Turkey: Free Trade Agreement

Lord Lansley Excerpts

Tuesday 27th April 2021 Grand Committee

[Lord Lansley (Con)]

My Lords, I join in thanking the noble Lord, Lord Purvis of Tweed, for securing this debate and for the way in which he introduced it. I also thank our chair, the noble and learned Lord, Lord Goldsmith, for his introduction to the report, albeit necessarily brief.

I want to complement it by talking about just one issue, that of subsidies, which I hope will illustrate what we are keen to see happen in the year or two ahead. Obviously, the rollover agreement does not carry forward the EU state aid regime, since we are departing from that, but it puts nothing in its place. That is not entirely surprising, not least because the EU-Turkey report from October 2020 says at page 58:

“Legislation to implement the State Aid Law, originally scheduled to be passed by September 2011, has still not been adopted”,


adding that there is no state aid inventory in Turkey. It notes that the administrative mechanism for the state aid legislation has been abolished, and that government support for certain priority investments, including a national automobile factory, is going ahead under the 11th development plan, including 400 product groups in strategic sectors where, as the European Commission’s report says,

“The amount of state aid granted for this investment is not disclosed, contrary to the commitments under the EU-Turkey Customs Union.”


So putting in place a state aid or subsidies agreement with Turkey at present does not work for the EU and it would not work for us.

However, that does not mean that we should not clearly put it in our negotiating objectives. It would not suffice for us to leave it in a WTO subsidy format because, as we know, the WTO format leads only to complaints by countries and is essentially retrospective, and damage must first have been established before the point at which any subsidy can be challenged. By contrast, the UK-Japan agreement, in articles 12.5 and 12.6, has specific provisions about sharing of notifications and the ability for each party to seek further information and to engage in consultation. That, of course, can mean, if necessary—I hope it will not be necessary too often —a complaint at the WTO that a subsidy is contrary to its provisions or some mitigating measures being taken by agreement.

At the moment, I think that we as a committee and the All-Party Parliamentary Group for Trade and Export Promotion—its chair is to speak next; I am a vice-chair—are very interested in moving from continuity agreements to full free trade agreements and seeing what those objectives will look like for a free trade agreement in the future. In this particular instance, I am keen to see something like the Japan agreement reflected into our negotiating objectives with Turkey.