Trade Bill

Lord Judd Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

[Lord Lansley (Con)]

Since I have no text, it will not be the same speech, so if you will forgive me, I will not do that. It will appear in Hansard, and I encourage Members to read it there. In any case, I am now talking about the amendments in this group, as opposed to responding to the noble Baroness, Lady Chakrabarti, which noble Lords can read in Hansard.

On these amendments, I have great sympathy with what the noble Lord, Lord Hendy, was saying. When Philip Morris was frustrated on an investor-state dispute settlement, it effectively used Honduras and the Dominican Republic to use WTO procedures. So the absence of ISDS is not enough in itself—we have to ensure that we are proof against that. In fact, where Australia was concerned, as it happens, the public health exemptions in the WTO were sufficient in the last decision of the appellate body that the noble Baroness, Lady Kramer, regrets the absence of: the last decision it made in June was to uphold Australia’s position. We have to be very mindful of that.

Before I get to my own amendment, I will speak to the others. There is a very legitimate question. Are the Government planning simply to roll over existing EU agreements as they are, including where there are ISDS provisions and including with CETA in due course, where there is an investment court system? I am very interested to know what the Government’s intentions are. Certainly, my expectation is that it will be very difficult to have a continuity agreement while departing substantially from continuity.

As regards Japan, I do not have the text of the UK-Japan Comprehensive Economic Partnership Agreement, but while the EU-Japan agreement encourages mutual investment, Article 8.9.4 of it makes clear that, while market access, national treatment without discrimination and most-favoured-nation status are offered, it says that for “greater certainty”, most-favoured-nation treatment

“does not include investor-to-state dispute settlement procedures provided for in other international agreements.”

I will be very interested to know in due course whether the UK-Japan agreement says the same thing. I know that my friends in Japan take the view that we will not be able to accede to the CPTPP without accepting an investor-state dispute settlement. So this is a very interesting moment in understanding whether we are joining with the European Union in moving away from investor-state dispute settlement, or whether we subscribe to the Japanese view that it remains a legitimate vehicle in international trade agreements.

Amendment 43 proposes a multilateral investment tribunal. I wish that we could use such a process. The Doha round did not accept a multilateral investment provision—the proposal failed. We have bilateral agreements, but while they might be desirable they are not sufficiently widespread to allow us to get to a multilateral tribunal. Putting in legislation a requirement for such a tribunal when people have not yet signed up to one seems heroic.

Amendment 91 is not about investor-state dispute settlement; it is about disputes between states. The best example to have in mind is the dispute between the European Union and the United States. As a result of US action, the dispute reached the point where it was lawful under WTO rules for the EU to apply specific import duties against US exports into the European Union.

The Taxation (Cross-border Trade) Act 2018 relates to this, but why I am talking about a different piece of legislation? The original Trade Bill and the Taxation (Cross-border Trade) Bill were introduced at the same time, at the end of 2017. They were intended to be considered side by side and they cross-refer considerably. In this instance, it is entirely right for us to look at the Taxation (Cross-border Trade) Act and ask whether the parliamentary scrutiny arrangements relating to it are correct. Section 15 of the Act gives the Secretary of State the power to impose through regulations additional import duties as a result of an international dispute—for example, regulations to impose import duties on US exports. That power is exercisable through the negative resolution procedure, but in my view it should be an affirmative resolution procedure—this should be added to the list of affirmative resolution procedures in Section 32 of the Taxation (Cross-border Trade) Act.

The argument in the Government’s Explanatory Notes for using the negative procedure in the great majority of cases where customs duties are imposed is that there are so many such regulations that they have to be made in that way, otherwise they become impractical. That is patently not the case here. In this instance, I encourage my noble friend the Minister to agree that there will be relatively few international disputes that give rise to the imposition of such duties and that, when that happens, it will by its nature be of considerable significance and therefore should be in the form of regulations subject to the affirmative procedure.

[Lord Judd (Lab)]

My Lords, we are indeed fortunate to have had someone with the huge experience, not least internationally, of my noble friend Lord Hendy introducing the amendment, as reflected in the authoritative way in which he did so. I always applaud my noble friend Lord Hain, who said that he could not understand why the Government did not accept amendments. I am sorry to bring controversy to this discussion, but we must face the truth. I suggest to my noble friend that the explanation is quite clear. A bunch of ideologues in Number 10, such as we have never been exposed to in my time in politics, are determined to drive their strategy through. Their strategy is for a free-for-all and a totally unregulated society. They are fundamentally opposed to regulation and, with that, accountability. Unless we face that reality, we are just tackling everything down river without going to the source of the problem.

My noble friend was right to underline the importance of the protection of labour and employment standards. I was glad to hear my noble friend Lady Blower speaking. She was absolutely right to emphasise the importance of the UN and UNCTAD in particular. UNCTAD has played an important role in bringing the nations together to find a workable and just system across the world. My noble friend Lady Chakrabarti also has considerable experience. She emphasised the fact that we are talking about the law and our need to be vigilant in protecting the environment and the NHS.

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[Lord Judd (Lab) [V]]

I am sorry about that. I had problems unmuting, and I was slightly taken by surprise because I thought I would be speaking after the noble Baroness, Lady Ritchie of Downpatrick.

My Lords, these are essential matters. Animal welfare, food safety and the environment affect us all, and they have huge implications for public expenditure because, if you get it wrong, the pressures on the health services and other care facilities become all the greater.

My noble friend Lady Henig dealt with the disturbing statistics from the United States. It is not very nice to think about dear American cousins in this light. However, it is true that deaths and hospitalisations in the States are—I called them troubling, but in a way they are quite threatening. As the noble Lord, Lord Inglewood, said, these things know no national frontiers.

We know that in the pressure for trade—trade is an end in itself—there could be terrific pressures to undermine all that we have built up, because we have built up a great deal in these spheres and can be quite proud of our record, although we cannot be satisfied with it yet, and to see that undermined with a scramble for trade would be shocking. We must monitor and have scrutiny in this area. Our families, friends and children are at stake. I so much agree with my good friend and fellow Cumbrian the noble Lord, Lord Inglewood, that it is sad about our having left the European Union. We need to work on these things effectively internationally and here was a chance to do that and contribute what we have—and we have a lot to contribute—to raising standards across Europe as a whole and from Europe moving into the world as a whole. This is a sad moment in our history—I state it again.

I commend all those who have tabled these amendments and all those who have worked and fought and struggled so hard over so many years to build up our standards. There is a great deal of understanding in the agricultural and farming community in this country about the importance of these things. The noble Lord, Lord Inglewood, was right: these amendments are a significant step in the right direction. They are not enough because we cannot give up the international struggle on the basis of our own standards.

[The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)]

I now call the noble Lord, Lord Beith. As we seem to be unable to reach the noble Lord, Lord Beith, we will move to the noble Viscount, Lord Trenchard.