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Free Trade and WTO Reform

Volume 663: debated on Thursday 11 July 2019

This weekend, it will be three years since my Department was formed, and in that time the UK has worked with partners to ensure that the World Trade Organisation is equipped with the tools needed to tackle present challenges and address 21st-century trade issues at a time of significant global headwinds. I emphasised the urgent need for WTO reform in discussions with my counterparts at the G20 trade and digital economy ministerial meeting in Japan a few weeks ago.

Can the Secretary of State please explain why some nations, such as Canada, are refusing to roll over their existing EU free trade agreements, while many others, such as Switzerland, have happily done so?

Continuity of existing trade terms is in everybody’s interests. I have to say that when the House of Commons gives mixed signals about the possibility of a no-deal exit, quite understandably some of our trading partners wonder whether it is worth investing in getting those continuity agreements. What I would say to those trading partners is that a no-deal exit is not entirely within the control of the United Kingdom; we might end up with a no-deal exit from the European Union. It is in everybody’s interests to have those safety nets in place.

Free trade has the ability to spread the blessings of prosperity and to bring nations closer together. What is my right hon. Friend doing to spread free trade, particularly with our friends in the Commonwealth and the Anglophone countries?

I would go further than my hon. Friend and say that free trade is beneficial for prosperity, stability and security, in the United Kingdom and beyond. The creation of Her Majesty’s trade commissioners is one of the most important elements of the Department for International Trade, and I am passionate about increasing the size of the DIT’s overseas network, including in the Commonwealth. Therefore, this morning I am proud to announce the creation of a new HM trade commissioner for Australasia. The post will be a senior civil service 2 director role and will be externally advertised later this year, to attract the best and brightest talent.

To return to the subject of continuity agreements, a number have been put in place but they do not apply to some of our biggest trading partners. Does the Secretary of State really think that by the end of October we will have a significant number of agreements in place with those countries with which we do the most trade?

Well, 10.7% of our trade is done under EU trade agreements with third countries. In fact, the largest of those, with Switzerland, and some of the other largest—for example, with the European economic area and South Korea—have already been concluded or signed, and I expect further agreements to be reached.

I do not know whether the Secretary of State saw the alarming report in yesterday’s Financial Times on the impact on the Amazonian rain forest of the EU-Mercosur trade deal. Of course free trade is a good thing, but not if the cost is climate change. Does he agree?

This Government have been very consistent in our approach to this matter. In fact, next week I will be setting out, at a slightly lesser level, moves that the Department for International Trade intends to take to mitigate our own international travel. We all have a responsibility, at international, national and personal level, to take climate change absolutely seriously. In international agreements, the environmental impacts are very much looked at. Of course, that agreement has not yet been finally concluded.

I congratulate the Secretary of State and his Department on the latest export figures, which have reached another new high, but there is clearly potential for further growth, particularly post Brexit. What plans does he have to ensure that we have sufficient staff and personnel in high commissions and embassies throughout the world looking for those opportunities and feeding them back to British firms?

For Britain to be able to sell abroad, we need to be able to do two things simultaneously: understand what Britain has to sell abroad and understand the markets we are selling into. That is why my Department is bringing in a major change to rotate our staff from our international posts through our sectors in the UK, so that they can understand what the UK can do in terms of services and goods in a real-time way as well as understand the markets. It is not just about how many people we have in the market, but about how well they understand what is happening in the UK. I hope that this innovation will lead to an increased capability for the UK and improve our competitiveness vis-à-vis other exporting countries.

We recognise the need to reform the WTO, not least in the area of speeding up dispute resolution. We also recognise the benefits of regional trade agreements and bilateral agreements that can be WTO-compliant. However, it remains essential that we have a fully functioning WTO implementing globally agreed trade rules, so may I ask the Secretary of State to take on board and to agree with me that in these negotiations on reform he should reject some of the approach of the United States, which is to suggest that it will walk away from the WTO if it does not get its own way?

I absolutely agree that we need an international rules-based system based on the WTO. It does require reform, but the fact that it needs reform is not an excuse to leave—it is an excuse to be more engaged in those reforms. It is worth pointing out that the United States has done very well, winning around 90% of the cases it has taken to dispute at the WTO. I hope that we all understand that the alternative to a rules-based system is a deals-based system, and the biggest casualties of that will be developing countries.