Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Johnson of Lainston Excerpts

Tuesday 19th March 2024 Lords Chamber

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

I thank all noble Lords for the extraordinary, high-quality debate that we have enjoyed today. I hope people at home are watching this discussion, because it is great proof of the value of this House and its contributions.

[Lord Fox (LD)]

They are crowded around their television sets.

[Lord Johnson of Lainston (Con)]

They are hopefully crowded around their iPads; the noble Lord should know that we have updated from the old-fashioned wireless—which, of course, we have in my household.

I want to say thank you, genuinely, to the noble Baroness, Lady Hayter, and the noble and learned Lord, Lord Goldsmith. I thank the International Agreements Committee for its report. I have a draft set of responses to the report, which will be formulated appropriately and given to the noble Lords as soon as possible. It really was excellent, and I think all the points that the Government have been challenged on are worthy of a response. I am extremely grateful for the mature approach the report took to the value of this trade deal and seeing the optimistic benefits of the CPTPP, within the reasonable framework that we will operate to.

It is possible that noble Lords may hear cheering if they listen carefully, because a few moments ago the Bill was passed in the House of Commons. I am sure we all feel the ripple—the Mexican wave, which is appropriate as it is a CPTPP member—coming down the Corridor to us. Before I go further and answer many noble Lords’ points, I refer Members to my register of interest. I do not believe there are specific conflicts, but I do have interests in CPTPP countries.

I have tried to group the comments made in this important debate and so, if I may, I will go through them. I will try to refer specifically to noble Lords themselves. I will highlight a few individuals, particularly the noble Baroness, Lady Lawlor. I congratulate her for giving a succinct and powerful description of the benefits of free trade, which often we forget. It is right that, in a scrutiny environment such as this House, we look at the problems, issues or challenges that might present themselves with a piece of legislation or a new treaty. To have the truly positive case for free trade made so clearly and powerfully is something that I welcome, and I am very grateful to the noble Baroness for that.

I am very grateful to the noble Viscount, Lord Trenchard, for his words. Again, he has been a passenger on the free trade express over the last year and a half since I have taken this position. I am extremely grateful for his advice and expert opinion on Japan, and the very positive case that Japan makes in terms of our trade relationship with the CPTPP and the associated benefits we have, both through having a trade agreement and an association with it through this process.

I thank the noble Lord, Lord Marland, for his very generous comments about our joint efforts to spread the benefits of UK trade around the world. If anyone has the most air miles on these red Benches, it must be a close competition between the noble Lords, Lord Purvis and Lord Marland. Both noble Lords are doing such important work, whether in spreading democracy and helping complex situations be resolved, or in pushing the Commonwealth. While this is not a debate about the Commonwealth, it is important to note how many countries that make up CPTPP are Commonwealth members. It is absolutely right that we should use this as further leverage to work with our Commonwealth peers. I will certainly take to my colleagues in the Foreign, Commonwealth and Development Office the comments made by the noble Lord, Lord Marland.

I am always grateful to the noble Lord, Lord Kerr, for his comments as to how we can better manage our trade process. If I may, I will just draw his attention, as someone so distinguished and who lauded the EU’s FTA negotiation process, to the fact that I do not think the EU has done a trade deal in my political lifetime. The most recent one was after a culmination of 17 years of negotiation, and the current ones are all live after many years. We have managed to close this deal in an extremely effective time period.

I turn to the process of CRaG which has been well raised by noble Lords. We made a clear commitment under the Grimstone convention that, if there was time, we would have a debate, and this is exactly what we are doing today. My colleagues and I have made ourselves totally and freely available to engage on every issue. Officials have been extremely open in responding to questions and challenges and I am glad to see some of them here today. I am particular aware of issues, such as SPS protection which was raised by the noble Baroness, Lady McIntosh, or agriculture, raised by the noble Lord, Lord McNicol, as well as points made by other speakers on the Front Bench from all parties. I think we have exceeded expectations in the work we have done in order to project that necessary element of debate.

I am not trying to avoid the point, but it is not for me to comment on the activities of the other place. I will leave that to them. It is right to be very comfortable in knowing that any new accession will be equally bound by the CRaG process. This is extremely important. It would be completely unreasonable if that were not the case. The Government have committed to that and I am very comfortable in making a further Front Bench commitment to it.

It is worth touching on some of the sub-issues that have come up in this debate. The noble Lord, Lord Fox, wisely raised SPS measures, and comments were made about ISDS. I believe we had a discussion earlier in this Chamber about the brevity of speeches and the importance of avoiding repetition, but I am going to have to repeat myself, if I may, and test the patience of noble Lords. There is no derogation. It says so in Hansard. It has been in Hansard before. There should be a collected, bound edition of my repeated statements in Hansard about free trade agreements that do not derogate from the security of our sanitary and phytosanitary provisions. It is very important to be comfortable about this. Hormone- injected beef, chlorinated chicken or dangerous pesticides which are banned here are not allowed into the UK on account of the FTA. This is a matter under our own control. It is important that consumers hear this.

When I talk to people about free trade deals, a lot of them worry that, somehow, this will result in a tidal wave of deadly products. The noble Baroness, Lady Bennett, referred to the UK becoming a dumping ground for dangerous products. Any decision to allow so-called dangerous products into the UK is a matter for the UK Border Agency, the food safety authorities and the Government. If that is the case, it has nothing to do with this FTA, which is important in the sense that it changes our position on tariffs and how we trade with each of the different countries. I just want to reassure noble Lords and the public that nothing will change.

[Baroness Bennett of Manor Castle (GP)]

To respond briefly to the Minister, of course, there is “allowing”, and there is also what checking is being done to make sure that it does not happen anyway. That is the kind of checking I was referring to.

[Lord Johnson of Lainston (Con)]

I thank the noble Baroness. The checking is a matter for the Food Standards Agency. We have made a number of assertions. It believes that this FTA will not result in additional risk for it. I do not wish to be contentious. I always listen very closely to the noble Baroness’s comment about free trade. We do not share the same views on its benefits. I listened to her very carefully and I noticed that at no point did she mention the principle of the consumer. I am particularly focused on making sure that the consumer benefits from these free trade deals—that they see prices come down and the range of products broaden.

A number of noble Lords, including the noble Lord, Lord Fox, and the noble Baroness, Lady Bennett, mentioned the concept of proximity being at the core of trade. For many goods, it is right and in fact efficient to have a proximous concept of trade. I think of the idea of swapping beef herds, in terms of practicality—although I think we sell better beef than the Australians, and certainly more specialist types—so there is a market in that sense. However, if we look at investment, which is an important element of the CPTPP, our two biggest investment partners in terms of growth and current value are the United States and now India. They are clearly not the most proximous countries to the UK, so it is important to understand that, in modern trade, in services, the digital provision of services and financial investment, the world truly is our oyster.

Speaking of investment: the ISDS concern is raised continually. As Investment Minister, I believe that strong investment protections for investors into the UK are at the core of our offering. If, at any point, investors felt that their investment rights would be derogated, it would be much harder for all of us—and whoever stands in my place as Investment Minister—to get the vital money that we need for our infrastructure into this country. These ISDS provisions are enormously beneficial for us. I feel totally safe in offering them to other countries. I do not believe that there is any derogation of our ability to manage our economy, our ambitions for net zero, how we treat our workforce or any other measure. Investing in these CPTPP countries protects our businesses, particularly in countries such as Malaysia where we now have these protections.

That brings me briefly to the services point—

[Lord Kerr of Kinlochard (CB)]

I entirely agree with the Minister about ISDS. Will he confirm that ISDS will be in any trade deal we sign with India?

[Lord Johnson of Lainston (Con)]

This is not in my notes. I cannot confirm what will be in our trade deal with India. I stress the importance of protecting our investor base when we invest internationally. It is right that the services principle has been raised. One of the most effective elements of the CPTPP treaty revolves around our agricultural access, where there is a high degree of compatibility between what we produce and what these markets want, as there is with goods. Noble Lords have raised this on a number of occasions. The noble Lord, Lord McNicol, raised the point about the Society of Motor Manufacturers and Traders, which particularly welcomes the relationship with Malaysia, where there is a different tariff approach. The rules of origin will simplify a lot of activity when we come to work with these countries. We do a lot of manufacturing trade with countries such as Japan, Malaysia, Vietnam and other CPTPP countries.

Services are the future. Some 80% of our economy and its growth are structured around services. The services chapters in the CPTPP can go further. This is a living agreement. We will build on the chapters, particularly on digital, that allow us to expand our services access. There are important basic building blocks around professional qualification recognition and plans to develop this effectively, to promote collaboration between professional qualification providers. It promotes collaboration between regulators. It allows for more effective business mobility, which is important. Someone who is posted to Canada on a work contract can take their spouse. There is first-time access and security for business mobility in countries such as Malaysia and Brunei, as well as other opportunities, such as transportation in Chile, and a number of other key points relating to digital provision and preventing data localisation. These all sound quite technical but are very important in firing the starting gun on further discussions.

A number of Peers, including the noble Lords, Lord Purvis, Lord Kerr and Lord Anderson, and the noble Baroness, Lady Hayter, have mentioned that these further discussions are encapsulated around a general review. This is a useful mechanism for us to participate in before we become a full member, as we are doing. This conversation will certainly include how to build on the services offering that is in the CPTPP. We welcome it. Our teams will be fully dedicated to it.

The noble Lords, Lord Kerr and Lord Marland, looked at the secretariat which will help us in these negotiations. I ask noble Lords to forgive me if I have missed any who also made this point. We have 14 full- time personnel who are part of the negotiating team and who now make up the CPTPP unit within the Department for Business and Trade. As I understand it, they are permanent and will not be moved to negotiate another deal. They will stay, I hope, to focus on making sure that we have a close relationship with the CPTPP countries. If a permanent secretariat is developed in the coming years, they would feed into that.

We want this organisation to grow, have deep roots and be strong for the future. I do not know what the plans are relating to the secretariat, but these are always live conversations, and of course we will feed in where appropriate. Once we become a full member, we will be able to put our platform forward with more vigour.

A question which is oft raised is how the department promotes the CPTPP to small businesses. I am very pleased that there is an SME chapter in the CPTPP; it is important, because it helps all economies focus on how they can help small and medium-sized enterprises to make the most of the CPTPP. This is at the core of all the economies that are participating in the treaty.

I am aware of the difficulty in promoting quite a complex treaty principle—there are rules of origin and comparable treaties, as we have treaties with many of these countries already, so it is not necessarily clear sometimes which treaty you should use, and you have to pick which of the two. We have done a great deal of work to ensure that our online access is powerful enough to enable people to make these decisions. We have a unit which specialises in promoting our free trade agenda and the treaties that we have signed up to. It has run a number of workshops. We need to work with the Chambers of Commerce to make sure that we get the message out.

I am totally aware of the need to ensure that this is a success, and I welcome the challenge. Crucially, the department sees it as part of its conceptual and fundamental mission. This Government want to be proud of their post-Brexit vision of Britain. Therefore, it is up to us to ensure that we deliver, by making the necessary noise to get as many businesses involved, both in exporting and in taking advantage of this treaty.

I hope I have covered the majority of the points raised. I am always comfortable coming back to noble Lords and the committee. Again, I congratulate the committee, and the noble and learned Lord, Lord Goldsmith, and the noble Baroness, Lady Hayter, for the work they do and the high degree of collaboration that they have with me.

On the question of our trade policy, people hunt for a matrix or template of what tomorrow holds. Looking back on our accession to the CPTPP, I am reminded that it has been likened to the next-door neighbour’s cat with a cough—I cannot remember quite what the quote was from the noble Lord, Lord Purvis. But I think this is a lion that will roar. Think of the rather extraordinary counterintuitive decision to say that we are going to pivot—that we had a relationship with the European Union and are now going to look for bigger and better relationships around the rest of the world. That is exactly the sort of economic decision that a good businessperson would take. Unquestionably, there is no derogation in the need to have the highest-quality trading relationship with our European neighbours, but where is the future? That is the point.

If you asked any of the next generation coming through—some of them are in this Chamber today—they would say that we should look to Asia and the growing populations. My noble friend Lady Lawlor rightly pointed to the astonishing levels of growth coming from those economies. In this country, for a politician, Cabinet Minister or Prime Minister—the leadership in this great nation of ours—to decide to go for the Pacific in this way and join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is an astounding jump of the mind that I am sure previous senior mandarins of the Foreign and Commonwealth Office must be aghast at—such out-of-the-box thinking.

I am enormously proud to have been party to bringing this legislation through this House and promoting it with all noble Lords in this place. If I can repeat them, the countries are Australia, Brunei, Canada, Chile, Peru, Singapore, New Zealand, Vietnam, Japan, Malaysia and Mexico. We are proud to join that phenomenal cohort. I am excited about the future and very positive about the opportunities that this trade treaty will bring. In my view, it will far outstrip the predictions made by everyone in this House, and even the Government themselves. I am grateful for this opportunity to discuss it.