Australia and New Zealand Trade Deals

Stephen Kinnock Excerpts

Monday 14th November 2022 Commons Chamber

[Greg Hands]

I thank the International Trade Committee for its various reports on both deals, and I look forward to engaging with its Chair, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), and indeed the whole Committee.

It can be said of any negotiated deal that something might have been better, as that is an inevitable consequence of negotiation. There is a bit of give and take. The safeguards for UK agriculture build in a very considerable length of time, of 15 or, in some cases, 20 years, for people to adjust. I contrast that with the European Union deal—the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) voted to have no deal with the European Union—which gave instant access.

Today, I will explain to the House how these important deals will help firms in every part of the country to flourish and grow. First, these agreements will remove 100% of tariffs on all goods, most of which will come into effect as soon as the agreements are in force—that is particularly with reference to UK exports. They will reduce red tape on British goods sold to Australian and New Zealand markets, making our exports even more competitive. Our automotive sector is among the many UK industries that will reap the rewards. For example, McLaren says that these tariff reductions

“will support and facilitate customer and network growth across Australia in the coming years.”

Nissan says that removing the 5% duty on car exports will help further exports to Australian customers of the Leaf, Qashqai and Juke cars it makes at its Sunderland plant. The removal of tariffs of up to 10% on car parts and on some vehicles sold to New Zealand is good news for other vehicle manufacturers across the UK.

A range of other industries will also benefit. For example, Nairn’s, the Edinburgh-based oatcake manufacturer, says savings from removing 5% tariffs under our New Zealand deal will help offset the increased costs that have affected businesses following covid-19 and Russia’s invasion of Ukraine. The Food and Drink Federation believes the removal of a range of tariffs will help to give UK businesses significant growth opportunities and make them more competitive in the New Zealand market.

UK investors will benefit from more access than ever before to opportunities in Australia and New Zealand, with guaranteed rights to invest across the economy. We are maximising opportunities for British companies to invest and grow their businesses in Australia. It will be easier for UK businesses to expand into both Australia and New Zealand, because we have increased the screening thresholds in both deals, meaning that fewer UK investments will be subject to review.

We also secured outcomes that encourage further inward investment into the nations and regions across the UK. In 2020, the UK was the second most popular destination for Australian foreign direct investment, and Australia is a big global investor. In 2019, there were more than 2,000 Australian-owned local business units in the UK, employing more than 71,000 people, and in 2020 we were the fourth largest destination for foreign direct investment from New Zealand.

Our Australia and New Zealand trade deals will also give our service industries a competitive edge on data and digital. Some 80% of our economy is in services. Scotland’s financial services industry and engineering services firms in the west midlands will benefit, and new opportunities will be provided for Welsh fintech firms in Cardiff. Our Australia deal allows professionals in areas such as engineering, accountancy and architecture to get visas to work. The law firm Herbert Smith Freehills says that these measures will make it easier for its staff to work across the UK and Australia. We also have access to the £10 billion Government procurement market in Australia, putting our firms on an equal footing with Australian firms. Just last month, I visited Informed Solutions, which is headquartered in Altrincham, and its management told me how much they were looking forward to the ratification of the upcoming free trade agreements to assist their business as well.

We have world-leading digital chapters, opportunities in cyber-security trade and so on. We also have a small and medium-sized enterprises chapter, which is very important for helping these companies navigate a free trade agreement. My Department is working hard at spelling out our many advantages, to businesses large and small. The national chairman of the Federation of Small Businesses, Mike Cherry, has said that our trade deal with Australia was great news for many of its members, as the small business chapter will ensure that the needs of smaller businesses are fully catered for in the years to come. My right hon. Friend the Secretary of State for International Trade often likens trade agreements to new motorways: they are at their most useful when they are well used by cars. That is why my team is meeting companies around the country to explain how they can make full use of our deals. Of course, businesses that want to trade with Australia and New Zealand and need more personalised help can turn to our network of trade advisers.

I have reflected on the many economic advantages offered by our free trade agreements, but these deals are not just about commerce. They are also about creating deeper international partnerships that will benefit both our citizens and the wider world, as well as our wider strategic objectives.

[Stephen Kinnock (Aberavon) (Lab)]

We are discussing making sure that these deals are about not just economic benefits, but the social partnership and ensuring that workers’ hard-won rights are not undermined by doing a trade deal that could lead to a race to the bottom. Will the Minister explain therefore why the deals do not contain any commitment to the International Labour Organisation core conventions?

[Greg Hands]

I thank the hon. Member for his intervention. I know that he takes a strong, keen and constant interest in these issues. Let me say to him that the UK’s commitment to human rights, workers’ rights and various social justices are not always best pursued through trade agreements; we do pursue them bilaterally as well. I do not believe that there are any widespread concerns in relation to Australia and New Zealand, but I am happy for him to write to me if he has concerns about workers’ rights in those two countries. However, it is not obvious to me how a trade deal will necessarily be the best way to pursue those objectives in any case.

Together our nations can use trade to address contemporary challenges such as economic degradation, health pandemics and threats to global security. Both of these deals support that endeavour, including the provisions that uphold high standards and foster co-operation on shared challenges. With world-leading chapters on trade and gender equality, the deals demonstrate our commitment to break down barriers that exist for women in trade, whether as workers, business owners or entrepreneurs.

The UK-Australia agreement contains an innovation chapter, which is the first of its kind in any FTA between two partners in the world. This will ensure that our trading relationship remains at the forefront of emerging technologies. I might just add that the Confederation of British Industry said that our deal with New Zealand puts us at the fore of the green trade revolution and showcases to the world that trade and climate change can go hand in hand.

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[Nick Thomas-Symonds]

I completely agree with my right hon. Friend that we do not need a single template, but we could do with a core trade policy and a core set of objectives from the Government.

I turn to the issue of scrutiny, because for those in this House who follow trade matters closely, it will not have gone without being noticed that this debate brings a distinct change of focus from Ministers at the Department for International Trade. Ministers—I would say they are new Ministers, but I think the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), is competing with Frank Sinatra in the comeback stakes—will I am sure be aware of stinging rebukes from the cross-party International Trade Committee, which has regularly and strongly raised the need for better scrutiny structures around trade deals. It called in its recent report for

“the Government to accept specific recommendations to enable better scrutiny of any FTAs”.

That is very much a cross-party matter—the hon. Member for Totnes (Anthony Mangnall) has regularly made the case to me as the shadow Secretary of State as well as to the various Secretaries of State and I hope that those criticisms and recommendations are having an impact. I hope that those recommendations, which come from right across the House, are being heard. Perhaps that is why we have at least ended up with today’s debate, although the irony is not lost on us that parliamentary time has now been allocated to agreements that were long ago signed and agreed.

[Stephen Kinnock]

My right hon. Friend is being generous in giving way. On this point about scrutiny, he is a Welsh MP like me, so does he agree that these deals have a huge impact on, for example, the Welsh farming industry? Does he share my regret that the Government have not published an impact assessment for the devolved nations, and that they have ridden roughshod over any conventions on consulting properly with the devolved nations, whose Governments are such important stakeholders in this process?

[Nick Thomas-Symonds]

I entirely share my hon. Friend’s concern about the lack of specific impact assessments. I also share his disappointment that there is not a specific set of structures in place where the devolved Administrations can make their voices heard at a far earlier stage in the process. That would be extremely helpful.