Leaving the EU: Negotiations

Kevin Foster Excerpts

Tuesday 10th July 2018 Commons Chamber

[Sir Vince Cable]

We did press for a referendum on the Lisbon treaty, as it happens. That was not the view of a majority in the House at the time, but we had no problem with the concept.

Let me try to be a bit more positive about what the Government are trying to do. The first remark I want to make is about the conduct of the Prime Minister. I was going around the radio and television studios yesterday following Conservative MPs and commentators, none of whom had a good word to say about her. It is important to put on the record that she has pursued her course of action, however misjudged it may be, with a grim determination that is rather heroic. I have some admiration for the way in which she is going about her job. She may be wrong, but she is pursuing it in a rather steadfast way.

The second point I will make is about the content of the Government’s announcement. It is clearly an advance on where they were before. There is a recognition now that the Irish border question has to be addressed and that there has to be frictionless trade for industrial and agricultural products. That is now understood. The Government appear to have heard the message from the Jaguar Land Rovers of this world, which have complex supply chains, that it is not possible to stay in the UK if there is interruption of trade, so industrial and agricultural products will have to flow freely.

There is also an implicit acknowledgment that the default position of crashing out of the European Union is less and less plausible, and the reason for that is the changing international environment created by our visitor on Friday. The idea that the UK can fall back on World Trade Organisation rules in the default position is made increasingly untenable by the fact that the WTO has progressively less authority. The United States is not willing to abide by its rulings or to staff its judicial panels. As an organisation, it is completely hollow. Were we to fall back on WTO rules, we would effectively be falling back on anarchy. There is at least some recognition in Government of the dangers of that approach.

Those are the positive things. There is one other positive achievement by default, which is that the Government have effectively scuppered any prospect of reaching a bilateral trade agreement with the United States.

[Kevin Foster (Torbay) (Con)]

indicated dissent.

[Sir Vince Cable]

Well, there are Members of the House—I am one, and the right hon. and learned Member for Rushcliffe (Mr Clarke) is another—who have experience of dealing with the United States through negotiations on the Transatlantic Trade and Investment Partnership. Several things were very clear. First, although the United States is important, it is considerably less important than the European Union in terms of our trade—it is about 18% versus 43% of our exports. There are undoubtedly some benefits to be obtained through a completely free trading arrangement with the United States; for example, there are few high-tariff points. However, by far the largest obstacle is public procurement, which is decided in the United States at state level, not federal level. The potential benefits of opening the US market are actually very limited.

The key point is that the United States made it very clear then and is now making it even clearer that it is only interested in entering into a bilateral trade agreement if it opens the market to American agriculture. That is not compatible with the Government’s commitment to maintain the regulatory rulebook on food safety and agricultural products. It is to the Government’s credit that they have agreed to do that, but it almost certainly makes it impossible to reach a trade agreement. Indeed, Wilbur Ross, the Trump Administration appointee, has made it clear that the United States will not enter into serious negotiations if freer agriculture for foodstuffs through regulation is not permitted.