What recent assessment the Government have made of the potential effect of a US trade agreement on SMEs. (902520)

We are working on a dedicated small and medium-sized enterprise chapter in the US trade deal to help the UK’s 5.9 million small businesses. Some 31,600 UK SMEs already export to the US, and we want to help them by cutting red tape on customs and tariffs.

SMEs are the backbone of the UK economy, but while the US Government are engaging with their SMEs, SMEs in the UK say that there is no equivalent engagement from the UK Government. Will the Secretary of State commit to having a dedicated chapter in every trade deal that they are looking to develop, and will she create a mechanism for SMEs themselves to help shape it?

I thank the hon. Lady for her question. We have been in touch with a number of organisations representing SMEs—for example, the Federation of Small Businesses, which has come out in favour of a US trade deal, saying:

“For small businesses, the US is the number one single market of choice for importers and exporters for the next three years, which is why these negotiations are so critical.”

We are committed to working with businesses of all sizes in this trade process through our expert trade advisory groups, which we have with all industry sectors, and I am very happy to engage with the hon. Lady about how even more SMEs can be involved in this process.

What assessment she has made of the potential merits of a free trade agreement with the US. (902522)

What assessment she has made of the potential merits of a free trade agreement with the US. (902529)

A free trade agreement with the United States is set to deliver a £15 billion increase in bilateral trade, benefiting every region of the UK, including the nation of Wales and the great county of Yorkshire, and delivering an extra £1.8 billion for workers’ wages.

In the light of the difficult circumstances we find ourselves in globally, I would like to congratulate the Secretary of State on setting up talks with the US. With the UK set to leave the EU at the end of the year, it is also important that we have free trade agreements in place with other nations, particularly our Commonwealth partners and countries in the far east. Therefore, could my right hon. Friend provide an update on progress with the potential trade deals with Australia, New Zealand and Japan?

I thank my hon. Friend for his question. We will shortly be launching negotiations with Japan, Australia and New Zealand, and pressing for early accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This is an important step in diversifying our trade and making sure we are not just dependent on a small number of countries for our imports and exports. It is also important that we work with like-minded free market democracies to help set global standards in trade.

Does the Secretary of State agree that all parts of the UK and all economic sectors stand to gain from a trade deal with the United States? However, some lobbyists are concerned about their specific interests, so what reassurance can my right hon. Friend give that fairness to both the UK and the US, as well as economic opportunities for all parts of the country, will be central to her thinking in the negotiations?

A free trade deal with the United States is set to benefit every nation and region in the UK, including Wales. We will strike a hard bargain, and seek a deal that is fair for our producers. For example, we want to make sure that we gain access for British lamb and Welsh lamb in the United States market. It is the second biggest importer of lamb in the world, and it represents a massive opportunity for our farming sector and for the nation of Wales.

I thank the Secretary of State for the warm welcome that she has given me in this new role and for the co-operative discussions that we have enjoyed so far in relation to both coronavirus and US trade. On the latter subject, she will be aware that the Trump Administration and the US Congress see the US-Mexico-Canada agreement on trade as a template for every other free trade agreement that they are looking to sign around the world. Can the Secretary of State make it clear to them today that she will not agree to any version of article 32.10 of the USMCA that would constrain the UK’s ability to negotiate our own trade agreement with China and would therefore represent an unacceptable breach of the sovereignty of this Parliament?

First, I welcome the right hon. Lady to her seat. It is great to see her in the flesh, even though we have had a number of calls over the last few weeks. I am committed to working with the Opposition to ensure that we get the best possible deal for all parts of the UK in the US trade deal. I can assure her that when we negotiate with the United States we will negotiate in the UK’s interest, ensuring that we have full freedom of manoeuvre and making our own sovereign decisions as a country. Of course, we are looking at a number of precursor agreements for the text we use in those trade negotiations, but my No. 1 priority is to ensure that we have our own sovereign capability to trade with the rest of the world as we see fit. One important benefit of a US trade deal and the trade deal we are looking to strike with Japan is that we need to be setting standards with fellow free market democracies and ensuring that we have proper transparency in our operations and proper setting of standards.

The Secretary of State really needs to think about the other Members who need to get in, so if she could shorten her answers, it would be helpful to all the Members who are waiting. [Interruption.] It is very good, actually.

Business and trade are all about the bottom line and numbers, and we know from the Treasury estimate that Brexit will cost about 6% of GDP. An American trade deal—and remember that the USA is a quarter of the global economy—will only give an average lift of about 0.2% to GDP, or a thirtieth of what Brexit will cost. Is there any prospect of that number improving? What are the GDP lifts for the deals with Australia, New Zealand and Japan and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership? We need to get to the numbers at the bottom of Brexit.

I thank the hon. Gentleman for his question. He will be aware that there is a projected benefit to Scotland from a US trade deal of over half a billion pounds on gross value added, which is a significant figure. In fact, Scotland is one of the parts of the UK likely to benefit most from a US deal. We will shortly publish the economics behind the Japan, Australia and New Zealand deals when we launch the respective trade negotiations.

What recent progress her Department has made on negotiating free trade deals. (902526)

I thank my hon. Friend for his question. We will shortly be launching negotiations with Japan, Australia and New Zealand. This is an important opportunity for the UK to form closer ties with a fast-growing group of countries and look forward to joining the CPTPP, which comprises 11% of the global economy.

I warmly welcome the ambitious agenda that my right hon. Friend sets out. Can she confirm that any trade deal with the United States will not lower our standards on imported food, and that these talks and the other ones she referred to represent a great opportunity for world-leading companies in west Norfolk such as Bespak and other pharmaceutical, engineering and manufacturing firms to benefit from reduced tariffs and the removal of other barriers to trade?

I can confirm that we will not lower our food import standards as a result of the US deal. We are going to maintain those standards; it is an important part of the quality assurance we have here in the United Kingdom. My hon. Friend will be aware that there are lots of opportunities for Norfolk farmers and producers from a US trade deal, and overall the east of England stands to benefit by £345 million.

Around a third of the value added of UK trade comes from indirect trade—indirect links—where goods and services are first exported to one country and subsequently exported to the UK. Given the importance of indirect trade and value chains generally, I am sure the Secretary of State would agree with the Dutch Trade Minister that we should rethink our trade deals to take a closer look at the sustainability of those value chains. Will she go further and agree that we should not just be looking at sustainability, but that trade deals should be as inclusive as possible and based on World Trade Organisation rules, and because of the importance of value chains and indirect trade—

Order. I think the Secretary of State will have got the question.

The hon. Gentleman is correct to say it is very important that we have resilient trade as well as trade that benefits our economy. That is why our strategy is to strike trade deals with more partners, to ensure that our companies have more options and that we are trading with a wider variety of nations than we were before.

Our priorities for the last four years were supposed to be in this order: first, securing a free trade agreement with the EU; secondly, rolling over all our existing deals with third countries; and thirdly, agreeing free trade deals with the rest of the world. Can the Secretary of State explain why the Government have failed on all three?

I would argue strongly that we are succeeding on all three of those aims. We have opened talks with the United States; David Frost is making significant progress in his talks with the EU; and we are making significant progress in increasing the number of countries that we are able to agree continuity trade deals with. We are on course to succeed in all those areas.

As the WTO makes clear, coronavirus will lead to a substantial fall in global trade. It suggests a reduction in the range of between 13% and 32% in 2020. Although it is true that this is primarily a health issue, trade will be an important ingredient of the recovery, so does the Secretary of State agree with the WTO that keeping markets open and predictable will be crucial to securing the renewed investment that we need?

I completely agree with the hon. Gentleman; he is right that protectionism would be a disaster for the global economy at the moment. That is why we have been pressing at the WTO to keep trade open, and why the UK has unilaterally lowered tariffs on key medical goods, to keep that trade flowing.

Will the Secretary of State tell the House what the UK’s approach will be to chemicals regulation during any future trade negotiations? Will we retain the precautionary principle, or is she looking to relax our current laws?

It is a very important principle that the UK Government have responsibility for their own regulations. That is not something that we will trade away in a trade deal; that is a matter for UK sovereign Government regulation.

11. What her policy is on protectionism. (902524)

As we emerge from the covid crisis, it is vital that we keep free trade flowing. That is why the UK has been making that case with G20 Trade Ministers and the WTO. We have another G20 meeting this Thursday, where I want to see further action to cut tariffs on medical products, and for longer-term WTO reform.

Stilton producers, such as the excellent dairies of Cropwell Bishop and Colston Bassett in my constituency, face a 25% tariff when they export to the US market. Can my right hon. Friend tell me what progress has been made, in the first week of negotiations, to reduce those tariffs?

We are determined to get those tariffs reduced and removed on products like Stilton, and the brilliant producers in my hon. Friend’s constituency. The Stilton Cheese Makers’ Association has backed a US deal, saying that a US free trade agreement will help recognise Stilton cheese further in the US, and bring down some of the existing barriers that we are currently facing.

12. What steps he is taking to expedite the import of essential medical products during the covid-19 outbreak. (902518)

13. What steps he is taking to expedite the import of essential medical products during the covid-19 outbreak. (902543)

We continue to work tirelessly to secure vital supplies of medical equipment from overseas partners to meet UK demand. Hundreds of millions of units of PPE have been procured and over 2,000 ventilators have arrived in the UK thanks to our trade and FCO networks.

Across the world, we are being advised to wash our hands with soap regularly to keep us safe from the virus, but the average import tariff on soap among WTO members stands at 17%, with some countries charging tariffs of up to 65%. What steps has the Minister taken to seek global agreement to reduce tariffs on the import of soap and other hygiene products, to combat the spread of covid-19?

That is a very good question and I thank the hon. Gentleman for asking it. We are working tirelessly, at different international forums, to ensure that trade barriers—either long-standing barriers or ones that have been thrown up as a result of the crisis—are reduced or removed. For example, just last month, at the UK’s initiative, the G20 Trade Ministers met and discussed a lot of these and took significant action. We have also been lobbying bilaterally, most successfully, with India to ensure that such barriers are reduced or removed.

It is shameful that our national stockpile of PPE dwindled during years of austerity. The Government’s response since has been one of confusion and panic—missing three chances to join the EU scheme to bulk buy PPE, and the recent fiasco of flying in unusable gowns from Turkey. What discussions are Ministers having with the Governments of New Zealand, Singapore and other WTO countries to support global efforts to keep medical supply chains running during and beyond this crisis?

We are extremely active at the WTO and other forums, including the G20, to ensure that products flow. We have delivered 1.22 billion items of PPE to the NHS, which is a tremendous achievement. That includes 40 million safety goggles and 1.3 billion face masks; the numbers are substantial. On the action that we are taking at the WTO, we continue to lobby at all levels. May I just correct the hon. Gentleman on one point—about the delivery of 400,000 Turkish gowns? That number represents a tiny proportion of the total, and only a tiny proportion of those gowns were actually found to be defective. We are very thankful to Turkish suppliers for what they have done.

It would be remiss of me not to welcome the right hon. Member for Islington South and Finsbury (Emily Thornberry) to her new role.

Thank you, Mr Speaker. May I also thank my colleagues for asking such vital questions about shortages of PPE and other essential medical supplies?

One area where we have, thankfully, not seen shortages to date is the supply of prescription medicines, thanks to the so-called Brexit buffer of supplies built up in preparation for a no-deal Brexit. But given that this buffer only provides somewhere between three to six months of supplies, will the Minister tell us how the Government are getting on with replenishing these stocks from imports, so that we do not experience any shortages once the Brexit buffer starts to run out?

I join the Secretary of the State in welcoming the right hon. Lady to her position. After four years of the hon. Member for Brent North (Barry Gardiner), we always look forward to seeing somebody new at the Dispatch Box.

Again, we are active in all available forums to ensure that the UK’s supply of prescription and non-prescription medicines continues. For example, following the restrictions that India put in place on 3 March, my right hon. Friend the Secretary of State has been very active with the Indian Trade Minister to get almost all those restrictions removed. We will continue to be active with all our trade partners to ensure that products continue to flow to our NHS at this time.

15. What recent discussions she has had with UK trade partners on including clauses on human rights in future trade deals. (902551)

The UK has a strong history of safeguarding human rights and promoting our values globally. Our strong economic relationships with trading partners allow the Government to have open discussions on a range of important issues, including human rights. We continue to encourage all states to uphold international human rights obligations.

Twenty-one countries have been listed where negotiations are ongoing with regard to rolling over existing trade agreements beyond 31 December. A number of those countries have shockingly poor human rights records, including Cameroon, Egypt, Singapore, Uganda and South Sudan. Will the Minister tell us whether human rights are part of those discussions? Also, in order to ensure that there is no saying one thing and doing another while everyone is diverted by coronavirus, will he guarantee the inclusion of human rights clauses in any eventual deals?

I think the hon. Lady is referring to the various EU agreements. She was a passionate campaigner —and, I think, still is—to remain in the EU. Of course, if we had remained we would still be in those trade agreements with the self-same countries that she mentioned, but we are clear that the UK will remain a strong voice for human rights and that more trade does not have to come at the expense of human rights, and we will continue to encourage all states to uphold international human rights obligations.

16. What recent steps she has taken to support businesses trading internationally that are affected by the covid-19 pandemic. (902555)

17. What recent steps she has taken to support businesses trading internationally that are affected by the covid-19 pandemic. (902539)

In response to covid-19, the Department continues to support UK businesses to trade. Office for National Statistics data states that 75.4% of businesses are continuing to trade.

For British companies that trade overseas, the one thing guaranteed to make a very bad situation even worse  would be the loss of free frictionless trade with the rest of the EU at the end of the year, so will the Minister reassure UK firms that the top priority when it comes to trade is securing the free trade agreement that we need with Europe?

Of course. The hon. Lady will have seen that the UK is continuing the negotiations, which the chief negotiator David Frost has been doing virtually. We have completed the first round and we look forward to getting the trade agreement that I believe is in the interests of both sides and which will bring relief to British business and others at this important time.

In Sunderland and the wider north-east, lots of businesses—large, small and start-ups—rely on international supply chains as they trade internationally. What are the Government doing in these challenging times to ensure that international supply chains are protected?

The hon. Lady asks a good question. One important thing that we will learn from this crisis is the importance of the robustness of supply chains. Currently, most of the focus is obviously on medical supplies, but that will extend more broadly. We need to make sure that we have diverse sources of supply, that the supply chains that ensue are robust, and that we have choice and diversity in respect of where we procure our goods from.

18. What assessment she has made of the effect of trade barriers to UK exports on the UK’s contribution to the global economic recovery from the covid-19 pandemic. (902533)

The hon. Lady is right to highlight the negative impact of trade barriers. OECD analysis shows that cutting tariffs and addressing unnecessary costs associated with non-tariff measures could increase trade by more than 20% among G20 economies. We are working to remove barriers for UK exporters around the world—from helping British beef and lamb to export in Japan to obtaining geographic protection for Scotch whisky in Indonesia.

The most recent WTO review saw G20 economies implement 28 new trade-restrictive measures, estimated to cover around $460 billion of trade, and import-restrictive measures in force for the period January-October 2019 are now estimated to cover $1.6 trillion, which suggests that import restrictions have continued to grow. It is obvious that we need resilience in our economies, but does the Minister agree that that cannot be an excuse to engage in economic protectionism or simply close down value chains?

I entirely agree with the sentiments expressed by the hon. Lady; she is absolutely right. Pre-covid, over the past decade, perhaps since the financial crash, there has been an increase in the number of trade barriers that have been erected, which is why, as an independent nation once again, we are so determined to champion free trade and to use the WTO and the other international forums referred to by colleagues to make sure that we make that case. It will lead to prosperity for all.

19. What recent progress her Department has made on trade negotiations with African countries. (902527)

I thank my hon. Friend for his work as chair of the all-party group on Ethiopia and Djibouti. The UK has signed continuity trade agreements that secure our long-term trading relationship with 11 African countries, and a further 35 will benefit from our unilateral preferences scheme. We continue to work with our partners on arrangements for the remaining African countries covered by EU agreements, in a way that reflects the current economic and public health realities.

I thank the Minister for that response. Does he agree that trade is the best way out of poverty for developing countries? Bringing that idea together with the fact that the United Kingdom is looking to forge trade agreements around the world would create a bigger benefit. Will the Minister do everything he possibly can to bring about strong trade agreements with African countries?

My hon. Friend is absolutely right: it is a win-win situation for the UK economy and those developing countries in Africa, and it is so important that we work together. To those considering seeking to put up barriers to foreign produce in our consideration of the Agriculture Bill tomorrow, I should say that not only would that breach the WTO’s global rules and hurt our good name in the international community, but it could also have the effect of restricting imports from developing countries, including those in Africa. Surely no one should wish for that.