European Union (Withdrawal) Bill

Lord Patten of Barnes Excerpts

Report: 1st sitting: House of Lords
Wednesday 18th April 2018 Lords Chamber

[Lord Kerr of Kinlochard]

Am I allowed to respond? I thank the noble Lord for his question. The Government would be required to negotiate for a customs union and make a statement about the outcome of the negotiations, which would be before the withdrawal implementation Bill came to the House. It seems to me that the requirement on the Government is simply to negotiate. I may be wrong about the willingness of the other side to envision a customs union—we cannot require the Government to come back with a customs union—but we can require the Government to explain how hard they have tried and what kind of customs union they think might be available.

[Lord Patten of Barnes (Con)]

I am delighted to second the amendment moved by the noble Lord, Lord Kerr, and I will seek to do so as briefly as he did, partly because he was so comprehensive in the arguments for a customs union and partly because we chewed over many of these issues in Committee and we plainly should not deal with them again. So I will not go into the issue of Northern Ireland’s border with the Republic of Ireland, because I spoke twice on that in Committee.

I assume straightaway, because I have a regard for his intelligence, that the Minister responding to this debate is not going to suggest that the referendum result or the Conservative manifesto disqualifies us from proceeding in the direction suggested by the noble Lord. If I am wrong about that, I would be delighted to come back to it later. But there is one point made in the manifesto that I will dwell on for a moment—and, as clergymen occasionally say at the end of sermons, share with you all—because it allows me to bridge to the main argument we have today, which is about trade and trade opportunities for this country.

I confess to the House straightaway that I used to make my living helping to write manifestos, and so I have a certain regard for these things. The manifesto said at the beginning:

“People are rightly sceptical of politicians who claim to have easy answers to deeply complex problems”.


So I ask the House to turn its attention to what we have been promised on trade.

We are told by the Secretary of State for International Trade that a free trade agreement with the EU will be one of the “easiest in human history”. He also told us that, by the end of March 2019, the Government will have put in place or drafted or agreed up to 40 trade agreements with other countries. That is the backdrop. It seems to me that those propositions invite a little scepticism, and in a moment or two I will suggest to the House why that is the case.

I have a degree of expertise in this area for which I do not seek to make extravagant claims—I do not know as much about trade as the noble Lord, Lord Mandelson, does, and I know that expertise is a dangerous thing in the present climate. But I did, either on my own or with others, negotiate free trade agreements between the European Union and Mexico, Chile and most of the countries of the Mashreq and Maghreb region. We were part of the negotiation team for China’s accession to the WTO. We failed with Russia—for all sorts of reasons which the House will not be surprised about—and we made only limited progress with Mercosur, the San José dialogue and the Andean pact countries. So I know how difficult these things are, and some of the problems that will be faced in addressing the agenda mentioned by the noble Lord, Lord Kerr.

The first thing we have to do is secure our market in the European Union—50% of our trade. We then have to think about the 12% of trade with countries with which the European Union has concluded agreements already and the 8% with which it is negotiating trade agreements already. That adds up to about 70%. Of the remaining 30%, about half is with the United States, a quarter with China and Hong Kong, and the rest with everyone else.

How are we going to manage with the countries with which the European Union has negotiated deals already? I spent a particularly dreary afternoon on Maundy Thursday looking through the European Union-South Korea trade deal. It was dreary not because it is not a good deal—indeed, it is such a good deal that the Foreign Secretary not long ago boasted about the great increase in British trade with South Korea—but because it is even longer than a long day’s journey into night. It runs to 1,400 pages, 900 of which just list tariffs. The idea that you can simply Snopake the words “European Union” and insert “United Kingdom” and grandfather that trade agreement in nanoseconds—even nanoyears—is absurd.

First of all, the South Koreans know that we are the demandeur. They will know that we have a trade surplus with South Korea at the moment, which might make them a little resistant to being as helpful as they were with the European Union, which is, anyway, a much bigger market than the United Kingdom—500 million to about 65 million. There are technical issues as well that will be particularly demanding. I will not try to explain to the House—because I have only a vague notion of what it means—the problem with trigger volumes preventing surges of agricultural imports to a country. But that issue is one that will involve not just negotiations with South Korea but tripartite negotiations between us and the European Union as well as the South Koreans.

Even more important are rules of origin—something that used to be well understood by the Secretary of State for Exiting the European Union. Not long before the Foreign Secretary made a speech saying that there was no reason why we should not, after leaving the European Union, stay in the single market, the Secretary of State for Exiting the European Union pointed out that, on balance, he was in favour of staying in the customs union because, even though you would not then be able to do independent trade deals on your own, the issue of rules of origin was so important that we had to stay within the union so that that did not present problems for us.