Commonwealth: Trade

Debate between Shailesh Vara and Barry Gardiner

Wednesday 22nd February 2017 Westminster Hall

[Barry Gardiner (Brent North) (Lab)]

Your firm guidance and chairmanship, Mr Davies, are always much appreciated by Members.

This has been an excellent debate. I pay tribute to my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and to the hon. Member for North West Norfolk (Sir Henry Bellingham), both of whom spoke very powerfully about the importance of education and visas connected with education. I especially want to draw out the remarks of the hon. Member for Mole Valley (Sir Paul Beresford), who spoke with great knowledge and understanding of the dangers that exist for our farmers.

I pay tribute, too, to the hon. Member for Rossendale and Darwen (Jake Berry) for initiating the debate. I thought it could have been subtitled “The importance of old friends”, because long before the Common Market became a twinkle in Edward Heath’s eye we had the Commonwealth. At a time when we are loosening the bonds with our nearest friends after a 40-year partnership in the EU, we have come to realise the value of those old friends. We seek to strengthen our ties with India, Canada, New Zealand, Jamaica, Australia, Pakistan, Bangladesh, South Africa, Kenya, Nigeria and all 52 Commonwealth members.

Trade is one of the most effective means of creating shared prosperity and decent jobs. Opposition Members understand the power of fair and open trade. We share the dream of the vast majority of people around the world who want to see closer ties between countries. We want to build trade links, not protectionist walls. We are therefore emphatic in our support for promoting trade with the Commonwealth and in welcoming the Commonwealth Trade Ministers conference to London next month. In that regard, I pay tribute to the work of the right hon. Member for East Devon (Sir Hugo Swire).

[Albert Owen in the Chair]

It would be foolish, however, to think that we in the UK may simply pick up where we left off before we joined the EU. The world has changed, the power balance has changed and the nature of global trade has been transformed beyond recognition. Yesterday, His Excellency Y. K. Sinha, the new high commissioner for India in London, made that absolutely clear at a conference in East Anglia. He said that the key to a post-Brexit free trade agreement would be to resolve the issue of workers’ mobility—how familiar does that sound from our Brexit debate? He made it clear that, for India, it is essential to ensure that its financial services and IT professionals could come to and go from the UK freely. He said:

“For India mobility is key”

and went on to point out that a recent study suggested that a free trade agreement could increase UK-India trade by 25%—I use that figure, but the hon. Member for Rossendale and Darwen said 26%. That would boost UK exports by only 0.4% of total exports. The hon. Gentleman spoke of the “huge prize” that that would be, but let us be clear and do the maths: none of the UK’s top 10 export partners is a Commonwealth country. Indeed, in respect of those Commonwealth countries for which the Government have announced trade working groups and dialogues, the volume of exports from the UK is extremely low. India accounts for 1.7% of our exports, Australia 1.7%, Canada 1.2% and New Zealand approximately 0.2%. Let us add Singapore, given the Secretary of State’s recent visit—that accounts for an additional 1.2%.

[Mr Vara]

Will the hon. Gentleman give way?

[Barry Gardiner]

Because of the time, I will not.

The Conservative Free Enterprise Group think-tank identified those countries as the priority target for trade agreements. It also recognised that the 10 largest Commonwealth export markets for the UK account for no more than 8% of our total exports but almost three quarters of our exports to the Commonwealth. Clearly, any shift away from the EU would require a substantial uplift in our export growth to make up for the potential loss from the European Union.

It has properly been said that trade between Commonwealth countries is enhanced and facilitated by the context of shared languages, cultural familiarity and particularly common legal and regulatory frameworks. The various communities in the UK from Commonwealth countries, including those in my borough, Brent, are our very best trade advantage. It is estimated that the so-called Commonwealth effect reduces overhead costs for businesses trading between markets by up to 15%.

However, there has been a move to greater regional co-operation through formalised partnerships and institutions very like the European Union, and the increased regulatory harmonisation that goes with that, which has unlocked similar benefits for those Commonwealth countries. It can be no coincidence that the countries mentioned by the hon. Member for Rossendale and Darwen are all members of the Trans-Pacific Partnership agreement. That drive to regional partnerships is significant. We must consider that, although the United Kingdom has determined that it will withdraw from the EU, many Commonwealth countries seek precisely to strengthen their own participation in such regional agreements, and not to recreate the Commonwealth’s old links with the UK. Two Commonwealth countries—Malta and Cyprus—remain members of the EU and will find themselves similarly restricted from pursuing the trade agreements that the UK now seeks.

I will try to move to a close in the next couple of minutes, Mr Owen, as I was asked to. That means leaving out a great deal, but let me pick up one essential thing. By withdrawing from the European Union, we will leave the EU’s generalised system of preferences, which allows developing countries favourable market access through generous tariff reductions, which essentially remove tariffs on approximately two thirds of imports from those countries.

I want to ask the Minister about the GSP-plus enhanced preference scheme for countries that have ratified and implemented core international conventions relating to human and labour rights, the environment and good governance, and the “Everything but Arms” arrangement for least developed countries, which grants duty-free and quota-free access to all products from those countries except arms and ammunition. Will he give us a strong reassurance that, when the UK leaves the EU, those very poorest countries, many of which are Commonwealth countries, will not see their exports to the UK effectively fall off a cliff edge? Will he assure us that the Government will continue the generalised system of preferences arrangements after the UK leaves the EU?