Transatlantic Trade and Investment Partnership

Mark Durkan Excerpts

Thursday 15th January 2015 Commons Chamber

[Julian Smith (Skipton and Ripon) (Con)]

I rise to challenge the premise of this rather cynical motion, which is yet another example of a cynical approach to scaremongering on many aspects of what is, in essence, an exceptionally positive deal for our country. The motion seeks to add to the many worries that our constituents are writing to us about, and it completely avoids looking at the work that has been done over the past 18 months since the deal began being discussed.

If we look at the press release—

[Mark Durkan (Foyle) (SDLP)]

rose—

[Julian Smith]

I will give way shortly. If we look at the press release from the sponsor of this motion, we see that the hon. Member for Swansea West (Geraint Davies) ends by saying:

“We need to engage responsibly to deliver regulation of trade and to avoid the social and economic Darwinism that is the inevitable result of disengagement.”

I say to him that there has been nothing but engagement from this place on this deal. This is the third debate in this Chamber about TTIP. The House of Commons European Scrutiny Committee has already had one and it is to have a second. TTIP was discussed during the Bill on the NHS promoted by the hon. Member for Eltham (Clive Efford). There has been a House of Lords—

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[Dr Whiteford]

I have read those documents, and I am glad that the hon. Gentleman raises that point. What we have had repeatedly are assertions. I read the Commission’s latest publications, which do appear to indicate that state monopolies will be protected. But elsewhere in the text, relating to services of general economic interest—namely utilities and public services—it says that they would be governed by normal competition law

“in so far as the application of such rules does not obstruct the performance in law, or in fact, of the particular tasks assigned to the enterprises in question.”

That does seem to water down the seemingly categorical assurances we have heard elsewhere. In reality, it is not at all clear that the requirement will protect public services in the absence of an explicit opt-out.

[Mark Durkan]

The hon. Lady heard the hon. Member for Crawley (Henry Smith) quote many assurances, which came from many different sources. Does she believe that they are any more reliable than the promises of the hon. Member for Skipton and Ripon (Julian Smith) to give way “later”?

[Dr Whiteford]

As ever, the hon. Gentleman makes an astute and telling point.

We need to know that there will be no obligation to open up the NHS in Scotland to US private providers, even if that is what England’s NHS decides to do, and we need to know that there is no chance whatever that the treaty will expose the Scottish Government to investor-state dispute settlement mechanisms.

People’s legitimate fears are not being assuaged. The Commission has sounded a note of caution regarding these mechanisms, because they are being misused around the world. We have seen an escalation in the number of aggressive cases being brought against countries that have made perfectly legitimate decisions. The fact that it has only happened a couple of times here does not mean that it will not happen more in future. That is why we need to debate the issues now.

I appreciate that Members will hold profoundly different views about the wisdom of opening the NHS to privatisation; indeed, some Members might see it as a one-way street, but in Scotland we have chosen a different direction of travel, and we need to be sure that that will not be derailed by complacency over the drafting of a trade agreement. I am also of the view that any disputes need to be resolved in our domestic courts, not through ISDS mechanisms.

Before I finish, I want to address some of the implications of TTIP for Scottish agriculture. There are undoubtedly potential benefits from better market access for our food and drink producers, but a number of non-tariff issues have potential downsides. My questions to the Government today focus on how they plan to address and mitigate those issues. I am particularly concerned about our livestock sector—which is key to the economy of my constituency—where risks as well as opportunities are likely to emerge from TTIP.

For example, Aberdeenshire produces some of the best beef in the world—Scotch beef that commands premium prices, is fully traceable and is produced to the highest standards of animal welfare. US beef is notably cheaper to produce. Producers in the US have some economies of scale, climate, and less rigorous compliance regimes, and they are allowed to use hormone growth promoters that are not permitted in the EU. I would like an assurance from the Minister today that TTIP will not lead to a dumbing down of production values, whether in the way animals are farmed or in the quality of the food that ends up on our plates.

It has also been suggested that protected geographic indicator labels could be a stumbling block within the TTIP negotiations. For many of our most iconic food and drink products, their origin is a core factor in the success of their brand and, critically, in the premium price it is able to command. Protected geographic indicators are essential to sustaining the livelihood of smaller-scale producers who rely on the high quality and uniqueness of their product to add value. Will the Government take the opportunity today to outline what they will be doing to ensure that PGIs are not undermined in the TTIP process, and assure Scottish beef and lamb producers that the markets for their distinctive premium products will not be harmed by opening the market to cheaper imports?

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[Mark Durkan]

On food, the hon. Gentleman will know that many in the food sector are very keen to trade significantly but really do worry about the implications of the treaty and the terms under which it is done. They feel that it will potentially undermine them rather than giving them a floor of confidence on which they can trade.

[Zac Goldsmith]

I very much agree and the same is true of chemical regulation. In Europe, our approach, while being very far from perfect, puts an emphasis on the precautionary principle. Again, we are told that our approach will not be affected, but there is plenty of evidence—including today—that that is not true. For example, the EU proposed in 2013 that endocrine-disrupting chemicals—chemicals that mess with the sexual development of children—should be banned, at least until they are proven to be safe. For the record, there is no scientific doubt at all about the effect of endocrine disruptors; none at all. But on the back of savage lobbying by the chemical industry, the US Government weighed in and pressed the EU to consider the impact of their proposals on fledgling trade negotiations. Bingo; a few months later, the proposals were suspended. The lobby groups had won. Our Government, to their shame, were involved in that process; the first European Government to step forward on the side of the lobby groups and say, “Yes, let’s back off and not jeopardise our trade deals.”

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[Matthew Hancock]

The conclusion that trade raises wages and prosperity is borne out not only in the theory but in the evidence. The evidence of my lifetime has been that enhancing trade increases prosperity. That has happened in the decades for which I have been on this earth in a greater way than in any other time in history. About £1.5 billion in goods and services is traded between the US and Europe every day and 13 million jobs are linked to that. This ambitious agreement has the target, which it could meet, of adding as much as £10 billion to the UK. What does that figure mean? It is almost meaningless to all but the very largest companies.

This is what it means. Let us picture a small business owner who, five years ago, might nearly have gone under through no fault of his own thanks, in part, to the economic circumstances. Like so many smaller business owners, he did not give up and recently things have got better. The recovery might have delivered for him here, but he might want to expand and take on more staff and he might find people in America who want to be customers. He wants to sell his product to more people, but if margins are tight the prohibitive extra cost of the trade barriers means that that simply is not an option. Now, let us picture a post-TTIP world in which those costs do not exist. We have not only increased the UK’s GDP but managed to ensure that someone can trade, creating an apprenticeship or a job to fulfil those orders, and in America somebody can get a product that they could not get before. That reciprocity—that “something for something”—explains why free and fair exchange makes us all better off.

So how do we make that a reality? First, we must significantly reduce cost differences in regulations by promoting greater compatibility while maintaining high standards of health and safety and environmental protection, especially for cars, pharmaceuticals, food—which was mentioned by Members in all parts of the House—and financial services. Secondly, while tariffs are low on many goods, we must tackle the high remaining tariffs on, for instance, food, clothing and other goods that impede exports and hurt consumers. Thirdly, we must push for better market access for service companies, which make up almost three quarters of the UK economy. Where possible, we will seek a guarantee that our service companies are treated in exactly the same way as US providers and do not face any additional regulatory requirements beyond those that US businesses face. Fourthly, we must have more open and transparent public procurement opportunities. Why, for instance, should US rules require that only US steel is used in certain projects? Fifthly, we will target trade facilitation, removing some of the red tape and bureaucracy at borders, and cut unnecessary costs while speeding up the movement of goods.

This is a historic deal. I want to tackle some of the challenges and objections head on. Several Members raised concerns about regulation. In fact, TTIP provides an opportunity to take stock of existing rules on both sides of the Atlantic and to remove unnecessary duplication while ultimately making sure that we support a well-regulated market. This will be done without lowering environmental, labour or consumer safety standards. Nor will the inclusion of the ISDS provisions affect the ability of Governments to regulate. As many Members mentioned—my hon. Friend the Member for North Dorset (Mr Walter) brought it up first—we already have 90 such agreements in place and there has never been a successful claim brought against the UK.

Others expressed concern about the impact on jobs, yet time and experience show that trade creates jobs and supports higher wages. This is backed up by independent assessment. The overall impact on labour markets will be positive in the EU and the US, as real wages, whether of unskilled or skilled workers, will be able to increase.

[Mark Durkan]

The Minister relies on history in saying that the UK has never lost an ISDS case. With regard to the way in which the ISDS regime will operate under this treaty, whether or not one can be confident that the UK will not lose a case, if a case is lost by another member state, or a firm in another member state, what would be the implications for the UK?

[Matthew Hancock]

If a case is lost in another member state on its domestic regulation, I would not expect that to have any implications for the UK.

As on regulation, so on the NHS, which has been brought up many times. We are quite clear that there is no threat to the NHS from TTIP. Public services and publicly funded health services are not included in any of the EU trade commitments. I will go further and read what the former Trade Commissioner said to the BBC:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

My hon. Friend the Member for Totnes (Dr Wollaston), the Chair of the Health Committee, gave a very clear enunciation of the exemption of the NHS set out by not only the EU but the US side in these negotiations. I would say this to anybody who continues to campaign against the inclusion of the NHS in TTIP: you have already achieved your aim, and continuing to campaign is continuing actively to mislead, because public services and publicly funded health services are not included in this negotiation.