Trade Bill (First sitting)

Stewart Hosie Excerpts

Tuesday 16th June 2020 Public Bill Committees

[Stewart Hosie (Dundee East) (SNP)]

Do you want to invite the witnesses in turn to make their opening remarks, and then we can see how this will work?

[The Chair]

Q That might be a good way to progress. First, can I invite you, Allie Renison, to introduce yourself and make your opening remarks? Can you speak up, because we are finding it quite difficult to hear in this room? So please do project.

Allie Renison: Absolutely. Forgive me, but people raised in America have no problem, unfortunately, projecting their voice. My name is Allie Renison. I am head of EU and trade policy for the Institute of Directors. That is at the intersection of working on EU negotiating priorities and wider trade priorities. We have a very high share of members who trade internationally—about 70% export. Largely, about two-thirds are in services, and one-third are in goods. So international trade is a big part of members’ focus.

All in all, from discussing the purpose of the Trade Bill with members of the IoD, there is broad-based support for it, in so far as the objectives remain limited to continuity agreements and what is necessary to put in place requirements for taking up our trade defence measures outside the EU. There are some question marks around the future of new trade agreements, but in so far as the Bill is understood to cover the continuity phase, there is broad-based support for trying to ensure that that is over the line.

--- Later in debate ---

[The Chair]

Yes, certainly.

Jonathan Brenton: UK engine exports to Turkey were £100 million in 2015. They were £900 million in 2018. You have a thriving trade that would hit a tariff wall of 10% if we cannot get a roll-over trade agreement. That is the stat I was looking for.

[Stewart Hosie]

Q Allie, I have one question for you. In your introduction, you said that while there are some concerns about future trade agreements, you are broadly supportive of this Bill because it delivers continuity. However, in clause 2(6)(a), it does allow the Government to modify primary retained EU law. Are there any anxieties among IoD members that those modifications, made in order to get some kind of a deal, may mean that we end up with a worse arrangement than we currently have with one or more countries?

Allie Renison: You are very right to raise that point. On the modification issue, I suppose we do not know to what extent that will become an issue, as it depends on where we get to with the roll-over process. I cannot speak for other countries’ priorities, but I think there is a distinct feeling that when the roll-over process was happening during the article 50 period, the time pressure certainly meant that it was a choice between either having an agreement and rolling it over or not having it in place. That may have helped get the agreement over the line. There may be some scope for increased modification.

That probably becomes a bigger negative issue for some of the agri-producers, depending on whether, for example, quotas are changed to get a deal over the line. It depends on the level of quota, it depends on the sector and it depends on the sensitivity of that sector. That is probably the only example, and it is not a particularly prominent one. We have far more members in the processing industries when it comes to agri-food retail and wholesale, rather than actual producers. Their priority is making sure that you are able to get the agreement over the line in the first place.

Just to wrap up my answer, when I say that there is some concern about future trade agreements, I should probably clarify that that means they wanted to understand what the purpose of the Bill was and whether it laid out enough scope for engagement with other devolved Administrations. That is an important point to put on the record: we do not want to get to a situation on the one hand where a future trade agreement can be easily held up, with the Walloon experience in Belgium in the rear-view mirror. However, it is very important that we see it. We do not think that the current CRAG provisions are sufficient for future trade agreements, simply because we want to see the devolved Administrations more involved from the outset, rather than coming in as a blocker at the end. That is why I should clarify the delineation between the concern over future trade agreements and the split in process.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Q Allie, I apologise for putting it like this but can you speak a little slower? I was up last night with two very young children, so my brain is taking a bit of time to get going this morning. One of the areas of contention about the Bill is the extent to which it should cover the future free trade agreements that we might want to enter into. I just want to get a sense of your two organisations’ understanding of the offensive and defensive interests for deals with the US and Japan.

Allie Renison: I am happy to begin on that, and I will slow down, rather than speeding up to get more information in. Keep in mind that that deal is a future trade agreement, rather than what is covered under the Bill. On future trade agreements, although I think the Government can do both, if you were to look at it in terms of priorities, the EU negotiations are four times as important as new trade agreements for our members.

With that in mind, however, when it comes to the US market, it is difficult to compare this with members’ views on the US negotiations with the EU, because there were not triangulation issues to the same effect. We do not know to what extent liberalisation with the US will impact on our relationship with the EU, so we simply do not have that triangulation problem. The triangulation issue rears its head more often now. If you think about it purely from a tariff perspective, a number of people in Great Britain who are trading in Northern Ireland simply want to know how it is going to work with the Northern Ireland protocol and how the tariff will operate. I do not think many members at this point have an offensive/defensive point of view. They want to know how the tariff changes will intersect with the EU negotiations. That is probably where the majority of our members are.

From a defensive point of view, some businesses have an eye on what changes there will be from an inward procurement perspective. There are some concerns about how standards will feature, without knowing how they are being discussed. I would not say that standards—chlorinated chicken and hormone-treated beef, for example—are big-ticket concerns for our members, because we do not have a lot of them in our membership.

From an offensive point of view, several big things unite our whole membership. First, there are the changes to delivering services physically—not immigration policy, but temporary labour mobility and the ability to go and provide services in the US. That is a big-ticket item for many members, who do not know whether that will be part of the trade agreement discussion. Secondly, e-commerce and facilitating digital commerce will probably be an even bigger offensive interest for both sides in the light of the pandemic.