UK-Japan Comprehensive Economic Partnership Agreement

Jonathan Edwards Excerpts

Wednesday 25th November 2020 Commons Chamber

[Elizabeth Truss]

My hon. Friend is a doughty champion of English sparkling wine and knows that this will be one of the geographical indicators that goes through the domestic process early next year, to be registered in Japan and recognised in Japan, and who knows how long it would have taken under the EU, because under its deal, it has to negotiate every new indicator. We have got agreement on those 70 indicators through the process, and the only circumstance under which English sparkling wine would not qualify is if English sparkling wine were produced in Japan, and I do not believe that to be the case.

This deal aligns with our high environment, animal welfare, labour, data and food safety standards, and it helps to position the United Kingdom as the world’s hub for services in tech trade and establishes us as a major force in global trade. Following Japan’s economic push on womanomics, we have also signed an entire chapter on women’s economic empowerment to help female entrepreneurs in both our nations—another chapter that was not included in the EU deal.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I do not want to rain too much on the Secretary of State’s parade, but she will be aware that, according to the British Government’s own figures, the Welsh economy will grow by only 0.05% over 15 years, based on a WTO baseline, as a result of this deal. Also, the British Government’s policy of leaving the single market and the customs union means we will need over 70 deals to make up for that loss, and if we have no deal that figure will be considerably worse.

[Elizabeth Truss]

This deal is worth at least £15 billion in extra trade, not including the trade that was already increasing between our two nations, and there are significant benefits for Wales, including the recognition of Welsh lamb as a protected geographical indicator as well as more opportunities for manufacturing industries.

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[Emily Thornberry]

I agree with my hon. Friend. I have to say that trade deals generally are better when we consult properly and extensively and put trust in Parliament, which unfortunately the Conservative party does not seem to have at this time.

[Jonathan Edwards]

Also missing from the Secretary of State’s comments were the Government’s own figures, which indicate that Japanese imports to the UK will benefit at a level four times greater than that for UK exports to Japan. Does that not indicate that it is actually a very good deal for Japan?

[Emily Thornberry]

I am grateful to the hon. Gentleman; I am coming to that.

When it comes to the exaggeration of benefits and the misrepresentation of the Japanese trade deal, one crucial issue is left unresolved, and it is a vital precedent to get right. By my count, I have now asked the Secretary of State a very simple question three times on the Floor of the House, twice in letters and once in a written parliamentary question and—she knows what is coming— I ask it again now: in pounds and pence, what is the forecast increase in UK exports and growth resulting from the UK-Japan deal compared with the EU-Japan deal that it replaces?

I fail to see why the Secretary of State gets so indignant about this question; after all, she is the one who has repeatedly claimed over the past 75 days that the deal she has negotiated with Japan goes “beyond and above” the EU-Japan deal, goes “further and faster” than the EU-Japan deal and delivers “additional economic benefits” compared with the EU-Japan deal. Indeed, when I pressed her last week simply to confirm that the forecast for exports and growth was higher under her deal than under the EU-Japan deal, the Secretary of State told the House, “Yes, it is higher”, so why has she continually refused to quantify that difference? Why will she not provide the figures, in pounds and pence, to back her claims?

All is not lost, though: we might be able to make some progress on this point today. I went back to the Department’s original impact assessment, published in May 2018, of the effects of the EU-Japan deal. It is a detailed 51-page document, signed and authorised on the front cover by the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands). I have to say that I do not think it is the right hon. Gentleman’s best piece of work—the assumptions and baselines are pretty sketchy, and my hon. Friend the Member for Brent North (Barry Gardiner) was pretty scathing about it during the debate in 2018—but, nevertheless, it is what we have to go on; we do not have anything else.

On page 2, after the Minister’s signature, it says in black and white:

“The analysis assumes that the UK continues to trade…after EU exit…with Japan on an equivalent preferential basis to the EPA.”

In other words, this is what we have been asking for and what the Secretary of State has repeatedly refused to provide—an analysis by her Department, authorised by her closest ministerial colleague, of what would happen if we had just stuck to the terms of the EU-Japan deal.

I remind colleagues—I wonder whether my hon. Friend the Member for Harrow West (Gareth Thomas) wants to write this down, because it might be worth coming back to—that in the final assessment produced last month by the Department of the long-term impact of the UK-Japan deal, the forecast increase in UK exports to Japan was £2.6 billion, and the forecast increase in UK GDP was £1.5 billion. Let us compare those figures with the Department’s assessment of the long-term impact of the EU-Japan deal. Under that assessment, the forecast increase in UK exports to Japan was not £2.6 billion but £4.3 billion, and the forecast increase in UK GDP was not £1.5 billion but £2.6 billion. I do not know about you, Madam Deputy Speaker, but that does not sound like further and faster, above and beyond, additional or higher to me. It sounds like smaller, slower, lower and lamer.

I have no doubt that the Secretary of State will tell me that the 2018 forecasts were inaccurate, the methodology was flawed and the Minister for Trade Policy was having a bad hair day, although he did put his name on it. All those things may be true, but here is the problem: unless and until she can produce an assessment of how the UK-Japan deal compares with the EU-Japan deal in terms of the forecast for UK exports and growth, that is all we have to go on. The two assessments produced by her Department in 2018 and 2020 show that her historic, groundbreaking, British-shaped deal has left our country worse off than if we had simply rolled over the provisions in the EU-Japan agreement. My suggestion to the Secretary of State is that, until she can provide her own assessment of the difference between the two deals, she should stop making exaggerated claims about the “additional economic benefits” of her deal, because quite frankly, she does not have the figures to back them up.

That is why this issue really matters, and that is why it is important that we get this precedent right before the Secretary of State goes off to negotiate any more trade deals on our country’s behalf. It does not matter whether it is an issue as small as soy sauce imports from Japan or as big as car exports to Europe. We gain nothing in international credibility if we overstate what our trade deals have achieved. Indeed, we risk misleading the British people and undermining their confidence in the importance of trade if we claim benefits from the agreements we negotiate that are simply not borne out by the facts.

I welcome the trade agreement with Japan—all of us on the Opposition Benches do—but the Secretary of State has done herself no favours and done our country no service in the way in which she has presented this agreement and oversold its benefits. I hope she will learn the right lessons from this when it comes to negotiating our new trade deals with the US, Australia, New Zealand, the rest of CPTPP and the Mercosur countries in the coming years. More importantly, I hope that a renewed focus on substance over presentation and the chastening loss of our trade deals with Algeria, Bosnia and Serbia will encourage her to get her head down over the next five weeks and do the hard, unglamorous work of sorting out the other 11 continuity agreements worth £55 billion in trade with Mexico, Singapore, Ghana and others before the clock runs out and before any more of the free trade agreements we already have are carelessly and needlessly thrown away.

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[Alex Sobel]

I do agree with my hon. Friend. I sat on the Environment Bill Committee many months ago, when the Bill first came in and before there was a huge pause, and this was also clear in relation to that Bill, so we are seeing a pattern across these Bills and these deals.

Moving on to the wider ambitions of the Government, I would like to ask—I see that the Secretary of State is leaving her place, but perhaps the Minister for Trade Policy will respond—whether this is the first step towards joining the regional comprehensive economic partnership, or just clearing the way to become a member of or a signatory to the CPTPP through the British overseas territory of the Pitcairn Islands.

[Jonathan Edwards]

From my understanding of the trans-Pacific partnership, it includes very strict provisions on state aid and an investor-state dispute resolution mechanism, both of which mean conceding a great deal of sovereignty. Does it not just go to show that the great Brexit slogans of “take back control” and “a global Britain” are inherently contradictory?

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[Craig Williams (Montgomeryshire) (Con)]

As a member of the Select Committee on International Trade, I will try to keep my comments brief. [Hon. Members: “Hear, hear!”] Thank you for that. My hon. Friend the Member for Wyre Forest (Mark Garnier) summed up the thanks the Committee wishes to give the Front-Bench team for the access given. It is interesting to see the CRaG—Constitutional Reform and Governance Act 2010—process in action, given that this debate had been asked for. The fears we heard from Opposition Members about the inadequacy of the CRaG process are clearly not being met in this trade debate. The report was interesting; we looked at those documents and discussed this process with other members of the Committee. We have fed back to the Front-Bench team about areas of possible improvement, but I wish to reinforce our thanks for the openness we saw.

It is a pleasure to follow the right hon. Member for Warley (John Spellar) and his talk about trade links and trade lines. I echo the tribute paid to both embassies for the work they put in behind the scenes and in front of the scenes on this trade deal. I was also reminiscing, as a Welsh Member, about how terrific the Japanese were in hosting the rugby world cup, and their match against England was one to remember.

As chair of the all-party group on international trade and investment, I completely agree with the comments made by my right hon. Friend the Member for North Somerset (Dr Fox) on liberalisation. This is an important milestone as we emerge from the tentacles of the European Union and set out on to the open stage with our own trade deals. It sets again an independent trading story of this island nation, and I certainly want to see that greater liberalisation. He espoused it far better than I can, so I will move on.

The hon. Member for Leeds North West (Alex Sobel) is not in his place, but he accused us of plagiarising the EU treaty and of lowering standards. I say gently that we can either have copied the EU treaty or be doing something differently, but I am not sure that both lines of attack work in the same paragraph.

As a rural Member of Parliament, I wish to reflect on the agricultural nature of these trade deals. I know that my local farmers will particularly take heart from the tone of this continuity extra trade deal. They will be looking at what they can achieve through this sector. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) touched on the potential for Wales, and trade between Wales and Japan has been growing at a terrific rate. Two companies in my constituency, Nidec and Invertek, are thriving under new Japanese ownership, and I can only see these bonds strengthening.

[Jonathan Edwards]

Before the hon. Gentleman gets too excited, I am sure he will agree that most Welsh farmers this evening will be looking at the cut of nearly a third in agriculture support that they now face as a result of today’s comprehensive spending review. That is a far bigger issue than the Japan-UK trade deal.

[Craig Williams]

I would not want to be told off by you, Madam Deputy Speaker, as often happens to me in these debates. I will not make accusations about anything that will get me in trouble with you, but if Members look at the detail of the funding supplied by the UK Government and topped up from the EU to the Welsh Government direct, they will see that the Welsh Government and the Farmers Union of Wales need to be very careful with their accusations. We will take that aside after this debate. I wish to focus on the growth of that trade, which has been terrific. It was £250 million in 2018 and we are talking about a 25% increase year on year. Our relationship and that of our companies with Japan is growing. It is hugely welcome, and it is reinforced by this trade deal.



I will finish by commenting on the GIs. It is brilliant to see not just the greatest lamb product in the world, Welsh lamb, recognised in these trade deals, but also the Anglesey sea salt, the Conwy mussels, the west Wales salmon and, of course, the plums from the Vale of Clwyd. They will be going through the normal process, of course, but it is great to see this on the face of these agreements. It is incredibly encouraging. On deals such as these, Opposition Members were incredibly sceptical that we could ever get anything on a par with the EU deal. Their attacks have moved on, and we now have something that is superior. I have no doubt that these deals will continue.