Comprehensive Economic and Trade Agreement

Liam Fox Excerpts

Monday 21st May 2018 Written Statements

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

My Department has today laid the European Union (Definition of Treaties) (Canada Trade Agreement) Order 2017 to designate the EU-Canada Comprehensive Economic and Trade Agreement as a treaty in accordance with the European Communities Act 1972.

The European Union and Canada have concluded negotiation and signature of this agreement, which was provisionally applied on 21 September 2017 and requires ratification by the EU member states to come fully into effect.

We have laid this order which will be followed shortly by the laying of the text of the agreement as a Command Paper under the Constitutional Reform and Governance Act for scrutiny. This is, in effect, the start of the formal process of ratification of the agreement in the UK.

This agreement will boost the economies of the UK, Canada, and the EU, promoting bilateral trade and economic growth. It removed 98.2% of Canadian tariff lines with provisional application on 21 September 2017. This will rise to almost 99% over the next seven years. The agreement also reduces non-tariff measures that businesses face when trading goods and services and when investing in Canada.

The Government remain committed to supporting the EU’s ambitious trade agenda including the free trade agreements it is putting in place. We see UK ratification of CETA, while the UK is still an EU member state, as a sound demonstration of this commitment.

The Government have been clear that they will seek to ensure continuity in their existing EU trade agreements and other preferential arrangements as we leave the EU, including CETA. The Prime Minister and the Canadian Prime Minister have confirmed that both countries remain committed to a seamless transition of the trade preferences between the UK and Canada brought into effect with this agreement.

We have also laid before the House an explanatory memorandum to this order. This explains the background and rationale of the agreement and ratification. At the same time, we are publishing our economic impact assessment of this agreement and the external study on which it is based. Copies of these documents are being placed in the Libraries of both Houses.

[HCWS700]

Oral Answers to Questions

Liam Fox Excerpts

Thursday 17th May 2018 Commons Chamber

[Mrs Madeleine Moon (Bridgend) (Lab)]

1. What recent discussions he has had with his international counterparts on US tariffs on steel and aluminium.

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

The Prime Minister and I continue to raise our concerns with President Trump and his Administration about the potentially damaging impact of tariffs on our steel and aluminium industries.  We are working closely with the US and our EU partners to secure a permanent EU exemption to these tariffs.

[Mrs Moon]

Steel tariff exemptions are vital for Tata Steel. Many of my constituents work at Tata in Port Talbot in the next constituency along from mine. The exemption is welcome, but there are concerns about the US placing quotas on steel imports, which will have a major impact on the exports going not just from Britain but from Europe. How does the Secretary of State see himself protecting our export trade once we leave the European Union and do not have its negotiating power behind us?

[Dr Fox]

When it comes to protection post EU, we will have our own trade remedies measures. But of course the hon. Lady and her Labour colleagues voted against our being able to establish those when the legislation came to the House.

[Nic Dakin (Scunthorpe) (Lab)]

What is the Secretary of State doing with our partners to ensure that we do not suffer from diversionary dumping of steel as a result of what the US is doing?

[Dr Fox]

We want to see a permanent exemption so that we do not get into that position in the first place, but we have made it clear that we would operate with our European partners to ensure that we took any measures necessary that were proportionate and within international trade law to ensure that the situation that the hon. Gentleman describes would not happen.

[Barry Gardiner (Brent North) (Lab)]

The US President seems intent on undermining the World Trade Organisation’s multilateral rules-based system. He is delaying the settlement of disputes by vetoing the appointment of judges to the appellate body and is using national security as a cover, in this case, for naked protectionism against foreign steel and aluminium. Does the Secretary of State still think that Donald Trump is a man we can do business with?

[Dr Fox]

We do business with the United States Administration because the United States is our closest strategic partner. Where we disagree on issues such as steel, we make our voice very clear. We do not support the use of section 232 as a mechanism for dealing with the overproduction of steel. That actually hits the United States’ allies and not the designed target, which was China. Citing national security, particularly in Britain’s case, makes no sense at all given that some of the steel that we send to the United States goes into its military programmes.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

2. What steps he is taking to ensure that UK trade with developing countries promotes women’s rights after the UK leaves the EU.

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[Nigel Mills (Amber Valley) (Con)]

11. What steps his Department has taken to promote the merits of free trade to the public.

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

The UK champions the opportunities created by free trade. As I said in my lecture at Speaker’s House last month, free trade increases prosperity, stability and, in turn, security. My Department engages businesses and the public to set out the economic and moral case for free trade: better UK jobs, consumer access to high-quality, well-priced goods and services, and lifting people in the developing world out of poverty.

[Martin Vickers]

I thank the Secretary of State for his reply. Forecasts suggest that 90% of economic growth in the coming years will be in countries outside the EU. Does he agree that that gives this country great opportunities to extend our trade with developing nations, which will be of great benefit to them?

[Dr Fox]

I agree with my hon. Friend that that provides enormous opportunities. Free trade has helped to lift more than 1 billion people out of poverty since 1990, and we will do all we can to continue to support the liberalisation of trade with developing countries. Indeed, we demonstrated that commitment by announcing £18 million to support the WTO’s enhanced integration framework in December at Buenos Aires.

[Nigel Mills]

A slightly surprising grouping, Mr Speaker. Does the Secretary of State agree that the public might be even more strongly in favour of free trade if they are completely convinced that the right remedies are in place for goods that come from countries that are perhaps not quite as keen on free trade as we are? The ceramics industry, for example, has a big base in my constituency, so will he ensure that, when we import products from countries that have a state-distorted market, the right powers are in place in the Bill?

[Dr Fox]

I am grateful for the support that my hon. Friend gives to the ceramics industry. It is, of course, necessary to have an international rules-based system. Where we have problems with that, it is our duty to try to improve it, not to try to break or leave the system.

[Sandy Martin (Ipswich) (Lab)]

What optimistic free trade message is the Secretary of State going to give to Welsh hill farmers or Suffolk sugar beet growers?

[Dr Fox]

The same message that I would give to everybody: free trade is of benefit to consumers and producers alike in the UK and to our trading partners. As I said, it has been one of the main tools through which we have alleviated global poverty.

[Jeremy Lefroy (Stafford) (Con)]

One thing that free trade depends on is investment. What steps is my right hon. Friend taking to promote outward direct investment by the UK to help those countries with which we would like to engage in greater free trade?

[Dr Fox]

The Government have recently completed a number of pilot projects on outward direct investment, and ODI can be a major adjunct to our development agenda. I recently visited a Jaguar Land Rover dealership in Johannesburg. It is not only promoting the sale of UK goods abroad, but providing apprenticeships in mechanics and salesmanship for some of the most deprived young people in Johannesburg. Trade and development can go hand in hand.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

Those who advocate protectionism often claim that free trade means a free-for-all. It is not. May I urge the Secretary of State to make it clear that free trade means trading within the rule of law, with clear remedies to the benefit of everyone?

[Dr Fox]

The WTO and the rules-based system is under attack, it has to be said, today. If the WTO did not exist we would have to invent it. There is a need for a rules-based system, otherwise we would have a free-for-all. The alternative to a rules-based system is a deals-based system, which might be fine for some of the biggest economies but would not help many of the smaller developing economies. It is our moral duty to ensure that there is fair play across trade.

[Victoria Prentis (Banbury) (Con)]

5. What steps his Department is taking to increase the level of foreign direct investment into the UK.

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

To ensure that we continue to be a global leader in attracting foreign direct investment, the Department for International Trade has launched a new FDI strategy that will deliver new ways to target support for those projects that create the most value for investors and national wealth. I am pleased to say that 2016-17 was a record year for FDI projects landing in the UK, showing that the fundamentals of the UK economy are strong.

[Victoria Prentis]

Will my right hon. Friend tell me why, in his assessment, investors choose to invest in the UK?

[Dr Fox]

We regularly ask our investors why they put money in the UK and the answers are very similar. They say that the British legal system provides certainty and predictability. We have a skilled workforce. We have a good, predictable regulatory system and a low-taxation economy. We speak English. We have some of the best universities and some of the best access to tech, and we are in a good time zone for global trading. None of those, incidentally, depends on our membership of the European Union.

[Stephen Hammond (Wimbledon) (Con)]

6. What assessment he has made of the potential benefits to the UK arising from third-country trade deals after the UK leaves the EU.

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[Mr Bob Seely (Isle of Wight) (Con)]

8. What progress he made on potential trade agreements with Commonwealth countries at the Commonwealth Heads of Government Meeting in April 2018.

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

My Department continues to work with the 24 Commonwealth countries that are part of the EU’s economic partnership agreements or other preferential arrangements to ensure that there is no disruption to our existing trade. We also have regular discussions with Australia and New Zealand on our future bilateral trading relationships through our trade working groups. With Canada, we already have an agreement in place in CETA—the comprehensive economic and trade agreement—which will form the basis of a UK-Canada agreement once we have left the European Union.

[Mr Seely]

That is good news. Firms in my constituency such as GKN-Melrose, Vestas and BAE Systems export across the Commonwealth and the wider world. Is my right hon. Friend confident that post Brexit, we will be able to continue and grow that trade?

[Dr Fox]

Very confident. I pay tribute to the companies such as BAE and GKN that he mentions in his constituency, which are exemplary exporters. We intend to have an open and comprehensive trade agreement with the European Union. We intend to take advantage of the fact that the International Monetary Fund says that 90% of the global trade increase will be outside Europe in the next 10 to 15 years, and we have a new export strategy to support all exporters, including the ones that he mentions in his constituency.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

Ironically, a trade deal between India and the European Union is more likely to be agreed by the remaining EU27, as two of the main stumbling blocks are whisky and visas, which mainly involve the United Kingdom. Therefore, will the Secretary of State advise me, the House and my constituents at the Auchentoshan distillery and the Loch Lomond distillery how they will seek to overcome that when the Government will be all alone?

[Dr Fox]

One of the main problems with India, of course, is the tariff that it applies on whisky. We have been involved in a trade review with India for some months now, and part of the process is to look at the areas where we require liberalisation to bring our two economies close enough to be able to consider a free trade agreement. The high tariff applied on Scotch whisky by India is one of the impediments, and we continue to urge them to reduce that.

[Kerry McCarthy (Bristol East) (Lab)]

9. If he will take steps to ensure that the UK has third-party membership of current EU free trade agreements to maintain compliance with rules of origin requirements after the UK leaves the EU.

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[Alex Cunningham (Stockton North) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[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 to announce that my Department recently appointed John Mahon as our new director general for exports; he will oversee the delivery of the Government’s export strategy. Later today, my fellow Ministers and I will be in Stirling for the third meeting of the Board of Trade.

[Alex Cunningham]

In the light of the latest mass killing of Palestinian civilians by the Israel Defence Forces, will the Secretary of State review and apply the criteria for arms sales to states that violate international law?

[Dr Fox]

The UK has one of the most robust arms export systems, which we operate under the consolidated criteria in line with our EU partners.

[Rachel Maclean (Redditch) (Con)]

I welcome the Department’s focus on international trade. I am delighted to hear that the Redditch eastern gateway is included in a project and strategy that the Secretary of State will announce today. Will he update the House on what he will do to bring much-needed international investment into Redditch?

[Dr Fox]

Later today I shall outline a project to attract £30 billion of foreign direct investment to the United Kingdom. Many projects, such as the one mentioned by my hon. Friend, are not necessarily visible to global investors, but our new website will ensure that we can attract more investment in middle-sized opportunities, which will genuinely help to bring prosperity to constituencies such as my hon. Friend’s.

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[Colin Clark (Gordon) (Con)]

T2. I hope that the Secretary of State enjoyed his recent visit to Aberdeen, which is probably the most productive part of Scotland, let alone the United Kingdom. Does he agree that the oil and gas industry is a deserving recipient of the export finance that is boosting that valuable sector?

[Dr Fox]

I did indeed enjoy my visit to Aberdeen, where I was able to chair a roundtable of companies from across the oil and gas industries as well as meeting senior figures from the Wood Group. Representatives of UK Export Finance were present at both meetings, and, as my hon. Friend will know, we are more than happy for UKEF facilities to be made available to the sector.

[Sandy Martin (Ipswich) (Lab)]

T4. Given the uncertainty over the future customs arrangements between this country and the rest of Europe, what steps is the Department taking to ensure that training is provided for the additional customs officials who will be needed to deal with the probable extra workload?

[Dr Fox]

That is not, in fact, the duty of the Department. Her Majesty’s Revenue and Customs is responsible for customs in the United Kingdom. None the less, HMRC has received extra funds from the Treasury to ensure that preparations are made for Brexit.

[Leo Docherty (Aldershot) (Con)]

The UK defence and aerospace industry plays a vital role in the country’s prosperity, and Farnborough, in my constituency, has a special place at the heart of it. What steps is the Department taking to support the industry, and will the Secretary of State kindly confirm that members of his team will attend the Farnborough international air show in July?

[Dr Fox]

I can certainly give that assurance to my hon. Friend. He will also know that in order to improve the functioning of our defence and security exports we are reorganising the Defence and Security Organisation so as to separate the defence from the security elements, because they require different levels and types of Government intervention and contact. I want to ensure that the appropriate skills are there to maximise our defence and security exports.

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[Ross Thomson (Aberdeen South) (Con)]

It was a pleasure to welcome the Secretary of State to my constituency last week where he could see that, from food and drink to oil and gas, Aberdeen is best placed to take on the opportunities of Brexit. I thank my right hon. Friend’s Department for promoting Aberdeen’s £150 million Queen’s Square project this afternoon. Will my right hon. Friend update the House on the benefits to Scotland of extending the high potential opportunity scheme, and does it not show that Scotland is better off in the United Kingdom?

[Dr Fox]

One of the benefits of having a UK-wide Department is that we are able to use economies of scale to lever international investment into the whole of the United Kingdom. My hon. Friend will be aware that a number of projects in Scotland are being highlighted today during our visit to Stirling, and it is much better to have a UK-wide Department able to bring investment to all parts of the United Kingdom than to have it broken up and fragmented.

The Minister for Women and Equalities was asked—

Trade Remedies

Liam Fox Excerpts

Thursday 10th May 2018 Written Statements

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

In November 2017, the Government introduced the Taxation (Cross-Border Trade) Bill and the Trade Bill into Parliament. Together, this legislation will establish the framework for a robust trade remedies framework for the UK once we leave the EU, and establish an independent trade remedies authority (TRA) to operate that framework.

On 29 March 2018, the Department secured a technical ministerial direction to authorise spending on the implementation of the TRA prior to Royal Assent for the Trade Bill, in line with the guidance issued by the Permanent Secretaries of HM Treasury and the Department for Exiting the European Union as well as the written ministerial statement from the Chief Secretary to the Treasury in October 2017.

The Government have continued to progress work to ensure that the UK has an effective trade remedies function for when we leave the EU. Following a review of suitable locations, the Government have determined that the TRA will be based in Reading. The high concentration of required skills and excellent infrastructure links to the rest of the UK will provide an ideal basis for the TRA to carry out its essential work to protect domestic industry from unfair trading practices and unforeseen surges in imports.

Following engagement with devolved Administrations and key stakeholders, today the Government will begin the process to recruit and appoint a chair designate to prepare for this important role, ready to take on the leadership of the TRA board once the Trade Bill has completed its passage through Parliament and achieved Royal Assent.

[HCWS672]

Oral Answers to Questions

Liam Fox Excerpts

Thursday 29th March 2018 Commons Chamber

[Peter Grant (Glenrothes) (SNP)]

1. What assessment he has made of the effect of the UK leaving the EU on food and drink exports.

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

In 2017 the UK exported more than £22 billion-worth of food and drink products to the world, an increase of almost 10% on the previous year. When we leave the European Union, as we will exactly one year today, we will free UK farmers from the constraints of the common agricultural policy and provide huge opportunities for Scottish businesses in emerging markets, where demand for quality produce is high.

[Peter Grant]

Despite the brave words of the Secretary of State, he knows as well as we all do that the Scottish fresh food industry is in crisis because there is nobody to pick the fruit—his Government’s policies are deterring people from coming to Scotland to work. Can he give us just one example of a country anywhere in the world that has given a guarantee that, after we leave the European Union, Scottish food exports will be treated in exactly the same way as they are in the European Union’s market of half a billion people? Just one example, please.

[Dr Fox]

For produce such as salmon, our exports are almost exactly 50% European Union and 50% non-European Union. Salmon exports to Japan, Taiwan and Vietnam are up 63% in the past year.

[Mr Philip Hollobone (Kettering) (Con)]

Weetabix, the great British breakfast cereal made in Burton Latimer near Kettering, gets all its wheat from farmers within a 50-mile radius. It was a famous British brand even before we joined the EU, and it will remain a famous British brand after we leave the EU. Will not the prospects for exporting more Weetabix be enhanced once we leave?

[Dr Fox]

Our exports are largely determined by the growth of markets, and the International Monetary Fund says that 90% of global growth in the next 10 to 15 years will be outside the European continent. That is where the big possibilities for UK exporters are, including in food and drink.

[Kerry McCarthy (Bristol East) (Lab)]

The Minister’s colleagues are fond of talking about pork markets in China, but I urge him to pay attention to the potential pulses market there. The British Edible Pulses Association is keen to export faba beans to China, but the Department for International Trade is not talking to the BEPA at the moment. The Chinese want these beans, but there are some technical obstacles. I urge the Minister to respond to the correspondence and let us get this pulses market moving.

[Dr Fox]

I am keen to ensure that that market is fully exploited. If the hon. Lady wants the representatives to speak directly to one of our Ministers, we would be happy to speak to them to see whether there are any technical impediments that can be swept away.

[Sir Desmond Swayne (New Forest West) (Con)]

What has been the impact of the Food is GREAT campaign?

[Dr Fox]

To get more people around the world to understand that high-quality British produce is a world beater.

[Thangam Debbonaire (Bristol West) (Lab)]

2. If he will hold discussions with the Secretary of State for Digital, Culture, Media and Sport and representatives of the creative industries on trade in that sector with EU countries after the UK leaves the EU. [R]

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[David Hanson (Delyn) (Lab)]

7. What assurances he has received from his counterparts in the US Administration that the section 232 tariffs imposed by that country on steel and aluminium imports will not apply to UK exports.

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

Although we welcome the United States granting an EU-wide exemption from the tariffs applied under section 232 for a limited time period, we continue to argue that this is not an appropriate mechanism to deal with justifiable concerns in relation to the overcapacity of steel worldwide.

[David Hanson]

Some 15% of UK steel goes to America, and, quite frankly, a pause on the imposition of tariffs is simply not good enough. What steps is the Secretary of State taking to make sure that that pause becomes permanent?

[Dr Fox]

We are working with the European Union to ensure a permanent exemption, and I spoke to Commissioner Malmström yesterday. On the specific case of the United Kingdom, the UK is responsible for only 1% of American steel imports. Much of that is high quality steel, which the United States does not manufacture itself. Some of our steel goes to American defence projects, which means that it would be quite absurd to exclude the United Kingdom, or to apply tariffs to the United Kingdom, on the basis of national security.

[Chris Elmore (Ogmore) (Lab)]

13. I welcome the assurance that section 232 tariffs will not apply to UK exports, but, ultimately, any tariffs will have a significant impact on prices here and could have a knock-on effect on those working in the steel industry, including in Tata Steel at Port Talbot, which neighbours my constituency. If those tariffs are implemented, what additional support will the Government provide for the industry to help deal with the damaging tariffs imposed on workers?

[Dr Fox]

The hon. Gentleman is right: there will be a knock-on price effect and there is also likely to be a displacement effect in the global steel market, for which we may have to look at imposing safeguard measures; along with the European Union, we would do so. He is also right that there would be a knock-on price effect in the United States, too. It does not make any sense to protect 140,000 steel jobs in the United States and see prices rise for the 6.5 million US workers who are dependent on steel.

[Nic Dakin (Scunthorpe) (Lab)]

I thank the Secretary of State for meeting steel MPs this week. Will he say a bit more about the safeguards that he will try to ensure are in place against diversionary dumping as a result of this action by the United States?

[Dr Fox]

I am grateful to the hon. Gentleman for his comments. As he knows, our aim, along with our European Union partners, is for the tariffs not to be applied in the first place. We argue that section 232 is not an appropriate means of doing so. If we want to deal with the over- production of steel—particularly Chinese overproduction —the best way to do so is through the G7 steel forum, where there are 28 outstanding recommendations to which we are still awaiting a Chinese response.

[Bill Esterson (Sefton Central) (Lab)]

UK steel faces a very real threat from dumping as a result of these US tariffs, but the Conservatives in the European Parliament led the group of MEPs that consistently blocked EU action against dumping. As the Manufacturing Trade Remedies Alliance says, in the Trade Bill—which has mysteriously disappeared—the Secretary of State is proposing the weakest trade remedies system in the world. It is simply not good enough. When is he going to stand up for the UK steel industry and for UK steel jobs?

[Dr Fox]

It is hard to know where to start when there are so many wrong facts in a single question. Let us leave aside the European Parliament. It was the Labour party in this Parliament that voted against the customs Bill and the Trade Bill, stopping us creating a trade remedies authority in the first place. The Trade Bill itself only sets up the trade remedies authority; it does not set up the regime.

[Several hon. Members rose—]

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[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

T1. If he will make a statement on his departmental responsibilities.

[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, establishing an independent trade policy on export promotion. Yesterday I chaired the 10th UK-Brazil Joint Economic and Trade Committee, where we signed memorandums of understanding on infrastructure, innovation and trade facilitation.

[Mr Sheerman]

The Chinese Government recently turned the tap on exports of waste plastic to China. That has made a fantastic and very disturbing difference in the chemical market in Britain. If the Chinese Government did the same in higher education, what would be the impact? Has the Secretary of State done any analysis of that?

[Dr Fox]

I had discussions in China only last week about exporting UK educational expertise. There is a huge appetite for that around the world, because there is an increasing acceptance that it is the gold standard. In fact, UK exports of education last year outstripped the City of London’s insurance business and continue to grow with Government support.

[Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

T2. Will the Secretary of State reassure my constituent, Simon Bainbridge, who is one of the finest producers of Northumbrian lamb, that lamb sales will not be forgotten in the new free trade agreements?

[Dr Fox]

Far from being forgotten, advocating further exports of high-quality UK produce is at the top of the Government’s agenda. I can tell my hon. Friend the good news that the latest international market to open up to British lamb is Saudi Arabia, with enormous potential.

[Bill Esterson (Sefton Central) (Lab)]

GKN has total sales of £10.4 billion, £9 billion of which are outside the UK. Profits from its operations in 30 countries around the world are repatriated to the UK. It will not be much of a global Britain if the Secretary of State’s approach is to stand idly by while a business like GKN that is so vital to our international trade is allowed to be subject to a hostile takeover that can lead only to its break-up and sale. Why has he stayed so silent on such a crucial issue for our trading prospects?

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[Chris Elmore (Ogmore) (Lab)]

T3. The dumping of steel from states including China has had a detrimental impact on the steel industry in the UK. Ahead of the further dumping that is anticipated when the US tariffs come into force, Canada has announced that it will be offering extra powers for border security checks to crack down on cheap steel. What assessment has the Secretary of State made of this policy?

[Dr Fox]

I rather feel that I answered this question earlier. The EU will look to see whether we need to introduce safeguarding measures as a consequence of any diversion. We are working closely with our European partners to assess what the potential may be and what the joint EU response would need to be consequently.

[Alberto Costa (South Leicestershire) (Con)]

T6. The Secretary of State has recently returned from Hong Kong and mainland China. Now that we are leaving the EU customs union and single market, what more trade can we do with these countries to ensure that our businesses are not left worse off?

[Dr Fox]

I am happy to tell my hon. Friend that at the festival of innovation last week we had 284 UK businesses and seven universities with us, all of which were able to discuss future partnerships and sponsorships. There was a very warm welcome, and we actually began the initial discussions with the Government of Hong Kong about entering into a future trade agreement on services.

[Matt Western (Warwick and Leamington) (Lab)]

T5. Given the less than successful outcome of the recent negotiations on behalf of UK fishermen, what hope and reassurances can the Secretary of State provide for farmers such as those in my constituency that future negotiations will make them better off outside the EU?

[Dr Fox]

The best hope for British farmers is to be set free from the constraints of the common agricultural policy and to start to produce for export markets. There is a huge demand out there for UK food produce. The high standards that we have in this country, which we will maintain, are in themselves a kitemark for British produce.

[Luke Graham (Ochil and South Perthshire) (Con)]

At a recent Public Accounts Committee hearing, the permanent secretary at the Department for International Trade confirmed that although there are eight regional offices for the Department in England, there are none in Scotland. Will my right hon. Friend meet me to discuss adequate resourcing for the DIT in Scotland?

[Dr Fox]

I met our DIT staff in Glasgow relatively recently. The point is that the Department for International Trade is a UK Department. It is there to help the trading interests, export interests and inward investment interests of the whole of the United Kingdom. Trade is a reserved matter.

[Mary Glindon (North Tyneside) (Lab)]

T7. The north-east is a net gainer from the EU, and 60% of our exports are to EU countries, but the region is set to be worst off after Brexit. How will the Department make sure we do not lose out as part of the Government’s global north vision?

[Mr Peter Bone (Wellingborough) (Con)]

Can the Secretary of State tell the House what he will be doing in 365 days’ time?

[Dr Fox]

Watching the clock.

[David Linden (Glasgow East) (SNP)]

The liquid gold that is Scotch whisky is a major export good for our economy, but so far in the EU negotiations we are still not getting clarity on geographical indications, which many other drinks benefit from as well. When will we get clarity on GI for Scotch whisky and other drinks that we enjoy?

[Dr Fox]

It always comes round to whisky at some point in these discussions on a Thursday morning. As the hon. Gentleman will know, the Government accepted that we would roll over the EU treaties that exist at the present time, including those on GIs. It is a pity that he voted against that in the House of Commons.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The ceramics industry stands ready to play its part in helping to boost global exports from the UK, but the reciprocal arrangement we need for that is protection from Chinese dumping of tiles and tableware. Will the Secretary of State ask his Cabinet colleagues to look favourably on the amendments that I have tabled to the customs Bill, which would ensure that the protections we currently have in Europe were written into British law?

[Dr Fox]

The hon. Gentleman is right about his amendments, but his party voted against setting up the trade remedies authority that would implement them. He cannot have it both ways.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The African continental free trade area agreement was recently signed. Will the Secretary of State assure me that economic development and fair trade will be at the heart of the free trade agreements he looks for?

[Dr Fox]

I am grateful to the hon. Lady for her question. It is very important that we tie together better than we have in the past our trade policy and our development policy. The Secretary of State for International Development and I will be making some announcements on exactly how we can do that, and we will be discussing at the Commonwealth Heads of Government meeting with some of the relevant trade partners exactly how we can make that happen.

[Mr Speaker]

Finally, in one short sentence without semi-colons or subordinate clauses, Wera Hobhouse.

[Wera Hobhouse (Bath) (LD)]

The EU has around 60 trade agreements with third countries. How many trade agreements with those countries does the Secretary of State estimate will have been agreed by December 2020?

[Dr Fox]

We hope all of them, but that means we have to transition them into UK law, which of course the hon. Lady voted against.

The Minister for Women and Equalities was asked—

United States Tariffs: Steel and Aluminium

Liam Fox Excerpts

Report stage: House of Commons
Monday 12th March 2018 Commons Chamber

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

On Thursday 8 March, President Trump announced that the United States would impose a tariff of 25% on steel imports and a 10% tariff on aluminium imports after a period of 15 days, with the final day being 23 March. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, have been exempted from the tariffs, subject to the successful conclusion of the NAFTA negotiations. For the products within the scope of the investigation, in 2017, the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. In addition, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports in tonnage, at a value of £360 million and £29 million respectively. The President outlined that there is scope for further countries and certain products to be exempted from the tariffs.

From a UK perspective, as Members of this House know, the UK and the US are strong partners and allies, and the US-UK economic and security relationship is crucial. The US is our largest single-nation trading partner and accounts for a fifth of all exports, worth more than £100 billion a year. It is also the top destination for outward direct investment by the UK and the single biggest source of inward investment into the UK. We have a long-standing and special relationship with the US; however, that does not mean that if we disagree with something, we will not say so, and we do disagree with the US decision to implement tariffs on steel and aluminium imports based on national security considerations. Such unilateral trade measures have weak foundations in international law and are not consistent with the Department of Defence’s own judgment in an investigation that was conducted on the basis of national security.

There is undoubtedly a problem of overcapacity in the global steel market, but our strong view is that a global problem requires a global solution, 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, which my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy attended in Berlin in November; the forum agreed comprehensive policy solutions. Most recently, the Prime Minister raised it during her visit to China, which is the world’s leading producer of steel and aluminium products. The UK will continue to work within the rules-based international trade system to tackle this problem.

Since the President asked the Department of Commerce to launch the investigation into the national security impact of steel and aluminium imports last April, the Government have made clear to the Administration on repeated occasions the potentially damaging impact of tariffs on the UK and the EU steel and aluminium industries. The Prime Minister has raised her concerns directly with President Trump. I have spoken on several occasions to the Commerce Secretary and to the US trade representative about the investigation, including this afternoon. I spoke again today to the director general of the World Trade Organisation, Roberto Azevêdo, and I regularly speak to the EU Trade Commissioner, Cecilia Malmström. Several of my Cabinet colleagues have raised this issue with their opposite numbers. The Government have worked closely with the EU as part of our unified response. In addition, I assure right hon. and hon. colleagues that we have been in regular contact with the UK steel and aluminium industry throughout. I spoke to Gareth Stace at the weekend and again this afternoon.

There are two routes to petition the US for exemptions from the tariffs. The first, overseen by the US trade representative, will exempt countries with which the US has a strong national security relationship and which agree alternative means to address the threat to US national security from the relevant imports. The second, overseen by the Department of Commerce, will evaluate product exemptions if it is deemed there is no domestic US alternative and there are national security considerations, but only after a request for exclusion is made by a directly affected party located in the United States.

The Department for Business, Energy and Industrial Strategy will be assisting UK industry in working with US customers to build their cases for the exemption of individual products. I will be travelling to Washington this week for face-to-face meetings with the US trade representative, Ambassador Lighthizer, and Commerce Secretary Wilbur Ross as well as leading members of Congress. I will be making the case for the UK as part of the EU. We have 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 the US is vital to international peace and security.

As the House is aware, our current membership of the European Union means that the European Commission will be co-ordinating the EU response, and we have been clear that we will continue to adhere to the duty of sincere co-operation. The EU response is focused on three possible areas. First, the European Commission is preparing to introduce immediate duties on the US ahead of a World Trade Organisation dispute. The EU has shared a draft list of proposed items for duties and we expect it to publish this list early next week. Secondly, the EU can apply a safeguard measure of its own to protect the steel and aluminium industries from being damaged by an influx of exports to the EU caused by the displacing effect of US tariffs. Thirdly, the EU can pursue a dispute at the WTO. We are currently evaluating all aspects of these responses together.

We are clear that it is right to seek to defend our domestic industries from the direct and indirect impacts of the US tariffs, protecting both jobs and industrial capacity. We will also press for any response from the EU to be measured and proportionate. It is important that the UK and EU response works within the boundaries of the rules-based international trading system. Over the coming days, we will be working closely with British industry and the EU to seek swift clarification and mitigation. I commend this statement to the House.

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[Dr Fox]

I am grateful to the hon. Gentleman for his co-operation over the weekend and for some of the constructive suggestions he made about how we might apply some further pressure to those US producers to enable them to seek exemptions for imports from the UK. He is right that there is overcapacity. The G20 global forum on steel excess capacity has made 28 recommendations. We now wait to see whether China will implement those recommendations, which is the key to sorting out the global overcapacity issue.

We have regularly said that we do not believe that section 232 was an appropriate vehicle for carrying out this investigation. Not only does the UK send some specifically high-end steel products into the United States that the US market is not necessarily able to provide for itself, so tariffs will apply an unavoidable increase in cost to American inputs, but we sell some specialist steel into the American military programme, making action taken against the United Kingdom on a national security ground quite an absurdity.

The hon. Gentleman is right to mention the sincere co-operation. I have made it very clear to the Commission that we continue to operate on that basis and that we will replicate the EU’s trade remedies systems as we leave the European Union. I remind him, though, that the Labour party voted against the setting up of the Trade Remedies Authority, not the issues that relate to its operation. That was a dangerous thing to do. However, it is right that we regard this as a national issue. There is no fundamental difference between us on the basis on which the section 232 investigation was conducted, nor on the options that we believe the European Union should take as a response.

[John Redwood (Wokingham) (Con)]

Will the Secretary of State stress to the EU that it is in our interests to try to take some of the tension out of this festering dispute, rather than to take it on to another height, given that the President is already talking about tariffs against German cars, for example? It is surely in our interests to get back to tariff-free or low-tariff business.

[Dr Fox]

The EU is taking countermeasures because the EU views section 232 itself as a safeguard. Any action that the United States were to take in response to that would be completely out of line with international trade law, as well as exacerbating an already tense situation.

[Hannah Bardell (Livingston) (SNP)]

This really is a blow to those right-wing, free-market Brexiteers who argue that the US will welcome a trade deal with open arms. Anyone looking at the somewhat unhinged tweets coming out of President Trump’s office will tell us otherwise. Given the Secretary of State’s nationality and where he was brought up, I am interested to know whether he has raised the matter specifically of Scottish steel and aluminium, and the steel industry’s impact on all nations of the UK. It was in 1992 that his Conservative Government closed Ravenscraig in Scotland, decimating 1,200 jobs and livelihoods, and it was the Scottish National party Government in Scotland who brought back into production the steelworks in Clydebridge and Dalzell and the aluminium smelter in Lochaber. We are fed up in Scotland with clearing up his Government’s mess and we do not want to have to do it again.

We know from recent reports in the press that the geographical indicators of products such as Scotch whisky could be under threat in a US-UK trade deal. The Secretary of State may have seen the article in The Scotsman last week suggesting that Scotch whisky is

“among the products that could carry a ‘Made in America’ tag after Brexit.”

It further said:

“US lobbyists are calling for the UK to drop geographical name protections after Brexit to allow supermarkets to import American copies.”

That would be outrageous.

Will the Secretary of State commit to protecting our valuable steel and aluminium industries and not to trading off our vital GIs for Scotch whisky in any trade deals? Given that a Tory Brexit would reduce UK GDP by 8% and put at risk some of our key exports, will he finally reconsider his approach to Brexit and admit that he was wrong in suggesting that leaving the EU single market and customs union could somehow be overcome by magical trade deals with the US and the EU that were going to be, in his words, the “easiest in human history”?

[Dr Fox]

It is not long since I remember the SNP being delighted at some of Mr Trump’s tweets, when he was having some of his relationships with the previous SNP leader.

We can best tackle this issue as a united United Kingdom in line with our European Union partners. The hon. Lady dares to raise the issue of GI. These matters are in the roll-over of the EU trade agreement for which we are trying to get continuity in our current Trade Bill and the customs Bill. She needs to understand that she actually voted against the roll-over of those Bills that would have given the very protections for which she is asking.

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

In its condemnation of President Trump’s proposed steel tariff, the EU has implicitly accepted that it would be a similarly retrograde step to impose tariffs or engage in retaliatory measures with key trading partners. How will my right hon. Friend be using the President’s announcement to make the case for open frictionless trade with the EU post Brexit and to assert the UK’s position as a leading proponent of free trade in the 21st century?

[Dr Fox]

We are seeing the sort of problems that come from introducing protectionist measures. Tariffs will very seldom—for any length of time—successfully protect a domestic industry. They are likely to add cost to the inputs for that economy. In the United States, where 140,000 people are employed in the production of steel, there are also 6.5 million people in industries dependent on steel usage who will not be helped by an increase in the price. My hon. Friend makes a good point. We should all be recommitting ourselves to an open, liberal, global trading system, rather than considering impediments to it.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

If the Secretary of State wants to rebuff Donald Trump’s claim that these tariffs are for national security reasons, he need only look at the President’s tweet from six hours ago, in which he starts off down the avenue of saying, “Oh, what about European farming tariffs or manufacturing tariffs?” It is quite clear that the Secretary of State and the European Union should be able to drive a coach and horses through the national security nonsense that the American President is putting up. Will the Secretary of State at least see this as an opportunity for us to work with our partners in the European Union and to use the leverage that we have in that alliance of 500 million customers to ensure that the Americans cannot walk all over us?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. A load of constituencies are affected. May I suggest that we have short answers and short questions, so that hon. Members can get in?

[Dr Fox]

We will work with our partners in the European Union because we are under a duty of sincere co-operation and because it makes sense to do so, but many other countries that are not members of the European Union are affected, and they will also make their voices known.

[Iain Stewart (Milton Keynes South) (Con)]

My right hon. Friend has rightly mentioned that many of the UK’s exports are very high value and specialised and that many of the supplies go to the United States military. Does he have an opinion at this stage whether the product exemption or the country exemption route offers the best hope for gaining an advantage for the United Kingdom?

[Dr Fox]

My hon. Friend asks a very good question, but it is difficult to answer until we can explore in greater detail with the US authorities exactly what the details will mean. In any case, whichever routes are the best to gain exemptions for the United Kingdom and the European Union are the ones that we want to follow.

[Catherine West (Hornsey and Wood Green) (Lab)]

What is the Secretary of State’s view on comments in the past 10 days regarding a tit-for-tat approach—for example, with peanut butter, cranberry juice and other products that are consumed here? Is this a good and sensible approach?

[Dr Fox]

The hon. Lady asks a good question. As I said, the EU intends to impose countermeasures under article 8 of the World Trade Organisation safeguards agreement, because it believes that section 232 itself is a safeguard. The EU is therefore entitled to respond to that. Let me say, though, that this constant upping of the ante regarding what may happen and what countermeasures may be taken is not a sensible way for us to approach global trade. If she is suggesting that it would be wise for everyone to keep the temperature down, I entirely agree—100%.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I welcome the Secretary of State’s statement in terms of its content and its tone. Free trade is about being free to trade within the agreed rules; it is not about a free-for-all. May I strongly encourage him to reiterate that message both to the United States and to China?

[Dr Fox]

I take every opportunity to do so. It is worth remembering that we have in the United States a number of those who very strongly agree with us, not least inside the American business lobby, many of whom may be harmed as a result of the measures that may be undertaken. We also have very strong and vocal allies in the US Congress, and I very much welcome them making their voices known in recent days.

[Anna Turley (Redcar) (Lab/Co-op)]

I would be very concerned if the Government were pinning all their hopes on an exemption either for the UK or for the European Union, because there will still be a substantial knock-on effect of further dumping on our shores by the countries that behave badly when they are shut out of the US. Has the Secretary of State done an impact assessment for the British steel industry on the knock-on effect of further global overcapacity as a result of these tariffs?

[Dr Fox]

We are working alongside the industry to look at that. My colleagues in the Department for Business, Energy and Industrial Strategy are engaged in that work. The hon. Lady knows that Skinningrove is a very good example of what I was discussing earlier. It is one of the areas where we make specialist steel that goes into the US programme, so the concept that we should be taken to task on a national security basis for providing the US with something that it needs for its own security programme does not make much sense.

[Adam Afriyie (Windsor) (Con)]

It seems to me that tariffs and protectionism fundamentally undermine the industries that they seek to protect. Can the Secretary of State confirm that it remains the British Government’s position that we are committed to world-wide free trade? Will he be seeking in some way to gain a bilateral opt-out from these tariffs as soon as we are able to do so?

[Dr Fox]

As I have said, we will work alongside the European Union because we have a duty of sincere co-operation for as long as we are members. I have often taken the view that it is strange that people should want us to obey the rules when we want them and not when we do not want them. We have a legal duty as EU members to fulfil this. We intend to do so, and we will work with our EU partners accordingly. As a country—this has been true under Governments of both colours—we have believed in free trade. We have been a global champion of free trade. Let us remember that free trade is the means by which we have taken 1 billion people out of abject poverty in a generation, and we as a country should be very proud that we have been in the lead in that.

[Sir Vince Cable (Twickenham) (LD)]

Can the Secretary of State give us some examples of how he has been able to use our close and special trading relationship with the United States to develop his vision of an open, liberal, multilateral trading system?

[Dr Fox]

As the right hon. Gentleman knows, we are unable to conduct an independent trade policy for as long as we are members of his beloved European Union. We have a trade working group with the United States. We are looking at short-term liberalisation. We are looking at the areas that we might look at in a future free trade agreement. We are looking at co-operation in the WTO when we leave. As he sits and looks, for some reason, very smug, he would do well to remember his comments from yesterday, which were as mean-spirited as they were wrong in substance.

[Crispin Blunt (Reigate) (Con)]

I congratulate my right hon. Friend on his answer to the right hon. Member for Twickenham (Sir Vince Cable).

My right hon. Friend says that when he goes to the United States, he will meet members of Congress. Will he continue to build the case with our Republican friends in Congress for the open, liberal trading system that we all support—on both sides of this House—to make sure that this can be delivered once we are out of the European Union?

[Dr Fox]

I would just correct my hon. Friend a little. We are not just talking to Republican members of Congress; there are very strong Democrat elements that are also in favour, and have long been in favour, of free trade. It is very important that in this country, in the United States and elsewhere, we work with like-minded people who believe in genuinely open, liberal global trade to achieve the ends that we have in common.

[Jessica Morden (Newport East) (Lab)]

The recovery that we have seen in our steel industry has been fragile. We are facing, as my hon. Friend the Member for Redcar (Anna Turley) said, not only the direct impact of tariffs on our exports but the indirect effects of other countries finding a home for displaced steel. The Government have been slow to act during the steel crisis in the recent past. Can the Secretary of State assure my steelworking constituents that the Government will do everything they can to fight for our industry at this time?

[Dr Fox]

As I made clear, the EU will impose countermeasures because it believes that what we are witnessing is a safeguard. We believe that that is not justified by the section 232 case on national security. We will, alongside the EU, take whatever measures are required to ensure that that is dealt with.

[Michelle Donelan (Chippenham) (Con)]

What steps is the Secretary of State’s Department taking to ensure that the UK can protect British businesses in all sectors from unfair trading practices once the UK leaves the EU?

[Dr Fox]

We touched on that earlier. We will do that by replicating the trade remedies measures that exist. To do it, however, we have to set up a Trade Remedies Authority under the Trade Bill that is currently going through the House. I hope that the Opposition parties will look again at their rather inexplicable decision to vote against the setting up of a Trade Remedies Authority.

[Hannah Bardell]

On a point of order, Mr Deputy Speaker.

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[Dr Fox]

We hope that we can persuade the United States of an EU exemption so that we do not need to go down this particular route. I hope that sense will prevail. The hon. Gentleman is quite right to raise the 2002 issue. At that point, there was a great deal of activity where an alliance between the free trade elements in Congress and the business community in the United States came together to change the mind of the Administration at that time. I hope that such a combination would be successful this time.

[Paul Masterton (East Renfrewshire) (Con)]

As we have heard, President Trump’s announcement has caused widespread concern within America itself. What steps will the Government be taking to exert pressure on President Trump not only from the outside, as part of the EU, but from the inside, in terms of the American political and trading establishments?

[Dr Fox]

As I have said, there is a great deal of opinion inside Congress, within both parties, that this is a mistaken route to take. In recent days, I have had discussions with, for example, Paul Ryan on this very subject. We should be trying to mobilise all the allies we can. I mentioned earlier the co-operation from the hon. Member for Brent North (Barry Gardiner). It is very important that we deal with this not just politically and through business, in that there is a role for the trade unions to play in talking to their opposite numbers in the United States where industries that are users of steel could potentially be damaged should the price of that steel rise as a result of tariffs. We can take a multi-layered approach to dealing with this issue, and we have a duty to use every one of the levers that we have.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Diversionary dumping is also the crucial issue for steelworkers at the Celsa plant in my own constituency. Does the Secretary of State not find it ironic that he is talking about the importance of working together across the EU to put in place the safeguards that are so necessary while at the same time advocating pulling us away from that and swimming against the tide alone? When he is speaking to his US counterparts, will he remind them that every single US state lost jobs as a result of George W. Bush’s actions in 2002?

[Dr Fox]

As I have said, the EU can take counter measures on the basis that it believes that this is a safeguard. It could also make a safeguard of its own if it felt that a surge of displaced steel product was damaging our own market. I remind the hon. Gentleman that this is not just a dispute between the United States and the EU but involves all the countries in the world who are steel producers. The WTO is much bigger than the EU, and we will not be leaving the WTO as we are a founder member.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I thank the Secretary of State for referencing Skinningrove in his answer to the hon. Member for Redcar (Anna Turley), because, as he rightly says, there would be a serious threat to that plant as it produces very high-grade steel. Will he commit to all the necessary support for Skinningrove, especially given that the core products produced there for Caterpillar, an American firm, are not produced in the US market, and therefore pose no threat to US jobs?

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[Dr Fox]

My hon. Friend makes an important point. The exports from Skinningrove to Caterpillar make up about 25% of the site’s output and he is right to say that US producers have poor capability in regard to this product. The application of tariffs is therefore likely to result in a rise in input costs, which would be to no one’s economic benefit.

[Nick Thomas-Symonds (Torfaen) (Lab)]

We all hope that these tariffs will not be imposed on 23 March, but if they are, what steps will the Government commit to taking in order to support steelmaking in this country and our steelmaking communities?

[Dr Fox]

That date, 23 March, is not quite the deadline that it might appear. My initial discussions with the US Department of Commerce and the Office of the United States Trade Representative have made it clear that the period of exemption will continue some way beyond the initial introduction. Clearly, if there are going to be exemptions for the EU or the UK, we would want to see them introduced as early as possible. We will continue to push for exemption on the basis that I have set out today.

[Bob Stewart (Beckenham) (Con)]

When my right hon. Friend travels to Washington later this week, will he be accompanied by representatives from Brussels? Obviously, we are still an EU member and cannot act unilaterally—yet.

[Dr Fox]

I do not require a babysitter from the EU on my visit to Washington. We are in continuous contact with Commissioner Malmström and her team, because this is an issue that affects us all. It would affect us whether we were in the European Union or not, however, because these actions are being taken not just against the EU but against all steel producers globally, all of whom will be equally affected.

[David Hanson (Delyn) (Lab)]

Did the Secretary of State, or for that matter the European Union, have advance knowledge of President Trump’s statement on 1 March? Either way, what does this say about future relationships with the President?

[Dr Fox]

I am not sure how many people, if any, had advance notice of President Trump’s initial announcement.

[Robert Courts (Witney) (Con)]

What representations has my right hon. Friend made to China with regard to tackling the global overcapacity of steel?

[Dr Fox]

As I have said, through the work that we are doing multilaterally, there are currently 28 outstanding recommendations that we expect China to apply. The Prime Minister raised this matter on her recent visit to China, and we are continuing the conversation. We understand China’s need for the production of aluminium and steel for export and for its domestic use, but if we are going to have a rules-based system, the rules need to be obeyed. They also need to be transparent, and we need to have sufficient information to determine whether the WTO rules are still effective.

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

If faced with a trade war, what post-Brexit trade defence mechanisms would little Britain employ against the might of the US economy?

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[Dr Fox]

As I have said, the whole aim of policy at present in the UK, the European Union and beyond is to try to temper these proposals and to get exemptions so that we do not feel any of the impetus that might lead to an escalation of the current position.

[Mrs Kemi Badenoch (Saffron Walden) (Con)]

As tariffs go, 25% is particularly high and could lead to all sorts of unforeseen consequences. Is there any evidence that there will be trade diversion to the UK as a result of the US imposition of 25% tariffs?

[Dr Fox]

It is quite difficult to know in advance where there might be diversion. Again I make the point that our aim is not to deal with the consequences but to prevent the imposition of the proposed tariffs in the first place.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State jokes that it is not clear that anyone knew about the President’s announcement before he made it, but it is worse than that. Sometimes, it looks as though the President himself does not know what he is about to announce, even when he has started to announce it. All too often, it involves a tweet in search of a policy. Are not the really disturbing matters not only the growth of protectionism in America but the false promise that it offers to some of the poorest people in the United States, who in the end will not benefit one jot from it?

[Dr Fox]

The hon. Gentleman makes an even better point than he thinks he has—[Interruption.] Or, in his case, possibly not. In recent years, we have seen a worrying trend among G20 countries to impose protectionist measures. In 2010, we saw about 300 non-tariff barriers to trade being operated by the G20. By 2015, that figure had risen to around 1,200, so there has been a gradual move away from the concept of global free trade and a temptation for countries to impose non-tariff barriers. In addition to making the economic case, we should remember that those countries that have benefited from free trade should not be pulling up the drawbridge behind them and denying those benefits to developing countries.

[Mr Philip Hollobone (Kettering) (Con)]

Is China doing anything at all to help to cut the global oversupply of steel?

[Dr Fox]

That is a discussion that we are having constantly with China. It says that it is taking measures to reduce it, but as I have said, there are 28 recommendations outstanding, and only time will tell whether we are witnessing the correct action or merely the rhetoric.

[Kate Hoey (Vauxhall) (Lab)]

Given what President Trump said during his election, none of us should really be surprised by this. If the Secretary of State does not manage to change the mind of the United States Government when he goes to Washington, and if they offer the United Kingdom an exemption, would that exemption come in from March 2019 or would it have to be subject to the almost ridiculous implementation period?

[Dr Fox]

Any exemption given by the United States will be in US law and will be determined by the US President, not by the US Congress and far less by European law.

[Rebecca Pow (Taunton Deane) (Con)]

Close co-operation between the UK and the US is vital to international peace. One route to petitioning the US for exemptions to the proposed tariffs would be to demonstrate the strong link with national security. How confident is my right hon. Friend that we can make a strong case on those grounds?

[Dr Fox]

Of course we have a strong national security linkage through our relationship in the Security Council and through being nuclear powers in the world, but it is always worth reminding our US colleagues who was alongside them in Iraq and Afghanistan and in many of the other conflicts that the United States has been involved in. The United Kingdom has never been found wanting as a loyal and steadfast partner in our bilateral security and in global security more generally.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Seeking exemptions from the US steel tariffs will not in itself protect the UK’s steel industry from dumped diverted steel from the American market. Will the Secretary of State undertake to work with the EU to ensure that whatever measures are necessary to preserve the UK’s steel industry are taken, and to work with the WTO to establish a more rational anti-dumping regime internationally?

[Dr Fox]

That is what we in the WTO are for. Its purpose is to ensure that there is a rules-based system and that the rules are applied, and that when the rules are not applied, there is sufficient mitigation to help those countries that are affected. In all the things that the hon. Gentleman has just mentioned, that is where we regard our duty as lying.

[Jack Brereton (Stoke-on-Trent South) (Con)]

As the Secretary of State will know from visiting Goodwin International in my constituency, Britain is a world leader in the specialist precision engineering of steel products. This is important not only for our British industry but for supplying US defence with equipment. How can we ensure that the US recognises that fact, so that those vital British products can continue to be exported to the States?

[Dr Fox]

The US Department of Defence has made it quite clear that it fully understands the contribution that the United Kingdom makes. Its report made it clear that it did not believe the use of section 232 was the appropriate means of dealing with concerns about global overcapacity. I hope that the good sense of the Department of Defence will be diffused throughout Washington.

[Lady Hermon (North Down) (Ind)]

May I commend to the Secretary of State the experience of Bombardier? In recent months, it risked losing thousands of jobs because of unfairly imposed US tariffs of 300%. The winning formula for defeating that proposal—and having it unanimously thrown out in the US—involved a combination of trade unions, management, local MPs and Ministers right across the Government, along with the personal intervention of the Prime Minister when she spoke to President Trump at the Davos economic summit. That strategy worked for Bombardier, so may I commend it to the Secretary of State and suggest that it is repeated in order to protect the steel industry in the United Kingdom?

[Dr Fox]

We have had, as I said earlier, a wide range of contacts in a wide range of areas. The International Trade Commission was ultimately the vehicle that sorted out the Bombardier case, so there are still in the United States those elements of an independent, free trading policy that we can rely on, on occasions when they are needed. It was not just the politics ultimately, hard though we tried for Bombardier, but the American mechanism itself—the ITC—that has a lot to be commended for.

[Kevin Foster (Torbay) (Con)]

Today it is steel and aluminium. Tomorrow it could easily be the photonics industry, which Torbay businesses that sell to the United States are part of. On Commonwealth Day, will the Secretary of State reassure me that we are also talking with our allies within the Commonwealth about what we can do to defeat a policy that will be as negative for the United States and for them as it will be for us?

[Dr Fox]

I said in an earlier answer that the people who have the most to lose if we move away from a global concept of free trade are the world’s poorest. If we genuinely want people to be able to trade their way out of poverty, they can only do it in a genuinely free trading environment, and the more non-tariff barriers that advanced countries put up, the less chance they have of doing so. It is in everybody’s interests to pursue a global free trade policy. This country has always shown the way on that, and this Government will continue to show the way.

[Dr David Drew (Stroud) (Lab/Co-op)]

rose—

[Dr Drew]

With regard to what the Secretary of State just said, will he do all he can to intercede with not just the US but the EU to make sure that agricultural products do not become part of a wider trade war? It is essential for the reasons he gave that less developed countries have continued access to all those markets.

[Dr Fox]

We can end on a note of perfect harmonisation, because there is no doubt that the more we can dismantle of the common external tariff that the EU currently has to the benefit of developing countries, the better. At last we have found a note of consensus.

[Mr Deputy Speaker]

The Financial Guidance and Claims Bill will not be taken today, so we will deal with the next statement, and the rest of business will be completed. After the next statement, we will take points of order.

Oral Answers to Questions

Liam Fox Excerpts

Thursday 22nd February 2018 Commons Chamber

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

1. What recent assessment he has made of the effectiveness of the trade envoy programme.

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

The Prime Minister’s trade envoys do a great job engaging with countries where trade and investment opportunities have been identified. Last year, trade envoys helped contribute to export wins of more than £15.5 billion in their markets. Based on an outlay of just under £250,000 for the programme over the same period, each trade envoy, on average, supported £700 million in exports.

[Chris Davies]

Does my right hon. Friend plan to appoint any further trade envoys beyond those already appointed?

[Dr Fox]

That is the least disguised job application that I have heard in some time. There are 30 trade envoys covering 60 markets around the world. The programme is reviewed regularly in consultation with our overseas team and any new suggestions are put to the Prime Minister. I will let my hon. Friend know as soon as possible if any vacancies occur.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Before these trade envoys do anything else, will the Secretary of State bring them all together and allow them to have the same briefing from the CBI that many Members from all parties had this week? That CBI briefing on the impact of leaving the EU says that it will be a disaster for working men and women, industry and manufacturing up and down the country.

[Dr Fox]

As I often point out to the hon. Gentleman, the working men and women of his constituency had a very different view about the reasons for leaving the European Union. I make sure that our trade envoys get a much wider range of briefings than simply one—a highly suspect one in that case.

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[Mr Speaker]

There is more than one Field in the House, but there is only one Prisk.

[Dr Fox]

First, I pay tribute to the work that my hon. Friend has done. We have a growing and increasingly improving trade relationship with Brazil, but he is absolutely right that we require business to put exporting at its heart. The positive signs in recent times are that that is happening and we will export more than 30% of our GDP this year for the first time in a considerable while.

[Dr David Drew (Stroud) (Lab/Co-op)]

What parliamentary scrutiny is there of this programme?

[Dr Fox]

There is cross-party ability to look at the programme. We have an International Trade Committee and questions in this House, and I have just reported to the House the value that we think the programme has.

[Jeremy Lefroy (Stafford) (Con)]

As trade envoy to Ethiopia, last week I had a meeting at the African Union about the continental free trade area agreement, which is incredibly important for the future of all countries in Africa and for the United Kingdom. Does my right hon. Friend see roles for the trade envoy programme in engaging with these free trade areas, which cover more than one country?

[Dr Fox]

I would hope that our trade envoys, along with our posts in those various African countries, would understand the value that increased intra-African trade can bring both to those countries and in increased opportunities for UK exporters.

[Catherine West (Hornsey and Wood Green) (Lab)]

2. What estimate his Department has made of the number of new institutions required to replicate the terms of existing trade agreements with the EU after the UK leaves the EU.

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[Ruth Cadbury (Brentford and Isleworth) (Lab)]

3. Whether he plans to replicate the terms of EU free trade agreements in trade deals with Switzerland, Norway and Turkey after the UK has left the EU; and if he will make a statement.

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

As we leave the EU, the Government intend as far as possible to maintain the effects of existing EU free trade agreements and other EU preferential arrangements. That includes agreements with Switzerland, Norway and Turkey.

[Ruth Cadbury]

I am going to pursue the questions asked by my hon. Friends the Members for Hornsey and Wood Green (Catherine West) and for Bradford South (Judith Cummins), which the Minister for Trade Policy did not answer. In 2016, the Secretary of State told the International Trade Committee that he would prioritise securing an agreement with Switzerland. The current relationship between the EU and Switzerland is overseen by some 20 joint committees. Very specifically, how many of those committees will be replaced by UK-Swiss committees, and how far along in the process of setting up those institutions is his Department?

[Dr Fox]

I met Swiss Ministers in Geneva recently, and we discussed what the future arrangement would be. Clearly, how we oversee the arrangement depends on what the arrangement itself is, and that is currently under negotiation.

[Sir Desmond Swayne (New Forest West) (Con)]

We do not need trade agreements to trade, do we?

[Dr Fox]

No.

[Bill Esterson (Sefton Central) (Lab)]

The Secretary of State has told us that he plans to replicate all the provisions of the trade agreements that the UK has, as a member of the EU, with Norway, Switzerland and Turkey. Those provisions include free movement of people in the cases of Norway and Switzerland, and a customs union with Turkey. Will the Secretary of State confirm that it is the Government’s policy to replicate all of them?

[Dr Fox]

In our transitional arrangements, we have made very clear that the key element is continuity. Until we create bespoke arrangements with those countries, we will maintain the provisions that exist today.

[Colin Clark (Gordon) (Con)]

4. What steps he is taking to strengthen UK trading relations with Australia, New Zealand and other Commonwealth countries in the Pacific.

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[Joanna Cherry (Edinburgh South West) (SNP)]

5. What recent assessment he has made of the effect on UK trade of the UK leaving the EU single market and the customs union.

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

By leaving the customs union and establishing a new ambitious arrangement with the EU, we will be seeking to maintain as frictionless as possible trade in goods between the UK and the EU, and the freedom to forge trade relations with partners around the world.

[Joanna Cherry]

The Norwegians have a saying: “Nothing is in as much of a hurry as a dead fish on the back of a lorry.” Like Norway, Scotland exports most of the fish it catches to the EU, which is why Norway has chosen to be a member of the single market, in particular to avoid non-tariff barriers so the fish can cross borders quickly. What assessment has the Secretary of State made of the impact of leaving the single market on the Scottish fishing industry?

[Dr Fox]

Of course, the majority of Scotland’s exports go to the rest of the UK, not the EU. The hon. and learned Lady talks about the value of the single market; it is just worth pointing out that, despite our membership of the single market, we have had a growing trade deficit with the EU at a time when we have had a growing trade surplus with the rest of the world. We want to establish the conditions for all our exports from all parts of the UK to be able to access the growing markets of the world, and, as the International Monetary Fund has pointed out, 90% of global growth in the next 10 to 15 years will be outside Europe.

[Nick Smith (Blaenau Gwent) (Lab)]

What is the Secretary of State’s preferred method of ensuring frictionless trade between the Republic and the north of Ireland?

[Dr Fox]

Our preferred option is to do that through a widespread and liberal agreement in trade with the European Union, as set out in the Government’s memorandum in December.

[Alan Mak (Havant) (Con)]

6. What progress he has made on arrangements for the GREAT Festival of Innovation in Hong Kong planned for March 2018.

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

The GREAT festival will be held in Hong Kong from 21 to 24 March 2018. With more than 70 confirmed speakers, the festival will showcase the best of British innovation, the potential of the UK economy and the strength of our world-class service sector.

[Alan Mak]

Britain is becoming a world leader in artificial intelligence, big data and the fourth industrial revolution technologies that will power future export growth. Will my right hon. Friend ensure that those technologies will be widely promoted at next month’s festival?

[Dr Fox]

They will indeed be widely represented. For example, UtterBerry, an AI-based infrastructure monitoring technology that has been used in this country in projects such as the Thames tideway and Crossrail, will be showcased. The festival will be an opportunity for us to show off the best of British innovation in general.

[Gillian Keegan (Chichester) (Con)]

7. What progress he has made on his Department’s overseas direct investment strategy.

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

My Department has responsibility for export promotion, foreign and outward direct investment, and trade policy. I am delighted to inform the House that my Department has appointed the first three of our network of Her Majesty’s trade commissioners, and Richard Burn, Antony Phillipson and Crispin Simon will serve as trade commissioners for China, North America and south Asia respectively. They will develop and deliver strategies to ensure that we can take full advantage of leaving the European Union, the single market and the customs union.

[Rehman Chishti]

I thank the Secretary of State for that answer. What evidence is he seeing for growth in UK manufacturing exports to the wider world? I have just returned from a visit to Pakistan with leading British companies in my role as trade envoy to enhance trading between our two great countries; will the Secretary of State join me in paying tribute to Elin Burns and Matt Lister, our trade experts in Pakistan?

[Dr Fox]

I pay tribute to all those people. We are seeing a big rise in our manufacturing order books, not least on the back of our strong export performance. In recent times, we have seen the biggest growth in consistent monthly manufacturing numbers for some 30 years. The figures produced by the Office for National Statistics suggest that our exports now represent 30.3% of our exported GDP—the second highest figure on record.

[Barry Gardiner (Brent North) (Lab)]

Given the Government Front-Bench team’s uncharacteristic failure to welcome my hon. Friend the Member for Bradford South (Judith Cummins) to the Opposition Front Bench, I know that you would want me to do so, Mr Speaker.

Is the Secretary of State aware that the Food Standards Agency recently detained large quantities of out-of-date meat in a company called Norish Cold Storage? The meat is believed to have come from Ireland and South America. Given that Norish is the parent company of Town View Foods, one of the directors of which, Plunkett Matthews, was also a director of Freeza Meats, a company implicated in the Irish horsemeat scandal in 2013 and found guilty of meat-labelling fraud, will the Secretary of State urgently liaise with Ministers in the Republic of Ireland, the FSA here and the Food Safety Authority of Ireland to ensure the supply chain for this illegal meat is identified, that our sanitary and phytosanitary regulations are properly enforced and that those behind the illegal trade—

[Mr Speaker]

Order. I say to the hon. Gentleman that if the meat was previously hot, it would certainly be freezing cold by now.

[Dr Fox]

I was not aware of that particular allegation. This cross-Government issue is clearly not one entirely for my Department, but I will ensure that other Ministers are made aware of it.

[Philip Davies (Shipley) (Con)]

T3. There is immense potential for growth in bilateral trade and investment between the UK and Israel after we leave the EU. Does the Minister share my hope for yet greater levels of trade with the start-up nation, and will he update the House on the progress being made by the UK-Israel trade working group?

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[Hannah Bardell (Livingston) (SNP)]

Although my party does not want to leave the single market or the customs union, a properly planned and managed transition period is always top of the agenda for businesses across Scotland, particularly in our thriving food and drink sector. Does the Secretary of State agree with his own Government that a sensible transition period is required, or is he sticking to his cliff-edge position, which will have a devastating impact for businesses across Scotland and the UK?

[Dr Fox]

We believe across Government that the simplest way to get to the position that we will be able to enjoy, of leaving the single market and the customs union, is via a transition period that is carefully planned and that gives predictability to business.

[Several hon. Members rose—]

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[Dr Fox]

We have four working groups with the United States at the present time, and at the last one we announced a UK-US small and medium-sized enterprise dialogue. My hon. Friend will be pleased to know that the first dialogue on SMEs will take place next month and will involve more than 100 businesses as part of a very constructive process.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Remoteness of location in the UK is no constraint on the success of some of our malt whisky distilleries in Scotland. Can I tempt the Secretary of State or his Ministers to come and visit Old Pulteney in Wick or Glenmorangie in Tain? Will they do everything to secure the future prosperity of the distilleries in my constituency?

[Dr Fox]

I already have several invitations to visit distilleries, and I intend to take a very close personal interest in this particular sector.

[Edward Argar (Charnwood) (Con)]

T6. Further to his earlier answer, does my right hon. Friend agree that the prospects for future trade with our close friend and economic partner India remain very bright?

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[Chris Philp (Croydon South) (Con)]

T7. Does my right hon. Friend agree that free trade helps consumers by lowering prices and that free trade has been one of the biggest contributors to combating global poverty over the past 100 years? Will he embrace the opportunities created by Brexit to do free trade deals that will help consumers and British businesses?

[Dr Fox]

At the WTO this week, I again made the case for free trade, and the UK is a global champion of free trade. We tend to discuss our trade in terms of producers, but we must always remember that free trade is an enormous benefit to consumers in lowering prices, improving choice and increasing quality. Free trade has also been the route by which we have taken more than 1 billion people on this planet out of abject poverty in the past generation, which we should celebrate.

Prime Minister’s Trade Envoys

Liam Fox Excerpts

Tuesday 23rd January 2018 Written Statements

[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 right hon. Friend the Member for North East Hampshire (Mr Jayawardena) has been appointed as the Trade Envoy for Sri Lanka, and my right hon. Friend the Member for Solihull (Julian Knight), as the Trade Envoy for Mongolia. These new Trade Envoys take the total number to 30 parliamentarians covering 59 markets.

The Trade Envoy programme is an unpaid and voluntary cross-party network, who support the UK’s ambitious trade and investment agenda in global markets. They have contributed to business wins worth around £19.5 billion.

[HCWS421]

UK-India Joint Economic and Trade Committee

Liam Fox Excerpts

Thursday 11th January 2018 Written Statements

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

I am pleased to inform the House that I will be co-chairing the twelfth meeting of the UK-India Joint Economic and Trade Committee (JETCO) in London on Thursday 11 January with Shri Suresh Prabhu, Minister for Commerce and Industry.

The UK-India JETCO was established on 13 January 2005 to further develop the India-UK strategic economic partnership. India and the UK already enjoy a strong bilateral relationship, and both sides take a mutual interest in enhancing the competitiveness of the two economies. Bilateral trade between the UK and India has grown over the last ten years and was £15.4 billion in 2016. We also have strong investment links; the UK has been the largest G20 investor in India over the last 10 years and Indian companies operating in the UK account for around 110,000 jobs. At the last UK-India JETCO, in November 2016, I agreed with my co-chair to establish a Joint Trade Review, a collaborative analytical project, that will evaluate the range of ways we can strengthen the UK-India trade relationship and remove barriers, both at present and as we leave the EU.

The twelfth meeting of the JETCO will be a key opportunity to further strengthen our relationship with an important and close trade and investment partner. The meeting will be supported by business working groups on smart cities and technology, advanced manufacturing and engineering, and will receive an update on the UK-India Joint Trade Review from my officials and the Indian Ministry of Commerce and Industry. We will also welcome increased support from the UK’s official export credit agency, UK Export Finance, for trade with India, of up to £4.5 billion. This will provide an additional £2.75 billion in support for UK companies exporting to India and for Indian buyers of UK goods and services, and be available in Indian rupees. The meeting will also be an important milestone towards the Commonwealth Heads of Government Meeting in April, from which we expect to give greater impetus to intra-Commonwealth trade. A joint statement will be released on Thursday 11 January to report on the outcomes of the JETCO.

[HCWS397]

Oral Answers to Questions

Liam Fox Excerpts

Thursday 11th January 2018 Commons Chamber

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

1. What his policy is on the UK joining the Trans-Pacific Partnership after the UK leaves the EU.

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

First, I warmly welcome my hon. Friend the Member for Beverley and Holderness (Graham Stuart) to my ministerial team, where he will serve as the Minister for investment. I also pay tribute to the fantastic job that his predecessor, my hon. Friend the Member for Wyre Forest (Mark Garnier), did over the course of his time in the Department.

It is right that the Government prepare for all possible outcomes from leaving the EU, including preparing for no deal. We will consider a range of options as we establish our independent trade policy on a bilateral, plurilateral and multilateral basis. The Asia-Pacific region is a very important market and an engine for future global growth. We are closely following progress of the comprehensive and progressive agreement for the Trans-Pacific Partnership.

[Martyn Day]

The UK’s trade with Trans-Pacific Partnership countries amounts to 7.2% of the UK’s total trade, whereas trade with the EU amounts to 48.6%. Will the Secretary of State confirm that his Department’s priority is to secure our close economic and trading ties with the world’s largest single market before embarking on negotiations with the other trade blocs?

[Dr Fox]

These are not mutually exclusive. We want an open and comprehensive trading agreement with the European Union because it is an important part of our trade. However, TPP trade is already 14% of GDP—it would be 40% were the US to rejoin—and, as the International Monetary Fund has said, 90% of global growth in the next 10 to 15 years will occur outside Europe, where there will be important markets for the United Kingdom.

[Michael Fabricant (Lichfield) (Con)]

10. Two of the countries in the TPP are Australia and New Zealand. Will the Secretary of State look closely at their closer economic relationship agreement, which allows free trade of goods and services between those two countries, and will he prioritise an agreement between the United Kingdom and those two countries?

[Dr Fox]

I have made it clear on a number of occasions, including in this House, that when it comes to future free trade agreements, Australia and New Zealand would be two of our top three priorities. If we are able, by another means, to achieve the sort of liberalisation in trade that we would all like to see, then that would be fine.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Surely the Secretary of State would agree that no Trans-Pacific Partnership trade deal will make up for the loss of the European Union market. Has he seen this morning’s independent report, commissioned by the Mayor of London, that shows what a cataclysmic effect leaving the EU will have on our business and so many jobs?

[Dr Fox]

As usual, I do not accept the premise of any part of the hon. Gentleman’s question. I do not believe that we will necessarily lose our share of the market. We want to maintain an open agreement with the European Union, and it will want to maintain an open agreement with us, because we are the fifth biggest economy in the world and a major trading partner for it. Of course, this morning’s report was anything but cataclysmic. In fact, its worst assessment was less than half the assessment that was given to us before the European referendum on what our loss of market share might be if there were no deal whatsoever.

[Barry Gardiner (Brent North) (Lab)]

I, too, welcome the new arrival to the Government Front Bench. I also welcome yesterday’s trade statistics. The Secretary of State and I may disagree over how much that owes to the depreciation of sterling, but we both agree that the narrowing of the trade deficit is a very good thing.

With regard to the TPP, the Secretary of State says, “These are not mutually exclusive”, but he must account for regulatory alignment, which is part of the impact that joining the TPP would have. Indeed, the former permanent secretary at the Department for Business, Energy and Industrial Strategy declared that joining the TPP would be “cloud cuckoo land”. Does the Secretary of State consider that that regulatory alignment to a trade agreement negotiated in secret to suit the economies of the Pacific Rim, which constitute under 8% of our export market, is a viable proposition for our country?

[Dr Fox]

I am in favour of trade liberalisation, whether it is bilateral, plurilateral or multilateral. If we can achieve openness in the global trading environment so that we can get global trading volumes up, that is of benefit not just to the United Kingdom but particularly to developing countries that should be able to trade their way out of poverty and not depend on aid.

[Mrs Pauline Latham (Mid Derbyshire) (Con)]

2. What recent progress he has made on the development of the Government’s export strategy.

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[Tom Brake (Carshalton and Wallington) (LD)]

3. What progress he has made on securing trade deals with non-EU countries.

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

As the Prime Minister set out in her Florence speech, the UK will seek a time-limited implementation period with the EU. We will prepare for our future independent trade policy by negotiating trade deals with third countries, which could come into force after the conclusion of the implementation period. To that end, we have already established a series of 14 working groups and high-level dialogues with key trade partners.

[Tom Brake]

Will the Secretary of State confirm that he is still on track to deliver 40 trade deals with non-EU countries after we leave the European Union in March 2019, as he said he would be? Will he explain to the House what demands there have been from those countries for additional visas for their citizens to come to the United Kingdom, and how that impacts on the tens of thousands figure?

[Dr Fox]

The Government are indeed committed to ensuring continuity of the 40 or so EU free trade agreements after we leave the European Union, and that is why we introduced the relevant legislation this week. I am, however, rather disappointed that the right hon. Gentleman and his party saw fit to vote against that legislation, and deny British business that confidence.

[Sir Desmond Swayne (New Forest West) (Con)]

Should we seek any level of protection, the agreements will take longer and yield less—won’t they?

[Dr Fox]

Our clear aim is to achieve continuity and stability. We want the agreements that we have already as part of the EU to be delivered safely and securely into UK law, and that is the point of the Trade Bill.

[Emma Little Pengelly (Belfast South) (DUP)]

Concerns have been raised that the transitional arrangements may lead to significant changes to the detriment of the United Kingdom. Will the Secretary of State confirm that he is not intending to make any significant or substantive changes to any of the transitional arrangements?

[Dr Fox]

That is absolutely correct; we aim to keep the transitional arrangements as close as possible to the condition they are in today, given that we have some minor changes to make, for example in the disaggregation of tariff-rate quotas.

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

From the preliminary dialogue that my right hon. Friend has had with the United States, what assessment has he made of the prospect of doing a trade deal with that country?

[Dr Fox]

May I add my congratulations to my hon. Friend on his well-deserved recognition of the service that he has given to this House and his constituency? We have four working groups with the United States on continuity, short-term outcomes, the potential scoping of a future free-trade agreement, and working with the US at the World Trade Organisation. I am content that we are making progress on all fronts.

[Chris Bryant (Rhondda) (Lab)]

I also welcome the Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart). He is a wonderful man, but I warn the Secretary of State not to send him anywhere at very high altitude because he is not very good with that.

The Secretary of State is right to try to pursue lots of good trade deals with countries outside the European Union, but is one of the major problems the corruption in some of the biggest countries? Brazil, Russia, India and China all fall very low down on Transparency International’s corruption perceptions index, and especially in Russia it is difficult for British businesses to do big business because they have to pay bribes all the time.

[Dr Fox]

The hon. Gentleman is right, and when I am having those discussions I often describe corruption as a supply-side constraint in many of those economies. If we are able to get trade agreements and good legal agreements, and if we make transparency a key element of that, we will be contributing to success on both sides.

[Iain Stewart (Milton Keynes South) (Con)]

4. What steps his Department is taking to support exports by small and medium-sized businesses.

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[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

9. What assessment he has made of the implications for his Department’s policies of the joint declaration of 8 December 2017 on maintaining full regulatory alignment between the EU and the UK.

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

As we leave the EU, the Government’s objective remains to maximise overall trading opportunities for the whole of the United Kingdom. As the Prime Minister has made clear—including at the time of the joint declaration of 8 December—we will be seeking a deep and special partnership with the EU, but at the same time looking to forge new and ambitious trade relationships with our partners around the world, as we develop our independent trade policy.

[Afzal Khan]

What discussions has the Secretary of State had with potential new trade agreement partners, including those that already have an agreement with the EU and those with whom the Government have established trade dialogue or working groups, about regulatory alignment?

[Dr Fox]

We are intending to maintain consistency with the agreements that we already have. That is why we brought the trade legislation forward. We do not anticipate any change in that; we intend it to be the same as it is to date, to provide continuity for business.

[Liz Twist]

Can the Secretary of State confirm whether maintaining full regulatory alignment with the EU will extend to farming standards in the United Kingdom, and that therefore chlorine-washed chicken will not be entering the UK in the event of a future agreement with the USA?

[Dr Fox]

We have made it very clear on numerous occasions that we do not intend there to be any diminution of standards in food safety, environmental standards or workers’ rights as we negotiate new trade agreements.

[Mr Sweeney]

Given how critical this issue is to maintaining an open border on the island of Ireland, what assessment has the Secretary of State made of practical supervision and management of maintaining full regulatory alignment with the European Union as per the joint agreement, and what institutions need to be established?

[Dr Fox]

Alignment is about pursuing the same objectives; it is not the same as requiring regulatory harmonisation. We hope that our agreement with the Republic of Ireland is covered by a full and comprehensive agreement with the rest of the European Union.

[Hannah Bardell (Livingston) (SNP)]

The Irish Government have been clear that a deal that maintains regulatory alignment means free movement of people, goods and services across the border to Northern Ireland. Given that the United Kingdom Government have shown that they are willing to give a nation of the UK a differential deal, will they now bring to Brussels the Scottish Government’s proposals to keep Scotland in the single market and customs union, and if not, why not?

[Dr Fox]

Why not? Because when we leave the European Union we leave the single market and the customs union—it is not that complicated.

[Jeremy Quin (Horsham) (Con)]

7. What assessment he has made of the potential effect of trade deals between the UK and developing countries on the economies of those countries.

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

T1. If he will make a statement on his departmental responsibilities.

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

Mr Speaker, you should see the length of the answers before we get to this stage.

My Department is responsible for UK exports, investment and trade policy. As we begin 2018, the House should note that in 2017 we achieved an all-time record for foreign direct investment. Our exports are up by 14% and employment is at a record level. Yesterday we saw that venture capital coming into tech firms was also at an all-time high, and that is before we consider the improvements in our manufacturing performance.

[Christian Matheson]

The Secretary of State does not want to trade under EU rules, under which we have considerable influence, but he is happy to trade under World Trade Organisation rules, under which we do not have very much influence. What does he find objectionable about EU trading rules that he does not find objectionable about the WTO?

[Dr Fox]

That is rather to misunderstand the situation, because the EU itself has to trade under WTO rules and is not exempt from them. We look forward to having our independent seat on the WTO, of which we are a former member, so that we can have a greater say in global trading policy, because as a member of the European Union we have none.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T4. What practical steps is my right hon. Friend’s Department taking to increase capacity in developing countries to trade their way to sustainable growth?

[Barry Gardiner (Brent North) (Lab)]

The steel industry has repeatedly complained that the Government are not prepared to impose penalties on exports from countries with significant market distortions. America is clear, having imposed penalties on China under section 232, and the EU is clear, having recently voted to pass new anti-dumping rules, but the Secretary of State has constantly ducked the issue and refused to say what his Department will do after we leave the EU. When will he give the steel industry a straight answer?

[Dr Fox]

What a cheek, in the very week that Labour voted against our ability to impose any penalties whatsoever in future. The steel industry and steelworkers in this country were betrayed this week by Labour Members, who would leave them as sitting ducks for dumping and subsidy, such is their love for their new hard-left, anti-trade ideology.

[Douglas Ross (Moray) (Con)]

T3. The Secretary of State will be aware that Scotch whisky is one of the UK’s greatest exports, and much of it is produced in my Moray constituency. Around 10% of the industry’s £4 billion of annual exports are linked to EU free trade agreements. Will he update me on the steps he is taking to ensure that, when we leave the EU, the benefits of EU free trade agreements to the industry are maintained?

[Dr Fox]

My hon. Friend makes an important point. The Government are committed to seeking continuity in our current trade and investment relationships, including those covered by EU trade preferences. Scotch whisky is a very important part of our exports and we want to maintain the vital bilateral dispute mechanisms, all of which are part of Scotch whisky’s contribution to our economy.

[Jeff Smith (Manchester, Withington) (Lab)]

T2. In setting up the Trade Remedies Authority, the Government will need to include a full range of skills, knowledge and experience. Will that include representations from the devolved Governments and trade unions?

[Dr Fox]

The Government are still looking at the potential membership. Of course before we can do so we have to have the legal basis for establishing the Trade Remedies Authority. The hon. Gentleman voted with his party against its establishment.

[Vicky Ford (Chelmsford) (Con)]

T5. Last year, I welcomed Nesta and Sage to Parliament when they launched their report on the state of small businesses. It said that just 18% of British small and medium-sized enterprises are exporting around the world, so what more can the Department do to help our innovative small businesses, especially in providing more information on the local rules and regulations those companies face in other markets?

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

T6. Given what we know Saudi Arabia to be doing in Yemen, is it appropriate that we should still be selling arms to it?

[Dr Fox]

All arms exports are covered by the consolidated criteria and, as the recent judicial review showed, the Government pay very due attention not just to the letter, but to the spirit of the consolidated criteria.

[Mr William Wragg (Hazel Grove) (Con)]

T7. With particular reference to the Trade Remedies Authority, will my right hon. Friend expand further on the potential consequences had the House voted the Trade Bill down this week?

[Dr Fox]

Were we not to establish our own Trade Remedies Authority, we would be unable to protect British business from dumping and subsidy in future. All those in this country who work in the chemicals, steel or ceramics industries will now know that the Conservative party is determined to have the legal protections they deserve, but the Labour party and its allies in this House voted against giving our businesses and those workers that protection.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

T8. Scotland is known internationally for its high- quality food and drink such as whisky and seafood, but there is real concern about the loss of protected geographical indications that are backed by the EU. How will the Secretary of State consult all the devolved Governments to help them to protect their unique products?

[Dr Fox]

The hon. Lady should judge the Government by their action. In the transitional adoption of the agreements that we already have as a member of the EU—in those 40 trade agreements—protection of GI is an essential part. I notice that the Scottish National party voted against that as well.

[Ross Thomson (Aberdeen South) (Con)]

Exports from my constituency include agricultural products from firms such as Saltire Seed and exports from the Aiken Group, one of the world’s leading suppliers for engineering solutions. What would the impact on Aberdeen be of not being able to implement continuity trade agreements with countries with which the EU already has trade deals?

[Dr Fox]

Clearly, there would be a major disruption in the local economy, which is why it is so important that we get that continuity. The reason the Government introduced the Trade Bill with the parameters it has is that we are looking to get stability and continuity on the agreements we already have. I reiterate what I said in the House a couple of days ago: it is not about new free trade agreements; it is about giving stability to the ones we already have, which is why I am amazed that anyone should vote against the Bill.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

What analysis has the Department done of the cost to business of complying with possible new non-tariff barriers, and what help will the Government provide companies, particularly SMEs, to understand the impact of any possible changes in this area?

[Dr Fox]

Of course we look at all possible scenarios, but I reiterate what I have said several times today: we want to see an open and comprehensive trading agreement with the European Union, because that is good not only for the United Kingdom but for the European Union. European member states are looking for their companies to have access to the UK market, just as we are doing the other direction.

[Martin Vickers (Cleethorpes) (Con)]

Last month, I welcomed a delegation from Taiwan to my constituency, where we met representatives of the offshore renewables sector and the seafood sector. Will Ministers work with me and with local businesses to ensure that we maximise our exports to that growing market?

Foreign Affairs (Trade): Post-Council Statement

Liam Fox Excerpts

Wednesday 10th January 2018 Written Statements

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

The EU Foreign Affairs Council (Trade) met twice in Buenos Aires during the 11th ministerial conference of the World Trade Organisation (WTO).

The first meeting of the FAC (Trade) took place on 10 December before the formal opening of the WTO ministerial. The second meeting of the FAC (Trade) took place on 13 December just before the conclusion of the ministerial. At both meetings, the Council adopted conclusions. Both sets of conclusions are available as an attachment online.

At the ministerial conference WTO members committed to securing a deal on disciplining certain forms of fisheries subsidies by the end of 2019. They also committed to improve the reporting of existing fisheries subsidy programmes. In addition, Ministers decided to extend the practice of not imposing customs duties on electronic transmissions for another two years, and to continue negotiations in all areas. In addition, WTO members agreed to the creation of the working party on accession for South Sudan.

The ministerial met key UK objectives by setting the foundation for discussions on a number of new issues. A significant number of WTO members agreed to advance discussions on: digital trade, domestic regulation in services, SMEs, and investment facilitation. The UK will work closely with the EU and other WTO members to ensure that the momentum behind these initiatives is maintained in 2018.

At the 11th WTO ministerial conference, 118 WTO members adopted a joint declaration on trade and women’s economic empowerment, committing to promote women’s economic empowerment through trade. The UK supported this initiative.

Attachments can be viewed online at: http://www. parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-01-10/HCWS396/

[HCWS396]