Transatlantic Trade and Investment Partnership

Robert Walter Excerpts

Tuesday 25th February 2014 Commons Chamber

[John Healey]

I had not heard that statement and I am surprised that the financial services industry has the detailed text of what is on the table, because we are not yet at that stage of the negotiations.

I want to do two things: first, I want to spell out a progressive economic case for trade and for the TTIP, and secondly, I want to set out four tests that I think a good TTIP deal and the Governments and negotiators involved must meet. On the economic case and why it is so important to the UK at present, I think that the great depression of the 1930s was the last economic crisis that was in any way comparable to what we suffered in 2008 with the global financial crisis and downturn. The policies pursued by the UK and the US back in the ’30s are, I think, widely seen to have prolonged that slump and held back any recovery. Not only were there deep cuts in public spending; there was also a sharp rise in protectionism and a decline in multilateral trade. Therefore, part of the reason why deals such as the TTIP and, indeed, the EU’s recent agreements with Canada and Korea are so important is that they avoid that default to beggar-my-neighbour economic policies and instead look to increase global trade through international co-operation. The UK has a particular need for the economic benefits and boost of trade.

[Mr Robert Walter (North Dorset) (Con)]

The right hon. Gentleman has talked about the benefits for the Untied Kingdom of the TTIP negotiations. Has his all-party group considered how the UK would fare if it had to negotiate a similar deal with the United States outside the European Union?

[John Healey]

Quite simply, there would be no negotiations. Interestingly, our all-party group recently had the Canadian ambassador in to talk to us about the Canadian deal and what lessons it might have for the TTIP negotiations. When the question was put to him, “Look, we’ve got long-standing British-Canadian relations, so why haven’t we had a British-Canadian deal like this before?” in effect, he said, in his own diplomatic way, “You’re not big enough: it’s not worth our effort.” This sort of potential boost to our economy and jobs is available to us through these negotiations only by our being part of a European Union that is capable of conducting such talks and of reaching such a deal with the US as an economic equal.

--- Later in debate ---

[Mr Robert Walter (North Dorset) (Con)]

I congratulate the right hon. Member for Wentworth and Dearne (John Healey) and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing the debate.

I want to start by saying that I believe in free trade. I subscribe to the goal of global trade that is both free and fair. Achieving that goal, however, is a slow and grinding process. In my view, it will be many decades before there is any meaningful World Trade Organisation-led, top-down framework that we could call global free trade. Why? Because the parties range from the richest to the poorest nations on the planet, from the prairie farmers of north America to the subsistence agriculture of sub-Saharan Africa. If we truly believe in free trade, however, we should use the building blocks that we have today. The European Union is the world’s largest market and we are part of it. It is the biggest building block in this equation.

Consider these numbers: EU GDP is 19.4% of world GDP, and US GDP is 18.9% of world GDP. Together that is nearly 40% of the worlds productive wealth, but between us we still maintain some of the most stringent tariff and non-tariff barriers to trade. Below the wire, under the barrier, 30% of the EU’s stock of foreign direct investment is in the United States, and 29% of the US’s FDI is in the EU. This is, therefore, a no-brainer. If we can create free trade across the Atlantic, with Canada as well of course, and have the transatlantic trade and investment partnership, that has got to be good for world trade, good for the United States, good for Europe and good for Britain. There are, however, those who want us to turn our backs on all of this and leave the EU, and so leave a trade deal representing 40% of world GDP.

The TTIP negotiations will not be easy. There are too many vested interests and we have heard about some of them already: in agriculture, the public sector, transport and financial services, to name but a few. However, the prize is so great and the balance of power so favourable to a deal that I am optimistic we can achieve it. Outside the EU, the cards are stacked against us. Heaven knows, it would be difficult enough to get a deal with the EU if we had just left it. Of course, some Eurosceptics would argue, in spite of the hard facts, that we would still be better off out and better off negotiating our own free trade deal with the US alone. That is, frankly, a fantasy. Can the UK afford to squander such a strategic and economic opportunity? I believe we cannot, and I hope we make sure that we do not.

I want to reiterate my support for the Government’s commitment to keeping our country firmly within the European Union, as a sure-fire guarantee of the UK’s best interests. I hope they will continue to hit home the point that the two issues are intimately linked and mutually reinforcing. The promise of a trade deal highlights not only the material value that the UK derives from our membership of the EU, but the leverage and influence that we can only exercise by playing the lead role within it. This is a fact. The UK has accomplished so much within the EU over many decades. UK companies already enjoy unfettered access to a single market of 500 million people. The EU has helped to create around 3.5 million jobs, one in 10 jobs in our country.

I agree that the UK wants to trade with the whole world but so do the Germans, the French, the Italians and the Americans—but here we have the opportunity of securing free access on our terms to a stable market that will represent 40% of the world’s productive wealth.

[Mr William Cash (Stone) (Con)]

In the light of his remarks, will my hon. Friend explain why, in our trading with the other 27 states, we have run a deficit, according to the last figures, of £49 billion, whereas with the rest of the world we run a surplus of around £13 billion, which is likely to rise by the end of this year to about £25 billion on the same goods and services?

[Mr Walter]

As always my hon. Friend asks an incisive question that deserves an answer, which is that if we successfully negotiate this deal—which is with another 20% of the world—it can only be advantageous to open up those markets in the United States, Canada and other countries to UK businesses.

There are other deals under discussion and in place that would mean that we would be more than halfway towards achieving our goal of world free trade. Do not let us throw that away. Our membership of the EU is too good to throw away and, in my view, the transatlantic trade and investment partnership is too good a deal to reject.