EU-Singapore Free Trade Agreement (FTA) AND INVESTMENT PROTECTION AGREEMENT (IPA)

Michael Tomlinson Excerpts

Monday 10th September 2018 General Committees

[The Chair]

Before we begin, I will briefly outline the procedure for European Committees. First, a member of the European Scrutiny Committee—in this case, Mr Tomlinson—will make a statement of no more than five minutes on the Committee’s decision to refer the documents for debate. The Minister will then make a statement for up to 10 minutes. Members of the Committee may not make interventions during either statement. Questions to the Minister will follow. The Minister’s statement and subsequent questions may take up to one hour. The Minister will then move the motion on the Order Paper and the debate will take place. We must conclude our proceedings by 7 pm. I call Mr Tomlinson.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

It is a real pleasure to serve under your chairmanship, Sir Henry.

The EU’s proposed free trade agreement and investment protection agreement with Singapore are expected to be signed on 18 or 19 October. We thank the Government for tabling this debate, particularly given the timing and the timetable, because it is imperative that Parliament has the opportunity to scrutinise and have its say on the Government’s position on the new EU trade and investment agreements, which obviously continue to generate interest inside and outside this House.

Let me first point out the broader Brexit implications of the proposed FTA considered by the European Scrutiny Committee. First, the Government reiterate their commitment to securing the continuity of the EU FTAs after we leave the EU. Under the draft withdrawal agreement, the EU intends to notify third parties that the UK is to be treated as a member state for the purposes of international agreements for the duration of the implementation period. However, the question that remains unanswered is whether the Government consider this notification or request to third countries wholly sufficient to secure the benefit of these EU bilateral agreements for UK businesses and consumers. We note Singapore’s agreement in principle to the continuity of trade relations during any implementation period. How and when will that be translated into a legally binding commitment?

Turning to the expected benefits of the FTA, the Government have assessed that the FTA will increase GDP by £95 million each year. Bilateral exports are expected to increase by nearly £300 million, and imports by just over £600 million, in the long run. Can the Minister explain how the expected £300 million trade deficit with Singapore will generate the £95 million per annum benefit? In particular, which UK firms or sectors are likely to be most affected?

The Minister states that the Government are working towards new bilateral agreements with Singapore after the end of the implementation period. Are the Government seeking a copy and paste job of the EU negotiated deal, or a more ambitious deal? When will the Government consult UK stakeholders on a new agreement and publish an accompanying revised impact assessment? Furthermore, and importantly, how might the Chequers plan have an impact on the UK’s ability to strike a more ambitious trade deal with Singapore after Brexit? Clarification on cross-border trading relationships with Singapore and other countries in a no-deal scenario—in which there is no withdrawal agreement and no implementation period—is also required. For example, what costs will UK businesses and consumers face if the UK reverts to World Trade Organisation most favoured nation trading terms with Singapore?

Turning to the proposed investment protection agreement, one of the most controversial issues in recent EU trade agreement negotiations, including those with Singapore, has been proposals involving investor-state dispute settlement mechanisms and the new version, investment court systems, which allow investors to sue Governments in independent arbitration tribunals. The Minister considers that ratification of the proposed investment agreement is unlikely to happen until after the end of any implementation period, so that will not apply to the UK. However, the Government remain silent on what sort of investment protection and dispute resolution mechanisms they would include in future agreements. With just six months until the UK’s exit from the EU, when do they expect to determine their position on this fundamental aspect of post-exit relations with third countries? For the reasons set out in the Committee’s report—we note the Minister’s response of 19 July—the issues require urgent clarification.

The Committee has also highlighted the need for transparency in, and effective scrutiny of, trade deals—both EU-negotiated deals and deals negotiated in the future. Will there be more or fewer opportunities than at present for parliamentary scrutiny and public accountability with respect to trade deals after Brexit, and if so why? For example, further to the Secretary of State’s oral statement to Parliament on 16 July, how does the proposed outline approach to new trade agreement negotiations before formal negotiations begin compare with the Commission’s negotiating directives, and to what extent will Parliament be involved in setting or amending such approaches?

Those are the main issues raised by the Select Committee. I look forward to the debate. It is good to see the Minister in his place, and I look forward to his responses.