International Trade

Lord Harrison Excerpts

Thursday 23rd January 2014 Lords Chamber

Moved by

[Lord Harrison]

That this House takes note of the role of international trade in increasing employment and economic growth.

[Lord Harrison (Lab)]

My Lords,

“all the evidence is that when you open up markets people flourish, businesses grow and you create jobs”.

Thus the former Trade Minister, the noble Lord, Lord Green, put it to a recent meeting of the Trade Out of Poverty group. International trade is central to all our lives, bringing jobs, growth and prosperity to the developed and developing world alike. I want to explore how well Britain is doing in promoting international trade, how well it is rebalancing its economy to emphasise exports—especially manufacturing—and how well we as parliamentarians are doing in holding to account UK, European Union and world decision-makers in doing the big trade deals. It is my belief that for too long politicians have neglected international trade as a job winner and left it on the parliamentary shelf.

How well is the United Kingdom doing? According to the ONS, the UK’s trade deficit on goods and services was some £2.6 billion in October 2013, while our deficit on goods rose to £29.5 billion in the three months to October last year. Eurostat identifies Germany as having the largest trade surplus, while Britain contests France, Greece and Spain for bottom place at minus €55 billion.

The former government adviser Sir Alan Rudge points out that the troubling balance of payments deficit in recent years has largely been financed by the sale of UK debt and assets, not by increasing exports and trade. In contrast, says Sir Alan, small businesses, the real engines of growth and trade, are frustrated by a Government who still have not solved the scandal of late payment of commercial debt or successfully dealt with the drought of investment finance for small businesses. This was evidenced today by the Bank of England’s lukewarm assessment of the UK’s plethora of indifferent schemes for small businesses.

The Prime Minister rightly vaunts the benefits of the purposed transatlantic deal between the European Union and the USA. It could indeed add £10 billion to the British economy, but such aspirations require the back-up of hard work and planned follow-up. I ask the Minister why our embassy in Washington has part sponsored a state-by-state study of the effect of TTIP on US jobs, but Ministers in the UK have yet to sponsor any such similar sectoral assessment for the United Kingdom, from which we might develop a reasoned industrial strategy.

I would be grateful for an update on the EU-US TTIP negotiations, and I ask the Minister to assure us that any potential adverse effects on developing countries will be mitigated. However, President Obama commented that he would have “very little appetite” for a deal with the United Kingdom alone. That brings me to the question of why, oh why, at this time when we are trying to secure this TTIP deal, we are giving the impression that we want to absent ourselves from the European Union, which is the principal negotiator.

We also need hard work on improving the UK’s grasp of foreign languages, instead of lazily relying on English as the world’s lingua franca. This is of the essence. The British Chambers of Commerce has remarked that knowledge gaps and language skills hold back British exporters. A rebalancing of the economy requires expansion of language acquisition in our schools, colleges and businesses. However, we should also mobilise the many pools of language expertise found among our British citizens, especially among communities of recent immigrants. How refreshing it would be if the Government coupled their insistence on immigrants speaking English with a pledge to arm each current UK citizen with the gift of fluency in one other language. In our engagement with the European Union and others, we have had too much British bluster and too little British barter, too much using the English language as a battering ram and too little buttering-up of trade partners in their own tongues.

Last week, the Commons Public Accounts Committee published a report which was critical of UK support for exporters overseas, and also highlighted the failure of UKTI and the FCO to work effectively together. There is also the failure of the Chancellor’s ambition to double the value of UK exports to £1 trillion by 2020, which was a realistic goal in the 2012 budget, and the failure of UK trade to match that of our EU partners, especially Germany, which is the export champion of Europe. How does the Minister respond to the criticisms of the Public Accounts Committee?

Does the noble Lord recognise, and how does he respond to, the changing trade patterns? I remember the vice-president of eBay addressing the WTO Parliamentary Assembly and underlining the importance of having secure WTO rules, whatever the medium of trade—in his case, of course, eBay. A second contributor to that debate reminded us of the increasing use of mobile phones for effecting trade. We have to change with the changing patterns and times.

I also ask the Minister to reflect on the Commonwealth and the CHOGM in Sri Lanka last November. What does he believe can be done through the Commonwealth? Does it have a responsible role in promoting intelligent trade? Indeed, how does he respond to the idea of a Commonwealth trade and investment facility?

I now turn to how well we, as parliamentarians, perform oversight of international trade deals done in our name here in the United Kingdom, in the Commonwealth or in the European Union—which is charged with agreeing the forthcoming TTIP deal with the United States under European Union law—or, indeed, through the World Trade Organisation, where I was until recently the Westminster parliamentary delegate in the run-up to Bali. Parliamentary oversight in the United Kingdom is woeful. We spiritedly examine the Government’s domestic economic policies but often neglect to place under the same forensic microscope their trade policies.

Perhaps the new Minister, the noble Lord, Lord Livingston, to whom I offer a very warm welcome, will acknowledge that trade scrutiny in Parliament is indeed too perfunctory. Would he not welcome being held to closer account by parliamentarians? The last time we had such a debate in the House of Lords was back in 2012, when my noble friend Lady Liddell led an important report. I am told that the only debate held hitherto in the House of Commons on the important EU-US trade negotiations was brought by John Healey MP, who runs the all-party group on TTIP. However, we need to have more than just that.

The Lords, of course, has a Select Committee system, which does very well. When I became chair of your Lordships’ European Union Sub-Committee on Economic and Financial Affairs, as well as trade, in 2010, we were entrusted with clearing trade deals such as the Korea-EU accord on the automotive industry. Perhaps that is why we have heard some good news recently on that front. The newly installed EU Trade Commissioner, Karel De Gucht, came before my committee. We took evidence from him on the new and important EU trade policy communication, Trade, Growth and World Affairs, which promotes a more assertive trade policy being developed by the European Union. However, that was the limit of our parliamentary investigation.

On that point, how does the Minister intend to report to Parliament on the annual EU Trade and Investment Barriers Report, which I am sure his officials have told him about, and the ambition in the 2011 March report to have made progress in extending the opening of government procurement markets and developing successful dispute settlement arrangements for the future? The EU foreign policy committee, led by the noble Lord, Lord Tugendhat, is currently scrutinising the forthcoming EU-US trade deal and it interviewed Karel De Gucht on 13 November last year. Perhaps the Minister can also tell us about either meetings that he may have had with Karel De Gucht or ones that he proposes to have with him in the future.

For 18 months I was the UK delegate to the WTO Parliamentary Assembly meetings, which included my co-chairing a meeting in Brussels with the International Trade Committee of the European Parliament—the so-called INTA—on which sit distinguished British MEPs who are now co-legislators on these important international trade deals. What conversations has the Minister had, or what conversations does he propose to have, with British MEPs to get a better and more thorough understanding of what the European Union and European Parliament will be doing in this area? Regrettably, the WTO parliamentarians were excluded from the final successful assembly concluding the Bali accord unless they were designated as part of the national delegation. That offer was denied me, much to my regret.

Perhaps I may conclude on the successful Bali accord and ask the Minister to report on its outcome. Does he understand that, increasingly, because of the difficulty with the Doha round and its completion, there have sprung up many more bilateral, plurilateral and even bi-regional accords such as the EU-US deal? They are proliferating in the absence of the giant multilateral deal that is aspired to in the Doha round. Do the Government believe that such partial deals undermine the principle of multilateralism, or are they stepping stones on the way to achieving multilateralism which, in the end, must be the favoured way of going?

On Bali implementation, will the Minister report on what discussions government departments have had and what budget provisions are being made to support the implementation of the Bali trade facilitation deal? Will he also report on the continuing economic partnership agreements that are being developed with the European Union and African states and whether we will mitigate any adverse affects that may arise as the deadline of 1 October 2014 comes into sight?

The point I have tried to make is that trade is hugely important. We, the Government and parliamentarians must take it seriously. We must find the road down which we can go to improve the understanding and transparency of trade deals, which have so much influence on our lives and from which those to whom we report will benefit if we get them right. I look forward to a debate in which these matters can be expressed and to the response of the Minister to the questions I have put. If he is unable to respond to everything, I hope he will write to me later. It is an important debate and I hope that we will treat it seriously.

--- Later in debate ---

[Lord Harrison]

My Lords, I thank all those who have contributed to the debate. In the words of the noble Lord, Lord Giddens, I have thought dialectically about some of these matters. In listening to the noble Baroness, Lady Thornton, I was taken back to my old stamping ground of Strasbourg. In listening to the noble Lord, Lord Carrington, I was taken to my contemporary stamping ground of the financial services. By the time we got to our two Caledonian colleagues, I was intoxicated on the Scotch Whisky Association. Encouraged by the noble Baroness, Lady Miller of Chilthorne Domer, I should perhaps admit that a scion of the Harrison family is one of Australia’s biggest wine manufacturers and exporters, not only to this country but in particular to China.

I thank the Minister for his response to the debate. When he has the opportunity and the time that the Whip has not yet given him, perhaps he could examine the questions that he was posed in debate, because we need a written reply to many of the substantial points. I was not simply asking—

[The Deputy Speaker (Baroness Fookes) (Con)]

My Lords, the time for this debate has now passed. I must therefore put the Question that this Motion be agreed to.