Transatlantic Trade and Investment Partnership

John Healey Excerpts

Tuesday 25th February 2014 Commons Chamber

[John Healey (Wentworth and Dearne) (Lab)]

I beg to move,

That this House has considered the Transatlantic Trade and Investment Partnership.

I am pleased to have secured this debate on behalf of the all-party group on European Union-United States trade and investment, which I chair, and to have done so with support from the hon. Members for Aberconwy (Guto Bebb), for Carmarthen East and Dinefwr (Jonathan Edwards), and for Ceredigion (Mr Williams). I am also pleased to see that the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), is on the Government Front Bench and will respond to the debate. It must be rare, if not the first time, for a Cabinet Minister to respond to a debate such as this. I take that as a good sign that the Government are at last starting to put some serious political weight behind the debate about securing a very good deal for Britain in the trade negotiations between the EU and the US.

It is seven months since the House last debated the transatlantic trade and investment partnership. That debate was also secured and led from the Back Benches by members of the all-party group. It took place in July, just a week before the first round of negotiations began. Since then, there has been very strong progress, with three rounds of negotiations and a fourth round set for next month. The European Commission has taken the unprecedented step of setting up an advisory panel of business, trade union and consumer interests, and of freezing any discussion on dispute resolution while it conducts a consultation. We have seen a level of political and media attention on both sides of the Atlantic that is markedly and unprecedentedly up on that for these sorts of deals in the past. Last week, we had a top-level political stock-take led by Commissioner de Gucht and US trade representative Michael Froman on progress so far.

[Alok Sharma (Reading West) (Con)]

Like everyone in the House, I want this partnership to succeed and for us to get to an end point. On the stock-take, the EU Commissioner noted that the areas of difference between the parties are still larger than the common ground they share. Does the right hon. Gentleman share my concern that there may be slippage in the timetable?

[John Healey]

There may indeed; the hon. Gentleman raises an interesting point. He has been part of the cross-party efforts in this House in taking the debate about the potential for this deal out more widely into the country, and he spoke at a business debate in Reading in his constituency.

What I fear more than slippage in the timetable is that we are entering a period in the life cycle of any trade negotiations when the uncertainty and the risks are greatest. It is still unclear what exactly is on the table, those with specific concerns are voicing them fiercely, those with general support for the deal are still muted, and the specific tangible benefits that may come to Britain are still not really clear. This is a period of significant risk, when elections to Congress and to the European Parliament during the course of the year may detract from some of the political momentum and support. The onus on Parliaments and Governments such as ours to maintain that political support and momentum during the months ahead is therefore greater than ever.

[Steve Baker (Wycombe) (Con)]

rose—

[Julian Smith (Skipton and Ripon) (Con)]

rose—

[John Healey]

I give way to the hon. Member for Skipton and Ripon (Julian Smith).

[Julian Smith]

Does the right hon. Gentleman agree that we in the all-party group have been somewhat helped by George Monbiot, who wrote a barking mad article in The Guardian, to which the Minister responded in his usual robust manner, and that we require George Monbiot to keep writing these barking mad articles so that we can resist them every step of the way?

[John Healey]

The hon. Gentleman may be slightly disappointed by my response, because I do not necessarily agree with his arguments. However, I draw the same conclusion about the particular focus of the article: the case for investor-state dispute systems as part of a deal between the EU and the US. In fact, I have written my own piece in which I say that I cannot see the case for that in a deal such as that under negotiation. The case has still to be made—I will come on to this later—by those Governments who may favour it and, indeed, by the Commission, whose role it would greatly enhance.

[Julian Smith]

rose—

[John Healey]

I was going to give way to the hon. Member for Wycombe (Steve Baker), but he has left the Chamber, so I will, of course, give way to the hon. Member for Skipton and Ripon again.

[Julian Smith]

Will the right hon. Gentleman clarify how on earth Britain will be able to persuade inward investors to come here and how we will be able to do a deal with China if we cannot sign this agreement?

[John Healey]

The answer is simply because a deal with China is very different from a deal with the US. The US and the EU both have long traditions of due legal process. If the hon. Gentleman looks at the representations being made by business and investors, he will see that there is very little call for the arrangements. The strongest advocate to date has been the European Commission, which is why I think the pause it has put on further discussions is so significant, although it did so only because it was put under significant pressure by those who had concerns, perhaps including Mr Monbiot in The Guardian.

These trade negotiations are about a potential trade deal like no other. They are the biggest ever bilateral trade talks, because together the EU and the US account for 30% of global trade and almost 50% of the world’s output. They are also the best prepared talks ever, because the serious work was going on for almost two years before the talks were formally launched, and they are the most ambitious negotiations ever, because for the first time in history this would be an agreement between economic equals, without any significant imbalance in power and wealth.

This is, therefore, a deal like no other, but it is being conducted at a time like no other, because since the 2008 global financial crisis and world downturn, faith in politicians, established civil servants and big business is at an all-time low and mistrust at an all-time high. I think that heightens the sense that past trade talks have been unjustifiably conducted in secret, controlled by a few big countries and often dominated by the interests of multinational companies.

A symptom of that current suspicion led War on Want to assert in a well-written report last week:

“TTIP is…correctly understood not as a negotiation between two competing trading partners, but as an attempt by transnational corporations to prise open and deregulate markets on both sides of the Atlantic.”

I quote that not because I agree with it, but because it is a sign of the degree of opposition and hostility to—and to some extent the lack of understanding of what is really at the heart of—the negotiations, which is fashioning the debate at present.

[Lisa Nandy (Wigan) (Lab)]

I am grateful to my right hon. Friend and colleagues from across the House for initiating this debate. Does he share my concern that many of the people we represent who are on zero-hours contracts and dealing with insecurity in the labour market will look at the United States, which is among those countries to have ratified the fewest International Labour Organisation conventions in the world, and be really concerned that this agreement, which could be very good for all of us, may actually make the situation worse for them? Would my right hon. Friend welcome a response from the Minister to that?

[John Healey]

I would indeed. My hon. Friend is right: the US has failed to sign six central ILO conventions on labour standards, including freedom of association and other workplace concerns. It may be that a deal such as this could have damaging consequences for already insecure workers in the European Union and the UK, but on the other hand it might not lower standards and it might bring an economic and jobs boost that would benefit many in Britain. That is what we have to secure and we have to make sure that my hon. Friend’s concerns are set to one side and not realised.

[Ian Paisley (North Antrim) (DUP)]

We currently export more agricultural products than we import in trade with the United States, and maintaining that balance would, of course, be beneficial to primary producers across the United Kingdom, principally our farmers. Does the right hon. Gentleman agree that United States produce should meet our exacting standards in the traceability of foods?

[John Healey]

I do agree. What is interesting about the way in which the debate has progressed in the seven months since the House last discussed the issue is that the Commission has become much clearer in saying that the stance of its negotiating team will be not to lower consumer, environmental or labour standards. I will suggest later that that should be one of four central tests that we or anyone else should be able to level at the quality of the negotiations and the agreement struck.

My central point at this stage is to say that, for the first time—because of the level of interest and the level of mistrust in the establishment, politicians and big business—this cannot be a traditional backroom trade deal done by the elites in Brussels and Washington. Like justice, good trade policy must not only be done but must now be seen to be done. Any legitimate agreement must command the broadly based confidence that it will bring benefits to British consumers and workers, as well as to British business. It must be subject to the scrutiny of open debate; otherwise, there will be a risk that bad policy will remain unchanged and that fears will flourish unchallenged.

My argument to the Minister in particular is that those involved in securing and ratifying an agreement—Government Ministers, negotiators and elected politicians—will have to work much harder and more openly for a deal, and those of us across all parties who are for a deal will have to work much harder to provide support to enable that to happen.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I thank the right hon. Gentleman for securing such an important debate. While Ministers seem keen to keep the public in the dark, the banking lobby is so happy with the financial services proposals that it has said that the text could have come straight from its own brochure. Does that ring the same alarm bells for the right hon. Gentleman as it does for me, and does he agree that the TTIP must not allow banks to undo the crucial EU agreement limiting harmful commodity speculation in particular?

[John Healey]

I had not heard that statement and I am surprised that the financial services industry has the detailed text of what is on the table, because we are not yet at that stage of the negotiations.

I want to do two things: first, I want to spell out a progressive economic case for trade and for the TTIP, and secondly, I want to set out four tests that I think a good TTIP deal and the Governments and negotiators involved must meet. On the economic case and why it is so important to the UK at present, I think that the great depression of the 1930s was the last economic crisis that was in any way comparable to what we suffered in 2008 with the global financial crisis and downturn. The policies pursued by the UK and the US back in the ’30s are, I think, widely seen to have prolonged that slump and held back any recovery. Not only were there deep cuts in public spending; there was also a sharp rise in protectionism and a decline in multilateral trade. Therefore, part of the reason why deals such as the TTIP and, indeed, the EU’s recent agreements with Canada and Korea are so important is that they avoid that default to beggar-my-neighbour economic policies and instead look to increase global trade through international co-operation. The UK has a particular need for the economic benefits and boost of trade.

[Mr Robert Walter (North Dorset) (Con)]

The right hon. Gentleman has talked about the benefits for the Untied Kingdom of the TTIP negotiations. Has his all-party group considered how the UK would fare if it had to negotiate a similar deal with the United States outside the European Union?

[John Healey]

Quite simply, there would be no negotiations. Interestingly, our all-party group recently had the Canadian ambassador in to talk to us about the Canadian deal and what lessons it might have for the TTIP negotiations. When the question was put to him, “Look, we’ve got long-standing British-Canadian relations, so why haven’t we had a British-Canadian deal like this before?” in effect, he said, in his own diplomatic way, “You’re not big enough: it’s not worth our effort.” This sort of potential boost to our economy and jobs is available to us through these negotiations only by our being part of a European Union that is capable of conducting such talks and of reaching such a deal with the US as an economic equal.

[Ian Paisley]

Does the right hon. Gentleman accept that, strictly speaking, he is not entirely right? As I have said, we export more agri-food products to the United States than we import from it. In fact, we export more minced meat to the USA than we consume in this country. Along with other food products, that means we are very valuable to the US as a trading partner, and we could reach our own deal on that basis.

[John Healey]

We are, indeed, such a trading partner, but I have to say that we are not big or significant enough to be in that position. Obama has made that clear and his staff have been even blunter—this sort of negotiation would not be available to Britain if it tried on its own to reach such a deal with the US.

Let me come back to the case for why the UK needs the economic boost and benefits of trade at this time. The size of our UK economy is still 1.3% smaller than it was before the peak prior to the 2008 global financial crisis and recession. The production component of our GDP is still about 10% smaller than it was before the downturn. We also have a high trade deficit—£30 billion in 2013—which has remained high despite the large fall in the value of the pound compared with the euro or the dollar during the downturn. At a time when we still have a domestic demand problem, trade deficits can lead to further weaknesses as income generated in the UK is spent overseas. In turn, that puts more pressure on factors such as household borrowing or inflated regional housing to fuel growth, which cannot produce a balanced or sustainable economic recovery. I must tell Government Members that, in his speech in Hong Kong earlier this month, the Chancellor of the Exchequer recognised that the economic recovery has not so far been put on a sustainable footing. He said:

“Britain is not exporting enough.”

The TTIP alone will not of course produce the kind of long-term recovery that we need. Public investment in infrastructure and new housing, an active industrial and regional policy, and a new deal jobs programme for young people are all needed, but an ambitious trade policy will be an important part of our future economic strength.

[Julian Smith]

Does the right hon. Gentleman accept that, as I understand it, there was no debate about trade or exports in this House under Labour for about 13 years, and that the number of trade trips by our Prime Minister in the past four years is more than the number undertaken by two Prime Ministers in 13 years? Government Members do not need to take lessons from Labour on exports.

[John Healey]

I remember a series of very high-profile international trade trips led by Prime Minister Blair and by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Prime Minister, but I have no idea about the figures. My point is not to offer lessons, but to make the case for the importance of trade as a part of a strengthening UK economy and of our efforts to secure a more balanced economic recovery and more sustainable growth in the future, as well as therefore to make the case for the importance of the TTIP to the UK, not just the European Union.

I suppose people may say, “Look, you’re a Labour MP. Why on earth are you making this argument about international trade and capitalism?” I have to say that I am also part of a Labour movement, which stretches back to Keir Hardie, that has a great internationalist tradition of qualified optimism about the benefits of trade. Hardie described international trade as a way of fostering shared values:

“Despite the keenness of commercial struggle there comes a time when on each side there grows up a feeling that underneath the hard bargaining…there is a human element…the dykes that separate man from man are broken down, and the waters of their common humanity begin to intermix and commingle”.

I can tell the hon. Member for Skipton and Ripon that it was the pioneering 1945 Labour Government who signed the first incarnation of the general agreement on tariffs and trade, which was of course the forerunner of the World Trade Organisation.

I do not want to labour this point too strongly in a cross-party debate, but it was in the same progressive spirit that Franklin D. Roosevelt encouraged trade as a way of dragging the US out of the great depression after the protectionism of his Republican predecessor Herbert Hoover. As a pro-trade Democrat, Roosevelt wanted clear rules and clear standards—in other words, fair as well as free trade. He said:

“Goods produced under conditions which do not meet a rudimentary standard to decency should be regarded as contraband and not allowed to pollute the channels of international commerce.”

My argument is that that progressive pro-trade case is even more important with the TTIP than with other trade deals, because a deal between the US and the EU would, as I have said, cover a third of world trade and involve countries responsible for almost half the world’s output. The size of our combined economies and the scale of the potential deal mean that it could set standards for future agreements with other countries on consumer safeguards, workers’ rights, environmental protection, trade rules and legal process.

Finally, to bring this together—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I hope that for the right hon. Gentleman “finally” means finally. The recommended time limit is 10 to 15 minutes, and he has now been speaking for more than 20 minutes. The debate is limited to three hours, and many hon. Members have indicated that they want to speak. I hope that he will not say, “Finally”, “In conclusion” and then “Finally, finally”, but that he is starting his last few sentences.

[John Healey]

I am grateful for your guidance, Madam Deputy Speaker, because I had not appreciated that the debate is limited to three hours, rather than running until the Adjournment at 7 pm.

[Madam Deputy Speaker]

Order. For clarification for all hon. Members, the debate is a timed one. It will last only three hours. It will not run any longer. That means that there may be more time for the Adjournment debate, but this one cannot last for more than three hours.

[John Healey]

Thank you, Madam Deputy Speaker. I shall resist any more interventions—I have taken plenty already—and I will rattle through my four suggested tests, about which I am happy to elaborate on other occasions.

First, any good fair trade deal must deliver on jobs and growth. There is good evidence to suggest that it could do so if we get it right. As we discussed seven months ago in the previous debate, we need from the Government a very clear area-by-area analysis of where potential benefits might come in the UK.

Secondly, we need a deal resulting from negotiations that are open and accountable to those that it will affect. The European Commission has taken significant steps on that, as has the Department for Business, Innovation and Skills.

Thirdly, we need to aim for the highest possible standards of consumer, environmental and labour protection. Commissioner de Gucht’s statement in London last week was very interesting and important. He said that

“no standard in Europe will be lowered because of this trade deal; not on food, not on the environment, not on social protection, not on data protection. I will make sure that TTIP does not become a ‘dumping’ agreement.”

He also said that

“we are happy to be scrutinised on this”.

I can tell him that he will be: that is part of our role in this Parliament and part of the role of the public.

Fourthly and finally, a good deal must allow sufficient leeway for Governments to act in their national interests. No trade deal should put at risk the vital democratic right of Governments to legislate in their national interests. Importantly, the Commission has stated:

“TTIP should explicitly state that legitimate government public policy decisions cannot be over-ridden.”

I say to the Minister that it is up to the UK Government to ensure that that means nothing less than an exemption for the NHS from any deal. We did that in the Canadian deal, which states:

“Health care, public education, other social services excluded”.

The NHS can and must be exempted in that way from the TTIP.

Finally, finally, Madam Deputy Speaker, those are the tests on which we all have a right to call negotiators, Governments and Parliaments to account. I hope that Ministers will accept them as measures of success, act to secure them in the negotiations, and account for them to the public and in Parliament at each stage of the negotiations ahead.

--- Later in debate ---

[John Healey]

We have had a good debate, with very good speeches from both sides. Notwithstanding the contribution from my hon. Friend the Member for Islington North (Jeremy Corbyn), the debate has provided confirmation of the strong cross-party support for an ambitious deal, as well as confirmation of the concerns that will need to be dealt with if we are not to risk derailing that support. The House will have been glad to hear the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), say that such cross-party support helps to strengthen our influence and the leading role that Britain can play in the negotiations. I hope that he will also see this debate as a demonstration of the House’s desire to hear more about what the Government are doing to increase public debate and understanding, to involve legitimate interest groups in the discussions and to use our leading influence in the negotiations to secure a successful deal. I am sure that the whole House will look forward to a further debate on this issue, perhaps even in Government time.

Question put and agreed to.

Resolved,

That this House has considered the Transatlantic Trade and Investment Partnership.