Oral Answers to Questions

Liam Fox Excerpts

Thursday 6th July 2017 Commons Chamber

[Chris Davies (Brecon and Radnorshire) (Con)]

7. What recent discussions he has had with his counterparts in other Commonwealth countries on the future of trade and investment between the UK and those countries.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

Ministerial colleagues and I regularly engage with business stakeholders and policy makers in Commonwealth partner countries. In March, my noble Friend Lord Price and I met over 20 visiting Trade Ministers at the inaugural Commonwealth Trade Ministers meeting in London, and we discussed strengthening collaboration and deepening intra-Commonwealth trade and investment. We are now preparing for the Commonwealth summit in 2018.

[James Duddridge]

I thank the Secretary of State for that answer. The Commonwealth is particularly up for doing trade with the UK, especially in Africa. The Secretary of State referred to intra-Africa trade. Can we be even bolder and encourage a continental—intra-Africa—free trade deal not only with our Commonwealth friends but going beyond our Commonwealth friends?

[Dr Fox]

We are sympathetic to the concept of an African continental free trade area, and we are in favour of a range of initiatives to help foster wider and greater intra-Commonwealth trade. There is a great deal to be gained for all Commonwealth partners from closer co-operation. The Government’s aim—including through the development agenda championed by my right hon. Friend the Secretary of State for International Development—is to create sustainable prosperity, and helping developing countries to enable them to trade their way out of poverty is an essential and key element of that strategy.

[Chris Davies]

Britain and the Commonwealth nations share a great history, and over the years have formed many great links across academia, sport, culture and numerous other areas. What steps has my right hon. Friend taken to expand this co-operation with Commonwealth countries to include a free trade agreement, so that we can add business and commerce to the long list of Commonwealth co-operative endeavours?

[Dr Fox]

As my hon. Friend knows, the Commonwealth is not a trading bloc, and it actually contains a number of very disparate economies. We are liaising with several Commonwealth partners about bilateral agreements in the future, and my Department is working with stakeholders to develop initiatives that will stimulate UK and intra-Commonwealth trade and investment in the lead up to and beyond that vital Commonwealth summit next year.

[Toby Perkins (Chesterfield) (Lab)]

Members on the Conservative Back Benches are desperate for the Secretary of State to give us more confidence that we will massively increase trade with the Commonwealth, but I think he is wise not to do so. India, Australia and Canada collectively account for less than 5% of our exports, and research shows that the most enduring statistic is that trade halves whenever the distance between nations doubles. Is it not foolhardy for us to be turning away from our closest trading partners and relying on increasing trade with countries so very far away?

[Dr Fox]

I am sorry to hear such a lack of understanding of how the modern economy works. Particularly for countries that have a large proportion of their trade in services, services trade does not depend on distance. In fact, what we need is increasingly close co-operation with countries that are similar to us in their economic status, not necessarily geographically proximate, although I entirely understand that for goods the geographical distance does have a greater bearing.

[John Spellar (Warley) (Lab)]

One country with which negotiations on trade have been very advanced is Canada, with the EU discussions on the Canadian trade deal. Obviously, the Secretary of State will want to seek to replicate that fairly quickly after our exit from the EU, but that has been subject to a huge amount of disinformation regarding the costs and benefits of the deal. When are the Government actually going to take on this issue and set the record straight?

[Dr Fox]

What we do not know at present is what the state of the EU-Canada agreement will be at the point at which we exit the European Union. It may well be that all countries have ratified it, but as the right hon. Gentleman is well aware, as a result of the Singapore judgment every single Parliament and some regional parliaments will have to ratify the deal. If the deal is not ratified at the point at which we leave the European Union and has only provisional application, it will have no basis in UK law, in which case we will have to have the fall-back position of using that as the basis for a future UK-Canada agreement.

[Mr Nigel Evans (Ribble Valley) (Con)]

I think that the potential for trade with Commonwealth countries is very exciting—they are growing and strong economies—but every time I open a newspaper or listen to the radio or TV, the story is presented very negatively, as though it will be almost impossible for us to do these trade deals. Does the Secretary of State feel that that is wrong, and that it undermines the work he is doing?

[Dr Fox]

It does appear that some elements of our media would rather see Britain fail than see Brexit succeed. I cannot recall a single time recently when I have seen good economic news that the BBC has not described as being “despite Brexit”.

[Ian Paisley (North Antrim) (DUP)]

Our agri-food producers see the Commonwealth as an exciting, wonderful and expansive new market for their powdered milk products, red meats, pig and poultry. Will the Secretary of State assure us that he is in discussions with the Commonwealth countries about increasing the opportunities for trade in our agri-food products to give encouragement to our producers at home?

[Dr Fox]

I entirely agree. To underpin the confidence in the agricultural sector, it needs to know that there are increasing markets out there. One of the key roles of the Government is to help our agricultural sector to have the confidence that it requires for investment by showing that we can help it into markets. It is worth pointing out that according to the European Commission’s own website, 90% of global growth in the next 10 years will be outside the European Union. Those are the markets we have to help British business get into.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

2. What steps he is taking to encourage businesses to take advantage of new opportunities for international trade.

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[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

The Department for International Trade has three main tasks: promoting British goods and services overseas, supporting inward and outward direct investment and creating a trade policy that benefits our businesses and citizens across the whole UK. To that end, I am delighted to welcome Antonia Romeo as our new permanent secretary and Crawford Falconer as our new chief trade negotiation adviser. Both bring excellence and expertise to the Department at this crucial time.

[Hywel Williams]

Fisheries and agriculture, the environment and transport are all key competencies of the National Assembly that could be affected by any future trade deal. Does the Minister concede that the National Assembly must have the power to endorse or reject any trade deal that would so profoundly affect its basic duties?

[Dr Fox]

We have made it clear all along that we intend to have maximum consultation and collaboration in that area and, to emphasise the point, in our manifesto we set out a plan to create a new board of trade, which will ensure that trade and investment is equally spread, as far as we can, across all parts of the United Kingdom—the devolved Administrations, as well as the English regions.

[Robert Courts (Witney) (Con)]

T3. As well as an economic opportunity, there is a moral opportunity in trade with the developing world. Will the Secretary of State please tell the House what steps he is taking to support trade with developing countries?

[Dr Fox]

We have made it clear that, post Brexit, we will continue with duty-free access for the least-developed countries, but we need to see whether we can go further and reduce some of the burdens, particularly as we leave the customs union and are outside the common external tariff, by stopping the distortions on value added, which diminish the chance of investment in some of those developing countries.

[Barry Gardiner (Brent North) (Lab)]

In his recent talks in the United States, did the Secretary of State discuss President Trump’s initiation of a section 232 investigation into the effect of steel imports on US national security? What concerns does the Secretary of State have about the impact such a protectionist ruling might have on the UK’s steel sector and on jobs in our steel industry due to lost exports and trade deflection of dumped goods on our market?

[Dr Fox]

We are all concerned about the overproduction of steel, largely coming from China, and what we have seen as possibly unacceptable subsidies into that sector, but it needs to be addressed in a way that is compliant with the WTO rules-based system. I raised with Secretary Ross and the trade representative, Mr Lighthizer, the impact that could have on the United Kingdom, and it is fair to say that our views landed. We now await the publication of the report, on which the President has up to 90 days to act.

[Chris Davies (Brecon and Radnorshire) (Con)]

T4. Brecon and Radnorshire is full of excellent small business owners who are looking to trade with the rest of the world, but many are concerned that the trade deals the UK is looking to make with the rest of the world will focus on big, rather than small, businesses. What assurance can my right hon. Friend give to small business owners that their voice will not be lost in negotiations?

[Christian Matheson (City of Chester) (Lab)]

T2. The Secretary of State wants to leave the EU because he felt it was undemocratic and unaccountable, so why is he happy for the UK to trade under World Trade Organisation rules, given that the WTO is more undemocratic and more unaccountable?

[Dr Fox]

The two things are not analogous. We operate with the WTO because we believe there needs to be a rules-based system for global trade, and if the WTO did not exist, we would have to invent it today.

[Mr Marcus Fysh (Yeovil) (Con)]

T5. My constituency has one of the largest export clusters in the south-west, and it is focused on the rest of the world as much as it is on the EU. What assurance can my right hon. Friend give that we will focus on doing global trade deals and not just on the EU?

[Dr Fox]

My hon. Friend makes a very valid point, and of course it is not just about exports; it is also about inward investment. Therefore, let me bring the House up to date by saying that at 9.30 this morning we published figures showing that a record-breaking number of foreign direct investment projects came into the UK in 2016-17—2,265—safeguarding nearly 108,000 jobs or creating new jobs in the UK. No doubt, the usual suspects will describe this by saying, “despite Brexit”.

[Kerry McCarthy (Bristol East) (Lab)]

T7. I thank the Ministers for the written answers they have given me this week on the EU-Japan free trade agreement. They were at pains to reassure me that existing animal welfare and environmental standards would be maintained, but can they give me further reassurance that we will use this as an opportunity to address with Japan the illegal timber trade and commercial whaling?

--- Later in debate ---

[Mr Speaker]

Order. It is a great pleasure to welcome the hon. Lady to the Chamber again. She is already a prodigious and assiduous contributor, but may I politely say to her that she must not inherit the bad trait of her hon. Friend the hon. Member for Strangford (Jim Shannon) of referring to the Minister as “you”? The word “you” in this Chamber refers to the Chair, and I have no plans to adopt any policies on these matters. She should refer to the Minister. I am still trying to train the hon. Member for Strangford, but I think his apprenticeship has some distance to travel.

[Dr Fox]

The words “tricks” and “old dogs” definitely come to mind on that one. The hon. Lady makes a good point: there are not only challenges, but great opportunities. It is essential that we look at our trade and investment programmes across the whole of the UK. As I said in answer to an earlier question, that is why we are bringing in the new Board of Trade to help ensure that we have that balance, but I can tell her that in the figures that we announced today Northern Ireland secured 34 new projects, totalling 1,622 new jobs. That is a big gain and this is exactly the sort of programme that we want to encourage to ensure that investment goes to all parts of the UK, ensuring that we create an economy that works for everyone.

[Mr Peter Bone (Wellingborough) (Con)]

You will be delighted to learn, Mr Speaker, that British tie manufacturers’ exports are worth millions of pounds. Can the Secretary of State suggest how this House could help promote the wearing of ties, to increase exports?

[Dr Fox]

I did not check with my fellow Ministers before I came to answer these questions, but I suggest we can lead by example: my tie was made in England.

[Mr Speaker]

I cannot claim that mine was; I am not sure. But I am sure that if they are so popular, it will not be necessary to compel people to wear them. We shall move on.