Trade Bill (Second sitting)

Debate between Nick Smith and Mark Prisk

Committee Debate: 2nd sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[Mr Prisk]

Q On the financial services side, can we look at the issue of remedies? Clearly, in the current set of arrangements that is frankly irrelevant in a strict legal sense to you as a sector but, looking forward, the TRA is clearly not going to disappear in two years’ time or after however long the transition period lasts. Therefore, looking at the longer term, what is the relevance to financial services and what are the critical issues that you will be looking for in an effective remedies regime at that stage? Perhaps you can just give us one or two highlights to give us a sense. We have heard about goods so far, which is very important, but obviously services matter as well.

Stephen Jones: I defer to Mr Bowles on this—given his experience with TTIP and equivalent regimes.

Edward Bowles: Obviously a high degree of dialogue is done regulator to regulator, so we are a supervised entity not merely in the home state where we may have our domicile and headquarters but in all markets where we have operation. In fact, your first point of call would be the nature of the relationship in terms of supervisory co-operation between those two entities, and what it is that you are permitted to do, and where any disputes may arise about what you are doing in those markets. In fact, the TRA is probably much less relevant to a highly regulated and supervised industry like financial services than to some others, in which there are fewer regulator-to-regulator forums that would determine the methods and modes of operation.

Stephen Jones: I would just add that the concept of dumping in financial services is, therefore, not strictly relevant.

[Nick Smith (Blaenau Gwent) (Lab)]

Q Mr Bowles, I will ask just a bit more about Standard Chartered and the developing markets in the states and countries where you work. As previously mentioned, your Razia Khan predicts some difficulty in lining up quick deals in Kenya and other places in Africa. What is your view about other countries where your company has long-standing experience, like Vietnam and South Korea? How quickly can those countries respond to these sorts of deals?

Edward Bowles: Thank you for the question. Standard Chartered has been UK-headquartered for the last 155 years, but 85% of our revenues are from Asia, Africa and the middle east. In respect of most of those countries, there are no FTAs, either with the UK or, indeed, with almost any other markets. I was quite involved in my 10 years at Standard Chartered with the negotiations between the EU and Korea, the EU and Singapore and the EU and Vietnam and, most latterly, with those on TTIP, and on India in between times—that has been a slightly less successful product in negotiating terms. The fact is that we have FTAs with some of those markets and some of them are incredibly advanced. Korea and Singapore are incredibly advanced markets. You are dealing with very sophisticated regulators, politicians and others. They completely understand what the UK would be seeking to achieve in any renegotiation post the roll-over of the current FTAs.

There is certainly scope, I think, in some of those FTAs for tweaking, shall we say, and data offshoring would be one of the issues that I am sure the UK would want to look at. The negotiations take a long time. Korea was seven years. Singapore is not yet in force but we have just had a European Court of Justice ruling in relation to one aspect of it that will enable it to come into force soon, but it has been eight years overall. We can cut and paste them, but then the question is, “What are the incentives on each side—which will probably be asymmetric in terms of interests—for tweaking, and what will be the appetite and the timeframe over which you could do it?” My guess is that you would want to do it expeditiously, but the degree of consultation and engagement with other interested industries, politicians, civic sectors and so on, would inevitably build in a longer time.

For other markets that are rather less developed perhaps than Singapore and Korea, it would take longer, because if there is no existing FTA you are looking at a degree of transparency around their regulatory framework and around the concessions they inevitably will be asked to make, and the question is: “What is the quid pro quo for them?” India is a classic example. You have visas, and immigration is one of their core demands. It has always been one of the core issues that has bedevilled the EU-India FTA negotiations and that will be no less the case, I am sure, with the UK than it is with India.