UK-Japan Comprehensive Economic Partnership Agreement

Lloyd Russell-Moyle Excerpts

Wednesday 25th November 2020 Commons Chamber

[Elizabeth Truss]

I observe that the right hon. Gentleman did support many of those deals. I afraid that the same cannot be said for most of the members of his party, who did not support, for example, the Japan trade deal when it previously went through the House. We are in a completely different position. From 1 January next year, we will be operating our own independent trade policies, we will be setting our own tariffs and we will be operating our own trade agreements. That is a huge step forward for the UK as an independent trading nation. Next year, we will be talking about our accession to the comprehensive and progressive agreement for trans-Pacific partnership, but today we are here to talk about Japan.

The UK-Japan agreement is a British-shaped deal going further and faster than the EU deal in areas such as data and digital, services, advanced manufacturing and food and drink. The deal has been welcomed across the board, from the CBI to techUK and the National Farmers Union. It was even welcomed by the Labour party—although rather tepidly and although Labour did not actually vote for the original Japan deal.

The deal is estimated to add over £15 billion in trade to our already growing trading relationship with the third largest economy in the world. We expect it to be even more. We have asked Professor Tony Venables from Oxford University to lead a review of our future modelling to ensure that it accounts for our world-leading digital and data trade. The United States recent study of its deal with Mexico and Canada found that the biggest economic benefit of that deal came from the provisions on digital trade, and we are confident that this is the case for the agreement with Japan, which is why we want to better quantify the benefits of future free trade agreements.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

On the quantification of future benefits, of course the Secretary of State has given us the most advantageous figures that she has, which are about what trade would have been if we were out of the European deal. The reality is that for businesses on the ground very little will change between the end of this year and the beginning of January, and the reality is that the quantifiable benefit she talks about is actually a maintaining of the status quo, is it not?

[Elizabeth Truss]

The reality is that if we had not negotiated this deal, we would have reverted to trading on World Trade Organisation terms with Japan and businesses on both sides would have faced tariffs and barriers to trade. But we have gone further than just continuity with this deal, and I am about to tell the House exactly how that is the case. This deal is better and more valuable than the Japan-EU deal, which is otherwise known as the JEPA, because in simple terms the CEPA is deeper than the JEPA. It goes further and faster in areas of in vital importance to the United Kingdom economy.

On digital trade, we are protecting source code, enabling the free flow of data while agreeing a ban on data localisation, saving companies the cost of setting up servers in Japan. Our textile and confectionery manufacturers will benefit from more liberal rules of origin, making their goods more competitive by allowing up to £88 million of UK exports to benefit from reduced duties. Our creative industries will have their brands and innovations protected, as we go beyond the EU in tackling the online infringement of intellectual property rights. Our fantastic food and drink producers will benefit from increased protection for iconic goods, as around 70 geographical indications, 10 times as many as before, will be protected in Japan, subject to their domestic processes next year.

Our services industry will have more regulatory co-operation, safeguards on data storage and greater flexibility to move talent across the world.

This is clearly a more British-shaped deal, and it delivers more benefits to the UK than the previous deal. Some Opposition Members have asked for a precise economic assessment of this difference, but in our Command Paper we agreed to assess our deals, not the deals of other countries or trade blocs, and I am not going to waste the time of Department for International Trade economists by asking them to assess deals that are clearly inferior to the one that we have secured.

This is a deal that will benefit every part of the United Kingdom. It delivers for our farmers and businesses, and it delivers for Japanese investors such as Nissan, Toyota and Hitachi, supporting thousands of jobs across the United Kingdom.

--- Later in debate ---

[Elizabeth Truss]

I am delighted that my hon. Friend welcomes the putting of the Trade and Agriculture Commission into statute, which will be done through the Trade Bill. We need to make sure that farmers are engaged, businesses are engaged and our whole country is engaged in these trade agreements because we are doing them to benefit the United Kingdom—to make sure that every part of this country is helped to thrive. We are lowering barriers to trade and creating—

[Lloyd Russell-Moyle]

Will the Secretary of State give way?

[Elizabeth Truss]

I have already given way to the hon. Gentleman and we have a limited amount of time for this debate.

--- Later in debate ---

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I, too, sit on the International Trade Committee and our report outlined the positives in this deal. There were also many things we just could not quantify, because the Government have not given us the figures, or they do not want to do that analysis, so we just do not know how things will pan out in the future. This is the first run at this.

My first point is about the role of parliamentary scrutiny. This is very much the first run and we need to deepen and strengthen parliamentary scrutiny. We have the weakest parliamentary scrutiny of the major bodies that we now want to negotiate with. Japan and the Japanese Parliament will have longer debates, binding votes and a guaranteed vote to accept sections, the European Union will of course be able to have discussions through the negotiations and will vote section by section, and the US will be able to vote section by section on the deal and will be involved in setting up the framework of the negotiations.

[The Minister for Trade Policy (Greg Hands)]

indicated dissent.

[Lloyd Russell-Moyle]

The Minister shakes his head; I am happy to send him a constitutional 101 of all those countries, because the fact is that we have one of the least developed parliamentary scrutiny systems. Of course we do, because we have not done it for 40 years and other countries have developed since then, but we do need to develop, and it is no good the Minister shaking his head on these points.

The other thing I would say is that, although I welcome the Department giving the International Trade Committee a two-week head start on these documents, I have here in my hand just one volume of the documents, and three of the annexes never arrived in time and were only given to my office a few days before they were publicly released. It is all well and good, and I understand these are working documents, but that cannot be a continued pattern for how these things work; we need to be involved earlier, and we need to be involved throughout.

On the content of the deal, let’s be honest: many of the clauses we have heard celebrated today are non-binding or worse, or are being exaggerated. The workers’ rights sections are of course all totally non-binding; the climate change sections are non-binding and weak; the women and trade section—a new section—is all totally non-binding in the agreement. There is no section on consumer standards, and Which? says to me that it has not been involved much at all in these discussions. It believes there need to be whole sections on consumer standards, and the agreement fails to do that.

Also, in many areas there are standstill clauses that embed the current system we have in Britain and do not allow change. For example, there is a standstill clause on the Post Office; that means if a future Government wanted to change their mind on the disastrous privatisation by this Government of the Post Office that put money into their crony friends who bought the shares which then zoomed up—[Interruption.] It is true, and we would not be able to reverse that without renegotiating this deal. That is an inhibition of sovereignty, and that is a problem.

This deal is also reliant on the EU deal. If we do not get an EU deal, there are some clauses in this deal that will not be enacted fully; there is also a danger that the deal might be a green light for offshoring many jobs out of Britain, as there will be an EU-Japan deal and a UK-Japan deal. But if there is no UK-EU deal, businesses will place themselves in Japan because they will access both markets from there. If we do not get that EU deal, this deal could be an offshoring charter.

The TRQs are a scraps-on-the-table deal, under which the EU of course gets first dibs and if there are crumbs left—we hope there will be crumbs left, for a few more years anyway, until we sign the CPTPP—then we can get those crumbs. We cannot get the crumbs beforehand of course; and in terms of developing innovation, businesses cannot rely on them because they do not know what amount of crumbs will be left over. We have heard that Government analysis of the EU-Japan deal conducted when it was signed shows that the deal will have a worse economic outcome rather than a better one: there will be £1.7 billion less in exports with this deal than under the EU deal, and £1.6 billion less in GDP with this deal compared with how much the EU-Japan deal was benefiting us. Those are the Government’s figures, not my figures.

There are also some very dangerous elements on data protection, including voluntary agreements rather than binding agreements, not least in areas such as data protection and the NHS. That should greatly worry many people.