European Union (Definition of Treaties) (Economic Partnership Agreements and Trade Agreement) (Eastern and Southern Africa States, Southern African Development Community States, Ghana and Ecuador) Order 2018

Lord Judd Excerpts

Tuesday 27th November 2018 Lords Chamber

[The Earl of Sandwich (CB)]

My Lords, as the noble Lord, Lord Stevenson, said, I was not sure that I would still be here this evening, but owing to changes in the timetable I am delighted to be here. The noble Baroness has already received advance notice of some of these remarks.

I support the amendment to the Motion because, from my limited understanding, ratification of these SIs has been a very disappointing procedure both in another place and in this House. It seems as though Parliament has somehow been the loser when it no longer has any influence in these international agreements. It is therefore perhaps inevitable that the Opposition have tabled an amendment, which deserves support from around the House.

I welcome the noble Lord’s remarks, first about the Trade Bill, because this is a preamble to what we expect to come; it is just a rehearsal. I also agree with the noble Baroness and the noble Lord that we need a committee dedicated to this particular subject—as we reorganise the EU committees, perhaps. There is no question about that.

Be that as it may, as we have heard, there are questions hanging around the EPAs from a decade ago that still concern many organisations with expertise on trade. I have worked with some of them over the many years that I have been working on development. Taking Africa alone, I can think of worries about rules of origin, GIs, reciprocity, and about tax—in short, about whether EPAs or interim EPAs are really worth having when you already have 100% access to EU markets through the EBA agreements and the GSP+. There is also a concern, as we have heard, about whether the regional groupings such as SDEC and ECOWAS can truly reflect the situation of individual states, which are all so different. Then there is education: how many citizens in these countries are sufficiently aware of the pros and cons of entering these agreements?

I know that I am bringing up very old concerns that have been expressed by civil society over many years. I hope that the noble Lord, Lord Judd, will follow me and show some of his experience of fair trade over many years. ActionAid, ODI and Traidcraft have done a lot of work on the effects of EPAs on wealthier countries such as Ghana and Kenya. But the question is whether our Government have provided enough answers. Should there not have been more impact assessments to accompany these SIs? The whole point of scrutiny is that you are given a proper opportunity to make judgments, and quite apart from the strange ratification process already referred to, it seems that proper briefing on this occasion has been sadly lacking. So does the Minister agree, apart from answering all the questions first, that this whole procedure is back to front anyway; and, secondly, does she believe that some countries affected are being dragged into this by the EU without proper consultation and examination?

[Lord Judd (Lab)]

My Lords, there is nothing I like more than to oblige the noble Earl, Lord Sandwich. It was good to hear what he had to say.

Central to our whole approach to European Union matters at this moment is the concept of bringing government home and of increasing our powers of scrutiny and accountability. Treaties of this kind, with their immense implications, opportunities and dangers for vulnerable and young economies, are no exception if we are to follow through the logic of what we have been arguing. It is not satisfactory to have an arrangement whereby the Government will listen to those committees with adjacent and valid observations to make. This House needs to have specific arrangements for scrutinising what is being done in this context.

--- Later in debate ---

The noble Lord, Lord Judd, raised a point about liberalisation. There is no doubt that we have to take into account the concern about this happening too quickly. That is the fundamental issue with liberalisation. But EPAs try to have proper timing and allow us to put control in the hands of the developing countries, which can choose sensitive products that they really do not want to be opened up. I agree that, if it was immediate and done with no protection, liberalisation would be an issue. However, even if we have not initially treated products as sensitive and cut them out, the EPA includes safeguards that can be applied: the tariff-rate cuts can be suspended and tariff-rate quotas can be applied. I agree that there are issues, but through these EPAs we try to address a number of those.

[Lord Judd]

I am obviously heartened that the noble Baroness agrees there is an issue, but there is perhaps one specific aspect on which she might give us a word or two. In evolving situations, what is suitable at one point will not be suitable at another—she has alluded to this herself. We have to be careful about what may seem appropriate at one stage if, for example, a country wants to start processing its primary produce. That is quite a hot issue. Are we in favour of its development or are we not? If we are, how do we facilitate its becoming a player and marketing its manufactured and processed primary products? Such a country may become very competitive in the world economy—but then we keep hearing about how competition is a good thing. We need a bit more detail on this.

[Baroness Fairhead]

We are trying to make these countries long-term trading partners. We provide support to help build and encourage investment, and it is likely that that will increase the processing capability of some of their plants, and will, therefore, potentially create competition for some of our companies. In a sense, however, that is what we are trying to do: to bring up trade. As the noble Lord, Lord Stevenson, said, trade matters and can lift up nations. It is not about a single point in time; we are trying to encourage investment to help these nations move up and become long-term, mature trading partners that we can continue to deal with in the future.

I turn now to another area raised by the noble Lord, Lord Stevenson of Balmacara, the noble Earl and the noble Baroness, Lady Sheehan: the question of regional integration. The EU has been one of the biggest supporters of African integration and efforts to deliver a continent-wide agreement. The EU has aligned the EPAs with the existing economic and customs union, seeing that as the best way, according to the preferences of EPA partners. It is clear that they are numerous and overlapping, not by the design of the EU but because we have worked with the flow of what it has done. To try to support regional integration, we are encouraging the African states to extend to each other the same level of liberalisation. This is to make sure that they aim to prevent increased imports from the EU displacing imports from neighbouring countries.

The issue has not been raised—I can hear it coming—but the most-favoured nation clause that might result from that is specifically designed to ensure that it applies only to major economies, and that excludes most of the African nations. We are genuinely trying to work with the flow of regional integration.

On the point raised about the AfCFTA by the noble Baroness, Lady Sheehan, it is a cross- African CTA that is being worked on and, as she will know, it has taken a while. We will continue to support the efforts to do that but in the meantime we believe that EPAs are a way of allowing those countries to progress.

As to the economic benefits, because these are EPAs they are asymmetric in favour of the developing nations and that is why we are seeing limited benefits in the short and medium term to the EU countries, including the UK.

The noble Lords, Lord Haskel, Lord Judd and Lord Stevenson, the noble Earl, Lord Sandwich, and the noble Baroness, Lady Sheehan, raised the issue of parliamentary scrutiny. The noble Lord, Lord Haskel, was helpful in laying out what the current scrutiny is under the EU system. In taking forward the existing trade agreements, we have said that we will try to replicate them to provide as much continuity as possible. In the interests of providing parliamentary scrutiny, we will make sure that a report is prepared outlining any changes that have been made and provide opportunities for debates in both Houses to allow Members to comment on those change before ratification under the normal procedure. So we have tried to address the issue of trade continuity agreements.

This SI is not about future trade policy nor about our future scrutiny arrangements. As I said in my opening remarks, an Oral Statement was made in the other place by the Secretary of State, who laid out some of the ways in which we will engage. There will be a 14-week engagement across civil society, with unions and businesses, and that consultation is taking place on four potential free trade agreements. We will then create an outline approach which, again, will be made public and available to Parliament. Through that process, reports and accounts will be laid before both Houses.

In this House there are a number of Lords committees but none with a specific remit on trade policy. It is not for me to determine for the House of Lords what committee would be appropriate but, as I said, I am keen to talk to noble Lords and hear their ideas. At the moment we are working out our proposals but, ultimately, if any new committee were established it would be for the House of Lords to make its own decision on what that would be.

On the question of involving civil society on these existing EPAs, as I have said, we are continuing to engage actively with civil society. However, under the existing EU approach, there is a joint civil society engagement which takes place under the existing SADC EPA to allow those states’ approach to an effective implementation of the EPA, and it is on the implementation side where that civil society involvement is continuing.

I agree wholeheartedly with the noble Lord, Lord Stevenson of Balmacara—trade matters. We need to get that right. We remain committed to engaging further with Parliament as we develop an independent trade policy. We will continue to work with stakeholders across the UK to ensure that our policy delivers for this great nation.

I encourage noble Lords to support the UK’s ratification of these agreements, which will demonstrate to these countries the importance to the UK of agreements with them, as well as our commitment to development and global prosperity.