Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Martin Vickers Excerpts

2nd reading
Monday 29th January 2024 Commons Chamber

[Kemi Badenoch]

Well, he should know them, because I believe I referred to them in the Select Committee; I hope he was listening. The point I am making to the Chair of the Select Committee is that trade is dynamic. On some issues that we are negotiating and discussing with our partners, we have differences of opinion; and others are going swimmingly. This is not a reason for us to cast aspersions on our trade relationships with the countries in question.

Joining this partnership will deliver for our manufacturers, but crucially it will also deliver for our globally renowned services sector. The UK is already the world’s second largest exporter of services, behind only the US, and services exports are at record levels. CPTPP, with its modern and ambitious rules on services and digital trade, plays to the UK’s strengths, given that almost 80% of our economy is services-based. It will reduce market access barriers, such as data localisation requirements; British businesses will not have to set up costly servers or data centres in each member country, and that will save them significant time, money and other resources. This agreement will help flagship British businesses such as Standard Chartered and BT to gain smoother access to markets in Singapore, Vietnam and Malaysia, strengthening our trade with those nations for years to come.

We also have a ratchet mechanism for the first time with Malaysia, Chile, Mexico, Peru, Singapore, Brunei and Vietnam, meaning that if those countries relax rules for a particular service, restrictions cannot then be reintroduced in future. That is another clear example of how this agreement will unlock smoother, simpler trade. The director general of the Institute of Export and International Trade, Marco Forgione, has rightly said:

“This is all good news for UK businesses, giving them greater access to one of the fastest growing regions in the world”.

The issue is not just the benefits that joining this partnership will bring over the short term. This is a growing agreement, designed to expand and bring in more markets and more opportunities for UK businesses in the long run. As the first acceding country, we will be ideally placed to take advantage of that future growth.

[Martin Vickers (Cleethorpes) (Con)]

I welcome our accession to CPTPP, which I think will be of great national benefit, but understandably Members across the House will look to businesses in their constituency. The Secretary of State is well aware that many businesses in my constituency in the Humber region are focused on the energy sector, particularly renewable energy. Does she see any great advantages for them?

[Kemi Badenoch]

There are multiple advantages that will accrue to my hon. Friend’s constituency. I do not specifically have figures for the energy sector, but I do have good news relating to Yorkshire and the Humber: 465 businesses are already exporting to Malaysia from Yorkshire and the Humber, and CPTPP will help to boost that region’s economy by around £210 million in the long run. In 2022, Yorkshire and the Humber exported £1.3 billion-worth of goods to CPTPP. Within five years, tariffs of up to 30% will be eliminated on UK exports of machinery to Malaysia, cutting costs for businesses in Yorkshire and the Humber. We will reduce tariffs and non-tariff barriers, which could mean many more companies—such as the jukebox manufacturer Sound Leisure, which already exports to five CPTPP countries—being able to enter more dynamic markets.

The Chair of the Select Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), raised questions about China, and I promised to address them. On China’s application to accede to the agreement, which I know many hon. Members are interested in, let me first say that there are six economies with applications to join the group—China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine—and more may apply. Members have not yet made any decisions on which economies will accede in future.

Every applicant must fulfil three essential criteria, called the Auckland principles, to join the group. First, they must be able to meet the high standards of the agreement. Secondly, they must have a track record of compliance with existing trade commitments. Thirdly, and crucially, they must command a consensus of the whole group. These are strong criteria, and they make it clear that working as a bloc is vital. The purpose of this partnership is to be a growing trade bloc, and we share that ambition. We want this agreement to grow, but our accession has set a clear precedent for those that follow. The robust process that the UK has been through has only reinforced the high standards that the partnership seeks to promote, and it has proved that the bar is not easy to meet.