EU-US Trade and Investment Agreement

Mike Gapes Excerpts

Thursday 18th July 2013 Commons Chamber

[John Healey]

If the hon. Gentleman looks, for instance, at the Bertelsmann Institute’s report, he will see some interesting evidence on the assessment of the potential impact of a comprehensive deal. It points out that the countries that are in Europe but not part of the European Union are likely to lose out the most. Britain could gain tens or even hundreds of thousands of new jobs in the long term through an agreement. In contrast, countries such as Iceland are set to lose at least 1,000 jobs, while Norway is set to lose about 11,000 jobs. In other words, the countries in Europe that are not party to the agreement are likely to lose out in future. The evidence is rather different from that which the hon. Gentleman cites.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Will my right hon. Friend give way?

[John Healey]

I will, and then I will make some progress, because I am conscious that the Deputy Speaker might want me not to delay the House for too long.

[Mike Gapes]

I must declare that I went to Korea last month, and my entry will be in the Register of Members’ Financial Interests. Is my right hon. Friend aware that as a result of the EU-Korea free trade agreement there has been a significant increase in British trade with and exports to South Korea in the past year? We will therefore clearly benefit from being part of the European Union negotiation with the United States.

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[Mike Gapes (Ilford South) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Sheffield Central (Paul Blomfield). I agree entirely with what he said and I particularly endorse his remarks about public procurement and the importance of the national health service. It is vital that debates on this issue make it clear that the trade agreement will not be used as a way of justifying the privatisation policies of the Conservative and Liberal Democrat coalition, by blaming it on the requirements of some European-US deal.

[Julian Smith]

I reiterate the question I asked earlier. Does the hon. Gentleman accept that the Labour party in government regularly used the private sector to deliver better services, where necessary, in the NHS?

[Mike Gapes]

I accept that because of the problems we had when we came to office, we had to get extra capacity. My constituents in Ilford benefited from the independent treatment centre that was established on the site of King George hospital. They had operations on their knees and noses that would not have been available previously because of the lack of capacity in the NHS. I make no apology for the fact that my constituents benefited from the investment and policies of the Labour Government, but that is not what this debate is about.

I want to make three points. First, in an earlier intervention I referred to the European Union-South Korea free trade agreement which, as the Foreign Secretary recognised in the House a few months ago, has not just been of great benefit to the European Union as a whole, but the removal of 97% of the tariffs that existed between Korea and the European Union led to a significant increase in British exports to Korea.

[Mr Cash]

I alluded to that in my speech. After inquiry, the European Scrutiny Committee was informed that it was difficult, if not impossible, to make a true comparison between the apparent benefits to the EU in general and the advantages to the UK individually, apart from in the car industry, where there appeared to be a distinct benefit.

[Mike Gapes]

On 23 April, the Foreign Secretary said:

“The free trade agreement with South Korea eliminated nearly 97% of tariffs, and some British businesses are now enjoying a huge increase in exports to South Korea as a result. We want to see the same thing happen on an even greater scale in relation to the United States.”—[Official Report, 23 April 2013; Vol. 561, c. 743.]

I suggest the hon. Member for Stone (Mr Cash)has some comradely discussions about these matters with the Foreign Secretary in the next meeting of the 1922 committee or somewhere else.

I want to emphasise a point made by the hon. Member for Skipton and Ripon (Julian Smith) about the significance of reducing the regulatory obstacles. Many of my constituents work in financial or banking institutions in London. TheCityUK has published a paper saying that it

“strongly supports the efforts being made in the US and the EU towards a Transatlantic Trade & Investment Partnership.”

It believes that that needs to be comprehensive and should cover all aspects of the economy, and it highlights the absurdities of different regulatory regimes, the additional costs this imposes on both sides of the Atlantic and the serious delays involved.

In another publication, British Influence highlights how the pharmaceutical industry has completely different requirements on the acceptability and availability of drugs in the US and Europe, meaning that drugs that have already gone through one rigorous testing procedure must then go through another one. That is not necessarily anything other than an obstructive measure to preserve markets for certain companies by squeezing out competitors. If it can compete on quality—and our pharmaceutical industry is certainly high quality—industry in Europe and Britain will be well capable of competing on a level playing field in an American market.

There will be people in the US, as in Europe, who will try to resist and obstruct these measures. We have heard some of those voices today, unfortunately. The reason for that is partly ideological, but it is also linked to pork-barrel politics, the two-year congressional election cycle and all the other difficulties people have in winning public office in the US, so this will not be an easy process, and these negotiations will take time; it is a bit optimistic to think they could be over in two years, and they will not be helped if the EU adopts a minimalist position or says it wishes certain items to be taken out of the negotiations at the start. That will play into the hands of those in the US who also want to play that game.

It is a bit like the Conservative party’s position on renegotiating our membership of, and repatriating powers from, the EU. We cannot take things à la carte, and in the negotiations between the EU and the US, we will not get all we want; it will be a difficult process, and it could well be undermined significantly by diversions, such as those relating to Scotland, to which my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) referred. It could also be undermined, however, if British negotiators, obsessing about other issues, divert their efforts and energies away from getting the best deal for British business and investment and trade in the United States, as my hon. Friend the Member for Sheffield Central pointed out earlier.

According to The Daily Telegraph, the Prime Minister said that

“if Britain weren’t in the EU you would not directly benefit from an EU/US trade deal”.

That is the fundamental point. If we embark on a process of renegotiating terms with, or withdrawing from, the EU, we will damage our position within an internal EU process and our long-term relationship with the US. As the US President, the ambassador and others have made absolutely clear, the US believes it to be in the interests of its co-operation with Europe that the UK play a full part within the EU. If we want to get an EU-US trade and investment treaty, we need to support it wholeheartedly.

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[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

It is a pleasure to wind up this debate. It has run over time, for which I apologise to hon. Members taking part in the next debate, but that is testament to the importance of the subject and the exceedingly high-quality contributions. More important than the quality of the rhetoric has been the unanimity of argument in favour of an EU-US trade deal. Of course important questions need to be addressed, and I will deal with as many of those as I can in the time available, but all speakers have been in favour, in principle, of pushing to make this deal happen, and that message should go out loud and clear from this House. As a passionate supporter of free trade, believing that free trade and capitalism has been the greatest force for prosperity ever invented by man, I am proud to be part of a political consensus in this country in favour of free trade. That is one of our great political and economic strengths.

On that note, I pay tribute to the right hon. Member for Wentworth and Dearne (John Healey) and my hon. Friend the Member for Aberconwy (Guto Bebb), not only for securing this debate, but for starting up the all-party group on European Union-United States trade and investment to make sure that a forum is available for all Members to discuss the issues relating to the TTIP deal. The launch of the negotiations started last week, and they are a once-in-a-generation opportunity to secure the biggest bilateral trade agreement in the history of the world. As many hon. Members have said, it would bring significant economic benefits, in growth and jobs, to both sides of the Atlantic.

There are also compelling strategic reasons for the agreement, as the right hon. Member for Warley (Mr Spellar) and the hon. Member for Linlithgow and East Falkirk (Michael Connarty) argued, putting the proposal in its historical context. It would be good not only for trade but for the relationship between our two continents. A successful conclusion could allow the EU and the US to agree common standards and rules fit for the 21st century. The principle of mutual recognition is an important one, and perhaps the mutually recognised standards would form the basis for standards around the rest of the world, given the sheer scale of a free trade area between the EU and the US.

We heard Opposition Members argue passionately in favour of the EU and against giving people their say, not least the hon. Members for Linlithgow, for Sheffield Central (Paul Blomfield), who gave a spectacularly passionate argument against allowing people their say in a referendum, and for Glasgow North East (Mr Bain). I think that the TTIP is central to our vision of a reformed EU that is more competitive and better able to deliver jobs and growth for its citizens, and for that proposition to be put to the British people in a referendum is a strong strategy for the way forward. Opposition Members talked about Barack Obama’s White House officials saying this and that, but I will go by the words of the man himself, who fulsomely supported the strategy of renegotiating our relationship and putting it to the people in a referendum.

The EU-US trade deal would be the biggest in the world, and it would build on our strong relationship.

[Mike Gapes]

The Minister just said that President Obama had supported a referendum. Perhaps he will give us the source of that statement.

[Matthew Hancock]

The source of the statement was President Obama. He said during a press conference with the Prime Minister—I do not have the precise quote, but I have the substance of it—that he thought it was right to try to renegotiate a relationship before deciding to leave. I will write to the hon. Gentleman with the precise quote. I think that it is better to listen to a politician, rather than officials representing a politician.

Crucially, the free trade deal must genuinely support free trade, which I think it will. My hon. Friend the Member for Aberconwy commented on that, channelling Bright. Negotiating an ambitious programme is vital. Many numbers have been quoted in the debate. We are already negotiating trade deals with Canada, India and Japan, each of which represents 2% of our exports. The United States represents 15% of our exports. I think that sums up the scale and importance of the proposition.

The relationship is already exceptionally close and deep. The US is the top export destination after the rest of the EU, and the US and the UK are each other’s largest foreign investors, supporting over 1 million jobs in this country, and US investment stock in the UK is worth around £200 billion, which is eight times the size of US investment stock in China. The scale is important, the Government’s ambition is high, and all areas are in scope. Of course, as has been mentioned, the audio-visual sector has been set to one side, but there is the potential to include it if negotiations go in that direction.

With regard to whether regional jobs data can be made available, the hon. Member for West Bromwich West (Mr Bailey) and the right hon. Member for Wentworth and Dearne argued strongly that we need to ensure that we make the argument for the deal. We will look at publishing regional jobs data in as robust a way as possible. Arguments were made, not least by the hon. Members for Hartlepool (Mr Wright) and for Birmingham, Yardley (John Hemming) and my hon. Friend the Member for Skipton and Ripon (Julian Smith), giving specific examples of how the deal would help British businesses and jobs and be a positive force for the economy and prosperity. It is some of the specific examples that were given that make the case most eloquently and strongly.