Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Lansley Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am glad to have the opportunity to express our thanks to the committee, its chair and its former chair for the work in preparing this report. I am glad we have the opportunity to debate it now, in good time in relation to the CRaG process. Noble Lords will recall that, in previous discussions on trade Bills, we secured what we regarded as agreement from the Government that, where any committee makes a report for debate in either Chamber, it should be facilitated before the conclusion of the CRaG process and moving to ratification.

That said, I do not want to understate the degree of scrutiny that has been given to our accession to the CPTPP. When I was a member of the committee some time ago, we looked in detail at the mandate for the negotiations, and we looked at the issues arising from the treaty, because of course we were looking at an existing treaty and could consider what the implications of the provisions of the CPTPP might be, were we to accede to them. The Government responded very positively to some of the points we made at that time, not least on behalf of the witnesses we received. In addition, we have had the opportunity to debate the Bill, in so far as legislation was required. I do not want to understate the scrutiny of this House, which has been nothing other than thorough, demonstrating the importance that should be attached to the continuing work of the International Agreements Committee and the scrutiny we give treaties in this place.

It is really important to recognise that this is an accession, not a negotiation. Occasionally, some of the witnesses’ evidence submissions to the committee and some of the wider CPTPP debate suggested that it was open to us to negotiate an agreement as we are doing with other countries on a bilateral basis to conclude an FTA. This is an accession, and I will come back to that in a moment.

Investor-state dispute settlement is a very good example of this. I remind the House of my registered interest as the UK co-chair of the UK-Japan 21st Century Group. Japan was a very early supporter of our accession to the CPTPP, and we should not underestimate the significance of that in our being able to be the first to join this regional plurilateral grouping. Some expressed the view that we could join the CPTPP but that we do not like investor-state dispute settlement. I am not quite sure why we do not like it; some do not because they think we will be challenged, although we never have been. As outward investment and our reliance on foreign direct investment is unusually important to this country, we should be in favour of giving investors confidence. I am therefore in favour of our agreeing to appropriate ISDS provisions. Had we tried to join the CPTPP while having side letters with everybody, and tried to exempt ourselves from all the effects of ISDS, including with Japan, we would not have been able to accede. Let us not get into arguments that pretend that we could have had a negotiation that we could not have had.

I want to talk about one main element from the latter part of the general themes that the noble Baroness, Lady Hayter, talked about: the strategic context—not the Indo-Pacific tilt but the question of whether the Government should have a trade policy White Paper and a trade strategy document. When we as a committee asked for one over a year ago, we were right to do so, but it is now late in the Parliament to do that. However, anyone who wants to—not least from these Benches—can look at the Government’s activity in trade policy and deduce what we are trying to achieve. I think one would make a very positive deduction, not least from the fact that we wanted to join the CPTPP in the first place. It was very easy for people to say, “What has that to do with us? We’re not a Pacific country and we weren’t involved in the negotiations that led to the CPTPP, so why would we want to join it?” The short answer is because our trade policy is to support a rules-based system that obtains at high standards and is a broad-ranging and flexible, but also progressive, system of agreement for trade.

At the time that it was negotiated, the CPTPP was cutting edge in terms of digital trade and was quite forward in terms of services trade. A number of years have gone by, and there is now scope in the 2024 general review to remedy that. When they started this process, the Government were demonstrating their commitment to trade liberalisation, open trade, a rules-based trading system and not simply to bilateral agreements but to plurilateral agreements that would bring others into a broader world trading system. In the years to come, CPTPP may well demonstrate itself in that way as by no means confined to the Pacific Rim. We are leading the way, and I hope there will be others that follow. Let us not discount completely —happily, sometimes things change, and they do not always change in the wrong direction—that there might be the day when the United States once again thinks about joining a plurilateral, open trading system in ways that it has not done in the recent past. When it does so, the fact that two of its leading strategic allies, the United Kingdom and Japan, are in the CPTPP and were involved in the early stages of negotiating the agreement may give it greater confidence that this would be the proper step for the United States to take, if it really wants to rejoin a rules-based trading system, and greater confidence on how to go about it.

The only other point that I want to make is that I agree with the noble Baroness and the committee report—I think it is in paragraphs 74 to 76—that the CPTPP is not an alternative to the WTO, but in the recent WTO ministerial conference we have seen that plurilateral agreements in that context have made some progress, on things like the regulation of services, investment facilitation and so on. However, the WTO was not able to get agreement on things like food security and fisheries, or, sadly, on dispute settlement. I do not think that we can rely upon the WTO to make the progress that we need. If we are not careful, in the absence of WTO agreements, everything will be done by way of bilateral agreements, which lead one into a more mercantilist system, whereas what we want is an open, plurilateral trading system.

From my point of view, that means that things like the CPTPP and other plurilateral agreements—which are not just regional but may, as we can see, develop in relation to services, investment facilitation or, very importantly, trade in environmental goods—are all ways in which we can promote a wider, positive, open trading system. If we do not do that, protectionism will increase, and in so far as people are not simply protectionist, they will be mercantilist, expecting—as President Trump was wont to do and China is wont to do—that they can negotiate the outcome of trade, rather than create a system which enables the outcome of trade to be the result of markets and competition. That is what we are looking for, and that is why we are looking for an open trading system.

In that context, our accession to the CPTPP is a wholly positive step. I do not think that we should in the slightest diminish it by reference to some of the current statistics about what the prospective economic impact might look like. By the time we have made changes in terms of digital and services trade, and by the time one takes into account the confidence that is given to investors, the beneficial impacts resulting from our membership of the CPTPP will be considerably in excess of what has presently been predicted. I very much support it, but I am also very grateful to and support the committee in the report that it has given us.