UK Accession to CPTPP

Tanmanjeet Singh Dhesi Excerpts

Thursday 22nd February 2024 Commons Chamber

[Liam Byrne]

I am grateful for the chance to make a brief statement about an excellent report that the Business and Trade Committee published on Monday, to coincide with the opening of the period of reflection, under the Constitutional Reform and Governance Act 2010, on the comprehensive and progressive agreement for trans-Pacific partnership.

It is timely for me to make this statement because, like many in the Chamber, I am old enough to remember that a major Brexit benefit was, allegedly, the freedom for us to negotiate free trade agreements more quickly than the EU, and to sign those free trade deals in a way that suited the UK. It is fair to say that, since Brexit, we have learned some hard truths about the difficulties of negotiating free trade deals, not least because the world has changed since then. Economic security is now a much more significant issue, which makes trade barriers harder to bring down. We have to navigate new imperatives on economic security and there are new dilemmas, which is why statements such as this are so important.

The Government have discovered that they cannot just rely on bluff, bluster and a bit of boosterism to get trade deals over the line. I remember the manifesto produced by His Majesty’s Government at the last election, which said that 80% of our trade would be covered by trade deals. We are at about 60% now. The Government promised around £1 trillion in exports by 2030—I am not sure that we are on track to hit that. The Australia trade deal was criticised by UK farmers for being a giveaway, and the Canadian trade talks are in a state of some confusion. The India trade deals, after 14 gruelling rounds, have some hurdles before the Indian elections. The broad point is that we have all learned a lesson about how difficult trade deals are. That is why it is important that the Government do not oversell the deal before us. The role of the Select Committee is to throw some light on what has been put before us, so that we can have a proper debate in this House.

I have five brief points that I want to draw from our report. The first is about precise gains, which in the short term are hazy, and in the long term are hazier still. Without doubt, geostrategic gains are to be had from joining the CPTPP. That was the objective set out in the integrated review, and it is a good and real one. There is a prize there. The impact assessment on economic gains said that the boost to UK GDP would be about £2 billion a year—less than one tenth of a per cent. by 2040. Even that number is in doubt, because in the evidence we took from the Secretary of State, she resiled from the models used by her Department and was unable to give any alternative numbers.

We heard evidence from exporters that the treaty would be good for export growth, but we noted that it would be limited because we already have many trade agreements in place with CPTPP members. Some UK sectors could lose out because of international competition: electronic equipment, transport equipment and semi-processed food. In our conclusion, we asked the Government to explain what steps they will take to ensure that UK businesses fully exploit the treaty.

The second point is about the future. Much has been made about the future possibilities of the CPTPP because it is a gateway to the wider Indo-Pacific region, which is expected to account for the majority of global growth between 2021 and 2050. We made the point that the members of this particular trade treaty account for about 15% of the Indo-Pacific market. That is quite small. Perhaps we were expecting to hear more about the Government’s game plan for using this treaty to grow. China will apply to join, but the Secretary of State is not willing to go on the record to explain the Government’s road map for expanding this trade agreement in future, or say whether they would endorse or block China’s application, if it materialises. We are at risk of willing the ends and not the means, which is not necessarily good policy. In our report, we asked that the Government update their trade model, give us some numbers to look at and set out their idea of what a future road map might look like. If the great prize in the Indo-Pacific tilt is economic trade of the future, let us understand how we will use the CPTPP in a strategic way to cover a bigger fraction of that market with free trade agreements for our country.

Thirdly, we looked at trade standards and food standards. We took lots of evidence and noted the Trade and Agriculture Commission’s advice to the Secretary of State. We noted that there was lots of evidence about the risks of maintaining UK bans on imports on beef and pork. We noted that the Trade and Agriculture Commission was pretty confident that existing protections could be kept in place. We also noted that protections on imports using more pesticides were unlikely to be diluted. There was evidence on either side of the argument about increases in palm oil, although the Minister addressed that rather well in the Bill Committee on Tuesday.

The fourth point on which we took evidence was the investor-state dispute settlement. That was the subject of lively debate in the Bill Committee on Tuesday. Again, we flagged that there are arguments on both sides of the debate. The Government are within their right to say that they have not lost a case like this, but the big strategic concern is that if such provisions are in a treaty, it may have a chilling effect on regulatory innovation in the UK. The point is that there is an argument to be made.

That brings me to my fifth and final point. Whatever the merits and drawbacks of the UK joining the trade agreement, the Government must allow that House to play a meaningful role in scrutinising trade policy. There are contentious issues raised by this treaty—there is no doubt about that. That is why my Committee recommended that Government should permit the House a debate on the ratification of the accession protocol. That debate, we said, should be on a substantive motion; it should take place during the 21-day scrutiny period under CRaG, which would give the House the option of exercising its power under that legislation to delay ratification. When we asked the Secretary of State about this in evidence, she said that she was happy to support a general debate. I very much hope that those are not hollow words, and that the House will get to debate this treaty in the way that was initially envisaged when CRaG was passed by this Parliament.

Those are the key five points; I hope they are of use to the House. Let me conclude by thanking, on behalf of my Committee, all the trade officials at the Department for Business and Trade for the hard work they have put into getting this treaty signed and over the line. It is in the national interest, and it is appreciated. I commend this report to the House.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

On behalf of the Labour party, I thank my right hon. Friend and indeed the other members of the Business and Trade Committee for their sterling work. We referred to much of the Select Committee’s work in the Bill Committee earlier this week. The Minister will be aware of some of the amendments tabled by Labour, and of the concerns not just of the Labour party, but of civic organisations and bodies such as the Trades Union Congress, on issues such as workers’ rights and investor-state dispute settlement. I hope that the Minister will take on board all those various points.

Does my right hon. Friend agree that it is imperative that before the CPTPP is finally ratified—Labour is firmly of the view that that would be in the national interest—it is important to iron out those concerns? To do otherwise would be to the detriment of our country. We also look to the Minister for clarification on issues around parliamentary scrutiny, on which there was an amendment in Committee.

[Liam Byrne]

I am grateful to my hon. Friend for that question. I think the Minister made the point in the Bill Committee on Tuesday that this is not necessarily an under-scrutinised treaty, as it has been the subject of quite a lot of debate; my Committee has certainly taken lots of evidence on it. However, when we left the European Union, one of the big arguments made was that this Parliament would reassert its sovereignty and—in those infamous words—take back control. That means that this House needs to have a strong hand in scrutinising trade agreements.

We hope that there will be many more free trade agreements to come. I know that they are getting harder, but this House none the less needs to develop expertise in scrutinising free trade agreements, so that we can ensure they are genuinely in the national interest. That is why I hope the Government will, within the 21-day CRaG period, find Government time for debate on an amendable motion, to give the House the opportunity to delay ratification, if that is the judgment we all come to. That is the process; we have to test it, use it, and make sure it works.

We have to get much better as a House at navigating the dilemmas of free trade in a world where economic security is a much sharper imperative than before. That means we have to have better debates, but also better numbers. We cannot have a situation where we produce models using very old data—going back to 2017 in the case of the models used for this treaty’s impact assessment —and when the Secretary of State comes to our Committee, she resiles from the models of her own Department. That is not a good way of producing evidence-based policy.

I hope we can have a discussion across the House on how to ensure that the economic models that we use are good. Free trade agreements are choices, and sometimes free trade agreements in one part of the world rule out those in other parts of the world. We have to judge what is in the best interests of the country, and it is difficult to do that if the numbers are flaky.