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International Trade

Volume 621: debated on Thursday 9 February 2017

The Secretary of State was asked—

Comprehensive Economic and Trade Agreement

1. What assessment he has made of the potential effect on UK environmental legislation of investment protection provisions in the EU-Canada comprehensive economic and trade agreement. (908684)

The EU-Canada comprehensive economic and trade agreement—CETA—is a good agreement for the UK. It will promote jobs and growth and benefit consumers. The UK Government are fully committed to supporting such agreements while we remain an EU member. The investment protection provisions in CETA will have no impact on UK environmental legislation. They cannot force the UK or other parties to change their laws on the environment or any on other area of public policy.

I am grateful for that answer, but many of my constituents are worried about us maintaining our current environmental standards post-Brexit. Can the Minister guarantee that with this trade deal and, indeed, any other trade deal that the UK intends to make, our current environmental standards will not be watered down?

Enshrined in CETA and many other free trade agreements is the UK’s right to regulate in these areas, and that includes key environmental protections. There is nothing, for example, in the investment court system that would force the UK to change its environmental regulations. I notice, however, that the hon. Gentleman voted against CETA yesterday, in line with the Leader of the Opposition, but he may not know that when CETA was debated in Committee on Monday, the Official Opposition were actually in favour of it.

Has my right hon. Friend heard of CANZUK, and is he encouraged by it? This is the plan being proposed in the Canadian Parliament for a Canada, Australia, New Zealand and United Kingdom trade partnership after Brexit. Does he share my enthusiasm for it?

I have seen this proposal, and we are very enthusiastic about the future of UK trade with Canada. I repeat that we are currently very supportive of CETA going through. We think it is very important for the UK, for the European Union and for Canada, and we will continue to campaign for it to go through, not least in the face of the new-found opposition by Her Majesty’s Opposition.

May I point out to the Minister that in the deferred Division, a majority of Labour Members voted for the trade deal? Given that Canada is such a long-standing Commonwealth friend, ally and defence and trade partner, could he answer this basic question: in a post-Brexit world, if we cannot do a deal with Canada, who the hell can we do a deal with?

I thank the right hon. Gentleman very much indeed for that question. He is right that more Labour MPs—86—voted for CETA than the 68 who voted against it, with perhaps more than 100 abstaining. This agreement has been eight years in gestation. You would have thought, Mr Speaker, that the Opposition would have got their act together by now. On the point that the right hon. Gentleman made, I quote from one of his colleagues, who said:

“If we don’t support a trade deal with liberal, Justin Trudeau-led Canada, who do we support trade deals with?”

Post-Brexit, will CETA be transitioned into a bilateral arrangement, or will there need to be a fresh Canada-UK agreement?

My hon. Friend raises an interesting point, and I think we will have to look at that when we come to it. There are a number of important aspects of CETA that we might look to replicate in a future deal, but, for the time being, while we remain a member of the EU, the UK remains strongly supportive of CETA going through.

I heard the right hon. Member for Warley (Mr Spellar) say that he was the unnamed Back Bencher referred to in the “Politics Home” article. It is good to see that he is now named, and that he is supporting the Labour party’s traditional friends in Canada, the Liberal party.

Fair Trade

The Government will lead the way in ensuring that developing countries have the opportunity to trade their way out of poverty. While the UK is a member of the European Union, we remain committed to development through the EU, including economic partnership agreements, the generalised scheme of preferences and “Everything But Arms”. We are working closely with the Department for International Development to ensure that the global trading system of the future is as fair and as free as possible.

Trade with developing countries is crucial to ensuring jobs and livelihoods, and our commitment to the sustainable development goals. Will the Secretary of State commit to fair trade principles in relation to future trade deals with developing countries to ensure that local populations can benefit sustainably and to complement the work of the DFID staff in my constituency and beyond?

Let me join the hon. Lady in paying tribute to the fair trade campaign. It is very important in ensuring that farmers receive a fair price for their products, that agricultural workers receive better wages and that agricultural practices are made more sustainable. As Britain leaves the European Union, we will actually have greater freedom outside the common external tariff to be able to do some of the things she recommends.

Whether we look at west African cocoa, east African coffee or Tunisian olives, time and again we find that the cause of unfair trade policy is the European Union. Does the Secretary of State agree with me that once we can set our own tariffs outside the common external tariff of the EU, we will be able to help those countries to trade their way out of poverty?

This Government are committed to an open and liberal trading system. One of the best ways to help poor countries is to have even greater liberalisation than we have today. When we are outside the common external tariff of the European Union, Britain will have the opportunity to act unilaterally, which will give us new opportunities, as my hon. Friend rightly suggests.

The 21st century offers us an opportunity to build on our pride and identity as a nation that promotes human rights, workers’ rights and environmental protection—all part of fair trade principles. How will the Government build on this part of our national identity in trade negotiations?

We are already playing a full part in that. Britain played a major role in the World Trade Organisation’s arrangement that is going to come into effect in just a short time—the trade facilitation agreement. It will be worth about £70 billion to the global economy, and for some of the poorest countries, such as those in sub-Saharan Africa, it will be worth about £10 billion. We made a major contribution to that, and we should be very proud of it.

I have a role as the Prime Minister’s trade envoy to Nigeria. In the context of fair trade, will the Secretary of State join me in encouraging the Nigerian Government to share the benefits of trade more widely with their people?

That is a message I will be taking with me when I make a visit to Nigeria in the not-too-distant future.

Space Exploration Sector

The Department for International Trade supports efforts to grow the UK space sector. We are working closely with the UK Space Agency, Innovate UK and the industry to provide sector growth. In January, I led a DIT and UK Space Agency mission to the US, where I advocated the UK as an attractive market for space sector companies. We intend to highlight progress at the UK space conference in Manchester in May. UK Export Finance offers finance and insurance to help UK-based companies in the space sector.

It is really great to hear that the UK is fast becoming a world leader in the space sector. Will my hon. Friend inform the House about his efforts to secure foreign direct investment into the United Kingdom to support domestic growth in this industry?

My hon. Friend is right to raise the importance of this sector. The numbers are absolutely fantastic: it has six times the average research and development investment, and it has 2.7 times the average productivity in the UK. During the past couple of years, the DIT has supported 19 successful inward investment projects in this sector, and we will continue to work with the Department for Business, Energy and Industrial Strategy to deliver the UK space innovation and growth strategy in the future.

The encrypted public service channels of the new Galileo space navigation system are restricted to EU member states. What steps will the Government take post-Brexit to ensure that the UK has access to Galileo, in which we have invested?

Galileo is the satellite navigation system that is being put up by the European Space Agency and the European Union. That is one of the many things we have to negotiate over the coming years. The use of spectrum is incredibly important, because spectrum is limited. The Government will look at that among many other important things, but I assure the hon. Gentleman that spectrum is a very valuable asset for this country, and we will work with Ofcom to ensure that we get our fair share.

Technology Sector

4. What steps his Department is taking to increase exports from and foreign direct investment in the technology sector. (908688)

Since 23 June, the UK has continued to attract investment from global technology companies, including SoftBank’s purchase of ARM, Facebook expanding by 50% in the UK, Google pledging to invest an estimated £1 billion, Snapchat’s new global headquarters in London and more. This Department additionally promotes and showcases the UK’s leading technology capability through our overseas network, and via our recently launched digital platform,

The global market for smart city technologies is now worth something in the region of $400 billion. British firms lead the way in many of the specialisations, but we could win more contracts if there were a UK approach to a complete smart city solution. I encourage Ministers to promote greater collaboration, both among businesses and between businesses and the Government.

My hon. Friend is absolutely correct and I agree with everything he said on the size of the UK capability, the size of the potential market and the need for a “Team UK” approach, which I spoke about recently when I visited his smart cities all-party parliamentary group just two weeks ago. In addition, I can announce today that two UK companies—Carillion and Zaha Hadid Architects—have secured a contract worth tens of millions of pounds to build a new headquarters in Sharjah in the United Arab Emirates, with support from UK Export Finance, which shows that the UK remains very much open for business.

The No. 1 tech Brexit worry is that when we leave, it will become unlawful to send personal data from Europe to the UK unless we have achieved an adequacy declaration from the European Commission about our data privacy arrangements. Important businesses will overnight become unviable. Will that declaration be achieved in time?

Fortuitously, I was in the Chamber for the earlier Question Time and heard the right hon. Gentleman ask precisely the same question of the Minister for Digital and Culture. The UK is committed to implementing the global agreement, and to ensuring that it works for the UK once we transition outside the European Union.

I welcome the British Business Bank announcement of £1 billion of funding. Will my right hon. Friend ensure that the technology sector gets its fair share so that Britain’s leadership in the fourth industrial revolution can continue?

I very much agree with my hon. Friend. I again praise his work on the fourth industrial revolution both in the House and beyond. He is a key advocate, not just in the UK but around the world, of ensuring that the UK takes advantage of its very great strengths in technology and its technological expertise.

Figures published by the Centre for Cities show that Glasgow’s exports of goods and services to the EU were worth more than £2.5 billion in 2014. Given the importance of Scotland’s membership of the single market to the technology sector in Glasgow, will the Minister commit to considering the Scottish Government’s proposals in the “Scotland’s Place in Europe” paper to keep Scotland in the single market?

I am very sympathetic to Glasgow maintaining its exports and capability in smart cities. The UK and the Department for International Trade follow a whole-UK approach, often working with key partners such as Scotland Development International. However, I would point out to the hon. Lady that Scotland remaining in the United Kingdom is more important. Some four times as much Scottish produce and capability is exported within the United Kingdom than to the European Union.

British tech firms have been unable to go to two US trade shows, and look unlikely to be able to attend a top conference and exhibition in Singapore, owing to extensive delays by the Minister’s Department in announcing trade access partnership funding. Will he go back to the Department and confirm the funding, so that British businesses can attend trade shows and play their part in boosting our exports and economy?

The Department continually reviews its products and services to ensure that it meets its customer needs and represents good value for the taxpayer. Business planning will be completed very shortly, so we will be confirming events shortly.


Building on my visit to Taiwan in September, we will continue to work with the Taiwanese authorities to address market access issues and to further increase our trade in this important market. The UK and Taiwan share a strongly favourable outlook on free trade and enjoy a robust trade partnership. Bilateral trade reached £5.9 billion in 2014, up 8% compared with 2010.

I am pleased that the Minister met the Taiwanese President in September. I hope he shares my belief that as Britain reaches out to secure more trade deals, we keep in sight our foreign policy values. Does the Minister agree that increased trade with Taiwan and the UK is a win for both our economies and our liberal democratic values?

I very much agree with the hon. Gentleman. The UK and Taiwan share so many commitments, including the importance of environmental protection and the importance of a free society. We also have very strong shared values of free trade, open markets and an openness to foreign investment. I had very productive talks with President Tsai in September. She is a big friend of the United Kingdom, not least because of her time as an undergraduate at the London School of Economics.

10. I know the Minister will be aware that back in 2008 Taiwan was granted Commonwealth Nations Research Society membership. As such, it will be looking to the Commonwealth Trade Ministers meeting in London in March. Will he confirm that trade with the Commonwealth is a top priority for the Government after we leave the European Union? Will he commit to ensuring that during the trade meeting many Members from all sides of the House can be involved to ensure key relationships with Commonwealth parliamentarians? (908697)

Yes. In terms of both trade with Taiwan and the Commonwealth, the Department remains extremely supportive of Members being involved. In relation to the Commonwealth Trade Ministers meeting, I very much hope the Commonwealth Parliamentary Association will be involved in those discussions.

With trade deals in place for the likes of Bushmills whiskey and Northern Ireland pork products, will the Minister outline how he intends to use that success for other agri-food business products, such as long-life dairy supplied by Lakeland Dairies to 77 countries across the world?

When I held talks with the Taiwan authorities in September, agricultural produce was very much at the centre of those talks. We talked about pork and poultry exports, and we made real progress on Scotch whisky. Taiwan is Scotch whisky’s third-largest global market and we made important progress on it being certified by Taiwan.

I know a lot of British businesses focus on the China market, for obvious reasons, but when I led a delegation to Taiwan in September, as chairman of the British-Taiwanese all-party group, I witnessed a vibrant economy. Does the Minister agree that if British businesses ignore Taiwan they are missing a trick?

I totally agree. I think my hon. Friend and I were in Taiwan at roughly the same time back in September. I applaud the work he does for the all-party group. Taiwan has been a longstanding open market for UK goods and services, and we need to ensure that we work hard to remove the few remaining barriers. That was the purpose of the Joint Economic Trade Committee—or JETCO—talks in September. The message from this House should go out loud and clear to British businesses that Taiwan is a very good place for them to do their business.

Given that the UK currently receives two thirds of all investment into Europe from Taiwan, does my right hon. Friend see any reason why that will not continue after we leave the EU?

New Business Markets: Cornwall

6. What steps his Department is taking to open new markets to businesses in Cornwall in (a) the food and drink and (b) other sectors. (908691)

The south-west FoodEx directory connects food and drink companies in Cornwall with buyers across the world. Local companies can also benefit from FoodEx workshops. Cornish companies in all sectors can access the full range of Department for International Trade services. We have launched the website, and our experienced international trade advisers are supporting new Cornish exporters to step into the global marketplace and helping experienced exporters compete in high-growth markets.

In west Cornwall and the Isles of Scilly, a flurry of businesses have been producing food, drink and other goods. There is no doubt about the quality of their produce, but the reality is that very few of those products—food and drink—go beyond Cornish borders, let alone overseas. Will the Minister accept an invitation to meet these producers and help them to expand their markets?

As my hon. Friend knows, my family has roots in Cornwall that go back over 100 years, which I think means that we are now no longer incomers. The Secretary of State, of course, is a south-west MP and I believe he has met Cornish producers, and I am a frequent visitor to the extraordinary county that produces such fabulous produce. At the very first opportunity, I will go with my hon. Friend to meet his constituents and, indeed, people across the whole of Cornwall to explore ways in which we can push this fantastic county’s product.

New Zealand

7. What recent discussions he has had with the Government of New Zealand on future bilateral trade and investment. (908692)

9. What recent discussions he has had with the Government of New Zealand on future bilateral trade and investment. (908694)

I launched a trade policy dialogue with the New Zealand Trade Minister last October to consider how we can strengthen our economic ties. Last month, my right hon. Friend the Prime Minister met the Prime Minister of New Zealand and agreed that preparatory work should be undertaken on the potential for an ambitious new free trade agreement between the UK and New Zealand, once the UK leaves the European Union.

I warmly welcome the early and constructive dialogue with our colleagues and friends in New Zealand. Will my right hon. Friend do all that he can to explore every opportunity for bilateral trade with New Zealand, including the natural synergies between our rural economies?

I very much agree. The UK exported over £1.2 billion-worth of goods to New Zealand last year, and opportunities for our rural businesses and farmers will be a very important part of our work as we take forward the dialogue with New Zealand, which I intend to visit over the summer months.

This year the British New Zealand Business Association, which exists to develop trade between our two countries, reaches its centenary. As someone who has worked in New Zealand, I have first-hand experience of the warmth that exists between our two countries. Does my right hon. Friend agree that there is hope for, and that we look forward to, a great increase in trade between our countries in the years ahead?

I certainly hope that will be possible, given the freedom that we will have outside the European Union to negotiate such a free trade agreement. It is not just our two countries that will benefit; all countries around the globe will benefit from the new global Britain and our attitude towards global free trade, with all the benefits it brings, especially to the world’s poor.

The Secretary of State will know that New Zealand is a land of 30 million sheep—there are six or seven sheep for every person—so has he discussed the impact of a trade deal with the leader of the National Farmers Union? It regards the combination of a 43% World Trade Organisation tariff on sheepmeat and increased market access for New Zealand as potentially fatal to our sheep farmers. How will he protect them?

As I said in answer to an earlier question, that will be an important part of our discussions. We will want to discuss how we do that with the NFU and others, but we also need to take something into account that does not seem to be mentioned very often, which is the interests of UK consumers in any trade deal that we come to.

Topical Questions

The Department for International Trade has three tasks: promoting UK exports to support a growing economy that serves the whole country; maximising opportunities for wealth creation, including through overseas direct investment to support the current account; and negotiating the best international trading framework for the UK outside the EU. In terms of investment, I can announce to the House this morning that McLaren will be opening a £50 million manufacturing plant in Sheffield that will create 200 new jobs.

Given how desperate the International Trade Secretary is to negotiate a trade deal with the US, what guarantees will he give that Scottish farmers will not be undercut by chlorinated chicken and substandard beef imports?

The quality of produce sold will be a major part of any negotiation, but as for undercutting the Scottish economy, I am regularly told by investors in the United States that one of the things hanging over them and depressing investment opportunities is the threat of separation.

T2. I welcome the recent establishment of a UK-Israel trade working group. Bilateral trade between the two countries has increased year on year, and our close co-operation in cyber, academia and medicine continues to grow. Can the Minister provide any further information about how the group will work, and does he share my view that we should strike one of our first trade deals with the middle east’s only democracy? (908710)

My hon. Friend is absolutely right to highlight the very good trading relationship we have, and hope to continue to have, with Israel. The Prime Minister announced the trade working group when the Israeli Prime Minister visited earlier this week, but it is worth bearing it in mind that the EU already has a trade arrangement with Israel, and this is something that, in the first instance, we would look to continue. I am sure, however, that there will be many opportunities to improve on that, given that that trade deal was done between one country and 28 countries, whereas a bilateral deal will be easier to negotiate.

The Secretary of State promised that Parliament would have the opportunity to debate the important comprehensive economic and trade agreement between the EU and Canada on the Floor of the House. Unfortunately, he broke that promise and the debate was sidelined to an obscure Committee of the House earlier this week. Given that the UK will soon be responsible for negotiating its own international trade deals following Brexit, what assurances can the Minister give the House that parliamentarians will have an opportunity to scrutinise such trade deals fully in the future, and not be afforded the discourtesy we unfortunately were in relation to CETA?

It was not an obscure Committee; it was a two-and-a-half hour debate in Committee Room 10 following the proper procedures laid out by the House. I remind the hon. Lady that, at the end of the debate, she failed to oppose CETA, yet the Scottish National party in yesterday’s deferred Division voted en masse against it. Like the official Opposition, it changed its position on something that has been debated for eight years now within the space of merely 24 hours.

T5. Many Cornish men and women emigrated to seek work in New Zealand in the late 19th century. Will my hon. Friend now support other great Cornish exports of our wonderful produce, such as Cornish cider produced by Cornish Orchards in my constituency? (908714)

It is good to see the far west of this country being so well represented today, on a one-line Whip just ahead of the recess. My hon. Friend is absolutely right. There are fantastic products coming from her constituency, including award-winning brands such as Cornish Orchards cider, Cornish Blue and Cornish Gouda. It is absolutely the job of the Department to go out to the rest of the world and, as I said before, to push Cornish exports far beyond the Tamar to the four corners of the globe.

When I wrote to the Secretary of State in November to ask for an investigation into his Department’s support for any British businesses engaged in corrupt practices, he replied that his Department had no power to conduct such an investigation. Last week, after the publicity surrounding Roll-Royce’s deferred prosecution, he announced precisely such an investigation. When did the powers of his Department change, when will the inquiry report back, and will he explain why he has refused to comply with the open government principles of the OECD anti-bribery convention?

Rolls-Royce has made it clear that it will not tolerate improper business conduct of any sort. It continues to co-operate fully with the Serious Fraud Office, and we await the final outcome, on which it would not be proper to comment beforehand. UK Export Finance notes, and is reviewing, the statement of facts released as part of the deferred prosecution agreement with regards to Rolls-Royce, but the details of the statement are a matter for the SFO and it would not be appropriate to comment further at this stage.

Continuing the trend of exporting from the south-west, last week Gloucestershire-based SME Fluid Transfer International won a £6 million contract to supply aircraft-refuelling vehicles to Indonesian airports. The key ingredients were British manufacturing, a strong commitment to the market, and a very good local partnership. Will my hon. Friend join me in congratulating Fluid Transfer, and will his Department work with me to produce a short video to capture the story and inspire other small and medium-sized enterprises by showing them what can be achieved?

I am sure that my hon. Friend played a part in that deal, given that he is a trade envoy to Indonesia and given the extraordinary work that he does in some of the ASEAN countries. We shall all be delighted to help to promote investment of this kind in every way we can.

T3. A hard Tory Brexit will damage the Scottish aerospace industry, which contributes more than £130 million to the Scottish economy. Will the Secretary of State assure us that that sector will continue to have barrier-free access to the European single market? (908711)

It has been the Government’s clear aim to ensure that there is tariff and barrier-free access once we have left the European Union, and that is exactly what we intend to negotiate—and, of course, the Scottish aerospace industry will be all the stronger for being represented by the whole United Kingdom.

Does my right hon. Friend agree that company registration with the use of a Companies House-type model is important to promoting the economies of developing countries that seek foreign direct investment, and is also good news for the UK’s financial services sector?

My hon. Friend has made an important general point in his specific question. An open trading system is a win-win: our economy, as well as other economies, can gain from sharing the same open system.

The entire departmental strength is now some 3,000. We are adding some 50 extra staff to our trade policy group this week, and the process will continue. We will increase the numbers further in the months ahead as we look to our WTO obligations, the transposition of our EU free trade agreements, and the FTAs that we have. The current number of about 200 staff will be augmented as we proceed.

As the Secretary of State knows, UK steel is the best in the world. What opportunities does he envisage to promote the sale of it around the world?

We take an ongoing and strong interest in the steel sector. It faces difficulties at present because of the low global steel price, but we see a good future for UK steel, and the Department looks forward to taking part in a whole-of-Government approach to ensuring that it is sold abroad.