Republic of Cameroon: Economic Partnership Agreement

Lord Kerr of Kinlochard Excerpts

Tuesday 29th June 2021 Lords Chamber

[Lord Kerr of Kinlochard (CB) [V]]

While I sympathise with the spirit of the Motion to Regret, in the name of the noble Lord, Lord Grantchester, like the noble Lord, Lord Bellingham, I cannot support it because our imports from Cameroon are so marginal that to impose any restriction on them would penalise some people in a very poor country without having any effect at all on the policies of their Government. EU sanctions might make a difference; on our own, we cannot. Trade flows with Ghana and Cameroon are marginal for us, but the point I draw to the House’s attention is seriously significant to British business because it is common to all these so-called rollover agreements. It is addressed in paragraphs 11 and 22 of the report that we are looking at today and concerns asymmetrical rules of origin, which seem to me to be one of the principal respects in which the new agreements are worse for British business than the situation before Brexit.

Take Cameroon as an example. It imports five times as much from France and more from Belgium, the Netherlands and Italy than it does from this country. Given integrated EU supply chains, there will have been UK content in these imports from the EU, but because our new TCA with the EU does not permit diagonal cumulation, such content will now disqualify such goods from the EU’s preferential trade arrangements, such as those with Cameroon. So, continental businesses will tend to look elsewhere for their components. It is asymmetrical: Cameroon’s exports to us will, under this agreement, still satisfy our rules of origin, however many European components they contain. More seriously, the same asymmetry applies in agreements with major trading partners such as Japan. Under the trade and co-operation agreement, not only will UK-assembled goods—motor vehicles, for example—not have tariff-free access to the continental market; those assembled here will not qualify for the EU’s preferential deals with third countries if their third-country content, in the first case, or their third-country and UK content in the second case, exceed rather low thresholds. That is bound to have serious economic effects in this country.

The problem was addressed at some length in chapter 3 of the EU Committee’s 24th report, of 25 March, Beyond Brexit: Trade in Goods, but I have not seen any government response and the Minister did not address the issue in the letter he kindly sent us yesterday. I would be grateful if he could now tell us what impact assessment the Government have made of the omission of diagonal cumulation under the TCA and its effects on future third-country trade. Perhaps he could also tell us when the House and the country can expect to see such an assessment.