EU-US Trade and Investment Agreement

John Hemming Excerpts

Thursday 18th July 2013 Commons Chamber

[John Healey]

Indeed. In this post-global financial crisis period, and the global downturn in trade that followed, there is a crisis in citizen and consumer confidence in business. Reasserting that confidence will require standards and agreements that people believe will benefit them, their families and their areas, and are not just deals done by politicians and big business in the backrooms of Brussels.

[John Hemming (Birmingham, Yardley) (LD)]

Will the right hon. Gentleman give way?

[John Healey]

The hon. Gentleman is the only Liberal Democrat in the Chamber, so I am delighted to give way.

[John Hemming]

I thank the right hon. Gentleman for giving way and congratulate him on his all-party work, which he is very good at. I agree that the views on the Government Benches are not united. I have a lot of sympathy with the idea of maintaining minimum standards.

[John Healey]

I am grateful for that continuing cross-party support at least. [Interruption.] The Minister is chuckling away; I look forward to hearing what he has to say a little later.

I have a third answer to my friends who ask why I am backing the deal, and it is this. I am pro-European and pro-internationalist, and I think this potential agreement underlines more clearly than anything the benefits for Britain of being part of the European Union. Those benefits would be simply unavailable if Britain left the European Union and tried to go it alone.

--- Later in debate ---

[John Hemming (Birmingham, Yardley) (LD)]

First, I refer the House to my entry in the Register of Members’ Financial Interests. I do not think that I have any relevant financial interests on this occasion. I am a member of a copyright society, and I have traded with America in the past, but I do not think I have a direct financial interest; obviously, my constituents have a substantial financial interest in the subject, because I am the Member of Parliament for Birmingham, Yardley, and although there are no Jaguar Land Rover plants in the constituency, it is next to the JLR plants in Solihull and Castle Bromwich. An agreement could mean 26% more exports of vehicles, which would reduce yet further unemployment in my constituency, and that is obviously something that I would like.

The UK and the US were, in many ways, the first countries to promote and extend free trade worldwide, as we see it today. That vision has been furthered by our membership of the EU, and we have been a driving force in extending and widening the free market. There have been set-backs, both in the UK and the US. Both countries have toyed with protectionism—that is even going on at the moment—often with negative effect. More recently, the EU and the US have had periods of fracture. The dispute over the two biggest aircraft manufacturers in the world, Boeing and Airbus, at the World Trade Organisation was not good. The US obligations to scan shipping containers and the “Buy America” provisions have also served to undermine trade. The EU emissions trading scheme for airlines was seen as unilateral by international partners, despite decades of inaction on the issue.

Bars and grills have an exception from music licensing rules in the US; that exception exempts 70% of bars and restaurants and almost half of shops from having to pay copyright royalties, and that remains a key outstanding issue. That exemption was found incompatible with the agreement on trade-related aspects of intellectual property rights, yet it remains in force, and no compensation, however minimal, has been made available to European and British artists since 2004. Interestingly, people are critical of China for not abiding by intellectual property law, but the US has an issue in that regard as well.

[Jonathan Evans]

That is sometimes called the music case. It is interesting; the US Government did pay some compensation on behalf of those people who are breaching the law, but they have not paid it since, so there is a clear precedent for their recognising that they are in the wrong.

[John Hemming]

Yes; I think $3.3 million was paid before 2004, which is why I said “since 2004”. The US Government recognise that there is an issue, but the problem continues none the less. I think that the US has been critical of China, but it should sort out its own issues as well.

I am sure that the House will echo my call for American Congress to uphold its obligations under existing international trade laws, respect intellectual property and use this process to salve wounds. A disregard for intellectual property only encourages others to have a similar disregard. It would be quite wrong for our laws to ignore American intellectual property, and it is about time the United States returned our courtesy.

Despite those set-backs, this new free trade agreement is to be strongly welcomed as a once-in-a-generation opportunity for the UK that will bring benefits of around £10 billion a year to our economy, help to build a stronger economy, and create many much-needed jobs. It is proof that our participation in the European Union does not restrict us from trading with the rest of the world.

Although the EU and US combined account for more than half of the world economy, our agreements with Korea have seen EU exports to Korea go up by 16.2%. For the first time in 15 years, we have a trade surplus with Korea, and UK exports to Brazil, India, China, Russia and South Africa have jumped from £12.7 billion in 2007 to £27.1 billion last year.

Being a member of the largest free trade area in the world creates jobs and opportunities for British industry around the world, and our relentless drive to widen and deepen the single market has created prosperity for the many, not the few. We simply get a better deal when we work with the world’s trade superpower—the EU—than when we act alone, which is why we should work with our allies to concentrate on reform and ensure that the European budget spends more on boosting jobs, research, development and infrastructure, as we did with the multi-annual settlement up to 2020.

The coalition Government are to be commended for ensuring that there is an overall cut in the budget and an increase in job-boosting measures. We need these negotiations fast-tracked, and I hope that Her Majesty’s Government are able to impress both on our allies in the US and our European partners the need to enter these negotiations in a spirit of can-do—with the “single tank of gas” approach mentioned earlier.

We have seen the greatest slow-down in world growth since the 1930s depression, and stalled starts must not be tolerated. My party, the Liberal Democrats, wants to see a relentless focus on jobs and growth. I personally do not believe that we can delay the discussion with the electorate on our role in the European Union, but I am unashamed to make the case for working with Europe to boost our economy.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sure that, like me, the hon. Gentleman has seen that the CBI’s director general recently said that we pack a bigger punch in securing trade deals when we are inside the EU, rather than outside. He clearly set out that the US wants that bigger prize. Is that not exactly why the uncertainty about our future position in the EU is really unhelpful to British business?

[John Hemming]

I disagree. I think that we owe it to the British people to give them a vote. There is uncertainty until that has happened. It has been far too long since the vote in the 1970s, and we need a referendum on the issue, although I am happy for it to wait until 2017. I would most likely vote to remain in, but that does not mean that I do not support a referendum. The issue needs to be resolved by us asking the British people.

It is in our national interest and the interests of the wider world to encourage free trade through Europe and increase prosperity for all, because it undoubtedly works. We must uproot direct barriers to trade; end import tariffs, business restrictions on services and regulatory barriers; and make it easier for investment to reach both sides of the Atlantic. Where joint positions on rules governing competition, state-owned enterprises, raw materials, energy, small and medium-sized enterprises, and transparency do not exist, it would be beneficial if joint positions could be established, so that we can form a new global standard of excellence in trade.

The potential benefits of an agreement are huge. The US is our second-largest trading partner, with two-way trade totalling £129 billion in 2011, while £200 billion has been invested by US companies in the UK. It is in our vital economic and national interests to ensure that we expand our economy, and this US-EU free trade agreement should receive support from all sides of the House.

I accept that there are complexities, and I have sympathy with the argument that we should not have a rush to the bottom internationally, so I am sympathetic to the idea of looking more widely than just at issues to do with tariff barriers in discussions. However, from the point of view of the financial interests of my west midlands constituents who work either directly in the motor business or in the supply chain, it is clear that an agreement would be a very positive step forward in most respects and should therefore be supported. However, it is good that the all-party group on EU-US trade and investment has been created, because the fear in such processes is that if we do not look at the issues until the agreement is brought about, what can we do about them? I welcome the fact that the right hon. Member for Wentworth and Dearne (John Healey) and his colleagues asked for this debate, because we need to discuss the agreement before it is decided; otherwise, it is too late. However, generally, the agreement seems a good idea.