensation to the steel sector as an energy-intensive manufacturer.

The hon. Gentleman is also wrong about the Opposition’s vote against the Trade Bill. They voted against not the provisions of a Trade Remedies Authority, but the setting up of a Trade Remedies Authority, which would have meant that we had no defence whatsoever. He is wrong about another matter, too. The American President was not involved in the Bombardier dispute. That was a commercial dispute brought by Boeing and nothing to do with the US Administration. However, the hon. Gentleman is right on the precedent of national security. The problem with using national security, as has been done in this case through the section 232 mechanism, is twofold: first, if the United States were successful, it would set a precedent for others to do the same and to use national security as a pretext for protectionism; and, secondly, it leads the WTO into the realms of having to determine what is, and what is not, acceptable as a definition of national security. That is something that the WTO has always shied away from.

When it comes to the countermeasures, we will still want to see what the measures themselves are. Specifically, we have been talking to the Irish Government about the issue of bourbon being on the list because of the potential implications for the Scotch whisky industry and the Irish whiskey industry. We will want to continue those discussions with the Commission.

I made it very clear that we will have whatever safeguards are required. I do welcome the WTO dispute. If we are talking about the need for an international rules-based system, it is the appropriate mechanism for us to show our displeasure and that is the correct route for us to go down. Once we have left the European Union, I hope that we will have no problems with a UK exemption.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Will the President of the Board of Trade confirm that we are obliged not to seek an exemption for ourselves because of the duty of sincere co-operation, and that we can therefore can only do things with the EU? Does he share my concern that tit-for-tat retaliation is not in our interests and may make a trade war worse? The lesson of trade history is that protectionism is worst for the country that imposes it, and going tit for tat is therefore not in the national interest.

[Dr Fox]

My hon. Friend, as usual, raises interesting points. He is completely correct that a tit-for-tat dispute will help nobody. The United States has already seen an increase in the domestic price for steel. That means that input prices in the US are likely to rise, its output prices will ultimately rise and it will become less competitive, which is not an answer to its current trade predicament. When it comes to the position of the United Kingdom, had we been given an exemption by the US, we would still have been required to carry forward any counter- measures proposed and implemented by the European Union, but if we had implemented countermeasures without any measures actually having been applied to the United Kingdom, we would have been in breach of WTO law. It is a Catch-22.