Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Frost Excerpts

2nd reading
Tuesday 21st November 2023 Lords Chamber

[Lord Frost (Con)]

My Lords, it is a pleasure to support the Government on this important Bill at Second Reading, and to congratulate my noble friend on his excellent maiden speech. I must say that I cannot claim quite the same experience of the noble Lord’s time as Prime Minister as others who have spoken so far today. I was, for part of the time, a humble bureaucrat in the system, working for Vince Cable on EU trade agreements—so we are none of us perfect—and then as head of the Scotch Whisky Association. I must say that, while I was doing that job, his Government either froze or cut the duty on Scotch whisky, to which he alluded in his speech—a policy which has since, regrettably, fallen into abeyance. Perhaps his return to government will herald a change in that policy as well. Who knows? I guess we are going to find out tomorrow.

In this context, I pay tribute also not just to my right honourable friend the current Secretary of State for Business and Trade, who got this agreement over the line, but to her three predecessors who kept the CPTPP on the agenda when it was not obvious that it would stay on it. I single out in particular my right honourable friend Dr Liam Fox, who kept the prospect of joining the CPTPP alive in a Government who, at times, seemed—how shall we put it?—unduly attached to remaining part of the EU customs union and other trading arrangements. Of course, if they had succeeded in that, it would have precluded CPTPP accession and we would not be having the discussion we are having today—so he deserves to be congratulated on that.

I will say just a word about the process that we are in. I think it is fair to say that I do not always agree with my former mentor, the noble Lord, Lord Kerr, who spoke earlier, but I do agree with the points he made about the process. It is a little strange that, after Brexit, the degree of scrutiny and the ability to comment, shape and, indeed, vote on major trade agreements that this Parliament has in both of its Houses is actually weaker than when this country was a member of the European Union. Obviously, I supported and worked for Brexit and I do not think it is right that we have less ability to shape these things than we did when we were in the EU. I have said that to Select Committees of this House and of the other place. We should look at that in the interests of democratic scrutiny and developing a trade policy that we can all buy into in the future. I hope that can be looked at one day.

We have heard a lot already about the economic benefits of accession to this trade agreement. I will not repeat what has been said already, but I want to highlight a couple of slightly more technical points. First, the rules of origin provisions in this agreement are generous—unusually so. They provide for full accumulation, as has been said. That is potentially of considerable value and will be of particular benefit to firms, perhaps especially SMEs, that seek to diversify and make secure their supply chains, away from China perhaps in particular, because many will need to do that in the coming years. Indeed, many are already doing it. Of course, as the CPTPP enlarges, that will become a more worthwhile provision—so, again, it is very good to see that we will be part of that.

I also want to highlight the value of the arrangements for conformity assessment bodies in Clause 2. I note in passing that the EU refused us these arrangements during the negotiation of the trade and co-operation agreement, so it is good to see that, at least in some of our trade agreements, we are part of them. It is the difference between being part of a trade agreement that is genuinely about facilitating trade and one that is about a power relationship between the two partners. So, once again, it is very good that we are part of that. Of course, it should go without saying—but I do not think it has been said yet—that we get all the benefits of the CPTPP without having to pay in £15 billion a year to the budget or make ourselves subject to a foreign court to get them.

So much for the economics; the key arguments for the CPTPP are more strategic than purely economic. I will briefly highlight three aspects. The first is diversification of our national trade policy. As we all know, increasing openness and competitive forces on our own economy is crucial to boosting productivity and growth, so it is not surprising, although a bit disappointing, to hear from some noble Lords a set of worries about precisely that openness to competitive forces, whether on ISDS, food, agriculture or on much else. The problem we have in this country is not too much competition but too little, and trade agreements are designed to boost that competition, boost efficiency and bring more growth.

Since leaving the EU, we have not pushed as far as we should in this direction. Indeed, our trade policy so far can be seen as in many ways a giant preference scheme in favour of the European Union. That is particularly true in agriculture, where EU goods enter without tariffs and quotas; no other trading partners have that at the moment, so it is vital that we open this up, and begin to open up our trading options globally. The CPTPP is part of this. It is a bit disappointing that in our accession protocol the transition to zero-tariff access for some agricultural products is a little slow, and even includes permanent quotas in one or two places. I understand the political logic that has led to that, because the NFU is a mighty power in the land, but this will defer some of the gains to our consumers. Again, it is something that we might look at one day in the future and take a more liberal approach.

The second strategic aspect of CPTPP is about embedding our engagement with east Asia, particularly with close allies such as Japan. The Indo-Pacific tilt is clearly more than just a tilt, and CPTPP goes with AUKUS and the ASEAN dialogue partner status as one of the three pillars of strategic engagement in the Asia-Pacific region. Indeed, let us hope that there will be a fourth pillar before too long, in the form of an FTA with India.

The third and final aspect is the signal that CPTPP membership gives about this country’s global trade policy aspirations and role. As the noble Lord, Lord Lamont, said, it is to be deplored that we are moving to a world of blocs, industrial policy and protectionism. Although there is room for a little more focus on national security in trade and investment, this development will generally see reduced incomes, reduced growth and probably further international tensions.

By its very existence, the CPTPP can and does already stand for something different. It is a different kind of grouping; it is a group of mid-size but extremely important powers that support open and global free trade. They are an open and free-trading counterweight to set against these broader undesirable global trends. It is absolutely natural for Britain to be part of that arrangement and to push for these things further within the CPTPP at a global level. Maybe in winding up, or later, the Minister could set out a little more what the aspirations to use the CPTPP are, and what ability it gives us to shape and broaden out our own trade policy, now and into the future.

Those who said the UK could never pursue an independent trade policy outside the EU have been proven wrong. With CPTPP accession, we have FTAs covering over 60% of our trade, goods and services, and the only reason we have not reached the 80% target is the reluctance of the US to do new trade agreements with anybody, not just us. This is a big success area, and getting into the CPTPP is a big part of it. That is why I am delighted to support the Government on the Bill and getting it through rapidly soon.