Trade Bill

Julia Lopez Excerpts

Tuesday 9th January 2018 Commons Chamber

[Julia Lopez (Hornchurch and Upminster) (Con)]

Admid the sparring over Brexit, it is easy to overlook our privilege in being the first MPs in over 40 years to debate the UK’s independent trade policy. This generation of parliamentarians stands at the foothills of an important new chapter in British history. When we come to look back on this era, I believe it will be regarded as a moment of crucial transition during which the post-war frameworks governing international politics underwent a crucial reform to reflect the reality of a globalised world and its changing power dynamic.

The character of that reform is up for grabs, and I therefore believe the UK has a huge role to play in ensuring that change delivers prosperity and security to people across the world. At its best, Brexit can aid in rebooting stalled progress in trade liberalisation and the setting of international standards in services and data, to govern and benefit properly from new technology, confounding the pessimists who see post-Brexit Britain as a diminished force.

Before I get too caught up in the moment, however, I record that the Bill before us today is relatively limited in its scope. Like the customs Bill yesterday, it is instead about preparedness. It sets us up for our independent status at the WTO, rolls over existing FTAs and EPAs, gives HMRC new powers to collect and share data on exports and makes way for a new trade remedies authority.

It would nevertheless be wrong to regard the Bill merely as administrative tidying, and I hope to offer my thoughts on its provisions in my capacity as a new member of the International Trade Committee. Reflecting the approach evident in the EU withdrawal Bill, this Bill is an understandable compromise between how our trade approach would look if we were starting with a blank sheet of paper and what necessarily needs to happen to prepare for March 2019 if we are to minimise disruption to UK businesses and consumers. I sympathise with the concerns expressed about the limited opportunity to scrutinise this and the customs Bill, but I accept that that is largely a result of practical constraints, rather than an Executive power grab. In time, though, it will be essential to have mechanisms in place for effective public scrutiny of new trade deals and to ensure that delegated powers do not extend beyond narrow technical changes.

The Secretary of State has been upbeat about the translation of existing trade deals when we cease to be party to the EU’s FTAs post Brexit by keeping it to a very narrow technical process without the possibility of renegotiation. I must express my own concern that that risks not proving to be such a straightforward process. I touched yesterday on the issue of tariff-rate quotas in my contribution to the customs debate. Existing trade partners might not wish to commence discussions on translating deals until they can see the shape of any EU-UK deal and might seek to change the terms of their FTAs with us. Those terms could actually improve, given that deals would be made without needing to account for the EU’s producer interests, but any renegotiation could prove time consuming. It is not clear how existing TRQs will be administered during any transition after March 2019. I would therefore welcome clarity from Ministers about which existing FTAs we are prioritising in the grandfathering process and what is being done to recruit even more specialist negotiation staff around any bilateral discussions.

In the creation of the Trade Remedies Authority, we have an opportunity to establish a globally respected, independent body that cements the UK’s credibility and reputation as a champion of competition, open trade and legal certainty. The EU’s own trade remedies process is unwieldy, bureaucratic and politicised, so there is a lot of room for improvement, but I should like to express my concern at the proposed powers being bestowed on the Secretary of State in imposing trade remedies—a structure considered to be 1970s thinking by panellists at a recent International Trade Committee hearing.

Many of us on the Conservative Benches like to think of ourselves as pro-free trade and pro-competition. None the less, our membership of the EU has sheltered us from the raw political choices that these ideas can entail. The politics of trade can be highly contentious and emotional, wrapped up in people’s livelihoods and an area’s industrial history. Less competitive domestic industries that benefit from protection often form powerful interest groups that can make trade protection measures politically alluring to any Trade Secretary, particularly when set against a consumer benefit that is very dispersed or sometimes apparent only in the medium term.

It is vital that we establish a robust, dispassionate and transparent trade remedies authority that has a clear duty to the wider economy and can unpick genuine concern about dumping or market distortion from protectionist producer interests. I should be grateful, therefore, if Ministers would consider commissioning detailed analysis of equivalent authorities in nations such as Canada, the US and Australia, in search of best practice. We might wish to establish a bifurcated model of two separate specialist bodies, the first working out whether dumping or subsidy has occurred and the second establishing whether injury has been caused. This could speed up the trade remedy process and lead to more objective outcomes. We might also want to look carefully at the TRA’s board to ensure that it contains a consumer representative.

The Bill proposes the automatic grandfathering of EPAs with developing nations. I should like to see a time limit or a mechanism for automatic review placed on these agreements. Brexit ought to spur a new approach on trade and aid, particularly with Commonwealth countries, but I fear that EPAs might prove counterproductive and even damaging to our relationship with developing nations in this regard.

There will be much to say in future trade debates about how we incorporate commitments on data sharing, cross-border services, technology and standards into modern trade deals, entrenching British values and opening up new markets to services. I would also like to talk about the UK’s high animal welfare and safety standards and traceable livestock systems, but these are things for another day. For now, I will finish with my concern that the political imperative to conclude trade deals swiftly post Brexit does not lead us to overlook our long-term economic interest. To avoid such a scenario, I ask the Minister to consider setting up an independent organisation to provide impartial and dispassionate advice on our trade policies options, which is what happens now in the US and Australia.