Australia and New Zealand Trade Deals

Tony Lloyd Excerpts

Monday 14th November 2022 Commons Chamber

[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.

[Tony Lloyd (Rochdale) (Lab)]

The Minister talked earlier about allowing the British public the chance to purchase in a competitive environment, but competition requires information. If there is no adequate chapter in the Australia agreement about environmental standards and the use of coal, for example, can he tell the House how it is possible for an educated consumer to buy in the way that he suggests?

[Greg Hands]

The hon. Member raises a very good point. The UK-Australia deal is the first Australia trade deal that has a dedicated chapter on the environment. I recommend that he looks at the deal to see what it does for the environment, which is something we take very seriously indeed. We did it in the run-up to COP, so it is very topical as well.

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[Tony Lloyd (Rochdale) (Lab)]

It is a pleasure to see the newly branded hon. Member for Totnes (Anthony Mangnall) in his place. His language is a degree more restrained than I am used to. Perhaps I can speak a bit for him in making the points about scrutiny. Let us be honest about this: parliamentary scrutiny of these two trade agreements has been woefully inadequate. That is because of a lack of commitment by senior Ministers throughout the process to expose themselves to the Select Committee and, more generally, to scrutiny. That matters enormously. It is also a matter of fact that the process itself is inadequate not simply because of the lack of political commitment, but because there is not the capacity to hold Ministers to account, to hold the Government to account and to hold the negotiators to account.

The right hon. Member for Camborne and Redruth (George Eustice) made some telling comments. I do not wish to put him in a difficult position but he was forthright in what he said today. He talked about the process and its failure to adequately reflect inter-departmental concerns and the fact that there was some failure in the political process, as proper account was not taken of the multiple needs that a trade agreement should address. That is the source of the concern over how we have operated scrutiny. We know that, post Brexit, the Government were in a hurry to establish that the UK was a nation that could negotiate trade agreements. That is not of itself anything to criticise the Government for. What we can criticise them for is the haste and recklessness with which that process went ahead, and their determination to say, almost irrespective of what trade agreements emerged, that those trade agreements were optimal; clearly, in no sense could anyone put that view forward.

In introducing the debate, the Minister talked about our being at the forefront of international trade policy. That rings very hollow when we know that the protections that the EU gained in terms of its relationship with New Zealand—the trade agreement and so on—were better for the UK agricultural position than those that we obtained as the UK. The idea that we are at the forefront of trade policy is, therefore, bogus and ridiculous. We have to learn the lessons from that. We have to learn we can do better.

One thing that Ministers have to take away from this debate is the need for a genuine trade strategy. On the basis of these two trade deals, it is impossible to see what the UK’s trade strategy is all about. I agree with those who said that every trade deal is going to have its own specific characteristics. That is inevitable. Even the New Zealand and Australia trade deals are not the same. It will be very different when we come to the CPTPP negotiations and when we come to negotiate with Mercosur and Brazil—the frameworks within which we operate are bound to be very different.

However, it is possible for the Government to share their overall strategy with the House. Some of the things such a strategy would address are obvious. Earlier, an hon. Member intervened to make a point about food security. In a world that is changing and where climate change is devastating the capacity to produce the food that the world needs, food security for our nation has to be fundamental, yet that is not written into any trade strategy that the Government have come up with. There is a need to balance the advantages and disadvantages not simply for the nation as a whole, but for different parts of the nation. That has to be fundamental. The agricultural parts of this country have very different needs from, say, the service sector of the City of London. It may be that we make great gains for the City and, objectively, nobody can be against that concept, but we will be concerned about the impact on communities if we see disruption of the employment base and of the capacity of our agricultural areas to operate in the way that we need as a nation.

Where is the strategy that allows us to see the Government’s ambitions for regional distribution? We know that there is very little reference in these two trade deals to the impact on Northern Ireland. That is such a serious matter when we are debating—whatever our different views are—the validity of the Northern Ireland protocol. How is the protocol going to be affected by these two trade deals? That is a matter of fundamental importance. But it is simply not there—it is not in these two agreements, or even in the way the Government are prepared to discuss trade policy. Across the piece, we need an international trading strategy that allows us to establish what our basic national interests are, and they are not there in either of these trade agreements.

If we look beyond these agreements, we will hopefully sign over the coming years many different and beneficial trade agreements, but they must be set against the objective standards of how we balance national interests. What is the national interest? Who are the winners and who are the losers? What do we do when there are losers, as there always will be in any deal that changes the terms of trade? On that basis, what do we do to protect the communities that are detrimentally affected by such changes?

Getting into the specifics of the two agreements, one remarkable thing is how much the Government have been prepared to trade away in a way that we did not see from the European Union. We know that the protections that the EU demanded, particularly for its own agricultural base, were very different from those that the UK obtained. Other hon. Members have already gone through the details of the tonnage that would be allowed, but we have ceded control in ways that the European Union simply did not.

I do not want to re-run the Brexit argument, but clearly Britain would have been better off within the European Union and with the EU’s negotiating position than with our own. That has to be a fundamental critique of and challenge to the capacity and competence of this Government. A simple conclusion would be, “If we cannot do better, why not?”. Ministers have not answered, or even attempted to answer, that in this debate.

Across the piece, we have gained relatively minimal benefits. Nobody can be against the concept of trade deals, but the benefits are minimal compared with what we have given away and what we could have negotiated better. My challenge to Ministers in this case is to own up. They have not done the work they should have done; politics and the need to gain political advantage by seeming to come up with rapid agreements have been put ahead of careful and skilful negotiation.

We need to get back to the fundamentals, because the way these two trade deals have been done cannot possibly be the template for the future. The real challenge is the fact that we need to do so much better in future. If this new grouping in the Department for International Trade are the Ministers we really want there, and are better than their predecessors, the question for them is why they cannot do better, because better they could have done, and better this nation of ours should demand.

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[Lloyd Russell-Moyle]

Exactly. I must wrap up— [Interruption.] Oh, I will continue, then. I thought you were giving me the eye, Madam Deputy Speaker.

That is exactly the problem. If we have higher climate change standards, workers’ rights or environmental standards, and we have free trade with another country that has lower standards, all we are doing is exporting British jobs, opening the door and saying to companies, “Don’t worry about our climate change rules, our carbon trading or the standards we expect you to meet. Go and set up your companies in that other country, and we will still import all the goods and services.” That is an unemployment note for British workers, and the Government are signing it constantly, with country after country, because they are obsessed with getting deals over the line rather than with the quality of those deals.

[Tony Lloyd]

The environment chapter ought to have been capable of actually changing the climate change debate in Australia, so it is disappointing that it has, quite frankly, no teeth whatever. What does that say to countries with which we might want to negotiate to stop deforestation, mining coal and so on?

[Lloyd Russell-Moyle]

Exactly. Australia is a deep friend of ours. I spent hours outside the Australian embassy for the last elections, canvassing and campaigning for the Australian Labour party, which is now in government—although I do not think that success is all down to me. I regularly meet our counterparts in the Australian Labour party, and I am proud to say that not only are they friends, but my senior researcher is from that party and now works for me. There are strong links between our systems and our people. If, with friends, we cannot negotiate a deal that has teeth on environment and climate, we have no hope whatever when dealing with much more difficult countries.

This is partly because of the Government’s refusal to have proper parliamentary scrutiny. First, there was no need for them to trigger CRaG, because the agreement cannot be put in place until we have passed the enacting legislation, which has not even come back for Third Reading. The Government forcing through CRaG without parliamentary scrutiny was just arrogance on the part of Ministers and the Government—there was no other reason for it. They show the same arrogance to the International Trade Committee, which, time and again, they refuse to come and speak to. I cannot ascertain whether it is the arrogance of Ministers or the arrogance of senior civil servants—maybe it is a bit of both—but it is clear that the Department for International Trade has shown in this process that it is not fit for purpose and needs a real overhaul.

I am quite in favour of some of the ideas that the right hon. Member for Camborne and Redruth (George Eustice) set out. We should have a Department of trade, of foreign negotiations, or probably of foreign affairs—a Foreign and Commonwealth Office, one might say—that co-ordinates expertise in other Departments, such as the former Department for International Development. I was in DFID negotiations on the environment and on the Rio process year in, year out, all through our European period, and our colleagues in DFID led many of the discussions on the oceans and biodiversity. It had real expertise in those negotiations. We should have been using it. We have failed in the environmental chapters of this agreement because we did not leverage the fantastic negotiators as well enough as we have in other Departments.

The right hon. Member for Camborne and Redruth was also right to say that proper scrutiny in this place can help the Government’s hand. I remember when I was a trade unionist, and we would want our members to lay out strong, hard lines to us so that when we went into negotiations with the employer, we were able to say, “Look, I am the reasonable one here—I am trying to get to an agreement—but my members are livid; they are angry; they are fuming. You need to give me a bit more so we can strike this deal and avoid any action.” It is the same process in trade deals, but the Government’s refusal to use us means that they have sold this deal short.

Finally, I will touch on procurement. In the Trade (Australia and New Zealand) Bill Committee, we heard that some of the wording on procurement puts British companies in a worse position than they are currently, and I will briefly explain why. There is already a global agreement on procurement under which British companies already have the right to bid for procurement contracts in Australia. Those agreements require that if a company has worked up a credible bid that is then rejected, the company can claim certain costs. This trade agreement excludes those particular words. Of course, a company will probably go to the Australian courts or to our courts, where they will be able to argue their case, but the insecurity of different wording in different agreements now means that although a French company would have a 100% cast-iron guarantee of protection, because it is part of the same global agreement on procurement, a British company would be insecure in that protection.

In some areas, the agreement not only falls short of what we want, but actively sells our country short. That is why the agreement is such a shame; that is why we should have gone further; and that is why, if we had had earlier debates, none of this mess from the bungling lot on the Government Benches would have happened.