Trade Bill

Lord Oates Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Tuesday 15th December 2020 Lords Chamber

Moved by

[Lord Oates]

14: After Clause 2, insert the following new Clause—
“Conditions for trade agreements: climate change obligations
(1) The United Kingdom may only become a signatory to an international trade agreement if the conditions in subsections (3) and (4) are satisfied.(2) The Secretary of State may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the conditions in subsections (3) and (4) are satisfied.(3) The condition under this subsection is that a Minister of the Crown has made a statement to Parliament that the agreement is compliant with— (a) the Climate Change Act 2008 as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019 (S.I. 2019/1056); and(b) the United Kingdom’s international obligations to tackle climate change, including but not limited to, the agreement adopted under the United Nations Framework Convention on Climate Change in Paris on 12 December 2015.(4) The condition under this subsection is that—(a) a Minister of the Crown has made a statement to Parliament confirming that the agreement will not give rise to a net increase in greenhouse gas emissions; or(b) a Minister of the Crown has laid before Parliament a detailed schedule of measures to mitigate in full any net increase in greenhouse gas emissions arising from the agreement.”Member’s explanatory statement
The new Clause ensures that trade agreements cannot be signed or approved if they are not consistent with the UK’s climate change obligations or if the Secretary of State has not made statements to Parliament confirming that the agreement will not increase greenhouse gas emissions.

[Lord Oates (LD)]

My Lords, Amendment 14 is in my name and those of my noble friend Lord Purvis, the noble Baroness, Lady Boycott, and the noble Lord, Lord Hain. The amendment sets out the conditions that must be met before a trade deal may be signed or laid before Parliament. Its objective is to ensure that trade agreements that the United Kingdom enters into comply with our domestic and international climate change obligations and do not lead to an increase in greenhouse gas emissions.

Proposed new subsection (3) of the amendment would require that, prior to signing a free trade agreement or laying it before Parliament, a Minister of the Crown would have to make a Statement to Parliament, confirming that the agreement is compliant with the United Kingdom’s domestic obligations under the Climate Change Act 2008. as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019, and that it is compliant with our international obligations, including, but not limited to, the Paris Agreement on climate change.

Proposed new subsection (4) would require a Minister to make a Statement to Parliament, confirming that the agreement will not give rise to an increase in greenhouse gas emissions, or, if the Minister is not able to do so, to lay before Parliament a detailed schedule of measures to mitigate in full against any increase in greenhouse gas emissions arising from that agreement.

Mitigating any increase in emissions is the absolute minimum standard we should expect; wherever possible, we should be using trade deals to secure reductions in emissions. Some are sceptical that trade agreements can be used in this way; they believe either that increased trade must inevitably result in additional emissions and we just have to live with that, or that trade in itself is a bad thing that should be curtailed. As a spokesperson on climate change for the Liberal Democrats—a liberal green party that believes in the importance of trade—I reject both arguments. Just as trade has increased collective prosperity over centuries and seen millions lifted out of poverty around the world, the opportunity now exists to use our trade policy to play an important role in tackling climate change. However, we have to be willing to take that opportunity, and to make the climate and ecological emergency that we face central to our trade policy thinking.

Sadly, at present, we are not doing so. At best, we are tipping our hat in that general direction and then passing by on the other side of the road as far as matters of trade are concerned. For example, the Government’s impact assessment for the recently concluded Japan rollover deal suggests that the agreement will add 0.28% to domestic greenhouse gas emissions, and that it could increase fossil fuel consumption by the same percentage. The impact assessment does not indicate the impact on Japanese domestic emissions, although one might conclude that the increase will be significantly higher, given that the estimated benefits from the agreement are worth £15 billion, £13 billion of which accrue to Japan and just £2 billion to the United Kingdom. The assessment is also unclear on whether trade-related maritime emissions will increase due to the agreement; at present global freight shipping accounts for at least 3% of global greenhouse gas emissions.

Whatever the actual figures, any increase in greenhouse gas emissions cannot be acceptable at a time when the world is already on course to see increases in global temperatures at a level that the International Panel on Climate Change warns us will lead to “catastrophic consequences” for our planet. We cannot just shrug off trade-related increases in emissions, whatever their size, and say, “Oh well, it’s an inevitable result of a trade agreement—nothing we can do about that”. If that were really the case, I might join those in your Lordships’ House who have a less positive view of trade, but it is not the case. If we choose to, we can work with our trading partners, and with the World Trade Organization, to ensure that trade agreements become an opportunity to tackle climate change, rather than vehicles that compound it.

In the first place, we should prioritise trade and trade agreements with countries that share a commitment to, and a sense of urgency about, tackling climate change. We cannot continue with an approach that celebrates our effectiveness in reducing carbon emissions in the UK when, in truth, we are simply offshoring them through trade that sucks in manufactured goods from high-carbon economies. We need to think carefully about how we approach our new trading relationships to ensure that they do not further exacerbate this trend, which is counterproductive to our climate objectives and damaging to our domestic industry because of the absence of—to coin a phrase—a level playing field. For example, there is much enthusiasm in government circles about the idea of the United Kingdom acceding to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, but have we really thought about what it will mean to be in a trade partnership with countries such as Australia, Vietnam and Malaysia, which remain heavily focused on coal-fired power generation and continue to invest in new coal-generation capacity? How would such a partnership be compatible with our climate goals? There is no point purporting to be committed to tackling the climate emergency if we continue to take decisions that will further fuel it. Equally, we should be clear that we will not pursue a trade agreement with the United States so long as the current US Congress’s fast-track Trade Promotion Authority is in place. As noble Lords may be aware, it includes as one of its objectives

“to ensure that trade agreements do not establish obligations for the United States regarding greenhouse gas emissions”.

Using our trade policy, by contrast, to prioritise agreements with low-carbon economies and support the decarbonisation of high-carbon economies could give an important lead to the world, not only in reducing trade-related emissions but in driving wider change in high-carbon economies.

Secondly, once we prioritise the countries we wish to enter into trade deals with, we need the trade agreements themselves to have climate and the environment at their heart. That does not mean a few warm words accompanied by passing references to the international agreements that the parties are already signed up to. It means dedicated chapters setting out concrete new actions agreed to by both parties. These will obviously vary from agreement to agreement, but they could include preferential treatment of environmental goods, removal of non-tariff barriers to trade and environmental services and technologies, agreements to phase out fossil-fuel subsidies, commitments on decarbonising merchant fleets, concordats on joint approaches to environmental trade measures at the WTO, et cetera. We should also be joining countries such as New Zealand and Norway, which, with others, have been pioneering an Agreement on Climate Change, Trade and Sustainability.

Whatever the precise measures, the key point will be to ensure that we have an ambitious negotiating agenda and to signal clearly to potential FTA partners that deals will not be concluded unless tackling climate change is at their heart. Sadly, the Government have demonstrated no such determination in their approach to date. In introducing the Bill in the other place, the Secretary of State did not refer to climate change once, and there is precious little evidence that the Government have even fully considered the opportunities offered by trade agreements to leverage action on climate change, let alone taken them.

--- Later in debate ---

[Lord Oates (LD)]

My Lords, I thank all noble Lords who have taken part in this important debate for their contributions, and I thank the Minister for his response. He said that no evidence had been offered that the Government had ever not met their obligations, but the Government’s own impact assessment of the recent trade agreement with Japan, for example, says that this will lead to a rise—albeit a small one—in greenhouse gas emissions. That does not seem to me to be the way we should be using trade: we need to use it to bring down emissions. He also said that it was unfair to say the Government did not have action plans. The noble Lord, Lord Callanan, admitted to me following a question from the noble Baroness, Lady Boycott, a few weeks ago that the Government did not have a credible short-term action plan and that, according to Hansard, one would be forthcoming soon. So I am not sure about the Minister’s point on that.

The Minister did not address the important point made by the noble Baroness, Lady Hayman. She was referring, I think, to Section 42 of the agriculture Act under which the Government are required to report that measures in an FTA are consistent with the maintenance of levels of statutory protection in relation to a number of issues, one of which is the environment. Could the Minister please tell us definitively—or he can write to us—whether, as the noble Baroness, Lady Hayman, asked, that covers climate change, because that is important?

It will not be a surprise to hear that I do not really agree with a word that the noble Lord, Lord Mann, said. As I set out in my opening remarks, I believe in free trade—that it has brought many benefits and raised many people in the world out of poverty. I do not take the protectionist approach that he does, but I share his regret that he did not table his own amendments and I look forward to seeing them at future points in the Bill.

As the noble Baroness, Lady Boycott, said, we led the world with the Climate Change Act and we could lead the world again as the champions of free, fair and green trade. As she said, words and targets may be positive—I do not decry for a moment that we have set these very positive targets—but as long as they are just targets, they are just words. What we need now is action across the piece, including on trade. I beg leave to withdraw the amendment.

Amendment 14 withdrawn.