UK-Japan Comprehensive Economic Partnership Agreement

Taiwo Owatemi Excerpts

Wednesday 25th November 2020 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab)]

It is a pleasure to speak in this debate as a Member who serves on the International Trade Committee. I would like to start by congratulating the Secretary of State and the Department for International Trade on what they have achieved. However, I have concerns that I would like the Department to address, and I will come to those in a moment. As we know, CEPA is the UK’s first bilateral trade agreement of its kind, and it therefore lays crucial precedents for the future trade agreements that the UK will eventually enter into. There are several aspects of CEPA that improve on its predecessor, JEPA. This is true, for example, of how CEPA treats the rules of origin of manufactured goods. Previously, there were stricter limitations on what could be considered UK- manufactured goods.

CEPA also provides for the so-called extended cumulation of manufactured parts made in the EU and placed in UK and Japanese goods. This change makes it easier for inputs from non-EU third countries to count as being of UK origin, and this will enable UK producers of those goods to diversify their supply chain. However—and it is a big however—the EU may challenge this shift, to the long-term detriment of the automotive industry, and as third-party cumulation will be crucial in producing electric vehicles, I believe that the Secretary of State should consider how a challenge to third-party cumulation could impact the automotive industry’s expansion into electric car manufacturing.

There are sections of CEPA that require further clarification, and prominent among them, as we have heard, are the rules governing data protection. That is an area in which CEPA departs from JEPA. There are concerns that provisions relating to cross-border data flow could have negative implications for our NHS, for example, and I ask the Minister to clarify how those restrictions could potentially harm NHS data storage and sharing.

I would also like to raise my concern over the provision relating to the UK’s future accession to the CPTPP. In the short term, the Government have promised to assent to a partnership that would give the UK access to some of the CPTPP tariff quotas and, by extension, access to more competitive export markets. However, the Secretary of State has indicated that that tariff scheme is a temporary arrangement that will expire in 2024, at which time it will be assumed that the UK will join the CPTPP. However, if the UK’s accession to the CPTPP takes longer than the Government predict, or if it ceases to be a high-priority objective, will the UK lose access to those advantageous tariff quotas?

I am also concerned about how the Government modelled CEPA’s impact on our annual GDP. The Government estimate a resulting 0.09% GDP increase in the event of a no-deal Brexit. Will the Minister clarify whether that increase would be due to higher projected barriers to trade between the UK and the EU, resulting in more potential trade with Japan, or whether it would be due to the negative impact on UK GDP growth of the UK and EU not concluding a trade agreement?

On a more general note, CEPA currently lacks any guidelines requiring imports to meet UK standards of animal welfare. As it stands, the agreement may create problems for our farmers and agricultural standards when it comes to agreements with other priority trading partners, particularly Australia and the United States. So when the Minister rises to his feet, I hope he will tell us whether the Government will re-evaluate that section on animal welfare, bearing this concern in mind. Finally, it is important to note that the time given to the Committee to scrutinise CEPA was very limited. I understand that there is pressure to pass CEPA with all urgency, but we should not sacrifice the thoroughness of a process this important for the sake of expediency. It is vital that Parliament should be given an appropriate amount of time, and indeed more time than the task requires, for future agreements.