Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Trade Bill (Second sitting)
Matt Western ExcerptsTuesday 16th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 June 2020 - (16 Jun 2020)
Matt Western (Warwick and Leamington) (Lab)
Q
Professor Winters: For the Trade Bill, which is presented as a piece of legislation to make it feasible to roll over the continuity agreements that we are trying only to roll over and not to change—we have already joined the GPA and are not trying to change our schedule—you do not necessarily need a huge apparatus. If we get into a situation where the Trade Bill is used to make quite dramatic differences to the arrangement with Korea or to make essentially a new agreement with Japan, it is unfortunate that there would be less of an obligation to consult the devolved Administrations, parts of the legislature and stakeholders. The solution is not so much to nail those processes on to the side of the Trade Bill, as to try to find a way to ensure that the Trade Bill is not used for purposes that involve a major change relative to the status quo.
George Riddell: I agree with many of the comments made by Professor Winters and would add two additional points. The first is on consultation and its importance. Not only does it help the UK to identify what its offensive and defensive interests are and how best to achieve them through negotiations; it also helps to build political support. The thing that businesses want when they are looking to use trade agreements is the certainty that, when they make an investment under the provisions, in five, 10 or 15 years they will continue to be able to trade under the terms of that trade agreement. By not having wide consultation and the necessary support, it calls into question that certainty. The question of scrutiny and everything else is for this House and this Committee, but from a business perspective, we want widespread support for the trade agreements so that they can continue into the future.
Matt Western
Q
George Riddell: My understanding from reading the Bill is that it covers the continuity agreements that existed between the EU and third countries.
Matt Western
Professor Winters?
Professor Winters: Is somebody trying to get my attention? I am afraid you all faded away.
Matt Western
Sorry, I was just asking whether you feel that the Bill covers the current UK-US negotiations.
Professor Winters: As I understand it, the Bill does not cover current negotiations with the US. It is restricted to those countries that had agreements with the European Union on 31 January this year.
The Chair
That brings us neatly to the end of the time allotted for questions to these witnesses. I thank both of the witnesses, Mr Riddell here in person and Professor Winters struggling with technology to join us. It is very kind of you both to assist. Thank you very much.
We will have a brief suspension while we engineer the next session.
David Johnston
Q
Nick von Westenholz: I guess I am thinking about some of the continuity agreements that are not quite continuity agreements—for example, the Japan agreement, which is being renegotiated. Certainly, we would hope that there is the opportunity for UK farmers to open up more markets in the far east.
Really what I was saying was that, as farmers, we want to be ambitious about increasing the markets, whether at home or overseas, for our produce. If we are going to increase them overseas, we have to recognise that that assumes a degree of free trade, international trade and imports. We certainly want to expand those overseas opportunities, and it may be that some of those continuity agreements, which are being looked at again, provide particular opportunities.
Matt Western
Q
Nick von Westenholz: I got the second question. Could you repeat the first question, sorry?
Matt Western
Q
Nick von Westenholz: In principle, the idea of mutual recognition agreements can work. There is nothing that we would object to in an MRA in principle. An important aspect of this is that, if we simply try to hold overseas producers to precisely the same standards as UK producers, that might create as many problems as it solves. We need to develop a mechanism for comparing standards as easily as possible to certify, accredit or whatever it might be a degree or level of production standards that we accept as equivalent to our own.
A lot of the things I have mentioned already demonstrate the complexity and difficulty with some of these issues. That is one of the reasons why we have suggested the establishment of a trade and food and farming standards commission to get under the skin of all these pretty tricky policy areas and set out a road map for Government of the sort of policies and legislation needed to tackle the issues properly. We would like that to be established in law, under the Trade Bill or any other legislation, so that it reports to Parliament and contributes to some of the shortfalls in parliamentary accountability and scrutiny that have already been flagged to the Committee. We think that that is a very good and sensible idea. That commission would absolutely look at such things as MRAs and broader issues of how you manage and measure equivalence.
On the Trade Remedies Authority, we have not flagged any specific concerns other than to acknowledge that the constitution of the committee is very broad, and quite a lot of leeway is provided to the Secretary of State in the formation of that committee. We would like to explore further the possibility of ensuring specific representation for specific sectors if necessary. Having said that, we would hope that the TRA, even in its current format as set out by the Bill, would consult fully and take into account all parts of the economy when advising on trade remedies.
Bill Esterson
Q
Nick von Westenholz: There is the prospect of including those sorts of provisions in any of the deals that the UK Government are either currently negotiating or imminently going to negotiate. I am not sure that that is an issue specific to the continuity agreements. Countries all around the world are increasingly considering how such issues can be better accommodated in trade deals. Traditionally, they have not been part of trade agreements, although we have seen in the draft text between the EU and Mercosur, for example, provisions for preferential access to Mercosur for eggs where the production standards have been equivalent to animal welfare requirements in the EU, which is interesting.
This is a really important point: the UK Government should be seizing this moment to be a global leader in negotiating trade agreements that accommodate some of these sorts of policy areas, such as animal welfare, environmental impacts and climate change, and being creative and imaginative in how future trade agreements ought to look—not looking backwards and seeing how trade agreements have been done in the past, and merely looking to replicate those.
Matt Western
Q
Richard Warren: Certainly. As I said, the vast majority of how the trade remedies regime will operate—the responsibilities of the organisation itself, how it reports to the Secretary of State and so on—are dealt with within the Taxation (Cross-border Trade) Bill and the secondary legislation. There were still outstanding issues that we had with that legislation. Obviously, it has passed now, and we are working with the regime as it has been established. If we had an opportunity as an industry—we are talking about a hypothetical now—to strengthen the trade remedies regime, change elements of how it was operated, perhaps be more explicit in legislation about how those investigations are conducted, and change certain elements of the methodology, like dumping and how we treat certain non-market economies, that would be fundamentally best be dealt with in the Taxation (Cross-border Trade) Bill and the secondary legislation that supports it.
This Bill is fairly cursory in what it establishes in the trade remedies regime. Our key request at this point remains the make-up of the non-executive membership, rather than dealing with precisely how that regime operates. It really is the customs Bill that we would look to if we were making changes.
Fleur Anderson
Q
Simon Walker: I am not sure that is really in our domain. I am very sympathetic to your point, but I am not sure how much that is in the remit of the TRA as such. Our professional teams will be trying to establish whether there is dumping, for example, from a particular country, and the sale of a product below its cost in that other country. If that is contrary to the economic interests of the UK, the TRA will try to assess that as objectively as possible. It is conceivable—I do not think it likely, but it is conceivable—that that might be from a developing country. There are shields for developing countries against an awful lot of tariffs—that is an element of exports that I hope will help them—and I certainly do not see developing countries being a big part of our focus, but I do not think that our remit is to look specifically at that.
Matt Western
Q
Simon Walker: I have not looked at other nations in that sort of competitive way. I suppose that what I have looked at is, as an organisation of not quite 100 people that might grow to 140 or 150 people—that sort of size—what it will take to run an organisation like that in terms of personnel with professional qualifications. It is not that hard to arrive at a budget for that kind of organisation, because it is not as if we are going to be paying for the submissions that are made to us. We are obviously taxpayer funded and our proposed budget—we are not in existence until the legislation is passed—is laid down by the Department. I think it is pretty much what anyone would expect, within a relatively modest scale, for an arm’s length body. Does that answer your question?
Matt Western
Q
Simon Walker: I do not think, I am afraid, that we have powers in that situation. Our mandate is very strict: it is about dumping, unfair subsidies and—this is very rarely used—safeguards in the event of unforeseen exports from another country that swamp the market. As I say, that is very rarely used. I take your point completely; that is a serious problem for the UK if that situation happens. I do not think it is one that the TRA can address.
Matt Western
Q
Simon Walker: The Department for International Trade and the Government as a whole. It is a matter for the Department and the Government as a whole rather than for us as an independent arm’s length body that will then be completely separate.
The Chair
That brings us to the end of our allotted time. I thank our witness very much. We are very grateful for your assistance.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Trade Bill (Third sitting)
Matt Western ExcerptsThursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
David Johnston
Q
Sam Lowe: Yes. In terms of countries that require continuity, Turkey is quite a good example: we currently have supply chains that run out of the UK into Turkey and back. I think particularly the automobile industry has some exposure here. This is a really tricky one, in that we are currently in a customs union with Turkey via our membership of the EU and, unless we are in a customs union with the EU, which is obviously not Government policy, we are going to be unable to replicate that relationship with Turkey. When it comes to the future trade agreement with Turkey, at least on the tariffs level, the most we can expect is for it to match what we have agreed with the EU. That, of course, would be better than not having a trade agreement; but the benefit of being in a customs union is you do not need to worry about rules of origin. So all of a sudden this becomes a slight issue with Turkey, and it is why I put it in my second box earlier, of being a continuity agreement but with big changes.
Of course the other ones that really do, probably, matter are Switzerland and the EEA countries—Norway, Iceland—in that we have quite deep trade relations with them now, as we are part of the single market. That will obviously, again, change quite substantially because of our decisions over our relationship with the EU.
Another country that does matter, and I believe it has been resolved—I do not want to say certainly, because I do not have a list up in front of me—is South Africa, in that we actually have automobile supply chains that run through South Africa. There we have a different problem, in that it does not achieve the same for the companies as now; we currently export products to South Africa—inputs to South Africa under the EU-South Africa agreement— that are put into, say, a car there and then sold back into the EU under the preferences of the agreement, because the UK-based inputs can qualify as local to South Africa under something called bilateral cumulation. That will cease to exist under the new agreement.
The point I would make is that all the agreements are going to change. I have just, in my head, got three different categories.
Matt Western (Warwick and Leamington) (Lab)
Q
Sam Lowe: Having read the Trade Bill, I think the approach seems broadly sensible. I do not have it in front of me at the moment, but I believe the Secretary of State approves the chair; and then the chair makes a recommendation on the chief executive, subject to sign-off of the Secretary of State, unless the chair is not there, in which case the Secretary of State does it. I understand it is an independent body to the Government, but it obviously needs to have close ties with the Department for International Trade.
Fleur Anderson
Q
Sam Lowe: Taking into account the current scope of the Bill, which is to achieve continuity, it is slightly unique in that sense. However, I agree with a comment by an earlier witness: if there is not going to be further legislation to lay down the scope for Parliament’s engagement in future trade agreements, it seems to me that it would be possible to expand the remit of the Bill to cover that. I think that is right, in that the Trade Remedies Authority and GPA provisions are forward-looking, so there is no reason why you could not do that as well.
The UK’s general approach to scrutiny is very poor. I think parliamentary scrutiny is very poor. Parliament has very little ability to influence trade negotiations or set the agenda of trade negotiations. To my mind, it has—[Inaudible]—yes/no vote. Just from a democratic point of view that seems slightly out of order to me, in that, when we compare it with the US or the EU, Parliament at the crudest level has a yes/no option on whether to approve a trade agreement or not. As a result it is much more involved with the process. That is something I should like changed. Of course that is not currently in the scope of the Bill, but if the Government are not going to introduce further legislation, I would understand if the scope of the Bill was expanded.
David Johnston
Q
Nick Ashton-Hart: Certainly.
Matt Western
Q
Nick Ashton-Hart: We are, as you know, one of the world’s powerhouses in services. Part of the reason we are a powerhouse in services is because, in the digital realm, we are also a great power in terms of innovation and firms that have had a lot of international success. Something like 60-plus per cent. of UK trade is underpinned in one way or another by digitalisation, so we are highly sensitive to any barriers to services through regulation, as well as through things such as the free flow of data and data protection.
We know that the agreements will not be duplications, because they are already not exactly the same. To the extent that we can, we should try to ensure that there are liberalising measures associated with at least the fundamentals of digital trade—some arrangements on data protection and on mutual recognition. Of course, that would also require us to stay quite close to the EU regime on data protection, which I and the industry have strongly argued in favour of. It is difficult, because if you are a negotiator and say, “I want to replicate this agreement, but I want to change one thing,” the other side is quite naturally incentivised to say, “Okay, then I want to change another thing.” The reality is that everyone will come to this with some changes, because—for many reasons, only one of which I covered—you cannot just copy and paste.
To the extent that we can put in digital measures, we should. It should be a part of the negotiating mandate for those agreements. It may be; I speak to DIT people quite frequently and have not heard whether it is, so I would not like to say whether it is, one way or the other.
Charlotte Nichols (Warrington North) (Lab)
Q
Nick Ashton-Hart: I would say that, at the level of principle, it probably should be. This is an example of an area of regulation that is not only economically consequential, but social and politically consequential. It is also not understood very well. The issues around platforms relate to business-to-consumer platforms, and particularly to social media. Those platforms are a tiny minority of the actual economic value of platforms as a whole. Business-to-consumer traffic represents about 10% of a platform’s value vis-à-vis the 90%, which is business-to-business traffic.
It is important at a level of principle to recognise that there are sensitivities, but it is also important to recognise that economic policy does not solve social problems and that the hooks need to be there to allow for exceptions, so that social problems can be anticipated and dealt with by the competent authorities that are responsible for them. In economic policy, however, the default is that platforms are a public good in the same way that markets are a public good. We want to facilitate innovation in the platform space, and our economy is a huge beneficiary of that.
Trade Bill (Fourth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Department Debates - View all Matt Western's debates with the Department for International Trade
Trade Bill (Fourth sitting)
Matt Western ExcerptsThursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Matt Western
It is a pleasure to serve under your chairmanship, Sir Graham. On the environmental amendment, so many authorities have shown leadership in recent months on adopting a zero carbon objective. At a simplistic level, it is perhaps easy perhaps to look at what that might translate to, but it is actually a proper audit of every facet of the services they provide to the community, and is about how they show leadership to the public, but also to businesses, on how far-reaching that should be. We in this place said that we want to be zero carbon and carbon-neutral by whatever date it was, and likewise our county and district councils—Warwick District Council is in my constituency—have really sought to show leadership, but are they actually going to be able to without the amendment?
Bill Esterson
That is a good question: what is possible if restrictions are in place because of international obligations in this area? I imagine the Minister will pick up on that in his response, but there are a number of important points in my hon. Friend’s comments. Yes, we must show leadership, but we should do that at a local and national level for businesses in this country. We should also show leadership elsewhere in the world, by setting our sights high regarding our obligations on the environment, labour, public health and support for SMEs. Through our procurement policy there are other areas of regulation and law where such things also apply.
Bill Esterson
I am grateful for that offer. It is something that we have already done with Ministers, but I am happy to revisit it. It may be that revisiting it would be helpful now that some time has elapsed since the response to my case—I do not know about that of my hon. Friend the Member for Warrington North—was received. It is important to recognise that we are trying to improve the situation so that we do not have such problems, whether they are authorised by Ministers or not. I am not going to stand here and say that the Minister and his friends authorised that kind of comment, but I am afraid that it happened, and I think the Minister’s offer is a good one. We need to find out why and ensure that it does not happen again, so I will take him up on that.
Matt Western
There is a broader point here. The geography may be one thing, but there may also be a cultural issue. I am not talking about the Government, but the machinery of government and the Departments. We recently found, through the crisis—this was a real revelation to me—that many businesses in my constituency and the region of the west midlands were being bypassed. They could have provided face masks, plastic visors and so much kit. Those were established manufacturing engineering businesses that had the capacity, the skills and the agility to do it, but for whatever reason—this is not a party political comment—cultural or otherwise, they were not looked at. It is almost as if we do not recognise the capacity of manufacturing in this country, but perhaps we should in the sense of procurement.
Maria Caulfield (Lewes) (Con)
On a point of order, Sir Graham. The debate is fascinating, but I ask your advice as to whether we are truly sticking to the scope of the Bill. I am aware that more than an hour has passed and we are on only the second group of amendments. Of course it is an important issue, but I would hate to reach a point next week where Opposition Members felt that we had not given proper scrutiny to the rest of the Bill.
Gareth Thomas
It is a pleasure to serve under your chairmanship, Mr Brady. I cannot do as much justice to these four amendments as my hon. Friend the Member for Sefton Central did from the Front Bench or my hon. Friend the Member for Putney did from the Back Benches, but I want to raise one or two slightly different points to try to underline some of the interventions I made. There is an understandable fear that at some future point the Government will roll back existing legislation that allows public authorities, the Government, devolved Administrations and local authorities to go beyond having to accept all the time the lowest price and instead to be able to think much more seriously about accepting quality concerns within contract offers. I am sure the Minister will have his most benevolent face on when he winds up and will say that the concerns that we have articulated, as have organisations such the TUC and good trade unions such as the GMB and Unison, are without any foundation. None the less, these concerns exist, because once we leave the protection of EU regulations, we will find that the provisions in the GPA are much more limited than those currently supplementing that under the EU procurement directive from 2014, which was transposed into UK domestic law under the Public Contracts Regulations 2015.
What these organisations understandably want to achieve is that little bit of extra protection against such an event happening, through the amendments that my hon. Friend the Member for Sefton Central has tabled. Indeed, they are seeking more ambition from the Government in terms of public procurement, and to move beyond the era in which big multinationals always win the big contracts. One thinks of the Sercos, the Carillions and the G4Ss, of which a little more anon.
I come back to the example that I gave in one of my earliest interventions on my hon. Friend: Hackney Community Transport, a local organisation that has managed to become much bigger in terms of the community transport offer that it makes. It depends on winning contracts from Transport for London to provide bus services, but has also been able to win contracts in many other local areas to provide transport services.
Hackney Community Transport provides a comparatively low offer because it has managed to get to a decent size where it can compete and, as my hon. Friend alluded to, it has a number of staff who are not just providing the service but thinking about how they win contracts. However, it has never lost its community roots. For the people of Hackney, it provides very cheap minibus hire and helps to train those from the local community who want to learn to drive a minibus. It employs ex-offenders and goes the extra mile, in a way that perhaps one of the corporate giants might not.
By comparison, Harrow Community Transport, which is a much smaller organisation but much valued by many of the most vulnerable people in my constituency—it uses its services to go to local day centres—struggles to survive. It has only one employee, and cannot imagine being able to win contracts from Transport for London given its present situation. There appears to be no sustained offer from central Government to change the situation for not only Harrow Community Transport but all those other community transport associations, or all those other local organisations, be they small and medium-sized businesses or small and medium-sized charities and co-operatives, that nevertheless provide commercial services that could be used effectively by public contracting organisations.
It is important that we build in that additional protection, so that procurement under the GPA does not inhibit local organisations that are determined to do something to provide good jobs with fair pay—not the kind of jobs that some individuals in my constituency have to do. Some of them have to work three jobs in order to make ends meet because the amount they are paid is so low. Businesses that want to help those who are disadvantaged in some way to get into employment must not be excluded as a result of our accession to the GPA. Amendments 24 to 27 help, very effectively, to give a little more protection against such exclusion.
I mentioned the Modern Slavery Act, which is a remarkable piece of legislation. The campaign for it was led by the Co-operative Group, to which I pay tribute for its work through its supply chain, and for the cross-party campaign that led to the Government passing that groundbreaking piece of legislation. Surely the last thing that we would want is not to build on it, and to inadvertently stop organisations that are committed to preventing modern slavery from getting into their supply chains winning the public contracts for which they bid.
My hon. Friend’s amendments seem to be about helping to prevent that from happening.
I served for a long time as chair of the Co-operative party. As a result, I have always wanted more co-ops growing and trading in the economy, and able to win government contracts, whether in local government, the NHS or central Government. I suspect that those of us of a certain generation remember Margaret Thatcher promising a world where owning shares would be as common as having a car. That grand promise of a share-owning democracy has long since disappeared, leaving economic power—according to some, certainly—concentrated in a few hands. That is why there are, I am pleased to say, organisations that champion the building of wealth in communities.
That brings me to the powerful demonstration that is taking place in Preston, where an inspirational council leader is seeking to use the public procurement tools that he and the local authority have available to them, working in partnership with other public bodies to try to contract locally. If we can reinforce those efforts that will surely help to tackle the anti-northern bias that we discussed earlier and allow imaginative council leaders to put extra support behind community organisations that want to do the right thing.
As to the failures of the Sercos, it is not only on test and trace that Serco’s performance has begun to be criticised. I remember it being accused and, so to speak, convicted, of false accounting and of breaching its responsibilities in handling radioactive waste. Carillion is another horror story, and the Public Administration and Constitutional Affairs Committee blamed the Government for outsourcing contracts based on the lowest price, and went on to say that that had caused public services to deteriorate. Surely, then, measures that would not stop us acceding to the GPA but would help us to get the best from our membership are sensible.
Matt Western
My hon. Friend makes some powerful points, but perhaps I may add some emphasis on public health and broaden that aspect of the argument. The emphasis on lowest price is mistaken. Perhaps we saw that with small and medium-sized enterprises—or more of a medium-sized to larger business in the case of De La Rue. However, on the public health side there has over the years been public anger, resentment and frustration at pressure for very low-cost meals to be provided in local authority schools, through companies such as Compass and others that source poor quality foods when they should think about the best value for public health and the health of children. That should be part of what we are talking about on this clause.
Gareth Thomas
My hon. Friend makes a good point. Part of the problem is that schools are not properly resourced. I am sure that he agrees about that. Other examples that we might point to are the difficulties that local authorities, whether Conservative or Labour-led, have had with refuse contracts. A number have had to bring contracts back in-house, or retender. Having gone for the lowest price, as my hon. Friend said, they have not got the value for money that local people rightly demand, and that councils expect from contracts.
Gareth Thomas
There was once a Conservative Co-op movement, which in practice had only one member. Richard Balfe left our ranks, in a very misguided move, and set up the Conservative Co-op group. We appear to have three potential new members of such an organisation, which would be fantastic. Membership of the all-party parliamentary group for mutuals is definitely on offer to the three hon. Members who have intervened.
Matt Western
I tried to intervene a little earlier, and I thank my hon. Friend for giving way yet again. This serious, honest, and important point will probably be echoed across the room: the contract to provide food vouchers to schools over the Easter period and Whitsun was given to Edenred, which happens to be a French company, and an unproven business. I have had a huge number of issues with constituents who did not get vouchers on time, and those vouchers could have been provided by the Midcounties Co-operative, for example, which makes them—they are available. That could have been done locally, and I am sure it would have been done very cost-effectively.
Gareth Thomas
As ever, my hon. Friend makes a serious and important point about the contribution that co-operatives can make. If I may, I will return to the intervention from the hon. Member for Arundel and South Downs, who asked me to extol the benefits of trade. I will certainly do that, but I do not think our country should sell itself short, which is why we have tabled these amendments. In a former life, in happier times, I served as Minister for Trade Policy. As a result, I am an enthusiast for the benefits of trade, but there are caveats to that enthusiasm. If the hon. Gentleman stays awake and enthused, he will listen to examples of our enthusiasm for trade, as well as some of our concerns about the Bill.
I will conclude my remarks by noting the significant potential for co-ops to help deal with some of the issues arising from our ageing society. By 2030, the number of people who need help to wash, feed, or clothe themselves in this country will have doubled to some 2 million. That will place heavy burdens on local authorities and national Governments who seek to procure the support to help those vulnerable people. With a bit of imagination from procurement managers, co-operatives could help to meet those needs, and I suggest that they would also provide a good service. That will require imagination and proper Government support and thinking about procurement, so that co-operatives, and small and medium-sized businesses—they are mentioned in amendment 26 —can benefit from those procurement opportunities. That is another reason why the amendments tabled by my hon. Friend the Member for Sefton Central are spot on.
Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Trade Bill (Fifth sitting)
Matt Western ExcerptsTuesday 23rd June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
Gareth Thomas
With due respect, the coffee that the hon. Gentleman had this morning may not have quite kicked in at the beginning of my remarks, when I set out what the Queen’s Speech defined as the purpose of the Trade Bill. As I said, it made clear that the Bill was designed to set the tone for the future of UK trade policy post Brexit, which it quite clearly does not if all the Bill serves to do is to explore the scrutiny of roll-over agreements. Our contention is that we need a proper parliamentary scrutiny process for future trade deals that we negotiate, including with the US and the Trans-Pacific Partnership—on which more anon.
Matt Western (Warwick and Leamington) (Lab)
My hon. Friend makes some powerful points. To broaden this a little, because it would be easy to become extremely focused on the US-UK trade deal, he knows very well that these sort of issues—food standards and production, and safeguards for consumers—apply to other countries, such as Australia. Any UK-Australia trade deal will face exactly the same issues as those we are talking about between the UK and the US.
Gareth Thomas
My hon. Friend is absolutely right. There is not the option at the moment for proper parliamentary scrutiny of a trade deal with Australia. If the Government were to bring forward a trade deal with China, there is as yet no scope in Parliament for proper scrutiny of such a deal. That is why amendments 4 and 5 and those linked to them are so important.
Matt Western
I just want to elaborate on that point. It is really important that the public are fully aware of what we are talking about. Hormone-fed beef applies to Australian-produced beef as much as to US beef. When it comes to egg production in Australia, they use battery hens, caged hens and so on. It is really important that consumers are made fully aware of what will happen with these trade deals if they are opened up in the way that the Government would like.
Gareth Thomas
My hon. Friend remakes my point for me. We need to have proper parliamentary scrutiny locked into the Bill. As we have been told, this the only trade legislation that is likely to come before this Parliament. There has been no hint of any other legislation to improve the parliamentary scrutiny of future trade agreements. That is why this group of amendments is so important.
Gareth Thomas
Not surprisingly, my hon. Friend is ahead of me in making that concern clear. I underline the issues about negative listing that he sets out, which I will come to. To finish the point about medicine pricing, Donald Trump’s chief negotiator has made it clear that they wish to use a trade deal to challenge the NHS’s current purchasing model for NHS drugs. That could be done through them securing specific market access provisions or other clauses aimed at helping the US pharmaceutical industry. Again, surely it is the responsibility of the House, and indeed the other place, to have in place the scrutiny mechanisms to check whether that concern is justified.
My hon. Friend set out the concerns about standstill clauses and ratchet clauses in trade agreements, which can lock in levels of privatisation and other forms of liberalisation and accelerate them, which will limit the scope of future Governments to take sensible steps, when services are not being properly provided, to bring them back into the public sector. He rightly set out concerns about negative listing, which emerged in particular in the EU-Canada deal, which we will explore in more detail in the debate on amendment 9. There are concerns that NHS management data services could be opened up to US corporate giants as a result of a UK-US trade deal. Surely it is Parliament’s responsibility to explore those concerns.
If a UK-US deal were concluded by the Government, MPs would not be guaranteed a vote or a debate on the signed deal. The proposals in the Command Paper, which Ministers were forced to publish in February last year, allow a scrutiny Committee to recommend one, but leave it at the Government’s discretion whether to hold one.
The deal is being negotiated in secret, even though it could have huge implications for Britain’s post-Brexit future. Negotiations with the US are particularly controversial, yet after six rounds of preparatory talks and one round of formal negotiations, we still are in the dark, at least from a UK perspective, about the substance of what is being debated. It is true that the Secretary of State made a statement to the House. However, apart from listing the major areas of the talks, which were hardly revealing, and reassuring us all that the meetings were positive and constructive, again, no substance was offered on the real concerns that members of the public and organisations outside this House have set out on food, import standards and medicine prices. As Mr Lawrence from Trade Justice Movement reminded us all in last Thursday morning’s witness session, there will have been more scrutiny of the decision to proceed with High Speed 2 than there will be, as things stand, of a UK-US deal. Our amendments would help put that situation right.
Matt Western
When those of us on the International Trade Committee were hearing evidence about potential trade agreements with Japan and South Korea and the Government’s failure to be transparent, to be open, to set objectives and to consult, we discovered in that process, online, that the Koreans had already shared publicly what was going on and where they were in the negotiation. It was secret from our side but open on theirs. It was not until we discovered that information online and Google Translated it that we knew what the Government were up to. Isn’t that extraordinary?
Gareth Thomas
That is an extraordinary position, but sadly, it is becoming clear that that is how Members of Parliament are likely to find out about the substance of these trade negotiations. Let us again take the US as an example. We are finding out through evidence to Congress what many of the concerns of UK business organisations are in terms of the desire to secure access to UK markets, which is surely an entirely outrageous situation for the House of Commons. We were promised we would be taking back control after Brexit, yet the Houses of Parliament and the British public are being left in the dark.
There are real concerns from a UK-US deal about the potential for ISDS.
Gareth Thomas
We should thank the TUC for its work with American trade unions to help inform British workers and the British House of Commons, and for that little bit more of an insight into what is really going on in the UK-US negotiations. I hope Ministers will be sufficiently embarrassed by the British people’s reliance on what is being told to Congress to open up more scrutiny opportunities for this Parliament.
ISDS clauses have been favoured by the US in many of its existing trade deals. They potentially allow new investors, if included in a UK deal, to sue our Government over measures that harm their profits. We know that ISDS lawyers are already talking up the possibility of compensation for corporate giants whose profits have been hit by Governments taking lockdown measures to tackle the covid pandemic. In case Government Members think that is not a real threat, the American firm Cargill won more than $77 million from the Mexican Government after they introduced a tax to deter high-fructose syrup to tackle serious health issues in Mexico.
ISDS provisions create regulatory chill—the temptation for Governments not to introduce necessary public health or, indeed, other environmental measures, for fear of being taken to an ISDS tribunal by a big overseas investor. They create a two-tier system, since it is rarely small and medium-sized enterprises that are able to access these secret courts. There is normally no appeals system for the Government to access, and there is extraordinary secrecy around the nature of the settlements.
The irony is that there is little obvious benefit to businesses from those clauses being included in trade agreements. Indeed, the Government under David Cameron published an analysis of the pros and cons of ISDS clauses and could not find any great pros to champion. Business organisations tell us—although this tends to be in private—that ISDS clauses do not matter much to them; what they take serious notice of is the business environments.
There are real concerns about the labelling of geographical indicators, where products in the UK have a geographic indicator that prevents their being imitated: one thinks of Welsh lamb, Scottish salmon and Armagh Bramley apples, for example. The American negotiators do not like those types of food label and will seek to get rid of them. Surely it is the responsibility of this House of Commons to explore whether those concerns have merit and to push the Government to protect those labels.
Matt Western
That labelling is so important because throughout this process the public have been led to believe, because the Government have insisted on this point, that they as consumers will always be informed about what it is that they are buying. The only way they can be informed of that is by labelling, but that is not going to happen because, as my hon. Friend says, the US negotiators will not allow it to. When I approached KFC—other leading fast-food outlets are of course available—and asked, “Will you be informing the consumer where the chicken has come from that has gone into those nuggets or whatever the product is?” there was no reply, but clearly it will not be doing so, which must be a profound concern.
Gareth Thomas
I have made my point already about chlorinated chicken, and my hon. Friend raises that concern again.
The point that I was specifically referring to is the significance of GIs for many British products, and I think particularly of Welsh lamb and Welsh beef, where the Welsh Government have concentrated much of their promotional effort around the agriculture industry in Wales on talking up the benefits of those GI-protected products. There is real concern that that is at stake in some of the trade negotiations that the Government are taking part in.
It is surely right that this House have the opportunity to scrutinise whether such concerns would be appropriate with respect to a UK-US deal, a UK-Australia deal or a UK-Japan deal. At the moment, we, as the House of Commons, will not have the chance to explore in detail whether that is a concern, or have the opportunity to force Ministers to take action. Our amendments would put that right.
One last concern to flag about a UK-US deal is Donald Trump’s hostility to action on climate, and therefore the possible lack of potential for Ministers to make progress on bringing carbon dioxide emissions down and helping to tackle the climate and nature emergencies that the world and our country face. Those are the potential concerns being talked about around the headline free trade agreement being negotiated by Ministers, which merit proper parliamentary scrutiny.
Amendment 4 would put in place a structure for proper parliamentary scrutiny of free trade agreements. New clause 5 sets out the process for scrutiny of those free trade agreements before they could be signed, including giving parliamentarians a vote on whether to approve the start of negotiations. That would help to lock in scrutiny of trade negotiations from the very beginning of the process.
Gareth Thomas
My hon. Friend is right. I fear that if Ministers persist with their refusal to give the House of Commons greater opportunities to scrutinise and vote on trade deals, her membership of this Committee may be her only opportunity to vote on concerns about a future UK-US deal. She rightly also opens up a concern about immigration. One of the trade-offs in trade deals, under so-called mode 4 agreements, is often the requirement for Governments to give ground on immigration requirements, yet we hear no mention of that from Ministers.
Ministers give the impression that it is a win-win-win and there are no trade-offs, but trade agreements are not benevolent arrangements in which our negotiators can simply rock up to another country’s trade ministry and pick up some wonderful new bargain deals. We cannot just take what we want. That is the nature of negotiations.
Another analogy might be that Ministers talk about trade agreements as if they were the Christmas sales; they only have to turn up and there are amazing bargains to be had. They have not bothered to explain that the negotiator sitting opposite them will want something in return, which will not necessarily be a comfortable choice for us as a country. All the more reason, therefore, for us to have proper scrutiny to consider whether the downsides of a potential trade agreement are not as significant as the gains.
To listen to some sceptics about a UK-US deal with Donald Trump’s Administration, our farmers will be undercut, standards of food production will be lowered, the NHS will be on the table, climate change will not feature, big corporates will be even more powerful and labour rights will be undermined. Ministers will say that is an outrageous and scurrilous description of the likely benefits of a UK-US trade deal. Those are the potential downsides, however, so we should be able to consider whether the trade-offs of a UK-US deal, or indeed any deal with any other country, outweigh the benefits and therefore should not be approved, or whether, in fact, the benefits outweigh the downsides.
It is certainly the job of the Government to try to negotiate the best possible terms for a free trade agreement with another country, but surely it is for the people of this country to decide in the round, through their Members of Parliament, whether, on balance, it is the great deal that it has been set out to be. I ask the Committee why Ministers are apparently desperate to exclude the British people from having the final say, through their MPs, on whether a trade deal goes ahead.
Trade agreements can take a long time to negotiate and can seem like great prizes to have. I recognise the potential desperation of the Secretary of State to rock up to the signing ceremony for a new free trade agreement and bask in the positive glow from newspapers such as The Daily Telegraph and the Daily Mail, and maybe even the Daily Mirror and The Guardian, which will provide all sorts of photo opportunities for Members of Parliament. That desperation to get a deal, however, might sometimes take ministerial eyes off the downsides of a deal. It is surely the job of the House to look in the round at whether a trade agreement is genuinely in the interests of the country.
Surely Ministers having to work a bit harder to convince us that they have a genuinely good deal can be only a good thing in law. Giving the British people back control through a series of votes in this House and the other place on future free trade agreements will help to lock in high standards of deal making. Ministers seem to be taking the George Bush approach—the “Read my lips: taxes won’t rise” approach to trade. They are saying, “Trust us, we won’t reduce standards; we will protect the NHS and we will deliver the most amazing opportunities for British business.”
Let us pretend for a minute that I am willing to believe such a message from this particular Minister and this particular Secretary of State. The trouble is, Ministers change. Governments change. A commitment may not outlast the next Minister or Secretary of State who comes along. That is why it is essential to underpin in law a right for the British people, through the people they have chosen to represent them in the House of Commons, to agree to start negotiations and to vote on the final result of those negotiations.
Even over the last three years, ministerial attitudes to trade have shifted back and forth, as we shall discuss in debates on other amendments. One moment, the Government are opposing the idea that they should produce a report on a proposed free trade agreement, then they agree to do it voluntarily but oppose the idea of having that written into law; and then they agree, on Report on the 2017-2019 Trade Bill, to write it into the Bill. Today, we are back to a voluntary process—a commitment given by a Minister who is no longer Trade Minister. If the Executive’s line can change on such a simple point in so short a time, it is essential that the interests of the British people are protected by a lasting lock in law on a clear and sensible process to give the people through their representatives in the House of Commons a direct say on trade agreements that will have a lasting significance for their lives.
Ministers have a record of promising the earth on trade deals. Who can forget the last Secretary of State, who said in October 2017:
“I hear people saying, ‘Oh we won't have any free trade agreements before we leave’. Well believe me we’ll have up to 40 ready for one second after midnight in March 2019”?
Sadly, as the Minister knows only too well, the reality is very different. One of my favourite trade quotes has to be from the Chancellor of the Duchy of Lancaster, then the Secretary of State for Agriculture I think, who said:
“There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU. After we vote to leave we will remain in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would remain part of this free trade area—and Britain would be on the outside with just Belarus—is as credible as Jean-Claude Juncker joining UKIP.”
We all know what has happened since.
My final quote demonstrating what Ministers have said on free trade agreements is from the now Foreign Secretary, who said:
“I hadn’t quite understood the full extent of this, but…we are particularly reliant…on the Dover-Calais crossing”.
If Ministers do not understand the basics about the nature of British trade, it is even more essential that we lock into law a process for giving Parliament the right to scrutinise free trade agreements.
Governments make mistakes. Ministers make mistakes. Let us think about this Government: too late to the lockdown, a failure to protect care homes, a failure to stockpile personal protective equipment, the chaos over schools reopening and now the test-and-trace app fiasco. Ministers make mistakes. Scrutiny in the House of Commons helps to minimise the damage that those mistakes can have. Given the long-term significance of trade agreements, and to help to prevent mistakes being made, we need to lock in a tighter, stronger process of parliamentary scrutiny.
Matt Western
To amplify that point, irrespective of where we currently sit in the House—whether on the Front Bench or the Back Bench, or on the Government or Opposition Benches—it is important that we have some say. That is not simply about scrutiny and holding the Government to account; it is about asking the questions that ultimately lead to better governance. Surely that is what this place is all about.
Gareth Thomas
My hon. Friend is right. I recognise the temptation, having been a Minister for Trade, to fear scrutiny—to fear being asked detailed questions about rules of origin and things like that. However, that fear helps to make Ministers and officials get over the detail of those hugely important technical questions on trade agreements, which as a result helps to make government better, helping to make trade deals much better as a result.
As I indicated, Ministers had to be dragged kicking and screaming to publish the February 2019 Command Paper on future scrutiny of free trade agreements. A series of commitments were implicit in that Command Paper, but we have heard in recent times that some of those commitments may no longer enjoy ministerial support. Indeed, there seems to be some suggestion that Ministers will no longer publish reports at the end of negotiating rounds. Perhaps the Minister can clarify that point in his wind-up remarks.
Certainly, there has been zero progress on agreeing to give a Committee of this House access to confidential information and briefing from negotiators. If ministerial views on parliamentary scrutiny of new FTAs have changed since the publication of that Command Paper, surely the British people have a further justified claim for ensuring that a process for scrutinising all trade agreements be locked in to law. If Ministers are determined to row back on that commitment to work with a dedicated Committee in both Houses, providing confidential information and private briefings from the negotiating teams, there is even more need to lock into law new powers for Parliament to have more leverage over Ministers regarding those trade agreements.
The amendments would also widen the scrutiny requirements for continuity trade agreements that Ministers are negotiating with countries that already have a trade agreement with the European Union. Many agreements already notionally negotiated have small but significant differences from the original EU agreement on which they are based. At the moment, the British people do not have a say, through their representatives in the House, on whether those changes were appropriate.
It is slowly becoming clear, from the little we are able to glean from those negotiations on continuity trade agreements, that the agreements that have been signed, and indeed being negotiated, are slowly making the terms of trade for British businesses and our existing partners and allies worse. As Professor Winters made clear in his evidence last Tuesday, in conversations about how negotiations on the so-called roll-over agreement with Japan were going, Ministers and negotiators were being studiously vague about what was really going on.
The detail of concerns expressed about what has been negotiated only underlines the need for increased scrutiny—not only of all future FTAs but, crucially, of existing continuity deals. Nick Ashton-Hart of the Digital Trade Network noted that the UK-Swiss deal that has been negotiated has only three mutual recognition chapters, compared with the EU-Swiss deal, which has some 20. It will be interesting to know from Ministers why the UK-Swiss deal had just three mutual recognition chapters whereas its predecessor, the EU-Swiss deal, had 20. Apparently, there are similar problems with customs arrangements. In the case of Norway, only a goods arrangement was rolled over, so British companies have no idea at the moment what they will be able to access in terms of services markets in Norway from 1 January next year. There is a similar position with Switzerland—much has not been rolled over. Companies operating in services markets will have little idea at the moment what access to those markets in Switzerland they will have from 1 January.
Matt Western
My hon. Friend is quite right to highlight the vulnerability of UK automotive manufacturing, particularly with Japanese plants, and the consequences of that throughout the entire sector. The Japanese clearly want to hold off on any negotiation with the UK until there is clarity on our future position with the EU. I recall attending a Japanese ambassador’s event two and a half years ago, at which the Japanese chamber of commerce said, “We will be watching you very closely to see what you decide to do, particularly in relation to your arrangements with the EU. If you get it wrong, watch this space.” The UK is incredibly vulnerable. That is why the Japanese are treading very carefully around any trade deal with us and why they will only come to high-line arrangements; they are going to hold off until they can see what happens with the EU.
Gareth Thomas
That is a very good point. Specific Japanese automotive manufacturers such as Nissan have been very public with their concerns about the way trade negotiations are going. In that sense, they amplify the case for proper parliamentary scrutiny of our future trade agreements.
A series of witnesses, as my hon. Friend the Member for Putney mentioned, made clear the lack of proper parliamentary scrutiny of trade agreements. Indeed, it would be fair to say that a majority of the witnesses who appeared before us in the three evidence sessions we had last week noted the lack of proper parliamentary scrutiny for free trade agreements and expressed serious concerns about it.
I remember that Sam Lowe from the Centre for European Reform suggested that our scrutiny of trade is very poor and not particularly democratic when compared with the US and the European Union, and he gave the UK parliamentary process for trade treaty scrutiny less than five out of 10. He made it clear that some agreements that Ministers have negotiated are purely continuity agreements and alluded to those with the Faroe Islands, Chile and Jordan. He thought there would be substantially different trade agreements with Turkey, Norway, Switzerland and Ukraine, and in effect fundamentally new agreements—surely they are not within the terms of the Bill, if it is limited merely to agreements we have through the EU with existing trade allies—with Japan, Canada and the stage 2 deal with South Korea, which will merit a different, more robust parliamentary process.
David Lawrence from Trade Justice Movement said he has heard “nothing new” billed by Ministers on scrutiny of trade agreements. He described the process as archaic, dating back to the first world war when it was used for secret defence treaties. It has not changed in about 100 years. Trade Justice Movement made clear that it has relied on reports from Washington and Brussels to find out what is going on in trade talks that the UK is a part of, which again underlines the point that surely the British people, through their representatives in the House of Commons, should have access to much more detail.
The principal justification that Ministers have deployed and hidden behind to resist giving the British people more control over such agreements is a decades-old convention first articulated, I believe, by Arthur Ponsonby in 1924. One can understand why Ministers look to Mr Ponsonby for inspiration as he was a Labour Member of Parliament, from whom Ministers get their best advice. Trade then was very much with the different parts of the empire; it looks completely different now, with the drastic changes we have seen to world trade and, of course, our exit from the European Union.
That convention was formalised in part 2 of the Constitutional Reform and Governance Act 2010, which no one conceived would still be in use should Britain exit from the European Union and need to negotiate all sorts of future free trade agreements on our own, without our EU allies. CRAG does not require Parliament’s approval for the Government to ratify treaties. Indeed, as a House of Commons Library briefing helps to make painfully clear,
“it gives any parliamentary objection to ratification (or similar processes like accession) a limited”—
limited is crucial—“statutory effect”. There is a theoretical power for the House of Commons to block ratification, but in practice that power does not amount to much. The briefing continues:
“Parliament does not have to debate or vote on the treaty, and indeed time to do so is hard to secure given the Government’s control over the timetable of the House of Commons.”
That the Conservative Government have a large majority underlines how it is entirely in No. 10’s gift whether a debate and a vote takes place on a UK-US deal, a UK-China deal, UK membership of the transatlantic partnership or on a deal with Australia or New Zealand. Why should not Members of Parliament have a vote on those free trade agreements?
It is worth underlining that Parliament cannot make amendments to a trade treaty under the CRAG process as the treaty will have already been signed. Parliament can only object to ratification of an entire treaty, and that is very much a theoretical power—it is fantasy. There is also the slightly less than theoretical option of Parliament refusing to put into domestic law the different elements of a new trade agreement. Again, with a Government with an 80-seat majority, it is difficult to see how that, in any way, could be anything other than a fantastical possibility.
Trade Bill (Sixth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Department Debates - View all Matt Western's debates with the Department for International Trade
Trade Bill (Sixth sitting)
Matt Western ExcerptsTuesday 23rd June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 June 2020 - (23 Jun 2020)
Matt Western (Warwick and Leamington) (Lab)
Thank you, Sir Graham. I rise to speak very briefly. I concur with all the comments made by my hon. Friends and will not rehearse many of them. I would just say that we should remember the famous line from the film, “Infamy! Infamy! They’ve all got it in for me!” There is something about scrutiny and more scrutiny. We have to keep repeating the word, because it is so important for all of us, wherever we sit. Whether we are Government Back Benchers or Opposition Members, the opportunity for scrutiny is important. Trust and transparency are in short supply and it is critical for the validity of this place that they are restored. There is likewise a matter of competency, which I will come on to. How do we face the challenges of the trade deals before us and ensure that we have sufficient competency and capacity?
The issue is secondary legislation and what Ministers are permitted to do that allows them to avoid full scrutiny. As such, the affirmative process in the Bill will not allow us the checks and balances that our constituents require, irrespective of the territory, geography or community that we represent. There will be serious issues that will fall to Government Ministers, and it should be a great concern for hon. Members on both sides of the Committee to make sure that Ministers can be held to account.
The process should be iterative. A great thing that we found out when the International Trade Committee visited Canada and the US was how involved their Parliament and Congress are in the process of determining and setting parameters for their trade representative bodies. That is what we should be pushing for: from the beginning, we as parliamentarians should have more say on the direction that the trade representatives take in negotiating our position.
We mentioned the situation with vehicles and what that means for our automotive sector, but irrespective of the sector or region that is up for discussion, trade deals will have an impact. It is about understanding those impacts through modelling, so a value decision or judgment can be made. Understanding and appreciating the consequences of that sort of trade deal was important in the evidence given to us by the Australian trade people and, likewise, the US and the Canadians.
I mentioned what we discovered several months ago from the South Koreans about where they were in their negotiations and discussions with the UK. It was all published online but there was nothing from our side, which should not be the case. I do not see how any of us, Back Benchers or Front Benchers, in government or in opposition, can face constituents or the major businesses that each of us have in our constituencies and say that we are unaware of what is going on on their behalf. In contrast, the Koreans—in the case of vehicles, the Kias, Hyundais, Samsungs and so on—will be totally aware of what is going on in the negotiations.
Trust and transparency are important because, without scrutiny, the process will lead to poor governance. As has been said by my hon. Friend the Member for Harrow West about events in the recent crisis, if more had been put into the parliamentary domain and if there had been more involvement across the House, perhaps we would have avoided some of the difficulties that we have experienced. We have to avoid a bunker mentality. It is not healthy for the Government or for the reputation of Parliament.
As has been said, while we are sitting here, many trade deals are being discussed, such as the UK-Japan deal, the UK-Australia deal, the UK-US deal and so on. They are seriously huge undertakings. In our evidence sessions in the International Trade Committee, we discovered that many such trade deals typically take six to eight years, yet the Japanese are telling us that they want a trade deal within six weeks. That is terrific—good for them—but they are holding us in a difficult position. They know that we need a trade deal, but it will be on their terms, because we are in a weak position. None of us want to be in that weak position.
The Australians are saying, “Yes, we will have a trade deal within a year.” Again, that will be very much on their terms. That is the sort of understanding that we need to share with the public and that needs to be shared in this place, so that we fully appreciate what the consequences of those decisions will be.
As we heard in the evidence sessions last week, there is no real rocket science about it. The ideal approach to negotiating trade deals is that there is involvement through parliamentarians, through consultation with trade unions, with business sectors and so on. It is understood, through some sort of guaranteed debate, what is trying to be achieved. Then, during negotiations, texts are published and updates are given. That is what the US, the EU and other nations such as Australia do. The negotiated deal can then be put to a formal voting process for ratification. However, it seems the Government do not wish to do that. Looking across the room here, that has to be of concern, irrespective of the constituencies we represent, because of what it means economically and what it means for some of our businesses, the agriculture sector and so on.
Greg Hands
I thank the hon. Gentleman for that intervention and I am glad that he made it, because I will take him back five years to a very interesting negotiation that I had with his friend, John Swinney, which was a negotiation between the UK Government and the Scottish Government. It related to the Scottish fiscal framework: how exactly Scotland’s finances and support from Westminster would work in coming years. We—John Swinney and I—agreed that it was a negotiation between two Governments, and it was not appropriate to publish text during the course of the negotiation. We would both provide general updates on the progress of the negotiation, rather than constant updates on text. That approach led to us getting a good agreement between the UK Government and the Scottish Government. I think both Governments were not entirely satisfied with it, but both could live with it. That shows the way forward, rather than publishing after each negotiation round, or mid-negotiation, what the latest text or approach is.
Matt Western
I hear that, and it is terrific, whatever happened between Scotland and the UK in that arrangement, but nub of this is essentially: how can it be that the EU informs and updates, providing not just heads of terms and whether things are going okay or badly or whatever, but the detail? That is what the US does and what Australia does. Why is the UK the only nation that will not give that detail to its public?
Greg Hands
Sir Graham, I think a comparison of how the UK and European Union do international treaties is a debate for another day. I do not think the two political systems are comparable. The approach proposed by the UK has greater parliamentary scrutiny than that of many Commonwealth counterparts that use the Westminster system—it is more extensive than that of Canada, Australia and New Zealand.
Greg Hands
I will make a bit more progress.
As with new clause 5, new clause 8 contains a number of practical flaws in the proposed system. Those flaws would undermine negotiations and disadvantage the UK. I understand that colleagues are keen to remain abreast of negotiations, and the Government are supportive of that endeavour, as I have outlined. I point hon. Members not just towards our commitments to share information but towards our record on the recent US negotiations, which I have mentioned.
Ultimately, this debate boils down to whether we believe that it is right that the UK Government, supported by experts, civil service negotiating teams and advisers, are able to negotiate international agreements on behalf of those who elected them, drawing on the expertise and views of Parliament and of the devolved authorities, via strong scrutiny mechanisms. Or do we believe that Parliament itself should be in control of the negotiations, determining who we negotiate with and how, and within what timeframes?
It seems clear to me that in the national interest, the former scenario must be right. It ensures that when our partners face the UK around the negotiating table, they know that it has a credible single voice—one that is represented by the UK Government alone, after they have consulted with the devolved Administrations and drawn on the extensive expertise in this House and the other place, via close engagement and scrutiny processes, such as those we have here for international agreements.
Matt Western
I understand that point. The EU has 27 nations, and yet it manages to achieve that. It has a coherent position from 27 nations, but it can still carry out talks. Surely, it is possible for us to have the involvement of Parliament to scrutinise matters and to be updated about them, and to have its engagement in this process. Can the Minister just answer that one point?
Greg Hands
I have already outlined in immense detail, probably three or four times now, the involvement that Parliament will have in future trade agreements. I remind the hon. Gentleman that the Bill is about the continuity of existing trade agreements. I may be the only person in this room—perhaps the hon. Member for Harrow West has done so as well—who has represented the UK at trade Foreign Affairs Council meetings of the European Union. I can reveal to the hon. Member for Warwick and Leamington that the EU does not always speak with one voice when it comes to trade. I can tell him of many a fruity row at those meetings involving different member states—rows between the Commission and the European Parliament and so on in relation to EU trade policy. I am afraid that the idea that the EU is one happy whole as it goes into trade agreements, with total uniformity of opinion across the EU27, is for the birds.
I hope that I have provided Members with some assurance that the amendments are unnecessary and impractical, and will unquestionably limit the UK Government’s ability to negotiate in the best interests of UK businesses, consumers and citizens.
On a slightly different topic, new clause 19 seeks to oblige the Government to publish parliamentary reports on continuity agreements, which the hon. Member for Harrow West has already drawn attention to, outlining any significant differences between the signed agreements and the underlying EU agreements. I am aware that, in the last Parliament, the Government introduced an amendment to that effect to the previous Trade Bill. However, Members will be aware that, despite the previous Bill falling, we have committed to publishing such parliamentary reports on a voluntary basis, to assist the House with the scrutiny of agreements.
We have published such a report for each of the 20 continuity agreements we have signed, outlining any significant differences from the underlying EU agreement. That process affords parliamentarians extra transparency on our continuity agreements, above and beyond the statutory framework set out in CRAG. As is demonstrated by the measures we have taken, and by the inclusion of a sunset clause and the affirmative procedure for any secondary legislation, we will ensure that Parliament’s voice is heard when clause 2 powers are exercised. I reiterate the commitment that we will continue to publish parliamentary reports for all remaining continuity agreements.
I suspect the Committee will be glad to hear that I am finally turning to new clause 20, which stipulates that the parliamentary reports must be published at least 10 sitting days before any statutory instruments are made under this power. Members will be aware that trade negotiations, and indeed many other international negotiations, have a habit of going down to the wire. I have only to remind colleagues of the negotiations surrounding the EU withdrawal agreement as evidence of that fact, although that negotiation is not included in the scope of the Bill, perhaps thankfully. As such, it is possible that we will be unable to sign continuity agreements until very shortly before the transition period ends.
I stress that that is possible. We have already signed 20 such agreements, but some may well finally be negotiated and signed in the last days before the UK once again becomes a fully independent trading country. That would make it very difficult to leave a period of 10 sitting days before any SIs are introduced. I assure colleagues that we will leave as much time as possible for essential parliamentary scrutiny. I point again to our record: we have published parliamentary reports alongside all signed agreements entering the CRAG process, meaning that that information has been available for at least the full duration of CRAG. I remind colleagues that CRAG allows a period of 21 sitting days for our agreements to be scrutinised in Parliament before they can be formally ratified. That provides an effective period of time for parliamentarians to scrutinise the agreements.
Turning to a few of the more technical matters that have been raised, the Opposition said that the South Korean and Swiss agreements have not been signed. They have both been signed and have both gone through CRAG. The House of Lords European Union Committee called the Swiss agreement for debate but, as I said earlier, no motion of regret was passed. The hon. Member for Brent North (Barry Gardiner) loved to talk about the Ponsonby rule, which is exactly what CRAG sought to codify. The Ponsonby rule, if it exists at all today, is there only through the living embodiment of CRAG.
The Opposition talked about the mutual recognition agreements incorporated within the Swiss agreement. The MRAs that have been signed and are part of the agreement cover 70% of our trade flow. On a technical point, we have in place a memorandum of understanding to continue discussions about trade continuity before the UK-Swiss trade agreement comes into effect on 1 January. We are committed to aiming to put in place mutual recognition of conformity assessment bodies in time for the agreement coming into effect.
The sectors not covered by the MRAs are underpinned by international standards regimes, not by EU standard regimes. There is therefore greater regulatory confidence in conformity assessments within these. On tariffs and the South Korea agreement, the hon. Member for Harrow West effected some kind of melange between tariffs and tariff-rate quotas. A tariff is the rate of tax at which we charge a product coming into the country; a tariff-rate quota is the quantity of that product that would be allowed on either a lower tariff or on no tariff at all.
Tariff-rate quotas have been resized from the original EU agreement. That is an entirely normal and expected part of the process. The TRQ stated that a certain volume of this, that or another product—the example of Cheddar cheese was used—is allowed to enter from the EU into South Korea without a tariff or with a lower tariff being applied. That volume is apportioned in the ensuing agreements: this part of the tariff-rate quota belongs to the European Union, and this part of the tariff-rate quota belongs to the UK.
How do we determine which part goes to which? Generally, the way in which to do this, which the European Union has agreed, is to look at recent trade patterns, take the average of recent years and say that a part should be determined to be the EU’s and another part should be the UK’s? If no UK products have been exported to South Korea under the tariff-rate quota, the effect will be that the tariff-rate quota ends up going to zero in the ensuing UK agreement, but it may well be that we end up with far more than the UK overall trade flow in the ensuing South Korea agreement in other areas. It simply is not the case that we have lost our tariff-free access, if it is a product that the UK does not currently export to South Korea under the tariff-rate quota.
Crucially, the tariff reductions are in the ensuing UK agreement. Whereas the tariff-rate quotas divide up, the agreed tariff reductions carry on. That is particularly relevant to Cheddar cheese. Tariffs on Cheddar cheese entering South Korea under the EU-Korea agreement have been coming down steadily each year since 1 July 2011. From 1 July 2021, UK Cheddar cheese will be free of customs duties entirely as a result of that gradual stepping-down process, which affects Cheddar made in the EU as much as it affects the UK. There has been no change in that and no loss in our preferential tariff treatment in the UK-Korea agreement.
I have talked at length about the Command Paper and one or two other things. I have responded to each of the points made by Labour Members, possibly to their satisfaction. I find various things a little bit rich. I think I heard regrets from the Labour Front Bench that we will not be able to transition the EU-Canada agreement. I remember, because I was doing this job at the time, a large part of the Labour party, including current Front Benchers, voting against the EU-Canada agreement even coming into effect. So Labour was opposed to the agreement three years ago, but now they suddenly complain that we are not being quick enough in transitioning it to a UK agreement. If there was any consistency in the Opposition’s approach, they should be cheering any delay to an agreement that they do not agree with. I find their position typical of the chaos still present on the Opposition Benches. They complain that we have not rolled over an agreement that they did not want to be part of anyway.
The hon. Member for Putney, who started off regretting the vote four years ago today to leave the EU, then made a speech questioning the trade agreements negotiated by the European Union that we are seeking to roll over. There must be more consistency.
I appreciate that the Labour party has had a leadership change. I thought that the whole basis of the new leader’s approach was to bring organisation and method to its opposition, but instead, we have seen continuing chaos. We see a shadow Front-Bench spokesman who now objects to the agreements that they presented when in government, and a shadow Front-Bench team who now want to roll over the Canada agreement that they originally voted against. Those on the shadow Front Bench regret the Brexit vote but now want to vote against our transitioning the very agreements that the EU, with UK participation, negotiated successfully. That is a recipe for chaos and one that the Opposition would do well to reflect on.
Bill Esterson
I beg to move amendment 11, in clause 2, page 2, line 23, at end insert—
“(4A) Regulations under subsection (1) may make provision for the purpose of implementing an international trade agreement only if the provisions of that international trade agreement do not conflict with, and are consistent with the United Kingdom’s environmental obligations in international law and as established by but not limited to—
(a) the Paris Agreement adopted under the United Nations Framework Convention on Climate Change;
(b) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and
(c) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety.”
The Government say they are committed to addressing the climate crisis and to net zero by 2050, even though they have missed the targets set by the fourth and fifth carbon budgets and the gap is getting worse, and even though their own analysis shows that their spend on nuclear export finance for energy projects has favoured the fossil fuel sector substantially, to the point where 99.3% of that budget spend over a five-year period went to fossil fuel projects, including recently to Bahrain. There is no sign of a real and meaningful switch away from fossil fuels and to renewables.
The Government can say that they are committed to something, but unless something is in legislation and in writing, and unless there are meaningful commitments, the situation does not change. That is why it is important to amend legislation such that we confirm our commitments to the Paris agreement, the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity, including the Cartagena protocol on biosafety.
Matt Western
What was telling about the evidence sessions was how everyone—including the Institute of Directors, the CBI, ClientEarth, the TUC—agreed that this type of amendment should be at the heart of what we do, and that they were disappointed that it was not included.
Bill Esterson
My hon. Friend is absolutely right. The Bill really should be the framework for what a progressive international trade policy framework should look like. There was an opportunity. Given that the Government did not pass the Bill when they had the chance last year or the year before, they could have included the provision this time. This amendment would produce a framework of the order expected by the witnesses.
There are real problems in international trade that affect our ability to meet our climate obligations. Trade agreements are used to liberalise regulations, including environmental regulations. The Bill is an opportunity to redesign trade policy to support our environmental ambitions, as the Government set out. The target of net zero carbon emissions by 2050 and associated commitments are in our amendment. The opportunity is there for the UK to require trade partners to ratify and implement key climate change agreements, such as Paris, before entering into trade negotiations, and for us to suspend ISDS agreements.
Environmental policy has been the object of investor-state dispute settlement litigation. Companies that have fossil fuel interests have sued other companies’ Governments because of the impact of Government regulations and legislation on their interests. That undermines investment and support for the renewables sector, and efforts to decarbonise economies and meet our climate obligations. Similar points are made about the convention on international trade in endangered species of wild fauna and flora, and the convention on biological diversity. If the Government want to address this agenda, they have an opportunity to do so with this amendment, and I hope they take it.
Given that the Bill is widely drawn and has the potential to address future trade agreements, let us look at what the US has been saying. This should worry us, given the damage that could be done by international trade agreements. In December, the US ruled out talk of a climate crisis in trade negotiations—yes, that is what trade representative Lighthizer said. He was categorical about that when the UK inquired—I am pleased that the UK did this—about the possibility of including reference to climate change in a future UK-US trade agreement, given that the UK has a strong historical stance on climate change and pushed strongly for the Paris agreement. The UK also highlighted in those talks the pressure for that that would come from civil society and non-governmental organisations. My hon. Friend the Member for Warwick and Leamington referred to the evidence that the Committee received.
What was the response from the US? It
“responded emphatically that climate change is the most”
politically sensitive
“question for the US, stating it is a ‘lightning rod issue’, mentioning that as of 2015,”
US trade representatives
“are bound by Congress not to include mention of greenhouse gas emission reductions in trade agreements. US stated this ban would not be lifted anytime soon.”
The US trade representative went further:
“we have an obligation to help real working people...there’s no point in being so ambitious we don’t end up with an agreement at all”.
The problem with that statement, of course, is that it is not one or the other. In the end, real working people need a planet that they can live on. They need the global temperature not to increase by more than 1.5°. They need the action on climate that will deliver that agenda. They need the jobs that will come from investment in low carbon industries now and in the future.
We should be worried about what the US is saying on this subject. We should take note of it and make sure that if the price of an agreement with the US is to oppose action on addressing the climate crisis, it is a price far too high for us to accept. I hope the Government will take the amendment on board, because there is nothing in it that is not in accordance with Government policy.
The Chair
I remind the hon. Lady to refer to Members of the House not by name, but by their constituency. I call Matt Western.
Matt Western
Thank you, Sir Graham. Very briefly, we have heard from Members across the Committee about our constituents’ concerns, and those of last week’s witnesses. We have only to think back to some of the extraordinary campaigns by Jamie Oliver, Hugh Fearnley-Whittingstall and others, who highlighted some of the terrible practices that were going on in the food chain, to realise that the public are very much in favour of an organisation such as the food and farming standards commission that has been proposed by the National Farmers Union, to ensure that our farming standards and food standards are maintained at the highest level.
We have some of the highest standards in the world. We also happen to have some of the cheapest food prices, due to the competition that we enjoy in this country. The question is what we would gain from not adding such an amendment to the legislation, and not including a food and farming standards commission. It is very easy to talk about the United States in isolation, and the concerns that the public have over such things as hormone-treated beef or chlorinated chickens. As I mentioned earlier, producers in Australia also supply that market, and have industrial-scale battery caged hens producing vast quantities of eggs.
It is likely that in any UK-Australia trade deal we would lose at least 20% of our current market of eggs produced in the UK to Australian producers. That is the sort of impact that we need to understand. I think the farming community is beginning to understand it fully. Consumers need to understand it as well because, at the end of the day, it is this sector that will be sacrificed in any future trade deal.
Just look at the YouGov poll that I think was announced in the last 24 hours. Some 80% of consumers do not want chlorine-washed chicken. They appreciate and enjoy very high standards currently and they do not want to see such standards reduced in a future trade deal, whether with Australia, the US or anywhere else.
Trade Bill (Seventh sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Matt Western
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Trade Bill (Seventh sitting)
Matt Western ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
Gareth Thomas
It is good to have you back in the Chair, Mrs Cummins. On Thursday afternoon, when you were not with us, we had one or two moments of light. The hon. Member for Stafford clearly began to feel nervous about whether the Bill was properly drafted, asking me to go into further detail about what was wrong with the Bill. The Minister helpfully confirmed that Command Papers published by his Department are not worth the paper they are written on once 12 months have passed and that there is absolutely no guarantee that the House will get either a debate or a vote on any future UK-US deal.
It is therefore a particular pleasure to have the chance to return to the subject of continuity or roll-over agreements and to speak to these amendments. As you will remember, Mrs Cummins, the Minister and his colleagues have presented the Bill as being purely about rolling over agreements already long since negotiated with the European Union. Effectively, they say, it is just a matter of changing “EU” to “UK”, putting a comma in a different place, dotting the odd i or crossing the odd t, or making some other little tweak—in practice, minor changes to deals that have already been done. Indeed, so confident was the former Secretary of State for International Trade about that, that he committed to get all 40 trade agreements with the European Union rolled over into UK-specific trade deals by March last year.
Imagine our surprise on seeing in the Bill clause 2(7), which suggests that a period of five years might be needed after implementation day, with the option to extend by another five years, to conclude those roll-over agreements. Bear in mind that we were told that deals such as the South Korea, Japan and Canada deals were going to be easy to complete and should be done by Brexit day—certainly, we were led to believe, by implementation day.
Matt Western (Warwick and Leamington) (Lab)
To elaborate on that very simple point, I recall very well that Lord Price even tweeted about this—it would be just a simple cut-and-paste job. We have all been misled, haven’t we?
Gareth Thomas
I am relatively new to the Trade Bill and am only catching up with the discussions that my hon. Friend and others have had about these continuity agreements. Something odd certainly seems to have happened. It is true that the Minister has managed to get a deal done with the Faroe Islands.
The Minister for Trade Policy (Greg Hands)
On a point of order, Mrs Cummins. I think that the hon. Member for Warwick and Leamington just accused Lord Price, a Member of the other House, of misleading people. I do not think that that is a permissible term to use in our debates. I invite the hon. Gentleman to withdraw that term.
Matt Western
I will certainly withdraw it; I recall that I used the word, now that the Minister mentions it. What I was trying to say was that Lord Price was suggesting that there was a simple procedure of cutting and pasting, and that was clearly not the case.
Gareth Thomas
It is certainly true that in exchanges at the Dispatch Box over the past two weeks, we have been led to believe that these 40-odd agreements will be very easy to complete. Yet only 20 of them have been completed thus far. It looks, to all intents and purposes, as though a number of the agreements are not going to be completed by implementation day—and that, surely, is an extremely surprising eventuality for all of us to contemplate.
Gareth Thomas
If my hon. Friend will forgive me, I will come to South Korea in due course.
The five-year point, perhaps, is understandable in the context of South Korea, but it is slightly odd that Ministers think they might not be able to get the South Korea deal done even in five years, and might need another five. One has to ask why we would need 10 years to put together a roll-over agreement that is simply, as my hon. Friend the Member for Warwick and Leamington said, a cut-and-paste job—a matter of just switching “UK” for “the European Union”.
The hon. Member for South Ribble helped throw a little light on the issue during her questions to Mr Richard Warren, the head of policy for UK Steel, in our second sitting. In Question 59, she asked:
“Mr Warren, if there were continuity trade agreements that did not roll over, what would be the consequences for the steel industry?”.
Mr Warren talked initially about the continuity trade agreements with north African nations such as Morocco and South Africa. He then cut to the chase on one of the biggest markets for UK steel exports: Turkey. Talking about the so-called continuity trade agreement, he said:
“Turkey…probably will not be carried over, regardless of the Bill.”
He went on to say that the Bill would allow the continuity and trade agreement to happen,
“but with politics and the complexities of negotiations, I fear, that agreement will not be in place by the end of the year, which would result in 15% tariffs, on average, on UK steel going to Turkey— 8% of our exports. It is an extremely competitive market already; a 15% tariff would pretty much knock that on the head.”
He went on to underline a similarly important point:
“At the same time, because the UK has no tariffs on steel, we would still have up to half a million tonnes of steel coming in from Turkey”.––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 42 to 43, Q59.]
We would not only have an uneven trading relationship when it came to steel exports, given the huge tariffs; suddenly, imports of Turkish steel into the UK would have no tariffs at all, creating even more competition for UK steel to face in the domestic market. That is a profoundly disturbing and worrying situation, and it would be helpful to have a little more clarity from the Minister, when he gets to his feet, about what is going on in those negotiations. As I understand it, negotiations have not even begun between the UK and Turkey, never mind being close to reaching any sort of conclusion.
Let us take the UK-Japan continuity agreement. Again, we are led to believe that this is simply a matter of two very close allies sitting down together briefly and changing the words “EU-Japan” to “UK-Japan”, as well as perhaps changing the odd comma here or there, and dotting the odd i and crossing the odd t. In practice, however, something very different appears to be taking place. Just on Tuesday, the Financial Times carried a story saying that Japanese negotiators have given Britain an ultimatum: “Do the deal with us in six weeks, or we will not be able to get it through our Parliament and there will be no continuity trade agreement in place by 31 December.”
Bear in mind that Professor Winters, in his evidence to the Committee on Tuesday 16 June, at Question 31, said in response to the probing of my hon. Friend the Member for Sefton Central that
“with Japan, we do not really know what the Government intend to discuss with the Japanese Government, but the analysis that we got last month was—what shall we say?—studiously unspecific.”––[Official Report, Trade Public Bill Committee, 16 June 2020; c. 26, Q31.]
Again, when the Minister gets to his feet, it would be helpful if he gave us a little more detail on the substance of what is going on in those negotiations. I thought we were told that when we left the European Union, we would stop being a rule taker any longer, and here it appears that Japanese negotiators are telling us: “Do a deal or you don’t get your trade agreement in time.”
Matt Western
My hon. Friend is making an extremely important point. Hiroshi Matsuura, the Japanese lead negotiator, is saying that their only focus for the next six weeks is the UK, whereas the UK is trying to negotiate with the US, the EU, Australia, New Zealand and so on. Yet we do not even have the full complement of Department for International Trade trade negotiators in the policy group: we are about 10% down on where we should be.
Gareth Thomas
My hon. Friend is right. Let us bear in mind another point before I come on to Canada. Negotiations are going on not only with the US in relation to the transatlantic partnership with the EU, but we still have not concluded a continuity trade agreement with Andorra, as I understand it. Presumably, one of the Minister’s civil servants is sitting in a room somewhere, worrying about what will be in the UK-Andorra agreement, when they could be properly deployed to trying to sort out whatever the problems are in the UK-Japan agreement. Again, I remind the Committee that we were told that that agreement would be incredibly simple to sort out. I think the Minister said it was just a continuity trade agreement or just a roll-over agreement.
Let us come to the UK-Canada talks—one of the great favourites of the Minister. He had a little fun with us, it would be fair to say, on Tuesday afternoon. Again, however, there does not seem to be any sign of the UK-Canada talks being completed by 31 December. The Minister has been at pains to sell us the great virtues of the EU-Canada deal, and presumably—I would ask him this—there will be similar virtues from a UK-Canada deal, but why is there no obvious sign of any progress towards a signing ceremony for a UK-Canada deal?
In the quote from the Canadian Government regarding why negotiations have not advanced at a more rapid pace, they made it very clear that they were waiting to see how EU-UK talks got on. One got the strong sense that Canadian negotiators are sitting out in the garden smoking a cigar and planning their holidays. They are in no rush whatever to complete a trade deal with the UK, notwithstanding the studiously unspecific comments the Secretary of State gave us at questions last Thursday about how good natured the conversations had been with whoever she had spoken to in the Canadian Government.
Greg Hands
I think the hon. Gentleman’s timeline—or the timeline of the hon. Member for Harrow West—may be a little incorrect. As it happens, I left the Department on 21 June 2018, which predated that amendment being made. In any case, the context then, which I will explain, was rather different from the context now, and I think it is very desirable that it be five years, not three years, for the reasons that I am about to explain.
There is a fundamental misunderstanding in everything that the hon. Member for Harrow West just said. The power is in large part needed to make technical changes that ensure that the agreements remain operable. The fundamental misunderstanding on his part is that it is not five years extra to complete the negotiations, sign the deals or finish the negotiations—no. It is five years that is needed to make sure the agreements remain operable once they have been signed.
Before I come to the real detail, let me give the hon. Gentleman an update on some of the agreements he asked about. It was interesting to hear him focus on Andorra and San Marino. Those countries are, of course, in a customs union with the European Union.
We are in discussions with both countries, but in our view, they are largely dependent on what the future relationship between the UK and the European Union looks like, for those two countries are in a complete customs union with the European Union.
The hon. Gentleman asked for clarity about Turkey. I was surprised by that question, because I checked his Twitter feed, and he does actually follow me on Twitter, which I do not take as a compliment ordinarily. He must have seen what we put out three hours ago from my right hon. Friend the Secretary of State for International Trade:
“Great to see”—
UK and Turkey—
“trade talks progress today. Let’s build on our already strong trading relationship worth £19bn. We are working hard to ensure we can reach a UK-Turkey trade deal at the end of the transition period.”
He has it right in front of him on his own Twitter feed; I urge him to read it. People mock social media—I might have been critical of social media in my time—but they occasionally perform a useful function. Helping us to keep up to date with what is going on in the world is one of the most useful aspects. So there he has it from just three hours ago.
The hon. Gentleman asked about the so-called temporary agreement with South Korea. It is not a temporary agreement. The agreement includes a review clause after two years, which is a standard feature of many international trade agreements. The review clause states—I am paraphrasing slightly—that if the two parties do not believe it is mutually advantageous to continue the agreement, there is the option not to. That does not mean to say that it is a temporary agreement. All international agreements can be cancelled by one party or the other, if they feel the agreement is no longer mutually advantageous. Of course it leaves open the possibility of doing a more extensive agreement in the future, but that is the case with all trade agreements.
When a country signs an agreement, no one is saying that it will stay in place forever. There may be opportunities in future to extend it into areas of trade that had not been thought of when the original agreement was signed. That is an entirely normal phenomenon. For example, the EU and Mexico have done an enhanced agreement based on their original agreement, which dated from about 2000 or 2002, to bring it up to date. New things come along, such as e-commerce and so on, so of course trade agreements are updated, but it is wrong to describe that trade agreement as temporary.
We are in discussions with Canada, but I return to the points that the hon. Gentleman made on Tuesday. He is so against the Canada agreement that, if there were any delay in the discussions with Canada, he should be cheering that not condemning it, because he is opposed to the agreement in the first place. I thought that would update him on where we are with the agreement.
Let me describe what it is all about. In the case of a transition mutual recognition agreement, we may need to change secondary legislation after the point of signing, and after 1 January 2021, to update the names of awarding bodies and third countries so that UK businesses can continue to use such bodies legally. It is not extra negotiating time. It is extra time to ensure that the agreement remains operable.
Alternatively, where our trade agreements reference international standards, such as environmental protection, we may need to update references in domestic legislation to ensure that we remain in compliance with our international agreements. Equally, a potential use of the power could be to upgrade the list of entities subject to procurement obligations to reflect machinery of government changes.
I used the example last week of DCMS changing its name from the Department for Culture, Media and Sport to the Department for Digital, Culture, Media and Sport. That name change might need to be reflected to keep one of those agreements operable, so a change in domestic legislation would ensure that the procurement obligations in the agreement are kept operable. It is not extra negotiating time. The power could also be used to update the list of entities subject to procurement obligations, as I have said.
I think there is a misunderstanding of the nature of the power. If Opposition Members had expressed concerns about the breadth of the power—in other words, the ability to carry on amending legislation for many years afterwards—that would be a much more legitimate concern than the professed concern about extra negotiating time. The Bill has been scrutinised by the Delegated Powers and Regulatory Reform Committee. Its 33rd report on the 2017-19 Bill raised no concerns about the delegated powers in the Bill, including the sunset clause, and welcomed our move to introduce the affirmative procedure for any regulations made. I see no reason why it should reach a different conclusion on this Bill.
Matt Western
I just want to understand the point the Minister is making. I understand the importance of it, but does it not suggest that the three-year clause in the previous Bill showed a degree of naivety on the part of Government—that they would have sufficient time on the other side to negotiate further agreements with these countries?
Greg Hands
No, I do not accept that. It has nothing to do with the negotiations; it is all about keeping the agreements operable. It is a matter of judgment, and our judgment is that five years is a reasonable time. It is renewable by the affirmative assent of both Houses. We think that that is a reasonable time to keep these powers in place, so that we can then make further changes as needed to keep those agreements operable, and it is renewable by both Houses.
Trade Bill (Eighth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for International Trade
Matt Western
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Trade Bill (Eighth sitting)
Matt Western ExcerptsThursday 25th June 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 June 2020 - (25 Jun 2020)
Greg Hands
That is absolutely correct. It is a point that we have made on numerous occasions, and I am happy to make it again today.
Although this Bill relates to continuity with existing trading partners, I recognise the concerns that colleagues have about future FTAs with new trading partners, as I said during Tuesday’s debate. As the Secretary of State, my DEFRA colleagues and I have told this House and the other place on many occasions, the Government will stand firm in trade negotiations. We will always do right by our farmers and aim to secure new opportunities for the industry. Returning to the point made by my hon. Friend Member for Stafford, we would like Stafford farmers to gain opportunities to sell their high-quality produce abroad by breaking down barriers, reducing or removing tariffs, and so on. That is also very important for our agriculture; in fact, the scoping assessment for the US trade deal showed that UK agriculture would be a net beneficiary of any such deal.
All imports under all trade agreements, whether continuity or future FTAs, will have to comply with our import requirements. In the case of food safety, the Food Standards Agency and Food Standards Scotland will continue to ensure that all food imports comply with the UK’s high safety standards, and that consumers are protected from unsafe food that does not meet those standards. Decisions on those standards are a matter for the UK and will be made separately from any trade agreements.
Matt Western
The Minister has said that UK farmers would be net beneficiaries of any trade deal with the US on exports, but I do not see how that can tally. If the United States’ No. 1 priority in any trade deal is agricultural products, is he saying that we will be exporting more agricultural products to the US than the US will be exporting to the UK?
Greg Hands
I am surprised by the hon. Gentleman’s apparent enthusiasm for Trumpian mercantilism, thinking that because UK agriculture might gain, that would somehow mean US agriculture would lose. Sir Graham, you and I both know that free trade does not work like that: there could be benefits for both sides in the trade agreement. For example, the US simply does not allow in British lamb, and currently puts very high tariffs—tariffs of between 20% and 23%—on British cheeses, including Cheddar, Stilton, and other high-quality British cheeses that we would like to sell to the United States. Of course there is an opportunity for British agriculture, and the scoping assessment that we published on 2 March shows that the UK agriculture sector has the potential to be a net beneficiary.
Matt Western
The Minister has very clearly said that UK farming will be a net beneficiary of a trade deal with the US. Is that correct?
Matt Western
Main Page: Matt Western (Labour - Warwick and Leamington)Department Debates - View all Matt Western's debates with the Department for International Trade
Trade Bill
Matt Western ExcerptsMonday 20th July 2020
(4 years, 5 months ago)
Commons ChamberRead Full debate Trade Bill 2019-21 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 July 2020 - (20 Jul 2020)
Bill Esterson
It is a shame that the hon. Gentleman has taken up other hon. Members’ time in the debate with such rubbish. The Constitutional Reform and Governance Act 2010 is the only formal parliamentary process in place for agreements not covered by the Bill, including with the United States. That is not scrutiny, is it?
Matt Western (Warwick and Leamington) (Lab)
Just to backtrack a moment, I remind my hon. Friend of the claims made by the Minister in his opening remarks, when he claimed we would enjoy better scrutiny than countries such as Australia and New Zealand, which I think is disputable. There was an exceptional omission, which was the United States. Should that not concern everyone?