Bilateral Free Trade Agreements

Lord Johnson of Lainston Excerpts

Tuesday 20th December 2022 Lords Chamber

[Lord Londesborough]

To ask His Majesty’s Government how many bilateral free trade agreements they expect to sign in the next 24 months.

[The Minister of State, Department for International Trade (Lord Johnson of Lainston) (Con)]

I refer noble Lords to my interests in the register. Our free trade agreement programme is being delivered at a pace unprecedented in global history. We are continuing negotiations to join the CPTPP, currently negotiating with India, Canada, Mexico, Israel, the GCC and Greenland and preparing for a new trade deal with Switzerland. We have an ambitious programme, but negotiating comprehensive and ambitious free trade agreements is our priority and we will not sacrifice quality for speed.

[Lord Londesborough (CB)]

I thank the Minister for that, but the truth is that we are well behind the target set in 2019 for free trade deals. Some of these FTAs are now described by the Government themselves as “not very good”. The trade and co-operation agreement with the EU is a case in point. HMRC reports that the number of exporters to Europe fell by 33% last year, with 9,000 out of 27,000 British businesses giving up on exporting to our largest export market. The Prime Minister before last promised us a bonfire of red tape, not a bonfire of exporters. How will the Government address this?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that very important point. The Department for International Trade has worked extremely hard to make sure that we have a global trade web of deals and that we support our European traders. I draw noble Lords’ attention to the export support service, which has had remarkable success in ensuring that some of the glitches and hitches in trade with the European Union have been removed.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I am delighted that the Minister has said that he will not sacrifice quality for pace, which we saw earlier with the potential India deal. Can he reassure the House that this deal will not be done easily just for a signature, but that we will make sure that business and our professionals have access to a fair market with safeguards for those working there?

[Lord Johnson of Lainston (Con)]

I thank the noble Baroness for that point, which was well raised. That is exactly what our negotiating teams are doing. This deal with India will be significant for us. That nation should be the second-largest economy in the world at some point over the next five to 10 years; we want a close relationship with it, but on the right terms. I appreciate her comment.

[Baroness Hooper (Con)]

My Lords, in drawing attention to Latin America, I refer to my interests in the register. I believe that Chile was the first country, if not in the world then certainly in Latin America, to sign up to a new free trade agreement post Brexit. It was basically a rollover agreement. Given that the Government are negotiating a new trade agreement with Mexico, can my noble friend say whether the same is intended for Chile?

[Lord Johnson of Lainston (Con)]

I greatly appreciate my noble friend raising that question—and her debate last night—and encouraging attention on central America. I thank her for the work she does as our trade envoy to those countries. Chile is a very important country for trade with the UK. I am very pleased to say that I attended, along with Minister Rutley, a Chile financial services conference only three days ago. Clearly, we have a number of free trade agreements to enact and an extremely busy schedule. When the opportunity comes for us to expand further on the incredible list I have already presented to the House, I have no doubt that countries such as Chile will be under consideration.

[Lord Purvis of Tweed (LD)]

I have been told for years that human rights will be an integral part of all FTAs, but the Minister told the House last night that this will no longer be the case. The OBR has now confirmed that our economy will be 4% smaller because of the enormous trade barriers with our nearest trading partners. The UK is now dependent on goods from China to the tune of a trade deficit of nearly £40 billion. Is it not in our economic and strategic interests to move away from this trend of dependency on autocracies and non-democratic countries and make it easier to have free trade with free nations, especially in Europe?

[Lord Johnson of Lainston (Con)]

I greatly thank the noble Lord for that point. We are all aware of the importance of resilience in our supply chains, particularly when it comes to nations around the world that may not share our values and interests. As for Europe, I refer him to the comment I just made about the export support service and the additional work and funding we are putting in to help our exporters export to Europe.

[Lord Hannay of Chiswick (CB)]

My Lords, in an earlier answer, the Minister said that the Government have eased trade to the European Union with several measures. Could he share a list of them with the House now?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that question. Clearly, it is not designed to put me on the spot to reel off a list of measures from the top of my head. It would be much more useful for us to have a full debate on this matter and for me to respond to the House with a written answer to that question.

[Baroness Blake of Leeds (Lab)]

My Lords, the Government promised that 80% of international trade would be covered by free trade agreements by the end of this year. However, there is no sign of a trade deal with the United States and, as we have heard, we do not yet know what is happening with India. Does the Minister acknowledge that the economic chaos created by the Government has done huge damage to the UK’s international reputation, making it harder to strike these trade deals and attract inward international investment?

[Lord Johnson of Lainston (Con)]

I thank the noble Baroness. I should point out that it is our leaving the European Union that now allows us to create trade deals. Without that measure, we would not be in a position to create FTAs with some of the largest economies in the world. Without wishing to overexpand on my answer, I foresee this country becoming a global superpower again—

[Noble Lords]

Oh!

[Lord Johnson of Lainston (Con)]

Noble Lords may not wish for this, but I do. We will be able to have trade agreements with India, the GCC, the CPTPP, Switzerland, Greenland, Mexico and Canada, and ultimately, state by state, with the US. This is an extremely powerful policy to allow our professionals to generate wealth and security by working in these states. I applaud the DIT for the work it has been doing on that front.

[Lord Udny-Lister (Con)]

My interests are declared in the register as co-chair of one of the business councils and director of another, both of which are voluntary. Will the Minister confirm that he will not turn these FTAs into Christmas trees covering everything under the sun and, in the process, miss the one thing that matters, which is trade?

[Lord Johnson of Lainston (Con)]

I greatly thank my noble friend for his comment. At no point have the Government not taken human rights very seriously, but we see trade deals as specifically focused on trade. This is exactly what we want to increase the inward investment and exports that my good friends the noble Lords opposite are so keen on.

[Baroness Coussins (CB)]

My Lords, following on from the last question, could the Minister explain why the Government were happy to agree to a human rights clause in all the FTAs to which we were party as an EU member but now seem determined to ditch human rights from the bilateral negotiations?

[Lord Johnson of Lainston (Con)]

I take that question with great sensitivity. It is very important to separate the two concepts. In these FTAs, we have a great focus on labour rights, which are more relevant to the concept of product arbitrage. That is more relevant in looking at the FTAs and the good work we can do to align our values with the sorts of countries that the noble Lord, Lord Purvis, wanted us to do more trade with, rather than those that do not necessarily share our values and are not aligned with our security direction.

[Lord Browne of Ladyton (Lab)]

My Lords, may I ask the Minister what aspect of a free trade agreement with the 56,000 people who live in Greenland will contribute to us being a global superpower?

[Lord Johnson of Lainston (Con)]

Every country has its advantages, as the noble Lord will know if he has read his Ricardo. Greenland is actually one of the greatest exporters in the world of fresh-water prawns, so when he looks forward to his prawn cocktail sandwich in the Lords Dining Room, he will be grateful for the free trade agreements that we have negotiated. I add that the geostrategic importance of FTAs is not to be underestimated. Some smaller countries that fit within our trading ambitions are extremely relevant to us in the alliances we are now creating as the next trading superpower.

[Lord Newby (LD)]

My Lords, in response to the noble Lord, Lord Hannay, the Minister said that it would be unreasonable to expect him to reel off a list of measures which the Government have taken to improve our trade with the EU. Taking the Minister at his word, I am not expecting a list, but could he just satisfy the House to the extent of listing one measure?

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I thank the noble Lord very much, and I hope he did not think I was being facetious. The importance of trade with Europe is paramount in the mind of the Department for International Trade, and on account of that I met with His Majesty’s trade commissioner to Europe this morning to discuss further work that we could do to remove the glitches, hitches and hurdles that confront some of our businesses in the post-Brexit vision of Britain. The export support service, which was started last year with a lot of input from myself and the board of the Department for International Trade, has been hugely successful in assisting traders in their exporting efforts to Europe. We have also recruited additional trade support in Europe and have in-housed our international trade advisers in this country to give more support to people who wish to export to Europe. There is a significant list. We have repointed our efforts at the DIT, we are making substantial headway, and the results have been extremely strong.