Transatlantic Trade and Investment Partnership (EUC Report)

Lord Radice Excerpts

Tuesday 17th June 2014 Lords Chamber

[Lord Radice (Lab)]

I congratulate the noble Baroness, Lady Henig, on an excellent speech. I, too, speak as a member of the sub-committee, but also as a very humble student of a very complex subject. It is wrong to say that everybody in this room knows all about trade. I do not believe that to be true. In fact, if one did a poll of the House of Lords and asked what TTIP was, I think we would find that almost nobody would have any idea at all what it is. I have been asking my friends, most of whom are reasonably intelligent, and they do not know what it is. That is an issue and one which we raised, I think rightly, in our report, and I want to return to it, but I begin by thanking our exceptionally able clerk, Julia Labeta, who has gone on, not necessarily to better things but to other things; our very expert specialist adviser, Dennis Novy; and our indefatigable policy analyst, Roshani. I will not say her surname in case I get it wrong and she feels offended, so I will call her just Roshani. Like everybody else who has spoken, I pay tribute to the wise, extremely skilful and experienced guidance given by our chairman, the noble Lord, Lord Tugendhat, who was an EU Commissioner for many years. He helped produce a comprehensive and clear report on this very difficult subject.

One thing that probably would be widely accepted in the House of Lords, and indeed in the other place, is that trade is crucial not only to production, growth and jobs but to prices and consumer choice. Therefore, what happens to trade is important. Part of the background to the TTIP idea is the failure over many years of the Doha round’s multilateral approach. It has not succeeded. We have also had the world recession, out of which we have only recently emerged. It is in this context that a deal between the United States and the EU, which between them account for nearly half the world’s GDP, as we point out in our report, could provide a substantial stimulus to world trade and growth over a number of years. We mentioned the figure of £100 billion. We should be careful about figures, but we point out that the gains for such a deal could be substantial. We mentioned £100 billion a year for the EU, £80 billion a year for the United States and £10 billion a year for the United Kingdom. I do not know whether those figures are right as it seems to me that we have made some fairly heroic assumptions, but clearly we are talking about a very big agreement indeed.

As the chairman pointed out, the focus of this agreement is new. It is not centred on getting rid of tariffs, although that could be very helpful given the massive trade flows across the Atlantic, but tries to reduce non-tariff barriers and promote regulatory co-operation. That has never been done before, certainly not on this scale. Therefore, we are talking about something very big and very difficult. It is no wonder that the idea of a living agreement has emerged, because we are not going to get an agreement straightaway. Therefore, we need to have a procedure that will ensure that we go on talking—that is what a living agreement amounts to in my view—and that is very sensible and realistic.

Our report also makes the important point that a deal on such a scale could set standards for the future in trade and investment agreements and could therefore be important for our relationships with emerging superpowers such as China and India. It is worth repeating what the chairman said in that regard. In that sense, TTIP has a strategic dimension, especially if there is also provision for allowing, and indeed encouraging, third parties to participate, as we suggest in our report. The noble Lord, Lord Mandelson, said that TTIP should not be,

“a closed shop for Europe and America to serve and suit each other but an open architecture that others can join and emulate”.

That seems to me a rather good description of what the Government, the European Union and America should be trying to do.

The UK Government are to be congratulated on their involvement in this matter. They rightly attach importance to TTIP. It is no coincidence that it was launched a year ago, as the chairman said. As our report emphasises, the UK stands to benefit considerably from a successful deal. We discussed some of the priorities, which I shall not go into at this stage because other Members have mentioned them.

I will, however, say this about the financial sector: as we found out on a frozen trip—I am talking about the climate—to Washington in February, there is no enthusiasm in the US Treasury for involving the financial sector in any kind of deal. We will have to live with that; it may well be that we have taken a realistic position but we will, no doubt, hear from the Minister about that. There is, however, a case for involving the financial sector, and the chairman was right to say in principle that it is a pity that one major partner just says that it is not an issue worth discussing, when it clearly is.

I repeat: the fact that we are in the EU is important for us. It makes us far more influential as a member of that bloc representing 28 member states and 500 million people than if we as a single country were trying to influence the United States. Let us say that loud and clear. It is something that the Government should say. It is very important indeed, when embarking on such an enormous venture, to point out that we are able to be involved only because we are a member of the EU.

I want to say a final word about the negotiations. They were launched with tremendous fanfare, but as everyone has been saying there is no certainty of success. The noble Lord, Lord Lamont, in an excellent, wise and skilled speech, pointed out just how complex all this is. The first round of talks was in June 2013 and they have continued every few weeks; there is a further meeting in July. We had excellent negotiators on both sides—Karel De Gucht for the EU and Michael Froman for the United States. Both are brilliant men, but technocrats, however brilliant, cannot carry the weight of negotiations entirely by themselves, which is what we are asking them to do at the moment. TTIP also needs the energetic support of individual Governments and individual Ministers at the very top level, as well as at the level from which we will hear this evening. That is true not just in the United Kingdom but elsewhere.

TTIP will also need the backing not just of the big corporations—we have been speaking to the automotive industry representatives, and there is no question that they back it strongly—but of trade unions and civil society. I was pleased that Karel De Gucht seeks to reassure Europeans that high levels of environmental safety and the safeguarding of workers’ and individual rights are not on the table for negotiation. A lot of disinformation is going on, but those issues are not on the table for negotiation.

As I said at the beginning, there has been little public interest in TTIP at all, but in so far as there is a public debate, member states are losing it. I quote from our summary, which is absolutely right:

“Proponents have yet to articulate the purpose or possible gains from TTIP in a compelling way”—

the name itself is a turn-off—

“or offer convincing responses to legitimate concerns”.

One example of legitimate concerns may well be the investor-state dispute settlement, or ISDS, on which De Gucht is holding a public consultation. That is a difficult issue on which we ought to try to reassure those who are arguing strongly against it.

As the chairman pointed out, from our investigations we have drawn the conclusion that there could well be a window of opportunity to make significant headway in negotiations after the installation of the EU Commission and the mid-term elections in the United States but before campaigning for the presidency begins. This could be the moment when politicians on both sides of the Atlantic seek to mount a concerted effort to face up to the outstanding issues, and to mount a campaign to make the public aware of potential benefits. We are right to take a slightly warning tone in parts of our report that without such political impetus the opportunity to make substantial progress might be stalled or even lost. If TTIP negotiations are to be successful, the watchwords must be carpe diem, which roughly translated for the non-Latinists means that we have to seize the day.