Commonwealth: Trade

Lord Swire Excerpts

Wednesday 22nd February 2017 Westminster Hall

[Sir Hugo Swire (East Devon) (Con)]

I join colleagues in congratulating my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing such an important debate. I also draw attention to my entry in the Register of Members’ Financial Interests, as I am the deputy chairman of the Commonwealth Enterprise and Investment Council.

No one cares more passionately about the Commonwealth than I do. I ceased being Minister for the Commonwealth in July 2016, after just over four years in the post, and I am absolutely delighted to have joined the board of the CWEIC, which designed the meeting on 9 and 10 March at Lancaster House and is also hosting it.

That meeting is incredibly important. It will be an opportunity to discuss the significance of Brexit for international trade, and we will cover six themes: financial services; ease of doing business; technology and innovation; business and sustainability; creating an export economy; and attracting investment. Also, there will be roundtables on the second day, each one designed to identify areas where Commonwealth countries can co-operate, to promote the agenda for growth and to help achieve the $1 trillion intra-Commonwealth trade target.

I will not reheat some of the arguments put forward so eloquently by my colleagues, but we need to be aware of the Commonwealth advantage: when bilateral partners are Commonwealth members, they tend to trade 20% more and generate 10% more in foreign direct investment flows than when one or both are non-Commonwealth nations.

Commonwealth trade and investment flows of all kinds are now growing noticeably faster than overall world trends, and currently account for some 15% of total world exports. The Commonwealth has a combined GDP of $8.4 trillion and an annual growth rate of 3.7%.

However, we do not need to get hung up on this idea of free trade deals; they are not the be-all and end-all. The CWEIC is also encouraging exporting, which is absolutely critical, especially exporting by UK small and medium-sized enterprises. Our Commonwealth First programme aims to help 100 companies to trade and invest across the Commonwealth over the next three years.

Currently, the UK exports around £220 billion-worth of goods and services to the EU, and as a result it has withdrawn from a lot of the Commonwealth countries over time, so the opportunities of Commonwealth trade are absolutely huge.

It is also worth bearing in mind the fact that the UK is the largest EU goods export destination for numerous Commonwealth countries, including Australia, Canada, India, New Zealand, South Africa, Pakistan, Sri Lanka and Jamaica. I believe that this meeting in March will be critically important.

I will therefore ask the Minister some questions. Given that we hope to follow up the meeting with a business forum, as we had in Sri Lanka and then in Malta, can he tell us today when the date and location for CHOGM will be announced? Also, can he confirm that the Commonwealth Heads of Government have been notified of that proposed date and that it has been discussed with them? Will he take the opportunity today to reaffirm the Government’s commitment to the Commonwealth, and to congratulate the CWEIC on the initiative that it has shown in setting up this meeting in March? Will he clearly state on record today the Government’s commitment to the Trade Ministers meeting, to the work that the CWEIC is doing and to the idea that CHOGM in 2018 should largely be focused on trade and business and that the Government will support a business forum at that time?

--- Later in debate ---

[Kirsty Blackman]

I absolutely agree that some small areas for some industries in some sectors have been disadvantaged by some of those EU trade deals. Some companies talk about how disadvantaged they have been, such as Tate & Lyle because it imports cane sugar, but it is important to note that in any trade deal with another country we might still have to cede some of our sovereignty, because that is how trade deals work—we have to concede some things and to compromise when we make a trade deal. That is what such deals are about—a level of compromise—so we will lose some of the ability to make our own decisions, because it will be wrapped up in the trade deals.

I tried to intervene on the hon. Member for Henley (John Howell) to mention this, but I have a huge Nigerian population in my constituency because so many people have come to Aberdeen North to get involved in the oil and gas industry. If the Government are truly keen to create better links with such Commonwealth countries, however, they need to have better relationships now, because in 2015, the most recent year for which figures are available, the UK Government refused 33% of visitor visas from Nigeria. If the UK Government want better relationships, they need to up such numbers—they only approved 57% of visitor visa applications from Ghana and 50% from Pakistan. Members were talking about special Commonwealth lines at airports and so on, but we need to change the high levels of visitor visa refusals, which are continuing and getting worse, if we want to have a better relationship with those countries and eventually to make free trade agreements with them.

The other point about free trade agreements was mentioned by my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) and was in connection with the private Member’s Bill promoted by my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin). The Double Taxation Treaties (Developing Countries) Bill sought to look at the tax treaties we have historically signed with countries to their disadvantage. A number of Commonwealth countries are affected. If we want to pave the way for smooth, positive trade deals, we need to look at the ways in which we have created disadvantage for those countries. A good way to generate some positive feeling would be for the UK Government to look at things such as tax treaties, because that would encourage those countries and increase the likelihood of a favourable trade deal.

The World Trade Organisation has requirements for what should be included in a free trade arrangement in order for it to be a free trade arrangement and not simply something that falls into the most favoured nation category. A free trade arrangement cannot be made for only one type of good or service—that is not acceptable to the WTO—but needs to be much wider. We will not easily be able to make agreements with New Zealand on lamb, for example, or on any such specific; we will need to make much more wide-ranging free trade agreements in order for them to be acceptable and not challenged in the WTO. Furthermore, the WTO is not dissimilar to the European Union in that, for schedules to be approved and so on, the WTO members need to agree them. The WTO road is not smooth, but bumpy, and a huge number of problems will be in our way, not least the cliff edge we are likely to fall off.

Finally, I want to talk about the historical links with the Commonwealth. For people my age or younger, in many ways our only link with the Commonwealth is the Commonwealth games. That is pretty much the only thing. I do not know whether this is generational, but some people believe that the empire was a sort of wonderful, historical panacea and an amazing relationship, but people of my age do not think that. We do not hark back to those days of empire; we look back to the subjugation that we—

[Sir Hugo Swire]

The hon. Lady must know enough to know that some countries in the Commonwealth were never part of the British empire.

[Kirsty Blackman]

That is the case, but most countries in the Commonwealth were. My point is that we will be trying to make trade deals with countries with which we have not necessarily always had a positive relationship. Fair enough, we have the Queen as a figurehead, but that is not necessarily enough for us to give them a positive trade deal, or for them to give us one, and it is not enough for the WTO to agree that we should give preferential agreements to each of those countries. The WTO will not agree to that unless we have given them to all countries.