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House of Commons Hansard
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DEPARTMENT FOR INTERNATIONAL TRADE
23 March 2017
Volume 623

The Secretary of State was asked—

Medical Research and Development (Israel)

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1. What steps he is taking to strengthen the trade relationship in medical research and development with Israel. [909448]

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As we begin our questions today, it is appropriate that we recommit ourselves to the values that this Parliament represents. Those who carry out such wicked and depraved actions as we saw yesterday can never triumph in our country. We must ensure that it is not violence, hatred or division, but decency, goodness and tolerance that prevail in our country.

The United Kingdom and Israel have a strong and important trading relationship, with nearly £5 billion in bilateral trade last year. We will continue to liaise closely on strengthening our trading links, including in important sectors such as medical research and development. The Life Sciences Organisation within the Department for International Trade currently supports companies wishing to export to Israel from the earliest stages of research and development through to manufactured medicines and medical devices.

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I join you, Mr Speaker, and my right hon. Friend the Secretary of State in expressing sincere condolences to the victims of the terrible atrocity yesterday, and particularly to the family of PC Keith Palmer, who died so that we can carry out our democratic duties.

I thank my right hon. Friend for his answer. Companies in the Israeli economy are responsible for more than 100 million prescription drugs consumed in this country every year, and one has recently launched the ReWalk device, whereby people are encouraged to develop. Will he set out what further plans he has to ensure that we benefit from Israel’s pharmaceutical industry?

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UK industry will have a strong and important trading relationship with Israel, and the Department for International Trade supports and will continue to support life science companies from Israel that invest in the UK, and those seeking to export from the UK. The companies range from large multinationals to small and medium-sized companies such as the one my hon. Friend mentioned. We support all stages, whether that is by facilitating investment in research and development or setting up commercial operations, such as manufacturing, to export from the UK.

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I, too, express my condolences to the families of all those who died, and I wish the very best for those who were injured.

One notable thing about Israel’s trade relationship with the EU is that Israel is part of Horizon 2020. Has the Secretary of State considered whether, after Brexit, we should stay in Horizon 2020 and the European Medicines Agency?

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The latter decision will be part of our negotiations. We have made it clear that our intention is to roll over in full the trading agreements that the EU currently has with third countries. That will include Israel, on the basis of the current negotiations.

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In his trade discussions with the Israeli Government, will the Secretary of State convey the House’s sympathy for and solidarity with Israel, which has so often suffered the same kind of terrorist attack as we suffered in this House yesterday?

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What we have in common with all terrorist attacks is the fact that such acts of savagery against the innocent can never be justified or excused by creed or by politics.

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May I echo the opening words of the Secretary of State and indeed the condolences that have been expressed for the police officer and the families of others affected by this tragedy?

The world-leading Institute of Cancer Research in the London borough of Sutton already does a lot of work with Israel. Can the Secretary of State confirm whether the post-grads who work at the institute, a third of whom come from the European Union, will be able to carry on working in those projects for years to come?

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The Government have already made it clear that the United Kingdom wishes to see an early resolution on the status of EU citizens. Those who collaborate with our research institutes do so on the basis of the quality of the research, and I am sure that that will continue.

Trade Facilitation Agreement

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3. What assessment his Department has made of the effectiveness of the WTO trade facilitation agreement. [909450]

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4. What assessment his Department has made of the effectiveness of the WTO trade facilitation agreement. [909451]

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The World Trade Organisation agreement on trade facilitation entered into force on 22 February 2017 once two thirds of WTO members had accepted the new agreement. This is a very significant event. Once fully implemented, the agreement could add more than £70 billion to the global economy, and of that we expect a benefit to the UK of up to £1 billion.

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I should say for the benefit of the House, because there was a quizzical air in the Chamber, that Question 2 was withdrawn. That is a situation which is not dissented. I can see that the hon. Member for Weaver Vale (Graham Evans) is in his place, but the question was withdrawn.

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I am very grateful to the Secretary of State for the work he is doing to try to secure a bespoke trade deal, and to his Ministers for the work they are doing as well. We do not want to fall back on to WTO rules, but, if we did, what would happen to airlines, digital data flows and trade and services?

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There is a difference between some of the agreements mentioned, which are bilateral agreements, and WTO tariffs that largely apply to goods. We hope to get a comprehensive agreement with our European partners across all the sectors that my hon. Friend mentions so that we will see no interruption to the business as we have it today.

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The WTO trade facilitation agreement’s coming into force last month brought about great reforms such as reducing fees on imports and exports and quickening clearance procedures. What impact will the reforms have on UK businesses that are importing and exporting?

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UK exporters in particular will benefit from the customs reforms being introduced, and implementing the agreement will reduce delays at the borders of participating members and improve the trading environment for businesses engaging in international trade, making it easier and cheaper for UK businesses to export their goods across the globe.

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May I associate the Democratic Unionist party with the sentiments that have been expressed for the innocents who were murdered yesterday? Our thoughts and prayers are very much with those who were injured.

With the initial period of this agreement now under way, will the Minister determine how we can enhance and further build capacity in this area? Does he believe that lessons learned here can and will affect our approach to Brexit, trade and negotiations?

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As most European Union countries are already higher than the bar set by TFA, that will not have a huge effect on intra-European trade, but it will have a beneficial impact on European exporters, especially if they are exporting to markets such as sub-Saharan Africa, where the greatest benefit of the trade agreement is likely to be felt.

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Will the Secretary of State give some reassurance to Welsh lamb and sheep farmers, who have faced 40% tariffs under WTO, and ensure that if we do have a trade agreement with New Zealand we will not be flooded with New Zealand lamb?

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When we get to the point at which we begin to have those discussions, we will want to take into account a balance between UK producer interests and UK consumer interests, and we will also wish to ensure that we are making a contribution to a global liberal trading environment that benefits everybody.

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This agreement is potentially of greatest advantage to the least developed countries, in which we have put very considerable investment. Will the Secretary of State continue to drive forward that agenda?

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Yes, and we have actually invested a large amount of money in supporting the agreement itself and in ensuring that it can be introduced in as beneficial a way in as many countries and as quickly as possible, because, as my right hon. Friend correctly says, this agreement will have the greatest benefit to some of the poorest countries in the world, which is why the United Kingdom, under Governments of both parties, has been so supportive of it.

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For well over a century the UK has not had security of food supply, but has instead always relied on imports. What will WTO tariffs of up to 40% do for the price of food for hard-working families already squeezed by the Tory Government’s policies?

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The hon. Gentleman perhaps unintentionally raises this important point: where we have genuinely free trade it benefits consumers, and where we can have an open global trading environment, it is likely to make the incomes of those on low incomes in particular go further. We should welcome an open trading environment, which I hope the Scottish National party does.

Overseas Trade

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5. What steps his Department is taking to help businesses build trading opportunities abroad. [909452]

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9. What steps his Department is taking to help businesses build trading opportunities abroad. [909456]

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The Department for International Trade provides market access, support and advice to UK businesses both in the UK and in 109 markets overseas. Through the GREAT campaign we build the global appetite for British goods and services, and give UK companies access to millions of pounds’ worth of potential business through the digital services offered on the great.gov.uk website.

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My hon. Friend the Minister leads the buy British goods campaign. Does he agree that taking companies that make British goods on trade delegations is an excellent way of ensuring that companies make the most of our opportunities as we leave the European Union?

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My hon. Friend is absolutely right. Trade delegations give an opportunity for small businesses to be put in front of buyers, and the Department for International Trade runs about 1,000 of them every year; I have been on a number, as have my colleagues, and they are extraordinarily successful in developing opportunities.

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What steps is my hon. Friend the Minister taking to help first-time entrepreneurs become first-time successful exporters?

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The great.gov.uk website is a tremendous opportunity, whereby entrepreneurs, many of whom are very tech savvy, can take advantage of the opportunities that we provide through our subsidised access to global e-marketplaces. They can also access the advice we provide through the website for exactly that type of business—they are supported as well.

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May I ask the Minister specifically what advice there is, and what the Government are doing, to help small businesses in that respect?

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The Department for International Trade has available a network of international trade advisers throughout the English regions who can be contacted through local chambers of commerce and are specifically there to hand-hold individual companies that need help.

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Is the Minister looking at the trade differences between the English regions? One of the reasons that lots of people in the English regions outside London voted to leave was that they did not feel they were getting the benefits of the European Union. What is he going to do to help those areas improve their trading links?

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We certainly look at foreign direct investment into the regions through trading links. That is why we see inward investment in areas such as Sunderland, which has benefited from Nissan. The right hon. Lady’s point about trade is absolutely right. The UK needs to trade more with the rest of the world—just 11% of businesses that could conduct such trade are actually doing so. One of the prime concerns and objectives of the Department for International Trade is promoting trade to the whole of the UK to ensure that we up our offer to the rest of the world.

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What steps is the Department taking to enhance trade between India and the UK?

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My right hon. Friend the Secretary of State has certainly held meetings in India, and we are having ongoing talks to try to facilitate opportunities there. I will visit India in the next couple of weeks with my right hon. Friend the Chancellor of the Exchequer to explore more opportunities with financial services.

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May I associate myself and my colleagues with the Secretary of State’s remarks about yesterday’s terror attacks?

The Federation of Small Businesses reports its members’ concerns that there should not be a cliff edge when we leave the European Union. Smaller businesses want to continue with tariff-free access and to minimise non-tariff barriers. What is the Minister’s Department doing to support small businesses and allay their concerns?

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The Department for International Trade absolutely shares those desires for a disruption-free exit from the European Union. We are certainly representing those interests to the Department for Exiting the European Union, which is tasked specifically with the objectives described by the hon. Gentleman.

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11. The United States is the UK’s single biggest export market. What early discussions has the Minister had with his new US counterparts about trying to secure a timely new trade deal? [909458]

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My hon. Friend is absolutely right to identify the United States as our single biggest trading partner, with 23% of the UK’s exports going to the United States. We are waiting for confirmation of when we can start having conversations.

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May I associate myself and my party with the Secretary of State’s opening remarks? We will have an opportunity to pay our respects later, but we are grateful that we are here because of the bravery of others.

The rise in Scottish exports has been one of the major success stories in the Scottish economy over the past decade. What lessons does the Minister believe the rest of the UK can learn from this, given that we have seen exports double in the past 10 years?

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Like everybody else, I am delighted that exports from Scotland have done particularly well, but I stress that trying to promote exports is part of an ongoing process through the whole UK, not just one region. I celebrate the fact that Scotland has a number of tremendous exports, particularly Scottish whisky. Nearly £4 billion-worth of whisky is exported from Scotland, and the rest of the world sees a great deal of value in the brand.

WTO Rules

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6. What discussions he has had with businesses, trade bodies and industry representatives on the potential effects of World Trade Organisation rules in the event that the Government do not secure free trade agreements with other countries after the UK leaves the EU. [909453]

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10. What discussions he has had with businesses, trade bodies and industry representatives on the potential effects of WTO rules in the event that the Government do not secure free trade agreements with other countries after the UK leaves the EU. [909457]

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14. What discussions he has had with businesses, trade bodies and industry representatives on the potential effects of WTO rules in the event that the Government do not secure free trade agreements with other countries after the UK leaves the EU. [909462]

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International Trade Ministers and officials regularly meet British businesses to discuss trade policy matters. These discussions have included our position in the WTO, work under way to avoid the loss of trade preferences that UK firms currently access via EU trade arrangements, and future trade negotiation priorities. The Department for Exiting the EU is also engaged fully with British businesses.

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As an EU member state, we are party to free trade agreements with countries such as Mexico, South Korea and South Africa. Is it the responsibility of his Department or the Department for Exiting the European Union to negotiate the grandfathering or replacement of those agreements?

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I can absolutely confirm that DIT leads in every sense on the trade negotiations with the rest of the world. The Department for Exiting the European Union is restricted to the European Union.

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How does the Department intend to help businesses trading with non-EU countries overcome trade barriers such as tariffs and rules of origin requirements if the Government are unable to secure continuation of preferential trading terms?

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When we leave the European Union, it is the intention of the Department for International Trade to carry over the existing trade deals that we enjoy through our membership of the European Union. Countries such as Mexico, for example, have trade deals with the EU, and it is our intention to carry over such trade deals in the first instance in order to avoid any cliff edge.

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The Minister will be aware of statements made by the head of the PSA Group, following the takeover of Vauxhall-General Motors group, that when new models are awarded plants across Europe will be judged on their competitiveness. A 10% tariff on cars would have a huge impact on the competitiveness of the UK car industry, so what contingency plans do the Government have to ensure that the UK car industry remains competitive?

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The hon. Gentleman is right to raise this point; he speaks on behalf of his constituents in an area that manufactures these vehicles. It is the intention that the UK can achieve tariff-free, customs-free access to the single market. That benefits not only the UK car manufacturers that produce 1.9 million cars, but the European manufacturers that export to the UK.

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Many countries breach WTO rules by using a whole series of non-tariff barriers such as local content requirements. What discussions have the Government had to get the WTO to enforce those rules, and what can we do to ensure that those countries are persuaded against this practice?

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My hon. Friend is right. Non-tariff barriers are incredibly disruptive to free trade, and we take that very seriously. We will be looking at our own system of trade remedies, but at the moment everything has been done through the European Union. We need to start engaging in that. To a certain extent, we have had conversations with other countries through the joint economic and trade committees, where we can deal with that.

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The Government will know that WTO rules are not something that we fall back on, but the ultimate foundation of all international trade. Will the Minister bear in mind the advice of Economists for Free Trade, which has said that a UK free trade policy could add 4% to GDP in the long term and reduce consumer prices by 8%?

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Free trade is absolutely the key to giving prosperity to the world, including the UK—it is a huge benefit to developing nations, as well as developed nations. For consumers, there is the opportunity to have market choice, and therefore price choice, which can be incredibly helpful to the economy.

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Tech City UK published its excellent “Tech Nation” report yesterday, showing that investment in digital companies in the UK is 50% higher than in any other European country. I know that my hon. Friend and his fellow Ministers are supporting the tech industry strongly, but has he made an analysis of how WTO rules will affect it?

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The Department for International Trade is carrying out an analysis of how WTO rules will affect every sector of our economy. This is an ongoing process, but my right hon. Friend is absolutely right to highlight the technology sector as one in which this country is leading, and that is a fantastic opportunity.

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Mr Speaker, you and I have been in this House for 20 years, and after yesterday’s attack, I have never felt more proud or more grateful to be speaking in this Chamber.

What assessment has the Secretary of State made of the need to deploy WTO trade remedies? We know that the Government opposed anti-dumping measures in Europe that would have protected British industries. Earlier, he spoke of a balance of interests between UK producers and UK consumers. If there is to be a balance, how many specialist staff has he recruited to deploy successful anti-dumping measures and protect vital UK jobs in the steel and ceramics industries from dumping by China?

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We will bring forward our proposals on this to the House in due course, but at the moment we are looking to adopt a rules-based process to deal with it.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [909440]

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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.

With your permission, Mr Speaker, I would like to acknowledge Sir Martin Donnelly, who leaves our Department after 36 years in the civil service. He is a great and distinguished civil servant who will be very much missed by my Department and more widely.

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Last weekend, we learned that the Secretary of State’s Department is secretly working on a 10-year transitional arrangement with the EU, based on the WTO general agreement on tariffs and trade. Will he confirm that the Scottish Government and all other devolved Administrations are being consulted so that the interests of all the nations of the UK are represented, should a trade deal not be reached in time?

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The Department is not working on a secret agreement with anybody, including the European Union. I think that the hon. Gentleman is referring to press reports about the possible use of WTO rules to ensure a smooth transition at the point when the United Kingdom leaves the European Union.

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T2. There has been considerable investment in the offshore wind sector off the East Anglian coast in recent years. With article 50 being triggered next Wednesday, will the Minister set out the Government’s plans to strengthen the UK’s position as a world leader in the sector, and to attract global investment in innovation and research, so that local businesses are well placed to win contracts at home and overseas? [909441]

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The Department for International Trade works with, and will continue to work with, key UK suppliers, potential and existing inward investors, foreign Governments and offshore wind developers. The UK is building a competitive and innovative supply chain that creates and sustains jobs, exports and economic benefits for the UK as we leave the European Union.

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Now that the Secretary of State has revealed to The Sun his plans for a trade Bill in the Queen’s Speech, will he do Parliament the courtesy of publishing a trade White Paper that sets out clearly what markets he wishes to liberalise and what measures he will take in future trade agreements to protect and enhance International Labour Organisation principles, sustainable development, human rights, environmental protection, intellectual property rights, food standards, future options on state-owned enterprises and the ability to nationalise particular sectors? If he develops an informed, consultative international trade policy, the Government may be able to restore confidence that they are holding trade dialogues that are backed by a clear and strategic plan.

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The hon. Gentleman raises an important point. Should the Government intend to introduce legislation on this issue in the Queen’s Speech, we would want a consultative process so that stakeholders could make their views known. It is important that we do that in a very collegiate way, because that is, as he said, the way to maintain and maximise confidence.

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T4. The aerospace sector is of great importance in Derbyshire. What steps are the Government taking to promote the UK’s excellence in this sector around the world? [909443]

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Our aim is absolutely to keep the UK as a leading aerospace—and, indeed, space—nation. We will continue to work with the industry through the aerospace growth partnership and to promote foreign investment, boost exports and grow high-value jobs here in the UK.

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T3. The UK video game sector is one of our great success stories. I was with Ninja Theory in Cambridge on Friday. The trade body UKIE has consulted its members, who have told it that maintaining data flows in Europe is essential. Can the Minister tell us what progress has been made on securing a data adequacy agreement with the European Union? [909442]

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The hon. Gentleman is absolutely right to celebrate the activities of this creative industry sector. However, since we have not started the article 50 process, we have not entered into any specific talks.

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T5. What discussions has my right hon. Friend had with Commonwealth countries about trade and investment opportunities? [909444]

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Just over a week ago, we held our first conference with Commonwealth Trade Ministers. That gave us an opportunity to look at how we might maximise intra-Commonwealth trade and at the differences between our trading systems. That will help us to move towards greater consistency in the rules that we apply so that all in the Commonwealth can get even greater benefit from a system that is growing faster than the global economy and should be much more beneficial.

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T7. When will the Government notify other contracting parties to the European economic area agreement of their intention to withdraw from the EEA? [909446]

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As we withdraw from the European Union, we will be having continued discussions with our partners about how we intend the process to be notified.

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T6. What early consideration are Ministers giving to product standards? [909445]

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The subject of product standards is incredibly important. My hon. Friend will be aware that the great repeal Bill will bring across a great deal of what relates to the European Union, and that Bill will contain detail about product standards.

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What influence can my right hon. Friend bring to the showcasing of great British beer in embassies around the world?

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We give great priority to all great British exports, and let me give my hon. Friend a personal commitment that I will take an unusually strong personal interest in the request that he makes on the regular trips that I intend to take in the coming months.

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T8. My constituent Heather Burns works in the digital economy. She has only ever known a borderless, connected world of work. Can the Secretary of State reassure her that he understands the difficulties that Brexit is likely to cause for this very globally focused industry? What action is he going to take to prevent problems from occurring? [909447]

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One problem that we have faced in recent times is that although the European Commission has been relatively forward-leaning on digital issues, European Union members have prevented the Commission from taking forward some of the measures of liberalisation that would, in fact, help this country and others. As we leave the European Union, we will want to see what advantages there are for the United Kingdom in liberalising our economy, especially so that the digital economy and e-commerce can flourish.