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.
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.