WTO: UK Goods Schedule
Liam Fox Excerpts(5 years, 11 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I have previously informed the House that in order to fulfil our obligations at the World Trade Organisation (WTO) as we leave the European Union we will prepare UK-specific schedules of concessions and commitments. I have today sent to the secretariat of the WTO the UK schedule for goods and I will place a copy in the Library.
This schedule replicates, as far as possible, our current obligations. We see this as a technical exercise for which the WTO’s 1980 procedures provide the appropriate legal mechanism. That will be our first step.
Presenting our own UK schedules at the WTO is a necessary part of our leaving the EU. It does not in any way prejudge the outcome of the eventual UK-EU trading arrangements.
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Free Trade Agreements: Consultation
Liam Fox Excerpts(5 years, 11 months ago)
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Board of Trade (Dr Liam Fox)
Today I am announcing the first public consultations on future free trade agreement negotiations. As I informed the House on Monday 16 July, these consultations will provide one of a number of means by which Parliament, the Devolved Administrations, the public, business, civil society and trade unions can have their say on the Government’s approach to new trade agreements.
Our first consultations will seek views on free trade agreements with some of our closest strategic allies, with whom we have no existing trade agreements—the United States, Australia and New Zealand. I am also opening a consultation on potentially seeking accession to the Comprehensive and Progressive agreement for Trans-Pacific Partnership (CPTPP). Our trade and investment working group discussions with Australia, New Zealand and the United States have been constructive and the Governments of each have expressed a desire to enter negotiations with the UK. These consultations will inform our overall approach to our future trade relationship with these countries.
The US is the UK’s single largest trading partner and foreign investor, accounting for £100 billion of UK annual exports. UK exports to Australia and New Zealand meanwhile are growing at 14.8% and 16.8% respectively, a faster pace than our global average. These relationships are mutually beneficial—in total, the UK imported £75.4 billion worth of goods and services from these three markets.
While there are other markets the UK will look to for new agreements in the future, our shared values and strength of trade with the US, Australia and New Zealand make them the right places to focus our initial attention.
The Government are also engaging with members* of the CPTPP about the possibility of the UK joining the agreement in future.
CPTPP is a signed, but not yet in force, plurilateral trade agreement including some of the world’s fastest growing economies that together represent 13-14% of global GDP, and a total population of around 500 million people. If the UK were to join, it would be the second largest economy in the group, and CPTPP’s coverage of global GDP would increase to around 17%.
Alongside these online consultations, which will shortly be available on: www.gov.uk, I will be publishing information packs that set out the characteristics of free trade agreements and the nature of the current trade and investment ties with the countries in question.
The consultations will be open for 14 weeks.
* Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
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Trade Bill
Liam Fox ExcerptsTuesday 17th July 2018
(5 years, 11 months ago)
Commons ChamberRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 17 July 2018 - (17 Jul 2018)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I beg to move, That the Bill be now read the Third time.
Let me begin by thanking right hon. and hon. Members from across the House who have shared their time and expertise to help enhance the Bill. We have spent today on Report thoroughly examining the measures in this short but significant proposed legislation. This followed four days of line-by-line scrutiny in Public Bill Committee. I would like to thank those who gave oral evidence to the Committee, and the individuals and organisations who provided written evidence and recommendations. I also extend particular thanks to the members of the Committee, on which the hon. Member for Brent North (Barry Gardiner) led for the Opposition and the hon. Member for Aberdeen North (Kirsty Blackman) led for the Scottish National party, for their detailed examination of the Bill and the positive way in which they contributed to debates on its provisions. I would also like to pay particular thanks to my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), who as Minister of State for Trade Policy played a vital role in developing the Bill and in steering it through the preceding parliamentary stages. I, and all my parliamentary colleagues, owe him a great debt.
This is an important Bill. It provides continuity and stability as the UK leaves the European Union for individuals, businesses and our international trading partners. It will be the confident first step that the UK takes towards establishing itself as an independent trading nation for the first time in over 40 years. As the hon. Member for Brent North concluded on Second Reading:
“The need for a Bill to establish a trade remedies authority, to establish our independent membership of the WTO government procurement agreement, to enable us to maintain strong trading ties with partner countries that have had historical agreements with us through the EU, and to establish the power to collect and share…information—all are uncontroversial requirements.”—[Official Report, 9 January 2018; Vol. 634, c. 221.]
I wholeheartedly concur.
As the UK leaves the EU, the Government are committed to seeking continuity in our current trade relationships. One way we will achieve this is by introducing powers to let us make domestic legislation implementing our independent membership of the Agreement on Government Procurement, or GPA. This continuity is important for both business and the taxpayer. GPA membership will maintain the access of UK businesses to a global public procurement market estimated at £1.3 trillion every year, across major economies such as the United States, Canada and Japan.
Taxpayers and users of public services will also benefit. The GPA has led to increased choice, quality and value for money in the public sector. TheCityUK, which represents financial and related professional services, wrote to the Public Bill Committee to say:
“We fully recognise the need for the UK to become a party to the WTO GPA”.
As it explained:
“The GPA requires that open, fair and transparent conditions of competition be ensured in government procurement…which cover both goods and services”.
The Federation of Small Businesses said:
“it is essential that the UK is able to become an independent member of the GPA, allowing small businesses to have continued access to government contracts and procurement opportunities.”
It is clear that the agreement is of great value to UK businesses and its importance is endorsed by organisations representing their interests.
As an EU member, the UK participates in many trade agreements with partner countries. We want continuity as far as possible in our existing trading relationships with these existing partners. As these agreements account for 12% of the UK’s total international trade, this will be important in preventing disruption to businesses, consumers and workers. The International Trade Committee observed in a recent report that:
“Almost no one who contributed to our inquiry suggested that the Government’s policy objective of seeking continuity was the wrong one.”
Additionally, the Scotch Whisky Association, which I have much pleasure in promoting at home and abroad, has said that
“continuity of current EU trade agreements is vitally important to us”.
British Sugar stated:
“We support the Government’s overriding intention to maintain continuity by replicating existing trade as closely as possible and believe that this is the best means by which to provide certainty to business.”
Continuity for the taxpayer, businesses, consumers and our international partners—that is what this Bill is about. To be absolutely clear, and as I made clear in my statement yesterday, this Bill is not about signing new trade agreements or making substantial changes to existing ones.
Despite many misleading claims to the contrary, the Government will not use measures in the Bill to implement substantially different agreements with existing partner countries. Our policy has always been, and remains, one of securing continuity first and seeking new opportunities second. We have been clear with our trading partners that continuity remains our primary objective, as I made clear earlier this evening. However, as debated on Report, to further reassure the House, the Trade Bill requires the Secretary of State to table a report outlining all the changes made to existing agreements as part of the transition into UK-only agreements. This places in statute the Government’s clear commitment to transparency—to aid appropriate parliamentary involvement, allowing Members of both Houses of Parliament the opportunity to see what changes have been made to secure continuity.
Additionally, the use of the clause 2 power will now be subject to the affirmative resolution procedure, allowing both Houses to debate regulations made under that power. The Government will not use the powers in the Bill to implement the obligations of new free trade agreements—ones with countries with which the EU does not already have a free trade agreement. We consider these to be future trade agreements and we announced this week our proposals for them.
The Bill also provides for the establishment of the Trade Remedies Authority. The World Trade Organisation allows its members to provide a safety net to protect domestic industries against injury caused by unfair trading practices, such as dumping and subsidies, and unforeseen surges in imports. Trade remedies level the playing field and restore the competitive balance. They are key to ensuring an effective rules-based system for international trade. The European Commission is currently responsible for undertaking trade remedies investigations and imposing measures on behalf of the UK. The Government are establishing the TRA to ensure that the UK can continue to provide a safety net for domestic industries after we have left the EU. I am grateful to Members on both sides of the House for the support that they have given on this issue.
Specifically, the TRA will be responsible for making an assessment in a case for a trade remedies measure, based on the evidence available. It will then make impartial recommendations to Ministers. This includes protection from goods that are heavily subsidised or dumped in the UK market at below domestic price. It also includes injury caused by unforeseen surges in imports. The investigative and decision-making framework that the TRA will be responsible for delivering is set out in the Taxation (Cross-border Trade) Bill.
The Government’s commitment to establishing the TRA has been recognised by stakeholders—by both producers and consumers. The Public Bill Committee was told by the British Ceramic Confederation:
“It is clear that we need a TRA, and it is certainly welcome that the Bill establishes one.”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 64, Q123.]
In its written evidence, consumer organisation Which? stated that it
“recognises the need to develop a trade remedies regime and establish a new TRA which will be able to consider the need for remedies objectively, on a case by case basis”.
As the International Trade Committee also recently acknowledged:
“Establishing a trade defence regime is critical to protect UK domestic industries from injury from adverse trading practices.”
The Committee described the Trade Bill and the Taxation (Cross-border Trade) Bill as “important, necessary steps” and stated that
“we welcome the Government’s attention to this subject.”
The Bill also includes measures that will allow HMRC to collect more detailed information on trade and share it with appropriate bodies, primarily the Department for International Trade. This will allow the Government a sharper picture of how the UK trades and where we can best target support for British businesses. These provisions will also ensure that the UK is able to fulfil its international transparency obligations to share data with organisations such as the WTO. This function is currently undertaken by the European Union and it is vital that the UK can take over this responsibility, if we are to operate an independent trade policy.
Appearing as an expert witness before the Public Bill Committee, Professor Winters of the UK Trade Policy Observatory said:
“Information is very important, not least in my trade, for analysing what goes on. The case for collecting reasonable amounts of information, as long as it is cheap to do so, is very strong indeed”.––[Official Report, Trade Bill Public Bill Committee, 23 January 2018; c. 57, Q108.]
In a similar vein, the British Chambers of Commerce told that Committee:
“If, in the future, there can be a more robust collection of data and stronger assessments of UK-third country trade, that would be helpful.”––[Official Report, Trade Bill Public Bill Committee, 23 January 2018; c. 72, Q136.]
Angus Brendan MacNeil
Given the vote just now and that the UK is turning its back on the customs union, we will most likely have a border in Ireland. In that eventuality, we will not have a transition agreement with the Republic of Ireland. If we have a border but no transition agreement, will the Government be ready in March 2019 with the TRA and will they have in place the 40 trade agreements that are vital for industry?
Dr Fox
I do not accept that the Government’s proposals will require a border in Ireland. In fact, the Cabinet took a specific decision to bring forward a proposal to take to the EU that will prevent us from having that border. Nor will we accept a border down the Irish sea, because all parts of the UK, however much the hon. Gentleman might dislike it, will be treated the same by this Government, who are proud to be a Conservative and Unionist Government.
The Bill also brings forward measures that will ensure a joined-up UK approach to implementing the GPA and continuity trade agreements. However, the Government respect the devolution settlement, as reflected by the amendments tabled by the Government on Report and accepted by the House. We have worked closely with the devolved Administrations to make progress towards legislative consent. Let me reiterate the Government’s commitment to not normally using the powers in the Bill in areas of devolved competence without the consent of the devolved Administrations. These powers are primarily here for administrative efficiency. We will not be taking back any powers currently in the hands of the devolved Administrations, however much the nationalists pretend that we will be. In fact, as powers return from Brussels, more will sit with the Scottish, Welsh and Northern Irish Governments than ever before.
As we leave the European Union, we want to provide continuity for businesses, for consumers and for our trading partners. This Bill sets the scene for the United Kingdom’s independent, sovereign trade policy. We will approach that with optimism and confidence. I commend the Bill to the House.
Trade Policy
Liam Fox Excerpts(5 years, 11 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
In October last year, my Department published a White Paper, “Preparing for our Future UK Trade Policy”, in which we set out the Government’s commitment to transparency and inclusiveness in our future trading arrangements. The paper also set out our intention to boost our trade relationships with old friends and new allies, expanding access to markets across the globe. Today, I can set out the role of Parliament, the devolved Administrations, public, business and civil society, and how the Government intend to engage with those groups as we embark on our new international trade agreements to benefit the whole UK and ensure we meet our commitments to an inclusive and transparent trade policy.
Scrutiny of our future trade arrangements is vital as we take powers back from the EU into UK law and begin negotiating our own new free trade agreements. I would like, at this stage, to make a distinction between our free trade agreements with new partners, to which this statement relates, and continuity trade agreements—those being legislated for in the Trade Bill tomorrow and to which the customs Bill powers being debated today will also apply. With that distinction in mind, for our new FTAs we will now put in place a structured approach to engagement to provide clarity on how stakeholders can feed into this vital work that will help to shape the trading future of our country.
To ensure that our new agreements and future trade policy work for the whole UK, it is vital that Parliament, the devolved Administrations, local government, business, trade unions, civil society and the public from every part of the UK have the opportunity to engage and contribute from the outset of the process. On Parliament specifically, the Government are committed to providing Parliament with the ability to inform and scrutinise new trade agreements in a timely and appropriate manner. I want to set out how this will be achieved.
We will ensure that parliamentarians are given the opportunity to consider the level of ambition of the Government’s approach to negotiations and the potential implications of any agreements. We will explore the best process to do that, but in the first instance it could take the form of a general debate. In addition, the Government will keep both Houses updated on the progress of negotiations through statements and updates to the International Trade Committee as the negotiations progress. This will include timely analysis at appropriate points to support decision making. Of course, as in any negotiation, a certain level of confidentiality will be necessary to help ensure the best outcome for the UK, and the updates will be given with that in mind.
At the end of a negotiation, the Constitutional Reform and Governance Act 2010 will continue to apply as it does to all treaties that are subject to ratification. Under the Act, the Government will lay before Parliament any treaty they intend to ratify, alongside an explanatory memorandum which will summarise the content of each trade agreement. Consistent with best practice, with any new international trade partners the Government will also, at the appropriate time, publish an impact assessment. To implement a new trade agreement with a new partner, the Government will bring forward a bespoke piece of primary legislation when required for each new future trade agreement that requires changes to legislation and where there are no existing powers. Parliament will therefore have the opportunity to scrutinise the new legislation in the normal way. I believe that this process will strengthen Parliament’s ability to shape and scrutinise the Government’s ambitious trade policy agenda and our new free trade agreements with partners around the world.
To develop and deliver a UK trade policy that benefits business, workers and consumers across the whole UK, we need to reflect the needs and individual circumstances of England, Scotland, Wales and Northern Ireland. We will work closely with the devolved Administrations on an ongoing basis to deliver an approach that works for the whole UK. As part of this, we are conducting a series of collaborative policy roundtables with devolved Administrations and key stakeholders in all parts of the country, which will draw on their knowledge and expertise, recognising their role in helping to deliver the objectives of our trade policy and future negotiations. We will ensure that the devolved Administrations are able to inform the Government’s approach to negotiations throughout the consultation period and, of course, with subsequent engagement throughout the entire negotiation process. We will also engage more widely in Scotland, Wales and Northern Ireland, holding meetings with a wide range of stakeholder groups. Let us not forget the English regions, whose involvement in this process is also of vital importance and who, from the north-east to the south-west, make a huge contribution to our trading performance. They, too, will be fully involved.
As we prepare to begin negotiating future trade agreements once we leave the EU, we will also want groups and any individuals with an interest to have their say and inform our approach to negotiations. Our White Paper asked how the Government should seek views from the public, business, trade unions and civil society. We were grateful to receive thousands of responses. The responses made clear the need to move to a more formalised engagement structure, so that stakeholders are clearer on when and how they can offer input and how their information will be used. It is therefore important that we ensure that the public, and wider stakeholders, have access to this process online to make sure that we reach the widest possible range of people, in terms of both diversity and geography. I will write to all Members with website and address details so that we can fully inform and involve our constituents.
My Department will also convene a strategic trade advisory group to bring expert external insight to trade policy making and to advise Ministers. We are inviting expressions of interest in membership and will appoint 14 members, based on their technical expertise, to take seats on the group. We will ensure that the group represents the varied interests of business, workers, consumers and non-governmental organisations in all parts of the UK. More details can be found on the Department for International Trade gov.uk pages.
I have said that all stakeholders and members of the public must be able to inform the Government’s approach, and that is why we will launch public consultations for each potential new trade agreement. If we are to learn the lessons from agreements such as the Transatlantic Trade and Investment Partnership, we need to ensure that people are able to express their views and feel that they have been taken into account. I want people to feel invested in this process and that the benefits of free trade are shared across the length and breadth of the UK. The Government’s consultations will therefore last for 14 weeks, giving everyone the opportunity to share their objectives and any concerns about potential new agreements. I will update the House on potential agreements that will be subject to consultation in the coming days. My ministerial colleagues and I will continue to meet representatives from business and civil society and my officials will continue to welcome technical policy discussions with a broad range of experts. We will also hold a range of outreach events to engage with stakeholders across the whole United Kingdom.
The views gathered through the Government’s consultation and engagement will ensure an informed and well evidenced approach to each of our trade negotiations. I can confirm that before entering formal negotiations, we intend to publish an “Outline Approach” to each negotiation, setting out the high-level objectives and scope of that negotiation. This document will be accompanied by a scoping assessment at that point.
As I have said many times, the decision to leave the European Union was not a decision to retreat from the world. In fact, we need to embrace it—to trade more, not less, and to fight protectionism and break down the barriers to trade wherever we find them. As agreed at the European Council meeting in March, the UK will be able to begin to negotiate new trade agreements from April 2019. It is therefore right that we set out how we intend to gather views from across the country now to inform the Government’s approach to new trade negotiations before those talks begin and as they progress to conclusion.
As we decide our own trade policy for the first time in over 40 years, I am sure that Members of the House will agree that it is only right that we all get a say. I am confident that our proposals will deliver the scrutiny and transparency that the UK public, including Parliament, expect and deserve, and I commend this statement to the House.
Barry Gardiner (Brent North) (Lab)
I thank the right hon. Gentleman for advance sight of his statement. I have to say, when he said that he wanted to boost his relationships with old friends and new allies, I did wonder for a moment whether he was talking about the previous Foreign Secretary and the current Prime Minister, but it seemed not.
The Trade Bill completed its Committee stage more than six months ago. Since then, the Government have been too scared to bring it back for fear of what their Back Benchers might do to it, but tomorrow, this House will debate Report stage and Third Reading of the Trade Bill, so it was with a certain amount of disbelief that I saw that today of all days, the Secretary of State would be making a statement on “Delivering a transparent and inclusive UK trade policy”. I thought to myself, “This man’s having a laugh.” He is.
For months, since the first publication of this flawed piece of legislation last October, we have been saying that it fails to do what the Government led us to believe it would in the Gracious Speech at the state opening of Parliament—namely, to set out the legislative framework to deliver a transparent and inclusive UK trade policy. Business has been saying it; unions have been saying it; civil society has been saying it. Madam Deputy Speaker, did you ever hear of such a coalition? The International Chamber of Commerce, the CBI, the British Chambers of Commerce, the EEF, the Institute of Directors and the Federation of Small Businesses all joined forces with the TUC, Unite the union, the Trade Justice Movement and even the Consumers’ Association, which publishes Which?, to tell the Government they needed to sort this out.
We tabled a series of amendments in Committee. The Government refused every one. So why this protestation, this deathbed Damascene conversion by the Secretary of State? It is a welcome confession, but as drafted the Bill does not provide what so many on the Government Benches told us was the point of leaving the EU. It does not give control over laws to this sovereign Parliament; it gives them to Ministers. What today in his statement has the Secretary of State done to change this? The words are warm. The detail is far from clear. Will he be accepting new clause 3 tomorrow? It sets out a proper scrutiny procedure for trade agreements. We tabled that amendment in Committee only to see it scorned. We welcome his statement that the Government will be bringing forward a proper consultation process in advance of future trade agreements. Does this mean he will be accepting our amendment 18 on consultation or our new clause 4 on respecting the rights of the devolved Administrations? The true penitent must not merely confess his sins; the true penitent must amend his ways. There is little in this statement that shows the Government are prepared to do so.
Modern trade agreements are so complex and extensive that they reach into nearly all aspects of government and policy, but they are not like domestic legislation, which can be repealed when it is no longer technically suitable or politically acceptable. Instead, they place legally binding obligations on Governments in perpetuity that cannot be simply amended or repealed yet those obligations can be agreed behind closed doors and in total secrecy by the Government’s negotiators alone. That is why it is incumbent upon Members of this House to ensure a rigorous and robust scrutiny framework for trade agreements.
Until now, the Government have rejected every single one of our amendments. It is welcome that, however late in the day, they have tabled amendments addressing at least some issues before tomorrow’s Third Reading, but they do not go far enough. They have now agreed with Labour that regulations should not be implemented under the negative procedure. They have also agreed with Labour that there could be substantive variation in the roll-over agreements compared with the corresponding EU agreements and have brought forward amendments that will require the Government to report on any such change. But of course as one hand gives, the other hand takes away, as they have also tabled an amendment that would allow them to ignore this, should they so choose. Reporting on a change is not the same as giving Parliament the power to amend it. I trust that, given the Secretary of State’s acknowledgement today of the Bill’s failings, he will support those amendments that seek to rectify the shortcomings tomorrow.
Finally, why are we having this statement today? It could and should have been delivered as part of the debate on the Bill tomorrow. Indeed, any concessions could have been brought forward as amendments at any stage since it had its Second Reading last November. Today’s statement can only have been brought forward in a bid to limit time for this afternoon’s critical debate on the Taxation (Cross-Border Trade) Bill and to stave off any opportunity for right hon. and hon. Members to expose the ludicrous position this Government have now got themselves into by saying they will accept European Research Group amendments that directly contradict the Chequers agreement.
A group of Ministers and Back-Bench Members within and outside the Cabinet now appear to be deliberately steering the Brexit negotiations on to the rocks of a no deal, with all the damaging consequences for jobs and our economy of moving disruptively on to World Trade Organisation rules. I believe the Secretary of State is one such. The warm words and platitudes of this statement do not mask the cynical political game he is playing and make a mockery of the role of this House in undertaking proper and rigorous debate of some of the most important legislation to come before us in 50 years.
Dr Fox
As no questions were actually raised in the hon. Gentleman’s response to my statement, I am tempted simply to sit down again.
One of the reasons we give advance notice to Front Benchers is to try to ensure that they are at least be talking about the same issue as we are. However, I am afraid the shadow Secretary of State does not seem to understand that the Trade Bill, which we will debate tomorrow, specifically does not involve future free trade agreements; it merely involves continuity agreements. If the hon. Gentleman does not understand that point, I am not sure what else in the Bill he will understand.
Today’s statement related to new free trade agreements. I gave the House a commitment that I would set out, before the summer recess, what our proposals would be, in the context of transparency and inclusivity, when it came to negotiating those new free trade agreements. The fact that we are making statements during the negotiations, and giving updates to the International Trade Committee, shows that we have acted in good faith. I am afraid that this afternoon we have simply had bluster and bunkum instead of reason and rationality, and if anyone was making a mockery of anything, it was a mockery of Front-Bench duties.
Several hon. Members rose—
Mr Kenneth Clarke (Rushcliffe) (Con)
I rather share the suspicion of the hon. Member for Brent North (Barry Gardiner) that the only reason this non-urgent statement was made today was to reduce the already inadequate time that we will have in which to debate the highly important Bill that follows, which is likely to be squeezed into four hours for speeches and Divisions—although the hon. Gentleman then filibustered. I shall try to avoid contributing to that filibuster.
As you have given your ruling, Madam Deputy Speaker, I will not ask the full question that I was going to ask about the rumours that the Government will adopt, this afternoon, amendments that are directly inconsistent with the White Paper of a week ago, including amendments tabled by my hon. Friends. For instance, new clause 36 contradicts paragraph 17(a) of the White Paper, on page 17. Are any statements by the Government on its trade policy in future to be relied on for more than a week or two at the moment, and is it not rather premature for the Secretary of State to come here and explain exactly how we may eventually be contemplating new trade agreements of our own, which will take many, many years to achieve?
Stewart Hosie (Dundee East) (SNP)
I thank the Secretary of State for his statement and for advance sight of it, and indeed for the tone that he adopted. I am particularly grateful for what he said about enabling Parliament to scrutinise future trade deals in a timely fashion. However, it should be ensured that we have enough information to be able to scrutinise them properly.
I will not be as cynical as others, but I find it slightly odd that an urgent statement has been made about a nine-month-old document. Nevertheless, what was said was welcome, especially in relation to liaison with businesses, workers and non-governmental organisations, particularly those concerned with trade justice. I ask the Secretary of State to confirm that there will be sufficient sight and enough detail of future proposals for them to do their work as well.
I also welcome what the Secretary of State said about liaison with devolved institutions. However, it is not enough simply to have liaison, discussion and consultation if there are real implications that consent may be required. A role in setting the negotiating mandate may be necessary. Actively seeking consent throughout the process towards ratification is a process that I would have expected the Secretary of State to welcome, and I hope he will look at our new clauses 20 to 24 tomorrow in that regard.
But most importantly, I hope the Secretary of State takes on board when he is liaising—and I take him at his word that this will happen—the deep concern in society, in campaign groups and throughout all sorts of organisations about the implications of trade deals in the future for public safety, good hygiene and the environment, and understands that we never again, as he mentioned in his statement, want to get into a position such as we were with the Transatlantic Trade and Investment Partnership, where, after a short period of time, there was mass opposition to a bad treaty not discussed with the public in advance.
The Secretary of State talks about future trade deals, and I understand why he is making that distinction, but if we have a trade deal that is being rolled over but requires some tweaks or changes that are subsequently extended beyond five years, that may look very similar to a new trade deal. I hope he will look actively at having the same scrutiny of and consultation on those arrangements as he does simply for deals in the future.
Dr Fox
I am very grateful to the hon. Gentleman for a response with some substance. He is quite right to say that the length of time available is important; it is why we have chosen a consultation period of 14 weeks—the EU, for example, has 12, and other countries have less than that—and it is important that we allow that to happen. He is also right that with TTIP many of the public felt they had not been involved from the beginning of the process; there was no equivalent process to the one we are setting out today for the pre-negotiation phase so that the public could set out their ambitions and objectives for any trade agreement.
On future agreements, I ask the hon. Gentleman to look at what this House has already agreed on CETA: chapters 23 and 24 specifically place restrictions on Governments from watering down in any way their labour or environmental laws for the promotion of trade. We have already agreed that that will be the basis of our future trade agreement with Canada, and I ask the hon. Gentleman to judge the Government on what we do, not on what is said.
Sir Nicholas Soames (Mid Sussex) (Con)
It will be brave man who does not acknowledge your strictures, Madam Deputy Speaker, and I shall stick faithfully to them.
First, I congratulate my right hon. Friend on the energy with which he is preparing the ground for these fiendishly complicated arrangements. May I endorse very strongly what he said about the TTIP process and the absolute need for people to understand clearly what is and is not involved in these questions and negotiations? Will he particularly do much more with our febrile and irresponsible press to convince them that these trade arrangements are not all about toxic chickens?
Dr Fox
My right hon. Friend is right: it is important that we explain what is involved. It is also important to genuinely consult, as he says. That is why the Government in their pre-negotiation phase are doing what has never been done to this extent before. Pascal Lamy, the former director-general of the World Trade Organisation, said we are leaving a period in trade which was about the protection of producers and entering one about the precaution of consumers. Our consumers are very much more interested in trade policy today than they have ever been, and therefore they will expect, and we have a duty to provide, the appropriate consultation for them.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
This statement is about consultations in advance of future trading arrangements, so will the Secretary of State assure the House that he at no time consulted members of the Conservative European Research Group on their four wrecking amendments wrecking the Chequers arrangement before they were tabled?
Dr Fox
Madam Deputy Speaker, of all Members of the House I know what it is like to invoke your wrath, so I will not stray into that territory about what may happen on legislation later today. All I can say is that the Government gave a commitment that before the recess we would come to the House with our proposals for consultation on and scrutiny of new free trade agreements, and that is exactly what we have done.
John Redwood (Wokingham) (Con)
I strongly support the Government’s line that where we have an existing trade agreement through the EU, we are as entitled to take that over for us as it is for the residual EU. I trust my right hon. Friend will just crack on with that and have it ready by March 2019 in case we leave then, while having a different process for a new trade deal, which I am sure the public will welcome.
Dr Fox
We have always made it clear, as I did at the beginning of my statement, that there is a distinction between the continuity agreements covered in the Trade Bill that we will debate tomorrow and new free trade agreements, which we promised we would set out the scrutiny procedure for, and that is what has happened today. I know that it sometimes comes as a shock to the House when a Government do exactly as they said they would do in exactly the timescale allocated, but I am afraid that that is exactly what has happened today.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State said in his statement:
“We will ensure that parliamentarians are given the opportunity to consider the level of ambition of the Government’s approach to negotiations and the potential implications of any agreements.”
Will he therefore confirm that the “potential implications” of, say, a US deal might include chlorinated chicken—toxic or otherwise—hormone-fed beef or GMO food?
Dr Fox
The whole point of the negotiation phase, which is one of five phases of a free trade agreement, is that the public set out what they believe the level of ambition should be. Those who want to set restrictions on what they think the Government’s mandate in the negotiation should be will be free to express themselves during that period. That is exactly why we are putting this forward, because the worst thing would be to go into a negotiation when the public felt that their views had not been taken into account in any way. As I have said, this is not just about the Government being philanthropic in the trade space; it is also about our self-interest, because it makes the job much easier for the Government and for Parliament if the public feel that they have genuinely been consulted. As my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) said, one of the problems with the TTIP process was that the public felt that they had been ignored and that the negotiation had happened from start to finish away from public scrutiny. We have to try to avoid that happening in future if we are to take advantage of the freedom that new free trade agreements will give to the country.
Greg Hands (Chelsea and Fulham) (Con)
I congratulate my right hon. Friend on outlining the broad parameters of how future trade policy and consultation will work. I think he is on exactly the right lines, particularly with the commitment to primary legislation for each individual trade deal. Will he tell us a bit more about the consultative roundtables that he has described? One of the things we will discover is that politicians and producer interests will quickly try to get to the front of them, so how will he ensure that consumers, consumer companies and consumer groups will have a proper voice in that consultation?
Dr Fox
As I mentioned earlier, one of the key elements will be the setting up of the strategic trade advisory group. We will ensure that we have representatives across that, including small and medium-sized enterprises, consumer representatives, development organisations and non-governmental organisations. I go back to the point that I made earlier: it is absolutely essential that people feel they have been genuinely consulted throughout the process; otherwise, they will say that they do not accept the agreement because there has not been sufficient transparency throughout the process.
Chris Bryant (Rhondda) (Lab)
I completely agree with the Secretary of State on two things. First, I agree that protectionism is on the rise, which is bad for us in this country. Secondly, I am delighted that he is sticking with the Constitutional Reform and Governance Act 2010, because I wrote those clauses. I want to ask a specific question about deals that we do with new countries. Will every single one of them include human rights clauses?
Dr Fox
I refer the hon. Gentleman to the answer that I gave earlier, which was that the Government should be judged on what they are doing. In terms of the agreements we are now looking at and will be debating tomorrow, they all include those. I find it difficult to imagine that, when we have a widespread consultation, that will not be a strong ask of the Government.
Sir Desmond Swayne (New Forest West) (Con)
But any scrutiny of and consultation on manufactures and food will be limited to tariff and quota, because we will continue to be bound by the acquis, won’t we?
Dr Fox
I am not sure that that question was entirely within the scope of the statement, Madam Deputy Speaker. Even if we are looking purely at goods issues, I think that the ability of the United Kingdom to abolish or reduce to zero tariffs with the United States on cars, for example, would have been something that President Trump would have welcomed last week.
David Linden (Glasgow East) (SNP)
If Scotland is an equal part of the United Kingdom, why can it not have a seat at the table when we are negotiating the free trade agreements?
Dr Fox
Back when we signed the memorandum of understanding, we made it clear that if there are areas where any of the devolved Administrations might have specific interests, that may allow us to have a seat at an international negotiation. Of course, that would involve having to further the Government’s position because, remembering that trade is still a reserved matter, we could not go into negotiations with someone sitting on the British side of the table who took a different view from the Government’s broader objective for the whole United Kingdom.
Sir Edward Leigh (Gainsborough) (Con)
My old mum told me that I should not cherry-pick rules. When we try to make free trade agreements with America, for example, will the Secretary of State confirm that, following the Chequers agreement last week, we will have to accept the common rulebook in its entirety and that nothing in those deals can deviate from it?
Dr Fox
If that is the agreement that we come to with the European Union, that would be the case, and my hon. Friend is right that there would as a result be some restrictions in the offers that we could make in a free trade agreement—it is pointless to state otherwise. However, there would still be considerable freedom on agricultural tariffs, for example, and on quotas, and many of things that many of the countries with whom we will be negotiating want would still be entirely within our gift.
Emma Little Pengelly (Belfast South) (DUP)
I welcome the Secretary of State’s statement, particularly the commitment to devolved region engagement. However, will he commit to embed and formalise that engagement in this policy, including in relation to the negotiating mandate?
Dr Fox
I hope that I have set out the broad direction of travel on that, and we will now be negotiating and holding discussions with and informing the devolved Administrations to see how we can make that work in practice. I say to the hon. Lady in all candour that if trade is to be a reserved issue for the whole UK, it must become self-evident that its benefits are actually for the whole UK.
Dr Julian Lewis (New Forest East) (Con)
For the avoidance of any doubt, will the Secretary of State confirm that none of these proposed arrangements would in any way be adversely affected if we left the EU without a deal and found ourselves operating on WTO terms?
Dr Fox
The arrangements that I have set out today must stand alone and have to apply whatever final agreement we come to with the European Union. They are about the scrutiny of our future trade agreements. There are no pre-conditions attached to how we have devised the mechanism itself.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Appreciating that the scope of this question is about our future trade agreements, a business from my constituency said to me:
“We already work with and export to places like the US, Australia and South Africa, and I fail to see how leaving the single market and the customs union would enhance our ability to do any more of this.”
Will the Secretary of State therefore please clarify how that business can contribute to the consultation to ensure that it can actually make something of this new free trade world?
Dr Fox
The whole point of free trade agreements is to gain market access where we do not have it today for the benefit of our businesses that want to export. I hope that businesses will outline their level of ambition as each trade agreement is set out so that the Government understand just what they think they could do if markets were more open than they are today.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate my right hon. Friend on his statement. What reassurance is he able to offer those who say that the inclusion of agri-food in the common rulebook is a sop to farmers in southern Europe and a snub to potential partners in places such as north Africa and Latin America?
Dr Fox
One of the most recent comments I have read is that this would stop Britain being able to import food of a standard that we do not currently find acceptable. I have said at the Dispatch Box many times that the Government have no interest whatsoever in reducing the quality of the food that we have in the United Kingdom nor the standards by which it is produced. In any case, if we reduced our standards, that would undermine the reputation of the goods that we sell abroad. It is because of our high standards that, according to Barclays, 57% of Chinese consumers, for example, are willing to pay more for goods made or produced in the UK.
Ben Lake (Ceredigion) (PC)
The Secretary of State has committed to ensuring that the devolved Administrations are able to inform the Government’s approach to negotiations, but will he clarify what role they will have in the negotiations themselves and whether their consent will be sought before any trade agreement is ratified?
Dr Fox
I would imagine that, in line with other agreements, we would seek legislative consent from the devolved Administrations where there were elements in which they were required to apply parts of those negotiations. I would hope that, because I believe our interests are one and the same, we would want to work together to ensure that what we get for UK consumers, UK producers and UK exporters are of maximum benefit.
James Cleverly (Braintree) (Con)
In my experience of public consultations, it is often the case that the people responding are not particularly well informed of the status quo, so will my right hon. Friend ensure that, as we move forward into this new way of working, we inform the public both of the situation as it currently is and of how it would be improved with the free trade agreements that are to be signed?
Dr Fox
I am extremely grateful to my hon. Friend for that question, as it is perhaps something I should have included in my statement. He is entirely right that, again to go back to the TTIP example, the public did not feel they were suitably informed. For each of the potential trade agreements, we will make available to the public a summary of what a free trade agreement actually is, the chapters that it constitutes, the specific nature of the country in question in terms of its market and what the opportunities will be. The more information we are able to give to all those stakeholders who will want to be part of the consultation, the better the collective decision we are likely to reach.
Rebecca Pow (Taunton Deane) (Con)
On that note, bringing people with us by clearly outlining, explaining and engaging with everybody about what is proposed in the new free trade world is essential, and I welcome my right hon. Friend’s approach today. This is absolutely the right way to go. Will he confirm that these consultations will be straightforward so that my constituents can get involved in this new free trade world?
Dr Fox
We have had a look at what other countries have done, particularly in their online content, and how well it has gone down with those who have been involved in consultation processes. For that reason, I think it is very important that we have an online consultation that is fairly standardised so that the public know what is being asked of them from the information they are given.
Mr Philip Hollobone (Kettering) (Con)
Will a comprehensive free trade agreement with the United States be more likely or less likely as a result of the White Paper?
Dr Fox
It will be dependent on what both sides are willing to concede and on the level of ambition that both sides have. Following my discussions, not least with the President of the United States last week, I am very optimistic that such an agreement is well within the reach of both parties.
Stephen Kerr (Stirling) (Con)
I welcome my right hon. Friend’s statement and congratulate him on the approach he is taking. When will he be able to set out the countries he is hoping to enter into negotiations with?
Madam Deputy Speaker (Dame Eleanor Laing)
And the prize for patience and perseverance goes to Tom Pursglove.
Tom Pursglove (Corby) (Con)
Thank you, Madam Deputy Speaker.
My right hon. Friend the Secretary of State met the US President last week. Did the President indicate the US’s desire to do a free trade deal with the United Kingdom? If so, how will this consultation help to directly affect and influence that process?
Dr Fox
In line with his patience, I take the opportunity to thank my hon. Friend for all the work he did as my Parliamentary Private Secretary. He was one of the best PPSs it has been my pleasure to come across in my 26 years in the House of Commons.
Yes, the United States did show it has an appetite for a free trade deal, and what I think will be of interest to it is our willingness to be extraordinarily transparent and to give Parliament the scrutiny powers that most other countries take for granted.
Oral Answers to Questions
Liam Fox Excerpts(6 years ago)
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Jim Shannon (Strangford) (DUP)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
If I may, I would like to begin by paying tribute to my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) for all the work that he did as our Minister of State and for helping to set up the Department. He is one of the very best Ministers that I have had the honour to work with in my whole time in this House.
Since April 2017, the Department for International Trade has actively supported UK companies, with over 50 outward direct investment deals in over 20 countries. With our help, companies from all over the UK have invested overseas in many sectors, including advanced manufacturing, infrastructure and energy.
Maria Caulfield
Sussex sparkling wine is beating French champagne in Parisian wine-tasting challenges. In my constituency we have English sparkling wine producers such as Rathfinny, Ridgeview and Breaky Bottom. What steps is the Department taking to help this industry to invest and export overseas?
Dr Fox
I know that my hon. Friend is a great champion of English wines in her constituency. In fact, Aldwick Court in my own constituency makes a very fine range of wines, Mr Speaker—I will attempt to get you a bottle to prove the point. We work closely with leading industry associations and producers to help to support English wine exports. A recent example of this was the festival of innovation in March in Hong Kong. Our team in-market arranged a bespoke programme of briefings and a high-profile tasting session to introduce a delegation of UK wine and spirit producers to potential buyers from around the world, very successfully.
Jim Shannon
The Secretary of State may not be aware of the input of a Department for Environment, Food and Rural Affairs Minister on this matter, but Lakeland Dairies in my constituency is attempting to secure Chinese business but is having some difficulty due to red tape. What support is available to help businesses across the language and cultural divide, and to gain results that benefit us all and in particular Lakeland Dairies in my constituency?
Dr Fox
As the hon. Gentleman knows, there have been a number of questions about the ease of doing business in China and market access has been one of the questions raised. A new trade commissioner has been appointed, Richard Burn, in China, and our team will work continually with the Chinese Government to try to remove some of the barriers. If companies in the hon. Gentleman’s constituency face specific problems, I will be delighted to meet him to try to resolve them.
Martin Vickers (Cleethorpes) (Con)
Last month, the Department’s roadshow that encourages small businesses to invest overseas and export visited Immingham in my constituency, and it was greatly valued by local businesses. Does the Department plan to continue and expand that roadshow?
Dr Fox
Of course, we will continue to do that; it is a very successful programme. But perhaps more usefully we can help to get small businesses the finance they require to get into the exporting business. Last year, in a change from the previous pattern, 78% of all the UK export finance agreements were done with small and medium-sized enterprises in this country.
Mr Jim Cunningham (Coventry South) (Lab)
Has the Secretary of State looked at the impact of tariffs on British investments overseas?
Dr Fox
Tariffs in general are one of the areas we want to be able to look at when we leave the European Union. Of course the setting of tariffs is a legal power that we do not yet have. To be able to take full advantage of alternatives—reductions in tariffs, for example—this House will have to pass the customs Bill, which is coming back shortly. I hope that we can count on the hon. Gentleman’s support on that.
Several hon. Members rose—
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Thank you, Mr Speaker.
May I ask the Secretary of State if he is not being a little complacent about the role of China in our manufacturing and other sectors? Does he realise that, when we encourage companies to export, some of the companies, like Syngenta in my constituency, are wholly owned by ChemChina and wholly owned subsidiaries of the communist Government in China? There is a greater number of British companies owned by the Chinese. Does that alter the sort of conversation he has with them?
Dr Fox
We believe in an open, liberal, global economy and, if we want to own companies overseas, countries overseas have to be able to own companies in this country. That is part of a liberal trading system, but that system requires a proper system of rules. That is why the World Trade Organisation needs to be strengthened and in some areas needs to be reformed, to ensure we have a global trading system that is fair and fit for all.
Priti Patel (Witham) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government’s transport investment strategy seeks to make Britain a more attractive place to trade and invest by improving the capacity and connectivity of Britain’s transport infrastructure. I know that, in my right hon. Friend’s own county, which has London Gateway, Tilbury and Harwich, she is a staunch campaigner for improved infrastructure and for more international trade and investment.
Priti Patel
To thrive as a global beacon for free trade, Britain has to have world-class infrastructure, so will my right hon. Friend the Secretary of State work across Government to bring in road and rail upgrades, but also the introduction of free ports and enterprise zones in order to turbocharge business, trade and investment opportunities post Brexit?
Dr Fox
Well-connected transport infrastructure is key to our trading capability. When it comes to free ports, as my right hon. Friend knows, I am personally very well-disposed towards the concept. It is one area where we can take potential advantage when we have the freedom to do so once we have left the European Union.
Neil Gray (Airdrie and Shotts) (SNP)
If he has not already done so, will the Secretary of State raise the potential merits of Scottish inclusion in the HS2 project with the Secretary of State for Transport?
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
While we sympathise with US concerns regarding transparency and the overproduction of steel, we continue to argue that tariffs applied under section 232 of the Trade Expansion Act are not an appropriate solution for dealing with these issues. We will continue to seek a constructive, permanent resolution with the United States to avoid further escalation, which would only harm businesses, jobs and consumers in the United Kingdom and the United States.
Dr Fox
Far from turning our back on any trading partners, we are seeking a full, transparent, comprehensive and liberal trading agreement with the European Union, and we will seek others. When it comes to protecting British industries, we can do that only when we have a trade remedies authority in place, and I have to remind the hon. Gentleman that he and his party voted against the Trade Bill, which establishes that authority.
Bill Esterson (Sefton Central) (Lab)
The Secretary of State’s reluctance to support EU countermeasures to combat Trump’s trade war, and the Government’s opposition to every amendment that we proposed to the Trade Bill and the Taxation (Cross-border Trade) Bill, speak volumes about his Government’s true intentions. When will he give the trade remedies authority the board members it will need if it is to stand up for UK businesses and consumers? And when will he put an end to the impression that the UK’s Secretary of State would rather back Donald Trump’s policy of America first?
Dr Fox
That question was wrong on so many issues that I do not know where to start. Rather than being against countermeasures, the United Kingdom supported the European Union—as I have done several times in this House—in saying that we believed that what the United States did was incompatible with WTO law and that we were therefore against it. And it is the height of cheek to demand that the Government should put members on a board that the Labour party tried to prevent us from establishing in the first place.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My Department is responsible for foreign and outward direct investment, for establishing an independent trade policy and for export promotion. I am delighted today to announce the appointment of Natalie Black, Emma-Wade Smith and Simon Penney as our new Trade Commissioners for Asia Pacific, Africa and the middle east respectively. May I also thank my departing senior private secretary, George Thomson? We do not thank our excellent civil servants nearly enough for the job that they do.
Sir Desmond Swayne
Will the Secretary of State adopt the trade policy of Her Majesty’s Opposition?
Dr Fox
Inasmuch as I am able to discern what it is, which the events of this week make extremely difficult, the answer would have to be no—not least because, in regard to trade, the Opposition Front Bench has become a caricature of a loony left party in seeming to regard Justin Trudeau as a lackey of global corporatism.
Barry Gardiner (Brent North) (Lab)
Ministers have made much today about the vote on the Comprehensive Economic and Trade Agreement earlier this week. I am not quite sure what they do not understand about no deal with Canada being better than a bad deal; I thought that in other areas that was actually their party policy.
I want to focus on the damning report on carbon emissions released today by the Committee on Climate Change. The Conservative Committee Chair, Lord Deben, set out a stark demand:
“Act now, climate change will not pause while we consider our options.”
In response, will the Secretary of State explain why, on the latest figures, 99.4% of the support that UK Export Finance gives to the energy sector goes to fossil fuels? Will he tell the House what steps he is now taking to redress that imbalance, to promote and support renewable energy and respect the Equator Principles, which his Department signed up to, about sustainability in global trade last year?
Dr Fox
When I saw the hon. Gentleman stand up, my heart sank, given that this is only a 30-minute session.
We use UK Export Finance to promote a whole range of environmental and trading issues—in fact, I was in discussions with Equinor in Oslo last week about how we can use UK Export Finance to further the use and export of renewables.
Fiona Bruce (Congleton) (Con)
Dr Fox
Like the whole House, I am sure, I am delighted that the Chinese Government have decided to lift the ban. I would like to praise my own officials in helping to do that, although it would not have been possible if the Prime Minister had not raised the issue at the highest level during her visit to China.
I will be seeing how we can take advantage of the lifting of the ban when I visit China in August for the Joint Economic and Trade Committee. I hope that in future we will be able to take delegations of UK beef producers, so that we can seek to make the most of an incredibly large potential market.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Kevin Hollinrake (Thirsk and Malton) (Con)
Dr Fox
The Department will provide an update on the grants available for trade show attendance in 2019-20 later this year in the context of our forthcoming export strategy. My hon. Friend has made an important point, but we must also ensure that the help we give is targeted to produce the best results, not the greatest number.
Paula Sherriff (Dewsbury) (Lab)
Dr Fox
I do find it strange that people think that foreign direct investment in the United Kingdom is a good thing, but that UK investment in other countries is a bad thing. Such investment is an essential part of an open trading system. It is also an important part of our development agenda. Investing and creating jobs overseas, as we saw with Jaguar Land Rover in South Africa, for example, is often one of the ways in which we can provide help for some of the poorest countries in the world.
Douglas Ross (Moray) (Con)
One of our great exports is Scotch whisky, much of which is produced in my Moray constituency. What is the Department doing to ensure the geographical indication protection on Scotch whisky is maintained within the EU when we leave?
Dr Fox
My hon. Friend makes an important point. The Government are seeking to ensure the continued GI protection of Scotch whisky in the EU after Brexit. Negotiations on geographical indications are continuing, and we anticipate that all current UK GIs will continue to be protected by the EU’s geographical indications scheme after Brexit.
Several hon. Members rose—
Nic Dakin (Scunthorpe) (Lab)
What initial assessment have the Government made of the impact of steel tariffs on the UK industry? What support are the Government giving UK steel to mitigate the impact until the tariffs are removed?
Dr Fox
The hon. Gentleman raises an important point, and I raised this with the EU Trade Commissioner last week. We are looking to see what impact there may be from any diversion and whether we need to introduce safeguards to protect UK steel producers. The earliest time that is likely to happen will be early to mid-July, and we are already seeing some movements that may justify it. As soon as we have the evidence to be able to justify such a decision, we will take it.
Nigel Huddleston (Mid Worcestershire) (Con)
I read a fantastic Ministry of Defence document the other day that showed how the global centre of economic activity has shifted over time: 30 years ago, it was in the middle of the Atlantic; today, it is somewhere over Egypt; but in 2050 it will be somewhere around Vietnam. Is it not right, therefore, that our trade negotiations should accordingly shift south and east?
Dr Fox
One of our reasons for introducing Her Majesty’s Trade Commissioners is to ensure that the United Kingdom has the proper organisation to take advantage of those shifts in global trade. As I have previously said in the House, the International Monetary Fund has said that, in the next 10 to 15 years, 90% of growth in the global economy will be outside continental Europe. That is where the opportunities will be, and that is where we need to be, too.
Patrick Grady (Glasgow North) (SNP)
Can the Trade Secretary tell us whether he intends to send the Trade Bill for Royal Assent, even if the Scottish Parliament withholds its consent from relevant clauses?
Dr Fox
We believe that, because the Trade Bill will give continuity to British businesses, including in Scotland, and because not passing it would be detrimental to the interests of businesses, jobs and workers in Scotland, the Scottish Government will, in the end, see sense and support the Bill.
EU-Japan Economic Partnership Agreement
Liam Fox Excerpts(6 years ago)
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Barry Gardiner
I am grateful to the hon. Gentleman on two counts—first for showing us precisely what we are talking about. I know that he will have read the full EPA assessment, as I have done. I am equally grateful to him for raising the issue of the balance of trade surplus and deficit that we currently run. I am just about to come to that point, so I hope that he can hold off with his remarks.
It is perhaps most damning to quote from the impact assessment document itself, which states:
“Figures presented here reflect the long run impacts per annum and should be treated as a magnitude of change and not a forecast…It is important to note the results below are not based on the final EU-Japan EPA text and are therefore subject to a degree of uncertainty…Estimates are produced against a baseline of 2008 and reflect a world in which the Doha trade round and EU-Korea FTA are un-concluded.”
So there we have it. The baseline is 10 years out of date and fails to take account not only of the EU-South Korea FTA, which has been applied ever since July 2011 —seven years ago—but of the terms of the final agreement text that it is supposed to be assessing.
The European Scrutiny Committee was absolutely right to demand in its report
“a clear breakdown of how different UK sectors and stakeholders are expected to win or lose from the agreement.”
All the independent projections made of the EU-Japan deal calculated that the gains accruing to Japanese firms would be far higher than those seen by European businesses. All the forecasts spoke of major increases in Japanese exports, and the potential loss of jobs and businesses in Europe as a result. The Government assessment has at least picked up on these forecasts, recognising that the UK’s balance of trade with Japan will take a serious hit when this agreement comes into force. Voting to approve this motion will allow the Government to rush ahead and sign a deal that the Government’s own figures show will result in a decline in our trade balance with Japan of between £2.2 billion and £2.9 billion, so the hon. Member for Stone, who chairs the European Scrutiny Committee and asked for the impact assessment to be published, will now see that the effect of this deal is, in fact, to increase our problems in terms of our balance of payments with Japan.
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I will try again. Am I now to assume that the official position of the Labour party is not to ratify the Japan EPA?
Barry Gardiner
Note how keen the Secretary of State is to deflect the House from the fact that his own impact assessment says that, in signing the deal, this country will be between £2.2 billion and £2.8 billion worse off.
Barry Gardiner
Yes; and, ultimately, if the Secretary of State is patient and listens, it will become clear—
Barry Gardiner
Goodness me! The Secretary of State is getting really exercised from a sedentary position; he is starting to be abusive. Let us be clear what has aggravated him so much. It is that I have read his impact assessment, and his own assessment of this deal says that this country will be £2.2 billion to £2.8 billion worse off.
Draft EU-Canada Trade Agreement Order
Liam Fox Excerpts(6 years ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I beg to move,
That the draft European Union (Definition of Treaties) (Canada Trade Agreement) Order 2018, which was laid before this House on 21 May, be approved.
I am delighted that we have the opportunity once again to debate the comprehensive economic and trade agreement between the EU and Canada, known as CETA, and that this is taking place on the Floor of this House. This follows on from the thorough and constructive debate last year and the overwhelming support shown by the full House in a subsequent deferred Division. I note that a majority of those on the Labour Benches who voted in that Division chose rightly to vote in favour of the agreement, and I hope they will continue to do so, because this debate comes at a crucial point in world trade, with the potentially destructive rise in protectionist sentiments.
Free trade is the means by which we have collectively taken millions of people out of abject poverty in the last generation, and we must not put that progress into reverse. We should also realise that trade is not an end in itself, but a means to widen shared prosperity. That prosperity underpins social cohesion and, in turn, political stability. That political stability, in turn, is the building block of our collective security. To interrupt the flow of prosperity is to risk creating a torrent of instability. We have an opportunity today to reaffirm Britain’s commitment to the principles of free trade and the application of an international rules-based system.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the Secretary of State accept that after exit day, we will be bound by these treaties with Canada and hopefully Japan, but that there is no legal obligation for Canada and Japan to honour their obligations to us, because we will be out of the EU? That is the big problem with leaving the customs union.
Dr Fox
We already have had substantial bilateral discussions with Canada, and it agrees with the United Kingdom that CETA should form the basis of a bilateral agreement between the UK and Canada as we leave. However, we will have greater leeway to look at what additional elements we might want to include when we are no longer tied to the European Union.
Dr Fox
I will make some progress.
This Government are clear that CETA is a good deal for Europe and a good deal for the United Kingdom. Our total trade with Canada already stood at £16.5 billion last year, up 6.4% on the previous year, with a services surplus of £1.9 billion. CETA will improve on this already strong economic partnership. It is an agreement that will potentially boost our GDP by hundreds of millions of pounds a year. It will bring down trade costs, boost trade and investment, promote jobs and growth and increase our ability to access Canadian goods, services and procurement markets, benefiting a wide range of UK businesses and consumers. More trade and more growth result in more money for the Treasury, with benefits for our publicly funded services. CETA is a comprehensive and ambitious agreement— the most comprehensive agreement between the EU and an advanced partner economy that has come into force so far.
Jeremy Quin (Horsham) (Con)
My right hon. Friend referred to the benefits that may flow to Canada, the UK and the EU, but there is a broader point to be made today about the benefits of free trade to the whole world. I hope that the House—hopefully united, and with Opposition Members hopefully united as well—can send the signal that free trade is a good thing for the world economy and that it is free trade that brings people out of poverty on a global basis.
Dr Fox
I think that something we share across the House is the belief that we would prefer people to be able to trade their way sustainably out of poverty rather than having to depend on aid budgets, and, of course, free trade is one of the key ways of ensuring that that happens. My hon. Friend is right: it is important that we send a signal, and I hope we can add to the signal that we sent last time that it is not possible to believe in the concept of free trade while not agreeing with any of the specific agreements that make free trade happen. It is important that we have consistency throughout.
Angus Brendan MacNeil
I am picking up the clear message that it is the view of the Brexiteer UK Government that the European Union has negotiated a very good trade deal. Is that correct?
Dr Fox
We think it is the most advanced and ambitious trade deal that the EU has produced so far. That is not to say that it could not have been more ambitious in some areas, such as services. There is, of course, room for improvement in the future.
Canada is an important strategic partner too. As one of the “Five Eyes”, and as a member of NATO, the Commonwealth, the G7 and the G20, we have bonds that go far beyond just our trading relationship.
As Members will know, CETA was provisionally applied in September last year, removing 98% of the tariffs previously faced by UK businesses at the Canadian border, and UK firms are already benefiting. We have seen drinks exporters such as Dorset’s Black Cow Vodka and Kent-based sparkling wine producer Hush Heath Estate improve their market access and profitability with the reductions in tariff and non-tariff barriers. We are also seeing new UK exporters to Canada, including Seedlip, which produces the world’s first distilled non-alcoholic spirit. Under CETA, Seedlip does not have to pay the 11% pre-CETA tariffs on its product.
Moordale Foods, which entered the Canadian market in March 2017 with assistance from the Department, was helped by CETA duty elimination. Pre-CETA, its range of products would have been subject to duties of 12.5%. Its prices in Canada are now closer than ever to its current domestic UK price, and its products can now be found in key Canadian gourmet food outlets, including the flagship Saks Fifth Avenue food hall in Toronto. That is an example of trade in action, and of how it will help the United Kingdom to earn more abroad and provide more jobs in the UK.
Chris Bryant
The Secretary of State has suggested that when we leave the European Union, there will be things that he will wish to secure from a new trade deal that the UK will sign with Canada, in addition to what this trade deal leaves us. Can he list three things that he would like to see in that new deal?
Dr Fox
As we will be in negotiation with Canada, I will not enter into that, but, as I have said, there are areas in which the final agreement was not sufficiently ambitious, such as services, and also issues related to data movement. There are areas in which the United Kingdom will have greater freedom when we are outside the European Union.
Kevin Hollinrake (Thirsk and Malton) (Con)
My right hon. Friend may be interested to know that while Wensleydale Creamery, which is just outside my constituency and makes fantastic cheese, is already trading with Canada, the agreement is bound to help it to increase that trade. He has identified the benefits of free trade very clearly, but does he accept that we also need fair trade, so that the standards—the non-tariff barriers to which he has referred—are the same on both sides of the trade agreement, and businesses are treated fairly?
Dr Fox
That is a good point. The debate tends to revolve around tariffs rather than non-tariff barriers, which are often the biggest impediments to trade. However, as has been pointed out by Members on both sides of the House, since 2010 an increasing number of non-tariff barriers have been applied by the G20 countries. It is not acceptable for the richest countries in the world to say, “We have done very well out of free trade,” and then to pull up the drawbridge behind them. If we ourselves have benefited from free trade, it is our moral duty to ensure that generations after us, both at home and internationally, benefit from it as well.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Secretary of State is making a compelling case for supporting the trade deal, and there is a great deal of cross-party support for it, but will he confirm for the record how long it took to agree the deal with Canada, and how long it will take him to ensure that we have the same deal, or something better, once we have left the EU?
Dr Fox
As I have already said, and as we have already agreed with Canada, the existing agreement will form the basis for the bilateral agreement that we will have with Canada when we leave the European Union. If we enact the Trade Bill—which Labour voted against last time—we will have no friction as we leave the EU, because this agreement will continue. However, that does not close down the possibility of our being able to improve on it in the future.
Several hon. Members rose—
John Redwood (Wokingham) (Con)
I am glad that the Secretary of State is now stressing to Labour Members, who do not seem to understand it, that the deal that the EU has done novates to us as well as to the rest of the EU. The EU that signed the agreement will not be in existence once we have left, so there is an equal opportunity for it to novate to us. There is no reason why it will not novate to us, and I am sure that my right hon. Friend will be able to improve on it subsequently.
Dr Fox
I have said twice that we have already had discussions with Canada to see how we can build on the agreement that we will inherit as we leave the European Union. It is not a question of choosing one or the other. The agreement will already be there for us—assuming, that is, that the House of Commons passes the trade legislation which is necessary to give our businesses, our communities and our workers the certainty of continuity as we leave the European Union.
Several hon. Members rose—
Dr Fox
I will make some progress.
In parallel with the trade benefits to which I referred, investment in the UK from Canada continues to grow. In 2016, Canada had £18.6 billion invested in the UK and we had £21.1 billion invested in Canada.
As I have said, ratifying CETA is also an important step towards our future trading relationship with Canada as we prepare to take advantage of the opportunities offered by our exit from the European Union. During the Prime Minister’s visit to Canada in September last year, both she and Prime Minister Trudeau reiterated their intention to seek to “transition” CETA swiftly and seamlessly into a UK-Canada deal once the UK has left the EU, and formally announced the establishment of a working group to ensure that the transition was as seamless as possible. Officials from our two countries have already begun to meet to discuss that transition. It is important that, as a first step, we prevent a “cliff edge” for British and Canadian businesses.
Of course, while we remain in the EU we continue to support its ambitious trade agenda. Free trade is not a zero-sum game, but rather a win-win. Ratifying CETA will send a strong message about our determination to champion free trade, to seek global trade liberalisation wherever we can, and to support the rules-based international trading system to deliver mutually beneficial outcomes. That is a key part of the Government’s vision of delivering a prosperous and truly global Britain as we leave the European Union—
Sir William Cash
I congratulate my right hon. Friend not only on what he has said today—which is completely correct—but on the fact that the repeal Act to which Her Majesty has just assented reinforces the point that we will now be able to make our own international trade deals under that Act. I congratulate my right hon. Friend and the Government on that achievement.
Dr Fox
I am grateful to my hon. Friend. Of course, our ability to take full advantage of what we have already agreed depends on our passing both the Trade Bill and the customs Bill in this House. If we are unable to do so, we will be unable to provide that continuity for businesses and workers in the United Kingdom, which would be hugely to their disadvantage. I hope that the Opposition will think again about their vote against the Trade Bill on Second Reading, and will give it the fair wind that it deserves during its subsequent stages.
It is important for the UK that CETA is ratified successfully by all EU member states, because ratification by all member states is required for the treaty to enter fully into force. This will give Canadian and EU businesses greater certainty that the agreement will continue into the future.
Areas that were not provisionally applied include a large part of the chapter on investment, including the new investment court system, about which there has been extensive discussion in Parliament and in wider civil society. The UK supports the principle of investment protection, and looks forward to engaging further with the Commission on the technical detail of the investment court system. We support the objectives of obtaining fair outcomes for claims, high ethical standards for arbitrators and increased transparency of tribunal hearings.
I also want to be clear that investment protection provisions protect investors from discriminatory or unfair treatment by a state. This includes protection of UK institutional investors—for example, pension funds—where we have a duty to ensure that individual investments are protected. We have over 90 such agreements in place with other countries. There has never been a successful investor-state dispute settlement claim brought against the United Kingdom, nor has the threat of potential claims affected any Government’s legislative programme.
Tom Brake (Carshalton and Wallington) (LD)
Will the Secretary of State confirm that any investment court system is in fact a pooling of sovereignty? He will be aware that Canada and the EU have agreed that they want to transform the investment court system into something more open, transparent and global. Will he confirm that the UK Government will also undertake to do that after Brexit?
Dr Fox
I have set out what I believe are the principles, but the mechanism may well be different. The Commission has not yet finished its work on the technical detail of the ICS. We have reservations about the ICS as a system, but, as I have set out, we believe that there needs to be protection for investors. What we cannot do as a country is say that our investors should be protected overseas when they make investments of UK money, but a reciprocal agreement should not be in place for others. We have to ensure that this is fair and equitable, and that is what we seek to do. I have to say to the right hon. Gentleman in all candour that I am not terribly attracted by the ICS, but we want to see the detail that the European Commission comes to and, when we leave the European Union, we will want to discuss with Canada what we think, on a bilateral basis, the best disputes resolution system might be.
It is also important to note that the customary international right to regulate has been re-emphasised in this agreement. Moreover, the agreement explicitly provides that member states should not reduce their labour or environmental standards to encourage trade and investment, ensuring that our high standards are not affected by this agreement. Let me say that nothing in CETA prevents the UK from regulating in the pursuit of legitimate public policy objectives.
Such objectives include the national health service. This Government have been absolutely clear that protecting the NHS is of the utmost importance for the UK. The delivery of public health services is safeguarded in the trade in services aspects of all EU free trade agreements, including CETA. Neither will anything in CETA prevent future Governments from taking back into public ownership—should they be crazy enough to do so—any services currently run by the private sector. The legal text makes this clear, if Labour Members would like to read it, although I have to say that the fear of nationalisation is the No. 1 issue that potential investors currently give for thinking twice about the UK as a foreign direct investment destination.
In fact, robust protections in CETA are covered in a number of related articles and reservations in the text. A key article is article 9.2, in chapter 9 on cross-border trade in services, which excludes services supplied in the exercise of governmental authority from measures affecting trade in services. In addition, in annex II on reservations applicable in the European Union, the UK has gone beyond the EU-wide reservations and has included additional national reservations for doctors, privately funded ambulances and residential health facilities, and the majority of privately funded social services. The UK Government will continue to ensure that decisions about public services are made by the United Kingdom, not by our trade partners. This is a fundamental principle of our current and future trade policy.
Mr Philip Hollobone (Kettering) (Con)
Given these extensive labour and public sector protections, which I congratulate my right hon. Friend on negotiating, could this EU-Canada agreement not serve as a template for a UK-EU trade agreement on our exit?
Dr Fox
As the Prime Minister has made clear, we hope, given we are starting from the position of complete regulatory and legal identity with the European Union and given the size of our trade with the European Union—not least the fact that the European Union has a surplus in goods with the United Kingdom of almost £100 billion—that we would be able to negotiate an even more liberal agreement than CETA. That is of course a decision not just for the United Kingdom Government, but for the other 27 Governments, who need to look not to political ideology, but to the economic wellbeing of their own citizens.
Let me say something on scrutiny. We have committed, through our White Paper published last year, that we will ensure appropriate parliamentary scrutiny of trade agreements as we move ahead with our independent trade policy. The Government can guarantee that Parliament will have a crucial role to play in the scrutiny and ratification of the UK’s future trade agreements, and we will bring forward proposals in Parliament in due course.
I would like to provide further reassurance to the House about the Government’s ongoing commitment to openness and transparency. Indeed, we have scheduled a debate on the Floor of the House on the EU-Japan economic partnership agreement, which the Minister for Trade Policy—it is a pleasure to welcome my hon. Friend the Member for Meon Valley (George Hollingbery) to his position on the Front Bench—will be leading straight after this debate. This is already over and above the engagement required for EU-only trade agreements.
Angus Brendan MacNeil
Should the right hon. Gentleman be talking not only about “Parliament”, but about “Parliaments”? Last week, the International Trade Committee took evidence from John Weekes, the former Canadian ambassador to the World Trade Organisation. He was also Canada’s chief negotiator for the North American free trade agreement, and an adviser to the Canadian Government and Parliament on CETA. One of the things he was asked was whether the central Government in Canada were tempted to make a power grab, or to deal with the provinces as they stand. He said that it added a degree of complexity, but that it made for a better deal at the end to respect the provinces of Canada, rather than deal with this centrally. Should the UK Government not ape that, and should the Secretary of State talk not just about Parliament, but about Parliaments? If we reach that stage when Scotland is still in the UK, we will need such respect.
Dr Fox
I have considerable sympathy with the hon. Gentleman, although trade is a reserved power for this Parliament. We have to accept as a country that, in an age of increased consumer awareness of trade, the public will want a genuine consultation about any future agreements that the Government reach. That requires us to avoid some of the pitfalls that occurred with the Transatlantic Trade and Investment Partnership, when the public felt that they had not been consulted during the process and were asked to take it or leave it.
It is therefore incumbent on Governments to devise mechanisms by which there is the fullest possible consultation not only with Parliament, devolved bodies and English regions, but with civil society. The Government will set out our proposals on that in the near future. I would add that I am grateful to the Select Committee for its thoughtful work on this area, because I think there will be quite strong consensus across the House about the mechanisms of consultation, even if we do not agree with the outcomes of such consultations.
I welcome this opportunity to make the case for CETA to Parliament, and to provide an opportunity, as the Government have done on previous EU free trade agreements, for full scrutiny of this important agreement. During the implementation period, the United Kingdom will retain access to EU free trade agreements, but we will also be able to negotiate, sign and ratify new UK-only free trade agreements for the first time in more than 40 years. In doing so, we will safeguard the benefits achieved in CETA for UK businesses and consumers, and lay a foundation for an even stronger relationship in the future. Canada is a progressive, dependable and honest trading partner which is committed, as we are, to the World Trade Organisation and the international rules-based system. This is an important time, internationally, to show our commitment to a free trading Commonwealth, G7 and NATO ally. I commend this order to the House.
Barry Gardiner
I will of course answer the right hon. Gentleman’s question—I will come to it later in my speech. Like my right hon. Friend the Member for Warley (John Spellar), the Secretary of State will just have to be patient a little longer.
The CETA deal has been marred by controversy. Hundreds of thousands of people have taken to the streets across Europe in protest. The deal was largely conducted in secrecy and with minimal consultation. It threatens the essential ability of Governments to legislate in the public interest. That is why it is so essential that Parliament has finally been afforded the opportunity to debate the agreement on the Floor of the House.
I pay tribute to the work of the European Scrutiny Committee under the chairmanship of the hon. Member for Stone (Sir William Cash), who is no longer in his place. In this respect, the Committee made repeated attempts over the past two years to ensure that Parliament was given just such a chance. The debate has been pending since the Committee granted a scrutiny waiver to the Secretary of State in October 2016.
Barry Gardiner
If we were out of the European Union, we would then be negotiating a new trade agreement with Canada and we would ensure that all—[Interruption.] Much that is in CETA is to be welcomed, as was outlined by the hon. Member for Brigg and Goole (Andrew Percy) who intervened on me earlier. Much of it is to be welcomed, but there are aspects of the trade agreement that the hon. Gentleman will recognise, and all of Europe recognises, as simply unacceptable.
Other Parliaments have, of course, had the opportunity to properly register their views on this agreement and perhaps this illustrates why the Secretary of State has been so concerned about allowing the House to have its say. In the Committee stage of the Trade Bill, I set out how a Labour Government would ensure full and proper consultation with key stakeholders—businesses, unions, civil society and the devolved Administrations—in advance of entering into negotiations on trade talks. My party believes that Parliament should have a vote to approve such mandates. That was why we tabled amendments to the Bill in respect of the same, but the Government voted down every single amendment we put forward.
Barry Gardiner
I will come on to our position in due course.
The European Commission hailed CETA, calling it
“the most ambitious trade agreement between countries ever undertaken.”
However, unlike other deals currently being progressed by the European Commission, it is a mixed agreement—trade and investment.
The investment provisions of CETA touch on matters of national competence and, as such, the agreement must be ratified at the national level and the regional level where appropriate. The European Commission and respective national Governments have sought to circumvent this process by provisionally applying CETA since 21 September last year, but the deal has not been ratified and is therefore not yet fully enforceable. To understand why, we need to look at the Wallonian Parliament in Belgium, which refused to ratify the agreement over concerns about investment aspects of it and, in particular, the investor-state dispute settlement mechanism, now known under this agreement as the investment court system. This is where process meets substance. Belgium has referred the matter to the European Court of Justice to seek a ruling on whether the investment court system is even compatible with EU law.
Barry Gardiner
Indeed I do. We actually said so in our manifesto. We made that clear in the manifesto that both my hon. Friend and I stood on and with which we went to the voters of this country, and he was elected on it just as I was. I propose to stand by it; I am not sure if he does.
For all these reasons, the Opposition cannot support the Government’s motion.
Dr Fox
On a point of order, Madam Deputy Speaker. I hesitate to raise this point of order, but in response—or non-response—to a series of interventions, the shadow Secretary of State promised the House that before he sat down he would make it clear whether he believed the Labour party would vote to ratify the agreement or lay a negative motion, which is procedurally very important under the CRAG procedure. Why did we not get an answer?
Madam Deputy Speaker
That is a matter of debate, not a point of order. I am sure that the shadow Secretary of State would intervene if he felt so inclined.
Prime Minister’s Trade Envoys
Liam Fox Excerpts(6 years ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Prime Minister has approved two new appointments to the trade envoy programme. My hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) has been appointed as the Prime Minister’s trade envoy to Libya and my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) as the Prime Minister’s trade envoy to Mozambique and Democratic Republic of Congo. These new appointments take the total number to 32 parliamentarians covering 63 markets. The Prime Minister’s trade envoy programme is an unpaid and voluntary cross-party network, which supports the UK’s ambitious trade and investment agenda in global markets.
[HCWS787]
EU-Japan Economic Partnership Agreement
Liam Fox Excerpts(6 years ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I am pleased to announce that my Department will today publish an impact assessment for the EU-Japan Economic Partnership agreement (EPA). I have separately written to the Scrutiny Committees in both Houses of Parliament such that they can consider this evidence as part of their important scrutiny of this agreement. A copy of this impact assessment will be placed in the Libraries of both Houses.
The European Union and Japan concluded negotiations on this agreement in December 2017, and have announced their intention to sign this agreement at an EU-Japan summit in July, subject to approval by EU member states in the Council of the European Union.
This agreement will promote bilateral trade and economic growth between the EU and Japan by eliminating most tariffs and reducing non-tariff measures that businesses face when trading goods and services and investing.
The Government remain committed to supporting the EU’s ambitious trade agenda including the free trade agreements it is putting in place and to date has strongly supported the EU-Japan EPA negotiations.
The Prime Minister and the Japanese Prime Minister Shinzo Abe agreed in August 2017 to “work quickly to establish a new economic partnership between Japan and the UK based on the final terms of the EPA” as the UK leaves the EU. The UK-Japan Trade and Investment Working Group, established last year by the Japan-UK joint declaration on prosperity co-operation, is tasked to deliver on this commitment and met for the second time in May.
[HCWS747]
US Steel and Aluminium Tariffs
Liam Fox Excerpts(6 years, 1 month ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
With permission, Mr Speaker, I will make a statement on the United States’s imposition of steel and aluminium import tariffs.
On Thursday 31 May, President Trump announced that the United States would impose tariffs of 25% on steel imports and a 10% tariff on aluminium imports from the European Union. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, will be subject to the same tariffs. Although Argentina, Brazil and South Korea have avoided tariffs, those countries agreed to lower exports to the US. The indications are that US imports from those countries will be restricted, in some instances involving quarterly quotas.
For products within the scope of these tariffs, in 2017 the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. Put another way, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports by tonnage, at a value of £360 million and £29 million respectively.
We are deeply disappointed that the United States has taken this unjustified decision, particularly on grounds of national security. We share a strong defence and security co-operation relationship. As close allies in NATO, permanent members of the UN Security Council and nuclear powers, close co-operation between the UK and US is vital to international peace and security, and other EU states are also key players in transatlantic security co-operation.
As I said the previous time I addressed the House on this issue, these unilateral trade measures have weak foundations indeed in international law, and they are not consistent with the US Department of Defence’s own judgment in an investigation that was conducted on the basis of national security. We believe that the EU should have been permanently and fully exempted from the unjustified measures on steel and aluminium. We will continue to make this case at the highest level, in concert with the EU. Our priorities now are to defend the rules-based international trading system, which supports growth, consumers and industry; to ensure that this does not escalate and risk further undermining world trade; and, most importantly, to protect the interests of British industry.
The use of national defence as the rationale for this action threatens to create a worrying global precedent. We are clear that these unjustified additional tariffs could harm consumers, hold back growth and, ultimately, damage industry by driving up the price of inputs and production, and diminish global competitiveness. We remain of the view that issues of global overcapacity in the steel market are best solved through international collaboration, not unilateral action. The UK has worked hard to address the issue of overcapacity. The Prime Minister called for a forum of G20 members to tackle this issue, and the UK will continue to work within the rules-based international trade system to tackle this problem through the G20 steel forum.
However, as the US has decided to impose these tariffs, which will damage the steel and aluminium industries in Europe, we must respond. As a member of the European Union, we will continue to work with the European Commission and member states on the EU response. That is focused on three areas. First, the European Commission is preparing to introduce immediate duties on the US, ahead of a World Trade Organisation dispute. Following a unanimous decision by member states, the EU notified the WTO of a potential list of product lines on 18 May and could trigger tariffs on this list from 20 June. The Commission is required to seek member state approval a second time in order for any of the countermeasures to come into effect. Specific timings are yet to be determined by the Commission.
Secondly, the EU can apply safeguard measures to protect the steel and aluminium industries from being damaged by an influx of imports to the EU caused by the displacing effect of US tariffs. The EU is finalising an ongoing investigation launched on 26 March into potential EU-level safeguard measures to protect its own steel market from trade diversion resulting from US measures. Provisional measures could be adopted as early as mid-July. The EU has also introduced surveillance of aluminium imports to determine whether an aluminium safeguard investigation is justified. We will support any safeguard measures required to deal with steel diversion as a result of these tariffs.
Thirdly, the EU can pursue a dispute at the WTO, and it filed such a dispute, challenging US steel and aluminium tariffs, last Friday. It is right to seek to defend our domestic industries from both the direct and indirect impacts of these US tariffs. The response must be measured and proportionate, and it is important that the United Kingdom and the EU work within the boundaries of the rules-based international trading system. Since the President asked the Department of Commerce to launch the investigations into the national security impact of steel and aluminium imports last April, the Government have made clear on repeated occasions to the Administration the potentially damaging impact of tariffs on the UK and EU steel and aluminium industries. The Prime Minister has also raised her concerns with President Trump. I have spoken on multiple occasions to the Commerce Secretary and US trade representative about the investigation, to the director general of the WTO, Roberto Azevêdo, to the EU Trade Commissioner, Cecilia Malmström, as well as to my colleagues in member states. The Government have worked closely with the EU as part of our unified response. In addition, I assure the House that we have been in regular contact with the UK’s steel and aluminium industries throughout, and the Secretary of State for Business, Energy and Industrial Strategy has convened a steel council, which will take place shortly. I have been in touch with UK Steel throughout, most recently at a meeting in Westminster earlier today.
We remain committed to robustly defending and protecting the UK’s steel and aluminium industries and their employees. The Government will continue to press the US for an EU-wide exemption from these unjustified tariffs. In parallel, UK suppliers will want to encourage their US customers to seek product exemptions via the process that is being overseen by the US Department of Commerce. Tomorrow morning, the Department for Business, Energy and Industrial Strategy will host a meeting with the industry to share information and advice on the product-exemptions process.
UK firms without a presence in the US cannot apply directly for a product exemption, which means that UK firms will need to work with their products’ end users in the US to apply for a product exemption and to gather the relevant data and justification for such an exemption. The Government will support applications made on the behalf of UK industry with representations to the Department of Commerce to process applications for product exemptions as promptly as possible. My Department published an information note on the procedure on gov.uk on Friday.
The Government are committed to free and fair trade, and to the international rules that underpin both. We will seek to promote and protect those rules alongside the interests of British industry. I commend this statement to the House.
Barry Gardiner (Brent North) (Lab)
I am grateful to the Secretary of State for advance sight of his statement and for his telephone call yesterday afternoon. He is a very courteous man, but no amount of courtesy can hide the fact that he and his party have a record of failure when it comes to defending our steel industry.
When China began dumping its over-production into the European market back in 2015, it was the Secretary of State’s Government who opposed the European Union taking stronger defence measures and who precipitated a crisis for producers in the UK that led to the loss of companies such as SSI and of 1,700 jobs at Redcar. That was not some civil service mistake, but ministerial ideology. That ideology has been confirmed by the Government’s refusal to accept the amendments that Labour tabled to both the customs Bill and the Trade Bill precisely to strengthen the trade defence measures that we could take against such illegal action.
Last week, the Secretary of State’s initial response was to say that he did “not rule out” countervailing measures with our European partners. Did “not rule out” such measures? He should have been demanding them. On the departmental website it says begrudgingly that while we are members of the EU we
“must abide by EU trade decisions”.
That hardly sounds like a full-throated and co-ordinated position with our EU trade partners—and no wonder: when the EU recently voted to modernise the trade defence measures available to protect our industries, our Government were one of only two to vote against them. It is no use the Secretary of State saying that the Opposition voted against the Trade Bill and the customs Bill and that that would have left us with no Trade Remedies Authority. We voted against those Bills precisely because they were so weak and ineffective on this matter, and he knows it.
Some 34,000 UK jobs in our steel industry and 3,500 more in the aluminium industry are at risk because President Trump is imposing protectionist tariffs that the rest of the world believes are illegal under WTO rules. We saw him use the same protectionist policies to attack Bombardier in Northern Ireland. This time, he has based the policy on a fundamental lie. He is pretending that the tariffs fall under section 232 of the Trade Expansion Act 1962 and are necessary for the national security of the United States. They are not. The lie is to try to avoid the perfectly correct response that the EU is now making in taking this as a dispute to the WTO, because the WTO is naturally reluctant to rule on what is and what is not member states’ national security.
All our steel producers want is a fair and level playing field on which to compete. They and we acknowledge that there is a real issue of global overcapacity, which brought our industry to crisis point three years ago and threatens to do so again now. That is why there are three issues on which we need absolute clarity from the Secretary of State. First, will the UK give the consent required to trigger the countervailing measures and enable them to come into effect on 20 June? The implication of the statement is that the Secretary of State will, but I ask him to leave no doubt. Secondly, the greatest threat to jobs is perhaps not directly from the loss of trade into the USA as a result of tariffs—the USA only accounts for 7% of our steel and 3% of our aluminium exports. The real danger is from the products diverted from other countries which can no longer export into the US being dumped here. When I first read the statement, I believed that the Secretary of State had made a commitment to agree to strong safeguarding measures to protect against such an influx surge. On careful reading, however, it appears that he may have given himself a get-out clause. He talks of supporting
“any safeguard measures required to deal with steel diversion”.
Can he confirm that he will support maximal measures to defend the immediate interests of our steel industry as well as any future trade defence measures that go beyond the lesser duty rule?
Thirdly, the Secretary of State mentioned that the EU filed a dispute at the World Trade Organisation on Friday. Strangely, he did not say that he welcomed that move. He knows that President Trump wishes to undermine the WTO and would prefer to do his trade deals on a bilateral basis using America’s economic might to obtain concessions. Can he confirm that, once outside of the EU, it would be his intention for the UK to continue with a WTO dispute against the US and that he is not minded to succumb to bully-boy tactics for fear of offending the President before a future trade agreement?
We do not want a trade war; most rational people believe that there are no winners in such a war. Only President Trump has said that he believes that he can win one. The UK and the EU must stand up to this behaviour and restore the integrity of the rules-based system. I therefore welcome the upcoming G7 summit and the opportunity that it provides the Prime Minister to press the case with President Trump. Will the Secretary of State assure the House that, however diplomatically embarrassing it may be for Canada as the host country, the UK will insist that this matter be given a high priority on the formal agenda and not relegated to the sidelines? The Prime Minister must persuade other leaders to respond to the fundamental problem of global oversupply as well as the unjustified action of the United States. The 37,500 workers in the UK whose jobs depend on these industries will expect her not to fail them.
Dr Fox
I am grateful to the hon. Gentleman. He is right that there is an issue of global overcapacity and that, as I have said, that must be tackled on a multilateral basis because it cannot be effectively tackled on a bilateral basis with the use of tariffs. That will not be a successful way of dealing with it. What it has resulted in is a great deal of energy being spent on blue on blue activity, rather than on dealing with the issue at source. However, he is wrong about the support to the steel industry. As of 8 November 2017, the Government have, for example, paid more than £207 million in compensation to the steel sector as an energy-intensive manufacturer.
The hon. Gentleman is also wrong about the Opposition’s vote against the Trade Bill. They voted against not the provisions of a Trade Remedies Authority, but the setting up of a Trade Remedies Authority, which would have meant that we had no defence whatsoever. He is wrong about another matter, too. The American President was not involved in the Bombardier dispute. That was a commercial dispute brought by Boeing and nothing to do with the US Administration. However, the hon. Gentleman is right on the precedent of national security. The problem with using national security, as has been done in this case through the section 232 mechanism, is twofold: first, if the United States were successful, it would set a precedent for others to do the same and to use national security as a pretext for protectionism; and, secondly, it leads the WTO into the realms of having to determine what is, and what is not, acceptable as a definition of national security. That is something that the WTO has always shied away from.
When it comes to the countermeasures, we will still want to see what the measures themselves are. Specifically, we have been talking to the Irish Government about the issue of bourbon being on the list because of the potential implications for the Scotch whisky industry and the Irish whiskey industry. We will want to continue those discussions with the Commission.
I made it very clear that we will have whatever safeguards are required. I do welcome the WTO dispute. If we are talking about the need for an international rules-based system, it is the appropriate mechanism for us to show our displeasure and that is the correct route for us to go down. Once we have left the European Union, I hope that we will have no problems with a UK exemption.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Will the President of the Board of Trade confirm that we are obliged not to seek an exemption for ourselves because of the duty of sincere co-operation, and that we can therefore can only do things with the EU? Does he share my concern that tit-for-tat retaliation is not in our interests and may make a trade war worse? The lesson of trade history is that protectionism is worst for the country that imposes it, and going tit for tat is therefore not in the national interest.
Dr Fox
My hon. Friend, as usual, raises interesting points. He is completely correct that a tit-for-tat dispute will help nobody. The United States has already seen an increase in the domestic price for steel. That means that input prices in the US are likely to rise, its output prices will ultimately rise and it will become less competitive, which is not an answer to its current trade predicament. When it comes to the position of the United Kingdom, had we been given an exemption by the US, we would still have been required to carry forward any counter- measures proposed and implemented by the European Union, but if we had implemented countermeasures without any measures actually having been applied to the United Kingdom, we would have been in breach of WTO law. It is a Catch-22.
Stephen Gethins (North East Fife) (SNP)
In spite of what the International Trade Secretary says, so much for the special relationship and the special treatment that the Government were seeking from President Trump. Coming hard on the heels of the weekend’s report that the Government are preparing for a Brexit armageddon, the chickens are truly coming home to roost for Brexiteers, who have had years to prepare for their big moment. But this has an impact on all of us, and the Scottish Government were left to secure steelworks in Lanarkshire. Will the Secretary of State tell us what discussions he has had with the Scottish Government and the industry in Scotland? His statement shows just how important the European Union is in these matters. Does it not make more sense to remain close to those who are closest to us economically and politically in Europe, and stay part of the customs union?
Dr Fox
The answer to the hon. Gentleman’s last question is no. The Minister for Trade Policy has been in touch with the Scottish Government in the past few days to discuss the wider impacts on the industry. I have made it very clear that we regard this as a UK-wide issue. The UK Government will take whatever measures are required, including safeguarding, to protect the whole UK steel industry.
Mr Philip Dunne (Ludlow) (Con)
First, I applaud the Secretary of State for focusing in his statement on how unfortunate it is that the United States has used national security as its excuse for this tariff measure. It is particularly ironic given a number of US-UK treaties under which specialist steel products are made available to the United States specifically to assist in its national security. May I encourage him to look at securing a product exemption for those products as soon as possible?
Secondly, as the Secretary of State and his colleagues are aware, Bridgnorth Aluminium in my constituency is one of the largest aluminium manufacturers in this country; 20% of its exports go to the United States, as it provides a product that is not manufactured there. The United States is hurting itself with this measure. The company not only fears that the increase in price due to the tariffs on that product will have an impact on demand, but is particularly concerned about the displacement factor from incoming Chinese imports.
Dr Fox
My hon. Friend, who knows a great deal about this subject from his time as a Defence Minister, is absolutely right. We will be looking at the displacement issue very closely to see whether safeguards are required for aluminium as well as steel. He is right about Bridgnorth in his constituency, which exported £21 million of products to the US in 2017. The irony is that the only potential competitor in that particular market is Alcoa in Warrick, Indiana, which has shown little, if any, interest in it. This situation can only lead to damage to US customers at the other end.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
As Chair of the International Trade Committee, may I take this opportunity to thank the Secretary of State for his courteous phone call to me at the end of last week outlining the situation that he found himself him? These tariffs stem from the very weird belief of the US President that if the US has a deficit with anyone, it is a result of unfair trading. Given that just about any two sets of nations find themselves in surplus or deficit with each other at times, there would be global trade chaos if the rest of the world were to follow his example of what the Secretary of State calls unjustified decision making. Meanwhile, how confident is the Secretary of State that the UK can legally take safeguarding trade defence measures if it finds itself out of the EU in March 2019, and that a trade remedies authority will be in place? My Committee has concerns about that, as I am sure he knows.
Dr Fox
I am very grateful to the hon. Gentleman for his comments. He is right that we have to have the TRA up and running. As he knows, we have now advertised for the most senior appointments and agreed its setting in Reading.
On the wider economic issue, the hon. Gentleman is absolutely correct. It is impossible, in an open and free trading system, that all economies will be in balance with one another. Surpluses and deficits are part of the allocation of resources that happens inside a free market. Were we all to aim for a trade policy where everybody was in balance, it would not be a free trading system. Apart from anything else, consumers would soon feel the detrimental effects of such a system.
John Howell (Henley) (Con)
Picking up on that point, will not a system of retaliatory tariffs hurt consumers more than anything else, and will it not be ordinary workers who suffer? Is the Secretary of State as concerned about that as I am?
Dr Fox
As my hon. Friend knows from being a trade envoy to Nigeria, it will not just be those in developed countries who feel the effects if this has a slowdown impact on the global economy. If we have tariffs, countermeasures and then measures against the countermeasures, it is very easy to see how the situation could ramp up into a global trading disaster. We need to try, in the time ahead, to get the United States Government to change their mind—to listen to the voices coming from American business and the American Congress about the damage that may ultimately be caused inside the American domestic economy.
Caroline Flint (Don Valley) (Lab)
I would be really interested to know what arguments the Secretary of State thinks are going to work with the Americans. Last time there was a trade war like this, some 200,000 jobs were lost in the United States. What efforts is he already making to identify and analyse the impact on the US economy? It seems to me that that is the biggest argument we can use.
Dr Fox
The right hon. Lady is absolutely correct that if we are to get a change in US Government policy, the most effective pressure will come from US business and the US Congress. I was very heartened to hear Chairman Brady of the Committee on Ways and Means making exactly these points yesterday—if American input prices rise, output prices will rise, and that is likely to hinder, not help, the problem with the American trade deficit. I hope that our colleagues in Congress will listen to the views being expressed clearly on both sides of the House and make those points accordingly.
Richard Graham (Gloucester) (Con)
When there was a sharp exchange on trade between China and the US recently, it was resolved surprisingly quickly. Does my right hon. Friend see that there are possibilities for a similarly swift resolution to this? If there are not, how confident is he that our voice in the EU will be able to prevent the EU from taking strong retaliatory measures and getting into the spiral of trade wars that he has described?
Dr Fox
The EU’s measures are designed to be proportionate and legal so that we can make the case that we have responded to what we believe to be legally dubious moves in a properly legal way, through the rules-based system. That is the appropriate way to go. I do not believe that the EU tariffs are escalatory, and it would be hugely unfortunate if further moves in that direction were made by either the United States or Europe.
Anna Turley (Redcar) (Lab/Co-op)
In 2002, similar retaliatory action was organised by the EU and had quite a profound effect on getting the US to drop the tariffs. Does the Secretary of State therefore wholeheartedly support the action that the EU is taking, and also the route through the World Trade Organisation?
Dr Fox
The potential countermeasures that the European Commission is setting out fall into two groups in their timing, and it is entirely possible that all or a smaller number of those measures could be put in place. I hope that the flexibility that is being shown in both the timing and the scope of their application lets the United States understand that the European Union is keen to have an agreement. It is keen not to rush into countermeasures, but to give the American Administration time to have second thoughts, which I think would be beneficial to all.
Mr Peter Bone (Wellingborough) (Con)
I think everyone will welcome the fact that the Secretary of State has come to the House at the earliest opportunity to make a statement. The European Union is justifiably outraged by the imposition of tariffs, but if we were to leave the European Union without a deal, why on earth would the EU want to impose tariffs on us?
Dr Fox
I know that opinions on Brexit are very strong, but with all due respect, we cannot see every global economic issue through the prism of Brexit. This action has been taken against what we believe to be WTO rules. It affects the European Union as much as it affects Canada and Mexico, which have economies of a very different size, and it is because of unilateral action taken by the United States. It therefore requires a proportionate response by all the countries affected, through the WTO mechanism. We have to show that we, at least, show respect for that rules-based system.
John Mann (Bassetlaw) (Lab)
I cannot believe what I am hearing. It is a good job that steelworkers and steel communities have not waved the white flag when they have been called upon repeatedly to defend our shared values with the US over the past 100 years. We cannot give in to this. The only language that Trump understands is people fighting back. It is about time that this country fought back. We can do it. Trump likes golf—let us bring in some tariffs on golf course owners in Scotland immediately and stand up for our steel communities and steelworkers, instead of this rubbish about not being able to do anything about it. We should fight him.
Dr Fox
There are two interesting points to make on that tirade of nonsense. First, we do not have the legal authority in the United Kingdom on our own, because the European Union is responsible for this issue on our behalf. When we leave the European Union we will have greater freedom, but I say to the hon. Gentleman in all seriousness that escalation is not what we require. We need a proportionate response, made calmly, giving the United States time to reflect and change its mind. This is about getting the right result, not the right rhetoric.
Sir Desmond Swayne (New Forest West) (Con)
How realistic was it to have expected a concession on steel notwithstanding our having publicly announced our intent to undermine US security policy and trade policy on Iran?
Dr Fox
I do not think that those issues are remotely related. It has been clear from the presidential election campaign onwards that the President has concerns about the US steel industry and global overcapacity. We do not disagree with the analysis of the problem; we disagree with the remedy being applied.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State not worry that future generations will look back on him and the group of people who pulled us out of Europe as the real villains of the piece? Is it not a fact that the promise that we would give up the market of 600 million people in Europe but get a massive market in North America has proven to be false? Will he remember that this country deserves to be in Europe, fighting united for Europe?
Dr Fox
It was not me, nor any other Member of the House, who decided to pull Britain out of the European Union; it was the people of Britain, in a democratic referendum. I will send the hon. Gentleman a dictionary, and he can tell me which of the words “binary”, “referendum” and “democracy” he does not understand.
Jeremy Quin (Horsham) (Con)
As my right hon. Friend has flagged, the use of national security reasons by the United States is particularly problematic, as history is littered with examples of how nations use it with a very wide definition. What work can be done with the WTO to get a better definition of what national security actually encompasses?
Dr Fox
My hon. Friend raises an important point. In fact, the WTO has always shied away from this territory because of the implications it could have, even potentially for the integrity of the WTO itself. It is better that we find a better way to deal with the oversupply in the steel market and that no one tries to use the national security route as a remedy, because as I said, if the United States were to be successful in using it, what would stop other countries doing exactly the same on protectionist measures when it suited them?
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Is not the gist of the International Trade Secretary’s position that the US is behaving outrageously—with illegal, protectionist tariffs—so he is working with our EU partners to build a strong, sensible response with the collective weight of the EU, yet he also wants to rip up the customs and trade deal with the countries that agree with us in exchange for a future, potential trade deal with a country that clearly does not agree with us? When he said last year:
“I want the UK and USA together to lead the world as shining beacons of open trade”,
was that a complete and utter fantasy?
Dr Fox
The United States has long been at the forefront of leading global free trade, including in setting up the WTO itself. That is why we find it so disappointing that the current Administration should take this particular route and try this particular remedy for the problem. The right hon. Lady will notice that being a member of the European Union has no more protected us from these tariffs than Mexico or Canada.
Michelle Donelan (Chippenham) (Con)
The UK produces some very high-value steels, some of which cannot be sourced in the US. What more can we do to promote British manufacturing overseas?
Dr Fox
My hon. Friend makes a very interesting point. Not only do we send some very high-end steel to the United States, but some of it is steel that the United States itself does not manufacture. For end users in the United States, that will actually increase the price of a product they do not manufacture domestically, which cannot have anything other than adverse economic consequences. That is why it is very important, as I have said, that the voices of US industry and of those in Congress make their views very clear about the potential damage that this will pose, as Chairman Brady has said, to American families and jobs.
Tom Brake (Carshalton and Wallington) (LD)
The imposition of US tariffs is rash, probably illegal and certainly self-defeating. Is the Secretary of State still confident that the UK can get a better deal with a protectionist United States after the UK has left the EU than we could with the European Union? Does he agree with me that if the US continues to act like a rogue state, we may reach a point where it needs to be suspended from the G7?
Dr Fox
Even for a member of his party, for the right hon. Gentleman to refer to the United States as a “rogue state” gives us pause for thought. With this particular measure, we think the US has behaved in a way that has a very poor basis in law and does not have any justification in national security. However, treating the United States in the way he suggests would be quite wrong, and it does a great deal to explain why his party has such a small representation in this House.
Stephen Kerr (Stirling) (Con)
My right hon. Friend the President of the Board of Trade mentioned in his statement that the industry will gather at the Department for Business, Energy and Industrial Strategy tomorrow morning. What form of support will BEIS be offering UK companies, especially those that do not have a US presence, in order to secure exemptions for their products?
Dr Fox
My right hon. Friend the Business Secretary felt it would be of the greatest benefit to those in the industry to have them in and to have experts, including legal experts, talk them through the product exemption system. The product exemption system does not require a presidential agreement; it occurs at the level of the Department of Commerce. Knowing how the system works and being able to access it efficiently is of prime importance.
Stephen Kinnock (Aberavon) (Lab)
As has already been said, when President Bush introduced similar tariffs in 2002, it led to the loss of 200,000 American jobs through the steel supply chain. What steps is the Secretary of State specifically taking to influence Congressmen and women from the states that will be most affected this time, because that surely is the point of leverage through to the White House? Will he come to speak directly to the all-party group on steel and metal related industries to explain those steps in detail?
Dr Fox
I would be happy to do so. I was in the United States and visited a number of our congressional colleagues just two weeks ago. It is worth pointing out that there are 142,000 steel workers in the United States, but there are 6.5 million workers who depend on steel as part of their business, so either reductions in supply or increases in cost are likely to have a domestic effect. Again, I hope our colleagues in Congress will see— I urge all Members of the House with links to either party in Congress to use those links to point this out—that history repeating itself would indeed be tragic for everybody concerned.
Chris Elmore (Ogmore) (Lab)
At present, half of UK steel exports are sent to the EU. In the light of the US decision to impose tariffs, it is highly likely that the steel industry in the UK will become more reliant on the European Union. Will the Secretary of State make representations to Cabinet to agree that Britain should remain within a customs union? If he will not do so, why not? It is the best way to protect steel industry jobs, including in Port Talbot—many members of the workforce live in my constituency.
Dr Fox
No, I will not do that. I believe that a customs union gives us greater trading relationships with some at the expense of greater trading relationships with others. As the International Monetary Fund has pointed out, 95% of global growth in the next 10 to 15 years will be outside continental Europe, so to tie ourselves into a customs model with the slowest growing part of the global economy would be very unwise.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
What is the Secretary of State doing to ensure that this attack on our steel sector will not lead to retaliatory attacks on ceramics?
Dr Fox
The hon. Lady makes a useful point that reflects the one made by my hon. Friend the Member for Horsham (Jeremy Quin) about using national security as a pretext. If that were a successful exercise, there would be nothing to stop other sectors being involved or, indeed, to stop other countries doing exactly the same thing, which is why, at the risk of repeating myself, we must try to have common sense prevail before there is any escalation, which could be very damaging to economies on both sides of the Atlantic.
Nic Dakin (Scunthorpe) (Lab)
Everyone knows that you have to stand up to bullies, not roll over and have your tummy tickled. I am really pleased that the Secretary of State is making it clear that he will support the leadership of the European Union on this matter so that robust and proper action is taken, as it was in 2002, which led to the US backing down. Will he talk to his colleagues across Government so that we can use this moment to introduce a steel sector deal to show confidence in the steel industry in the UK?
Dr Fox
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), will have heard what the hon. Gentleman said. Again, I make the point that we have set out a reasonable and proportionate response. There is no point escalating rhetoric; there is no point escalating the terms of this dispute. We should use the time available before the imposition of countermeasures to go back to the United States and say, “You still have time to think again, to stop history repeating itself or to stop economic effects that can only be detrimental in the United States and beyond.”
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Following the tariffs on steel and aluminium, it is reported that the US Secretary of Commerce is now looking at the car industry, again on national security grounds. What analysis has the Department undertaken of what other sectors may fall victim to President Trump’s protectionist strategy?
Helen Goodman (Bishop Auckland) (Lab)
Will the Secretary of State stop talking as if President Trump is amenable to reasonable arguments? This is a deliberate attack on multilateral institutions and the international liberal order. It is evident from the proposal reported in the Financial Times this morning that the American Administration do not even want to appoint judges to the World Trade Organisation court, so will the Secretary of State support urgent EU retaliatory measures?
Dr Fox
I do not believe that it is an attack on the international order. That is far too hyperbolic. It is a response to an understandable concern about the over-production of global steel and the effect that that can have in the United States, including on US steelworkers, but made in an inappropriate way. We believe that the best approach is on a multilateral basis, through the G20 steel forum, but if the United States insists on applying these measures we will apply countermeasures. We believe that the rule of international law must be upheld.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Secretary of State’s words so far have not given me comfort and I am sure that the ceramics workers in my Stoke-on-Trent constituency will have similar concerns. Countermeasures and potential retaliatory countermeasures from the US would do untold damage to the ceramics industry. One way in which the Secretary of State could help domestically to fortify and strengthen the industry would be to talk to his Cabinet colleagues about bringing forward the ceramics sector deal and giving some certainty to an industry that really has had enough.
Dr Fox
There are two things that we can do. We can help to define and identify new markets for top-end UK ceramics to guarantee the prosperity and jobs in the sector. We can also make sure that we have a trade remedies authority of our own that is able to guarantee the measures that are needed. Of course, the hon. Gentleman voted against the establishment of exactly that.
Paul Blomfield (Sheffield Central) (Lab)
It is steelworkers who are on the frontline in terms of the risk from the direct and indirect impacts of the tariffs. Will the Secretary of State outline what discussions he has had with their trade unions to address their concerns?
Dr Fox
We have had discussions across the whole steel industry. However, the hon. Gentleman is not exactly right. He is correct that steelworkers will be on the frontline, but they would not be the only ones affected. The problem is that there will be knock-on effects across the whole economy. As countermeasures are applied, more sectors will become involved as a consequence of the dispute. Therefore, it is in the interests not just of the steel industry, although it clearly is at the forefront of this battle, but of all our industries and all our consumers that we bring an end to what could otherwise be a very tragic episode in global trade.