Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Leong Excerpts

Committee stage
Thursday 14th December 2023 Grand Committee

Moved by

[Lord Leong]

17: After Clause 5, insert the following new Clause—
“Report: accession of the People’s Republic of China to the CPTPP(1) Before any decision is made by the Government of the United Kingdom on the accession of the People’s Republic of China to the CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the impact of China’s accession on the United Kingdom.(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”

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[Lord Leong (Lab)]

My Lords, I speak to Amendment 17, which was tabled by the noble Lord, Lord Alton, who is unable to introduce the amendment due to a long-standing commitment. The effect of the amendment would be quite simple. Proposed new subsection (1) would require the Government to produce a report on the impact of the People’s Republic of China joining the CPTPP, before any decision is made as to whether the UK could support the PRC’s accession. Proposed new subsection (2) would provide for a vote in both Houses on the UK’s position towards the PRC’s membership.

I do not believe that this amendment ought to be controversial. The prospect of the UK joining a trading bloc with China—one that has the potential to be the largest FTA zone, accounting for 53% of global GDP and 30% of global trade—has significant long-term implications for the people of the United Kingdom and beyond. As such, it ought to be a matter for parliamentary oversight.

I believe that the PRC should not be allowed to accede to the CPTPP, but it has become clear that what seemed like an impossibility a couple of years ago looks more and more possible. After the UK, China is next in line. China is a much more important trade partner for many CPTPP members. Close economic ties have already persuaded some CPTPP members, such as Singapore, Malaysia and Vietnam, to voice their support for China’s entry. Australia, which previously opposed it, has reportedly softened its opposition and Beijing is lobbying hard for membership.

There are three key reasons why the PRC should be kept out of the alliance, and why the UK must not be bounced into a position of support without the support of Parliament. First, China should not be admitted because it will not meet CPTPP standards. The CPTPP contains major commitments on labour, the environment, IP and state-owned enterprises regulations that China is unable to meet. As my noble friend Lord McNicol has already said, Article 19.3 incorporates the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and Its Follow-up of 1998, which provides the right to freedom of association and prohibits all forms of forced labour, child labour and discrimination in respect of employment. To further entrench these rights, Article 19.4 explicitly prohibits members derogating from these protections, meaning the labour laws cannot be weakened to encourage trade or investment.

The CPTPP also establishes a number of positive environmental obligations for members. Under Article 20.3, members must effectively enforce environmental laws and must not derogate from them to gain a trade or investment advantage. The environmental chapter is enforceable under the CPTPP’s broader dispute resolution mechanism. The CPTPP also recognises the sovereign right of each party to establish its own level of domestic environmental protection. Although China has recently made important efforts to address environmental concerns, including by announcing its goal to phase out coal investment abroad and by debuting its emissions trading system, CPTPP obligations may none the less prove onerous, given China’s status as the world’s largest emitter of greenhouse gases and the challenges it faces reconciling climate and pollution control with rapid economic development.

China will also be unable to meet the CPTPP’s data transfer obligations and standards, which eliminate data localisation and prohibits Governments of CPTPP members demanding access to an enterprise’s source codes as a condition of import, distribution or sale. Importantly, these provisions are subject to the CPTPP’s dispute settlement mechanism. Further, a national security exemption is not allowed to let members derogate from this regulation. Although China has made similar commitments on data transfer and data localisation, as a member of the Regional Comprehensive Economic Partnership, or RCEP, this agreement does not contain a provision prohibiting the forced transfer of source codes. Additionally, the RCEP’s digital trade provisions are not subject to dispute settlement, and members may use a self-judging national security exemption to circumvent these requirements.

Secondly, should China join the CPTPP, it would definitely block Taiwan’s participation, as it did with RCEP. Given Taiwan’s importance in the supply chain network, the island’s exclusion from the CPTPP will have significant implications for the restructuring of the global production network and for the setting of standards in key industries and technologies where Taiwan is the leader. Further weakening and isolating Taiwan is neither in the interests of the people of Taiwan nor aligned with the interests and values of the United Kingdom and our regional allies.

That brings me to the third reason why China should be kept out of the CPTPP. Accession will make China more powerful and increase its willingness and ability to act coercively. China’s joining of the CPTPP will not only expand the CPTPP’s weight in the global economy but increase its global influence. A significant driver behind the CPTPP was the region’s recognition of a need for an alternative to be able to de-risk from an overreliance on China. This is good practice.

The United Kingdom played a key role in supporting China’s accession to the WTO, which I firmly supported. China pledged upon its accession to adhere to WTO rules, to phase out subsidies, and to ensure fair competition. It promised that the state would not influence commercial considerations. As we were reminded by the US trade representative in 2021:

“After more than 20 years of WTO membership, China still embraces a state-led, non-market approach to the economy and trade, despite other WTO Members’ expectations—and China’s own representations—that China would transform its economy and pursue the open, market-oriented policies endorsed by the WTO”.


Good faith may have been reasonable 20 years ago. Sadly, China has changed, as has its global ambitions. We simply cannot afford to get it wrong again.

In closing, I urge us all to recognise the importance of the CPTPP to the United Kingdom’s future economic and geopolitical importance and interests, and to support this amendment, which would ensure parliamentary oversight of the UK’s position on China joining the CPTPP.

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[Lord Leong (Lab)]

My Lords, I beg noble Lords’ patience as I share my business experience of doing agreements in China. I still have scars on my back. My first visit to China was in 1999, when I was a much younger law publisher. This was before China’s accession to the WTO. It wanted to acquire the subsidiary rights to every mercantile law—what a beautiful name—and commercial and international law book. I was happy to enter into agreements with various Chinese university presses. Noble Lords will know that most businesses in China are wholly or partially owned by the state, so you can enter an agreement in good faith but whether the agreement is abided by or complied with is a different conversation. After many years of doing business in China, the managing of agreements took its toll and eventually we stopped doing business there.

I will share a simple analogy with noble Lords. It is as if you allow a friend into your house and then suddenly notice that some things have been taken away. Much later, more valuable things are taken away, and then the friend starts dictating the terms of your stay in your own house. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Leong Excerpts

Report stage
Tuesday 16th January 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

My Lords, Amendment 4 is a minor technical amendment that the Government have introduced. I will read out my brief to be clear, because it is quite technical. The Bill as currently drafted may lead to a degree of uncertainty for decision-makers over the date that should be used when assessing whether the new grounds for cancellation of a geographical indication apply in a case where the GI has successfully undergone a name change. Under the current drafting, it could be argued that, in such a case, the date on which the original application to register the GI was submitted under Article 49 of Regulation 1151/2012 should be the date used to carry out the assessment and not the date when the name change application under Article 53 was submitted. This amendment addresses that uncertainty by making it clear that the assessment should be carried out based on the factual position relating to the date when the name change application was submitted, rather than the date the original Article 49 application was submitted.

I will translate that a little. The provision is effectively looking at the date on which the name change is submitted, rather than the original name. If I have a GI—“Johnson’s Water” or whatever it may be—registered in 1990 and then change the name to “Lord Johnson’s Water” this year, then the reference would be made to the point at which the name change application was made, rather than the status at the time of the original GI. It is a clarification which we think is important, and I trust my officials’ view on that.

I will just answer briefly the very helpful comments raised about Japan and geographical indicators. I would be extremely grateful to my noble friend Lord Lansley for making representation to the authorities in Japan to speed the process up. We are fully committed to ensuring that our GIs are protected in Japan; it is part of the agreements we have undertaken, but these things take time to effect. We are doing everything we can to be sure that those indicators are protected. Anything that he can do to speed that process up will be gratefully received by this Government. I beg to move.

[Lord Leong (Lab)]

My Lords, as we have heard, this government Amendment 4 is really a relatively minor and technical amendment, so there is not much to add, except for some questions we hope the Minister will respond to. How often do the Government expect this test to be utilised, and are there any potential ramifications they will come across? What happens if the name change application is not successful—is that a possibility? Finally, if a name changes from a geographical indication into a generic term, does this amendment apply?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that point. I am very comfortable having a more detailed discussion about GIs in principle. It is worth noting that many countries, including those in the CPTPP, do not have necessary GI processes. Sadly, too few do, so there is a great push on behalf of this Government to ensure that we advance the cause of geographical indicators to ensure that our rights are protected. It is correct that it is possible for a name change to be rejected; it is a process that takes time, as with any intellectual property issue. It is a detailed and thorough process to ensure that we can be comfortable that names, trademarks, GIs and so on are properly protected, and the research has been done. It can be six months or it can be a year, which is why we have built in this provision to ensure that it is the point of application rather than the point of approval that the data is referring to. That makes sense.

There have not been any cancellations of GIs undertaken by this Government, or indeed recently. I will check that, but I hope I am accurate; if I am not, I will certainly correct myself in the Library. The question from the noble Lord is about whether this is something that happens regularly, and is a constant and ongoing issue. Maybe there have been one or two exceptional examples but as far as I am aware, it is a relatively straightforward process; it seems quite uncontentious so far.

These regulations simplify the processes in respect of how we operate with the CPTPP. Often, we look at the activities that will take place in this country, which is right. How to protect our own GIs is what we are working on domestically. Really, this allows us to export the whole principle of geographical indicators—the wonderful concepts of Scottish salmon and Scottish whisky, to name just two enormously important and well-branded products. It allows us to work with our partner countries in the CPTPP to ensure that those brands and concepts are well protected, because a GI does not give us any strength unless it is domestically registered and the domestic legal system respects these principles. I therefore hope very much that the House will support me on this technical amendment and on the principle that it projects.

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[Lord Berkeley of Knighton (CB)]

My Lords, on the whole I tend to support the idea of having one’s sparring partners join the club, because there is then a way to communicate. The noble Baroness, Lady Kennedy of The Shaws, made this point. Communication is incredibly important, such as through cultural and sporting exchange.

However, the points made by my noble friend Lord Alton seem to me to rather trump that consideration. The noble Lord, Lord Hamilton, said that we would be making an exception in the case of this country. But why would we make an exception? I suggest that the answer lies in my noble friend’s point that the country has behaved exceptionally and therefore that we have to take that into account.

Finally, I say that we must learn from the Post Office affair, for example, which we will come on to, that we can never probe enough—we need to look at things in depth, especially something such as this where there are clearly areas that we could consider more thoroughly. I repeat what the noble Lord said: this is a plea to look further. It is not doing anything else at this stage. It asks the Government to allow us to look further at something that has considerable consequences.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Alton of Liverpool, for presenting this amendment calling on the Secretary of State to publish a report assessing the potential impact of China’s accession to the CPTPP on the United Kingdom and saying that both Houses of Parliament must be presented with a Motion for resolution on the said report.

As the noble Lord, Lord Lansley, indicated earlier, we on this side of the House would have preferred this amendment to cover all new accession countries—but for the purposes of this amendment I will refer just to China. Several noble Lords spoke in Committee on the case for this amendment and I do not propose to repeat what was said. However, I will make noble Lords aware of China’s non-market trade practices and its history of using economic coercion against CPTPP members, which must be considered in any valuation of its prospective accession.

First, there are aggressive military exercises and drills in the Taiwan Strait that threaten peace and stability in the South China Sea. This could be destabilising to regional trade. In addition, China has ongoing territorial disputes with other CPTPP members, including Japan, Malaysia, Brunei and Vietnam. Its willingness to use coercion against countries that disagree with it has often strained relationships with several CPTPP members. For example, it halted imports of Canadian canola and meat products in response to the arrest of a Huawei executive in Vancouver. Japan was denied access to rare earth materials in 2010 and Australian exports have suffered from Chinese import bans. Furthermore, several CPTPP member states have expressed concerns that China’s subsidies of state-owned firms and arbitrary application laws would be likely to make it hard for the country to join the trade pact.

I wanted to quote two examples, but the noble Lord, Lord Alton, mentioned the Japanese State Minister, so I will leave it at that and bring in another example of our very own British CPTPP trade negotiator, Graham Zebedee. Without commenting specifically on China’s application, if a country’s economic rules are really quite far apart from what CPTPP says, inevitably there is quite a big question about whether they could undertake really massive reforms. These concerns alone seem to provide sound justification for the commissioning of a report and Motion for resolution, as required by this amendment, so that both Houses of Parliament have the opportunity to fully consider the case for and against China’s accession to the trading bloc.

Recent newspaper reports have shown the lengths to which President Xi will go to crack down on companies when strengthening his control of the economy. Business leaders in China are under immense pressure. Last year, more than a dozen top executives from sectors including technology, finance and real estate went missing, faced detention or were accused of corruption practices. China’s national security law, as mentioned by my noble friend Lady Kennedy, is dangerously vague and broad. Virtually anything could be deemed a threat to national security under its provision and it can be applied to anyone on this planet. This law has provided little or no protection to people targeted. Lawyers, scholars, journalists, pastors and NGO workers have all been convicted of national security offences, simply for exercising their freedom of expression and defending human rights. Business leaders may face the same treatment.

China’s current policies and practices are at odds with many of the provisions and requirements of the CPTPP, and it is unlikely to be able to conform to them unless current members agree to significant concessions in the negotiations. This is why concerns about coercion are particularly relevant. Without considerable concessions, it is hard to see how China would qualify for accession. Equally, China is highly unlikely to make the changes to its laws and regulatory systems that would be required to gain the acceptance of CPTPP.

We are obviously sympathetic to the arguments made by the noble Lord, Lord Alton, and others in support of this amendment. However, there is not yet any agreement for any other country to join the partnership. It would be improper to single out any one of the possible new members at this stage, including China. At Second Reading and in Committee, we put on record our strong concern about China’s human rights record, but we believe that our human rights concerns should be universal and that one country should not be singled out. Should the noble Lord, Lord Alton, decide to divide the House on this amendment, we will abstain.

[Lord Johnson of Lainston (Con)]

My Lords, I am grateful for this debate and I have the greatest respect for my noble friend Lord Alton, who, over the years, has demonstrated his significant level of passion on this very important matter, as have many other noble Lords today. I do not want to deviate from the important points I wish to make relating to this CPTPP Bill, so forgive me if I do not necessarily answer all the questions that have been presented in relation to some of the topics raised. However, I would like to say, very importantly, that I clearly personally strongly reject the sanctioning of our parliamentarians. We have made it very clear before that China’s attempts to silence those highlighting human rights violations at home and abroad, including, and specifically, their targeting of MPs and Peers here in the UK, are unwarranted and unacceptable. I begin discussion on this amendment with that very important statement.

I turn to the debate around the CPTPP. As I have made clear throughout the last few stages of this Bill, in joining CPTPP, we are securing our place in a network of countries that are committed to free and rules-based trade, which has the potential to be a global standard setter. CPTPP acts as a gateway to the dynamic and fast-growing Indo-Pacific region and delivers on last year’s integrated review refresh to continue to enhance our relationships in that region. I stress this point, which was raised, I believe, by the noble Lord, Lord Purvis. Expansion of this agreement’s membership will only bring further opportunities for British businesses and consumers.

On potential new accessions, there are currently six economies with applications to join the group: China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. China’s application, alongside the applications of the other five economies, is at the outset of the application process and has certainly not been determined. As noble Lords are already aware, the CPTPP is a group of 11 parties and will become 12 when the UK accedes, and decisions must be taken by consensus of the CPTPP parties. However, it has been agreed within the group that applicant economies must also meet three important criteria: they must meet the high standards of the agreement; they have to have demonstrated a pattern of complying with their trade commitments; and they must command consensus of the CPTPP parties. These are very strong criteria, and I hope that all Peers on all sides of the House hear this very clearly.

As a new member of the CPTPP group, it is right that we work within the principles of the group to achieve a consensus decision, rather than give our own individual narrative on each applicant, such as through the report proposed in this amendment. My kinsman and noble friend Lord Hamilton made a very strong point in support of that. As I indicated previously, the UK is already closely involved in discussions on this topic but will have a formal power to oppose an application only post-ratification. It is therefore crucial that we ratify the agreement and become a party, so that we can work with CPTPP members decisively on each current and future application. I stress that to be drawn in on individual applicants now, ahead of the UK becoming a party to the agreement, could risk significant repercussions to our own ratification, which is why this is such a sensitive and important issue.

The UK becoming a party of the CPTPP is dependent on CPTPP parties individually choosing to ratify the UK’s accession, so it is not in our interests to step outside the group on such a sensitive issue. As I have been clear throughout our debates, we must join first so that we are on the inside judging other applications, not vice versa. It is therefore crucial that the UK ratifies the agreement, which will in turn trigger other ratifications that will allow us to become a party.

I want to be clear that our own accession working group was successful because we are demonstrably a high-standards economy with a strong track record, we made a market access offer of the highest standard, and we garnered the support of every party for our accession. Our accession process has set a strong precedent: the robust experience the UK has been through has reinforced the high standards and proved the bar is not easy to meet.

Comments were raised about state-owned enterprises. I will give noble Lords an anecdote from the negotiating team, as I understand it. We received a great degree of scrutiny over the relationship between Channel 4 and the Government, which few people, I think, would necessarily equate with the concept of a state-owned enterprise. I hope that that demonstrates the sort of inquiry that was behind our own accession.

I also reassure the noble Lord, Lord Alton, and everyone else who participated in this debate, that the accession of new parties after the UK has joined will entail a change in the rights and obligations of existing parties. Any new agreement requiring ratification by the UK would therefore be subject to the terms of the Constitutional Reform and Governance Act 2010. So, if he will allow me, I push back against the noble Lord and his suggestion—I think the noble Lord, Lord Purvis, also suggested it—that there is no track for the CRaG process to be triggered should a new party be able or about to accede to the CPTPP.

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[The Earl of Clancarty (CB)]

My Lords, I rise briefly in support of Amendments 7 and 8 from the noble Lord, Lord Foster. I will say only one thing on the concerns about performance rights, because the noble Lord, Lord Foster, summarised the problem very comprehensively. Before I do, I wish to thank the Minister for his extremely prompt reply by letter to our concerns on the artist’s resale right in relation to the CPTPP that we discussed in Committee and for agreeing so quickly to set up a meeting on this, which I believe will take place on Monday. I look forward very much to that.

The single thing I will say about performance rights in relation to this Bill is to iterate a concern that Music Week, in response to the IPO consultation, raised yesterday. It highlights the importance and principle of reciprocity that the noble Lord, Lord Foster, mentioned. My understanding is that, until now, performance rights have been based on the principle of equitable remuneration, but this Bill potentially puts that in danger. There is a fundamental question—as the noble Lord, Lord Foster, said—to be asked about why the music and broadcasting industries are being put through the wringer on this when they are broadly happy with the status quo. If—and it is an “if”, because there are a number of options—the Government go down a particular route whereby, because of a reduction in the money going to US labels, US music is effectively free to play in the UK but UK music, particularly new UK music, is not, the concern is that, to quote Music Week,

“domestic acts might be squeezed out by UK broadcasters looking to save money”.

I hope the Minister will agree that that kind of asymmetric, or inequitable, scenario is one that needs to be avoided—although I am sure that that point and more will be made by interested parties in response to the consultation, which I hope that the Government will look at very closely.

[Lord Leong (Lab)]

My Lords, I am speaking to Amendments 7 and 8, and I thank all noble Lords for their contributions.

Intellectual property, particularly copyright, plays a pivotal role in the global trade in creative content, with the UK music industry serving as a prime example of its significance. It is imperative to acknowledge the substantial impact of copyright on fostering innovation and ensuring the efficient operation of markets. Additionally, it is crucial to recognise existing obligations under international copyright treaties and ensure their full and correct implementation by the signatories of the CPTPP. While the fundamental rights encompassing reproduction, broadcasting, communication to the public and distribution are addressed within CPTPP, it is disheartening to note that member states retain the option to opt out of certain obligations. Furthermore, the non-recognition of copyright protection for the utilisation of recorded music in broadcasting and public performance remains a regrettable challenge. To comply with obligations in the CPTPP, as mentioned earlier by the noble Lord, Lord Foster, changes need to be made to UK legislation with regard to rights in performance. We share some of the concerns in the noble Lord’s contribution earlier, and we would welcome an impact assessment to help us understand some of these non-compliance cases.

Will the Minister respond to the following questions, as mentioned earlier by the noble Lord, Lord Foster? Why is the extension of rights in sound recordings and performance to foreign nationals not covered under this consultation? At the same time, can the Minister share with the House when the results of this consultation will be published? Will there be a statement on collective management organisations, given their importance for the income of composers, performers and rights holders? Can the Minister also confirm that UK musicians are able to tour throughout CPTPP member states without any barriers and checks?

[Lord Johnson of Lainston (Con)]

I am extremely grateful to the noble Lord, Lord Foster, for bringing this amendment, for the discussions and dialogue we have had, for the correspondence I have enjoyed with the noble Earl, Lord Clancarty, and for the excellent summation by the noble Lord, Lord Leong—I was about to say “my noble friend” because he is a good friend—who asked some key questions. I am afraid I do not have the answer to the final question that the noble Lord, Lord Leong, asked about the touring rights of artists. I will write to him on that; it is a very good point, and we very much hope that clearly the additional facilities that we have, in terms of temporary business entry for CPTPP countries, may include this. I hope it will and I will confirm this.

Some good points have been raised. In response, first, I will say that the desire to treat performers equitably is the right thing to do. Currently, there are a number of performers who are excluded from receiving the 50% mandatory royalty payment, simply because they come from another country or their work has not been registered in the appropriate fashion. The consultation, which started yesterday and will report on 11 March, is not specifically a consultation on the CPTPP, because we wanted it to be a far wider consultation around the principles of broadcast rights—but clearly it will reflect on the discussion we are having now.