Comprehensive Economic Partnership (EUC Report)

Viscount Trenchard Excerpts

Thursday 26th November 2020 Grand Committee

[Viscount Trenchard (Con)]

My Lords, I declare my interests as stated in the register. I thank the noble and learned Lord, Lord Goldsmith, for his report and for introducing this debate today. Having spent 11 years living and working in Japan and a considerable additional period on business trips to the country, I am delighted that the UK-Japan CEPA was the first of our EU trade agreements to be rolled over, as an enhanced continuity trade agreement.

I also welcome the noble Lord, Lord Darroch of Kew, to the House and congratulate him on his impressive maiden speech. The noble Lord and I gained our first experience of expatriate life in the same city, Tokyo, at the same time, which is interesting. I served under six ambassadors in Japan, including the great Sir Hugh Cortazzi, who perhaps was the one person whose effectiveness inspired me to study Japanese seriously.

The committee’s report is somewhat too grudging in its assessment of what has been achieved in only four months and against the predictions of the naysayers. It is perhaps also too reluctant to give fair credit to the political significance of the agreement against the background of Brexit and the launch of global Britain. Does the Minister also agree that it underestimates the importance of the side letter to CEPA, in which the Government of Japan express their firm determination to support the early accession of the United Kingdom to the CPTPP?

Japanese officials have been encouraging the other 10 members of the CPTPP to understand the benefits of UK accession for some time. The US had persuaded Japan to include significant agricultural quotas in its CPTPP schedules, which are still there after US withdrawal. This is one reason why early UK accession makes a great deal of sense. In addition, Japan believes that early participation by the UK and the workings of the CPTPP will maximise British influence, which will help to ensure that the CPTPP develops as a global beacon and exemplar of the benefits of rules-based free trade, contributing greatly to growing prosperity for many millions across the world.

In May 1998, I was honoured to be allowed to introduce a debate in your Lordships’ House on the state of Anglo-Japanese relations at the time the then Emperor and Empress of Japan arrived for their state visit. At that time, Japanese companies in Britain accounted for 65,000 jobs. Twenty-three years on, the planned state visit by Japan’s new Emperor and Empress has regrettably had to be postponed as a result of the Covid-19 pandemic. But the number of jobs provided in the UK by Japanese companies has more than doubled, to around 150,000. Since then, trade and investment have grown impressively and the cumulative stock of foreign direct investment from Japan now stands at £128.9 billion.

Cultural and educational exchanges between the two countries have also continued to develop impressively. In 1998, defence co-operation between Japan and Britain amounted to not much more than the provision of courtesy vehicles by Honda and Mitsubishi Motors at the Royal International Air Tattoo. Now, Japan is an increasingly important partner in both defence operations and procurement, all three armed services having conducted exercises with their Japanese counterparts in the last three years. Our Japanese friends had been disturbed by the emphasis placed on the UK’s developing relationship with China and are now relieved that Ministers have stopped talking about the “golden era” of our relationship with that country.

Japan’s soft power on the diplomatic stage has increased dramatically since 1997, particularly during the period in office of Mr Shinzō Abe, who has recently had to stand down for health reasons. My right honourable friend the Secretary of State for International Trade and her team deserve to be congratulated on the CEPA, but it has also been possible to execute it in such a short timescale as a result of the very positive approach towards Anglo-Japanese co-operation held by the previous Prime Minister, Mr Shinzō Abe and his Government, including his chief Cabinet Secretary, Mr Yoshihide Suga who, of course, has now succeeded Mr Abe as Prime Minister. This augurs well for the continued positive developments in bilateral relations. Given more time, perhaps the agreement might have included an investment protection chapter. Will the Minister tell us whether that could be added later? Does he also agree that the digital and data provisions illustrate well the benefits of being able to diverge from cumbersome EU regulations in that field?