Trade Bill

Mark Prisk Excerpts

Tuesday 9th January 2018 Commons Chamber

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I note your strictures, Madam Deputy Speaker, and I will do my best to keep within that timeframe. I state for the record that I am a former Business Minister and a former interim Trade Minister, and I am now the Prime Minister’s trade and investment envoy to Brazil and the Nordic and Baltic nations.

I welcome the Bill and the fact that we will now have a legal structure that will create an opportunity for both continuity and consistency—which is somewhat more than can be said about the Opposition’s policy on a customs union. I welcome the fact that this is one of the very first Bills that addresses the issues that this nation will face after Brexit. Trading will be one of the top issues for all of us as politicians, not just for Ministers. If we are to be an outward looking nation, it is crucial that, both as a House and in government, we embrace trade, but what principles should inform that trade policy? What kind of approach should we take as we leave the European Union? In the short time available, I will offer three broad suggestions.

First, I agree with the strong sentiments expressed by the Secretary of State that we should renew our advocacy of free trade. I strongly believe in open markets—that free trade is the way in which we stimulate innovation and create new jobs. For the consumer, it means greater choice and lower prices; and by encouraging firms to specialise, which is one of the key drivers of trade, it increases productivity. Indeed, recent evidence shows that in companies that export, productivity rises by a third in the first year of trading. That is good for them, but it is also good for the wider economy. The Secretary of State was right to say that trade is also crucial for developing nations—indeed, it is through trade that millions of the world’s poorest citizens have been lifted out of abject poverty.

I strongly believe, therefore, that once we are outside the European Union, one of our core principles should be that the UK leads the way in advocating open markets and free trade. But as we have heard in this debate, free trade does not mean a free-for-all—trade without rules. For international markets to work, there have to be clear rules that we agree on, so my second point is that we must consistently work for a rules-based multilateral trading system, based on fairness and proportionality.

I strongly commend the Government, and particularly the leadership of the Secretary of State, for their engagement with the World Trade Organisation. In the last year, British Ministers have been building up good working relationships within the WTO; they have taken the key steps needed to enable us to be an effective, independent member in the future. That is why the Bill is absolutely right to empower the Government to rejoin the GPA in our own right. Government procurement is a £1.3 trillion market, so it is clearly in our interests, but it is also important at this point for us as a nation to signal our intention to engage in that sort of plurilateral agreement.

A rules-based trading environment also means that we need to create new powers, so that we can challenge unfair or injurious practices when others break the rules; equally, we need to be able to respond when the market becomes distorted. That is why I very much welcome the creation in the Bill of the Trade Remedies Authority. I am sure that in Committee we will debate how that will work, but to be effective the TRA will need to be objective, it will need to be evidence-based and—as questions in this debate have already suggested—it will need to be free of political interference in individual cases. If I am a member of the Committee, I will want to ensure that the legal framework and the authority itself are able to pass these tests. Clearly, when there are unfair practices that are damaging UK businesses, the Government of the day and the TRA must act, but we must be careful to avoid creating rules that can be bent for political expediency.

As a former Business Minister. I know how intense the political and the media pressure can become. A really awkward case suddenly comes out of the blue—perhaps it involves a totemic, major British brand or company, or perhaps substantial job losses are threatened, affecting an individual town. The tempting path for us as politicians, quite naturally, is to instantly demand, “The Government must act! The Government must retaliate! The Government must intervene!” regardless of the evidence. But we should be clear as a House that if we go down that path—if we seek to bend the rules for uncompetitive British businesses—we will have created a cover for protectionism, and that path leads to economic failure. Protectionism makes an economy less competitive, reducing its ability to create new jobs. Domestic prices rise, which hurts those on the lowest incomes the most. If we gain a reputation for being protectionist, what will happen? Others will retaliate. In the end, if we want others to follow the rules, we must lead by example.

That leads me to my third point. We need a cultural change in both business and politics if we are to succeed as a global trading nation. We need not just more exports but more exporters. Our current trading is far too reliant on a small proportion of British companies—11%, according to recorded figures. I suspect that that does not capture everything, but even if it were 15%, that would still be less than half the proportion in Germany. We need to challenge the business world to change the culture.

As the Prime Minister’s trade envoy to the Nordic and Baltic nations, I have seen for myself the success of companies in those countries. It is already our sixth-largest export market, and there is a strong appetite for British goods and services, but the business groups can do more. They can use their networks and resources and set the expectation that British firms should export. That should be the norm and should be expected of people in each and every business sector. It is the reverse at the moment. We need to change that culture. I hope that Ministers, and all of us as Members of Parliament, will continue to challenge the business groups that say they speak on behalf of business to ensure that they promote exporting.

We also need to change our thinking about trade agreements. A lot of the debate—I heard it again today about trade and Brexit—is all about comprehensive multilateral trade agreements. They will be important, particularly with our European neighbours and other regions, yet because of their scale and complexity few will be fully implemented in the next five, six or seven years, so we need to change our thinking. We need to recognise the role of bilateral and plurilateral agreements, particularly in regions such as the Pacific. The Secretary of State is absolutely right to take the pragmatic view and say, “Where is the growth coming in the world in the next 20 years?” It is in the far east, and we need to be in that market. We need to change our thinking.

The circumstances for most exporters are such that billions of pounds of exports are being undertaken today in areas where there is no formal trading agreement. We need to be pragmatic; we need to be smart; we need to be sharp. We should not always assume that this is simply about national Government to national Government. I have learned from my work in Brazil, for example, that the regional state of São Paulo, on its own, has an economy larger than most Latin American nations. We need to be sharp in how we engage with the regions and nations abroad and with their city states.

Free and fair trade is crucial, but we in the House should not kid ourselves that when awkward cases come up, those discussions will be easy. I want a remedies environment that is free of individual political interference; one that is objective and evidence-based. This is a strong Bill that will allow us to move from where we are to the next stage in our transition. As the Secretary of State has rightly said, there are more legislative measures to come, but the Bill has considerable merit. It is a shame that the Opposition seem to be trying to amend a Bill that is not before the House.