Skip to main content

International Trade

Volume 707: debated on Thursday 20 January 2022

The Secretary of State was asked—

SME Trade with EU

The refreshed export strategy, launched in November, focuses on the barriers to trade faced by small and medium-sized enterprises, using targeted interventions that help businesses at every stage of their exporting journey. Our newly unified Export Support Service provides a single point of contact for businesses trading with Europe, as one of the central elements of the strategy.

After finally getting to grips with last year’s contradictory guidance on trading with the European Union, one family-run business in Chesham has immediately come up against problems with the new rules introduced this month. They tell me that

“we would love to do it all absolutely correctly”,

but that nobody will tell them what correctly is. Will the Minister support the thousands of UK businesses struggling to trade with Europe by clarifying the Government’s new rules, and will he work with colleagues in the Department for Business, Energy and Industrial Strategy to reopen and expand the SME Brexit support fund?

The ESS is there to help traders who are struggling with elements of trading with Europe and it will continue to do so. It is available online and by telephone, but if the hon. Lady would like me to meet her constituents, I would be more than happy to do so.

Given the growing list of companies setting out the real and obvious difficulties they are facing in accessing markets in Europe, and given the many very practical suggestions that business groups have put forward to the Government in recent weeks, from negotiating a veterinary agreement and making progress on mutual recognition, to even just getting agreement on shared customs advice, when are Ministers going to try a bit harder to help businesses make Brexit work?

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

2. What progress her Department has made on securing UK membership of the comprehensive and progressive agreement for trans-Pacific partnership. (905101)

14. What progress her Department has made on securing UK membership of the comprehensive and progressive agreement for trans-Pacific partnership. (905119)

Is CPTPP not now one of the greatest opportunities we have to reshape the basis of international trade, to the benefit of not only the whole UK and the world, but great British businesses such as Oxford Instruments in Wycombe?

I thank my hon. Friend for the work he is doing to champion his local businesses. He is right: it is an £8.4 trillion market that we are opening up. However, this is about not only the economic benefits, but the benefits of those closer trading ties to enable people to work on problems that we are all facing around the world, in tech, the environment, healthcare and other sectors. That has got to be good for the progress of humanity as well.

Many people in Cheadle work in the tech sector, where jobs in digital, HealthTech and FinTech provide high-skilled, well-paid work. Given the high rate of northern unicorn start-ups, does my right hon. Friend agree that new trading partnerships can open up markets for future growth and for levelling up in the north?

My hon. Friend is absolutely right; the pay for people working in those sectors is about 50% higher than the UK average, so the more jobs we can create in those growth sectors, the better. I thank her for the work she is doing to champion her local businesses and expand those opportunities for her constituents.

For every £490 of Brexit damage, CPTPP should recover about £8 of it, but that is at risk if the UK patent attorneys’ membership of the European Patent Organisation is undermined or removed. At the moment, UK patent attorneys, who represent about a fifth of the patent attorneys in Europe, deal with a third of the patents of Europe. What assessment has been made by the Government of the damage that could be done to them through CPTPP and will that assessment be published so that they will know?

CPTPP is not doing damage and our accession to it is opening up markets. I work closely with all kinds of professional bodies, including those looking at patents, intellectual property and so forth. These are key sectors where we want to break down barriers to trade. As well as free trade agreements, we are looking, as the hon. Gentleman will know, at memorandums of understanding not only with countries across the world, but with states in the United States, to enable those non-tariff barriers to trade to be removed. We want to work with the EU. I know that the hon. Gentleman has not come to terms with the fact that we have left the EU and that we are looking to expand our trading opportunities. Some 99.9% of the businesses in his constituency that export will benefit from CPTPP, and I look forward to the day when he welcomes that.

The national food strategy published last year said that to allow lower environmental and welfare standards in future trade deals would represent

“an extraordinary failure of joined-up thinking”,

yet that seems to be exactly the Government’s approach. As we await the Government’s White Paper in response to the national food strategy, what discussions is the Minister having with colleagues in other Departments to make sure that in that White Paper we firmly pin down that we will not accept lower standards?

As I have alluded to, as well as the economic benefits that we hope trade agreements will bring, they are about highlighting the fantastic food safety, quality and welfare standards of our local produce and are an opportunity to champion that. For example, on my recent visit to the United States I met the agriculture commissioners of every state and talked about the practices and values that sit behind what we do here in the UK. The United States is interested in that and wants to reform some of its practices. I know that the hon. Lady is passionate about this agenda and hope she will support us in ours.

Free Trade Agreement: India

We have a slight problem. Will the Secretary of State answer the question? I will then go to the Opposition spokesperson.

I visited India last week to launch negotiations with my counterpart, Minister Goyal, for an ambitious free trade deal. India is one of the world’s biggest and fastest-growing economies and is home to more than a billion consumers, with a growing middle class eager to buy the goods and services that our country excels in. Securing a world-class FTA with India will deliver benefits for people across all four nations of the UK.

We know that India does not cede access to its markets easily and that one of its top demands in any trade deal will be generous visa concessions for Indian citizens to come to the UK. Recent press reports indicate that although the Secretary of State would consider such terms, the Home Secretary would oppose them. Will the Secretary of State clarify the Government’s negotiating position and what their red lines will be?

From services and digital to investment and intellectual property, we are aiming for a broad and ambitious deal with India that delivers for both businesses and consumers alike. The first round of negotiations started this week and we hope the second round of talks will be in March, at which point we will have the opportunity to shape and see the scope of the FTA that both countries want to work towards. We will confirm that at an appropriate time as the negotiations progress. We very much hope to reach a mutually beneficial agreement by the end of this year.

Scotch whisky exports to India, the world’s largest whisky market, have declined dramatically since 2019. A year on from Brexit, the Government can no longer deflect to the EU for their failure to deal with the eye-watering 150% tariffs that apply to Scotch whisky sales to India. Will the Secretary of State confirm today that her Government will finally make the removal of those tariffs a priority?

As the hon. Gentleman says, British products such as Scotch whisky and cars currently face substantial barriers to trade in the form of tariffs of well over 100% on their import into India. The reduction of tariff barriers would be a golden opportunity for UK exporters and, indeed, slash tens of millions of pounds off costs. We will put forward our position in a number of areas, including in respect of Scotch whisky, in the first round of negotiations in the next two weeks. We will make clear the issues that are important to us so that we can achieve a successful, mutually beneficial FTA for all sides.

The whisky industry is used to dealing with weights and measures, but it has been waiting for too long for measures from this Government. Will the Secretary of State confirm what target has been set for tariff reduction for Scotch whisky? Is it half, more than half or—what the industry needs—the complete removal of that 150% tariff? What is her measure of success?

The hon. Gentleman would be surprised if I were to disclose the details of my negotiations mandate at this point, but I think I have already been clear—I will say it again—that it is important that the trade deal is mutually beneficial, and the reduction of barriers to trade such as tariffs will be an important point of the UK’s negotiating mandate.

A free trade agreement with India would be a wonderful thing, but these agreements take a lot of negotiation and a lot of negotiators. When we were in the EU, we lost all our trade negotiators and we have had to build up the Department from scratch. How many free trade negotiators does my right hon. Friend have in her Department? Are there enough or do we need more?

We have a fantastic team of now extremely experienced negotiators. The team who are now focused on the India FTA not only bring with them a wealth of experience from Whitehall, but are experts drawn from a number of fields. We will be cracking on with these discussions, which will be virtual for the first two weeks, because of the restrictions in India, after which we hope to be able negotiate face to face. The teams—for instance those who worked on the Australia free trade deal—work 24/7, or whatever is required through virtual discussions. We will continue to do that, and we have a fantastic team leading the way.

Free Trade Agreement: US

We have had five productive rounds of negotiations to date and have agreed a significant proportion of the legal text across multiple chapters.

The 2018 Tory manifesto on which the Minister stood said that a trade agreement with the US would be completed by the end of 2022, but the agreement is shrouded in secrecy. As the Secretary of State said, she toured the US last month, playing up what she described as a “massive opportunity”. Can the Minister advise us at what stage the negotiations are now, and confirm that the promise to the electorate will be fulfilled and a deal put before this House by the end of the year?

I have just outlined where we are to date in terms of how much has been written and agreed to. I am sorry that the hon. Gentleman did not congratulate my right hon. Friend on having started discussions on section 232 and the announcement that was made yesterday by the Administration. He will know that we are concurrently negotiating memorandums of understanding with states. These things can only be done at state level; I am talking about regulated and regulator discussions, mutual recognition of qualifications and so forth, which will reduce massively the cost of doing business with the United States. We are making good progress on that twin-track approach. If he thinks that we should move a little faster, perhaps he might like to say that to the US Administration.

Trade with Australia

The UK signed its first “from scratch” free trade agreement with Australia on 16 December 2021. The deal is expected to increase trade with Australia by 53%. Both countries have committed to removing tariffs on a vast array of popular products, which can now be more easily traded, including eliminating tariffs on 100% of UK exports. This deal is tailored to British strengths, providing benefits for our world-class services industry, unprecedented new opportunities for UK professionals abroad, and for trading digitally.

The Australian high commissioner is hosting a gala dinner on Ynys Môn on 18 February to help raise much-needed funds for the Anglesey Agricultural Society. How is the Minister working to help my island farmers and businesses increase trade with Australia?

First, I would like to wish the Anglesey Agricultural Society good luck with the Anglesey show, which I understand is in August. I look forward to an invitation and an excuse to pay a visit.

The UK-Australia trade deal could boost Wales’s economy by around £60 million. Welsh farmers will benefit from the opportunities to sell their produce in Australia, and Welsh manufacturers could benefit from new procurement opportunities and enhanced business mobility provisions. Many small businesses will also enjoy greater access to Australia.

Will my right hon. Friend provide a specific description of the protections and safeguards that are in place for farmers, particularly in Scotland, and what recent engagement her Department has had with National Farmers Union Scotland and other Scottish food production trade bodies?

The UK has secured a range of measures to safeguard our farmers, including tariff-rate quotas for a number of sensitive agricultural products, product-specific safeguards for beef and sheep meat, and a general bilateral safeguard mechanism providing a temporary safety net if an industry faces serious injury from increased imports as a direct consequence of the agreement. The NFU, Salmon Scotland and the Scotch Whisky Association are trade advisory group members which were consulted throughout negotiations and regular meetings, and we will continue to engage with the NFU and other Scottish agricultural bodies to understand the impact on the industry.

Following on from that, the Government’s own impact assessment shows a £94 million hit to farming, forestry and fishing sectors, and a £225 million hit to the semi-processed food industry. The Government have also negotiated first-year tariff-free allowances of a 6,000% increase on Australian-imported beef to the UK. Can the Secretary of State outline what conversations that she has had with the NFU, specifically about the impact of that deal on British agriculture?

We have continual and regular discussions with the NFU and other agriculture bodies. As I have just said, they have been integrally involved in the discussions all the way through, and I know that the ministerial team will continue to meet them. I believe that my Minister responsible for exports will be having a meeting with them next week.

Unseemly haste in securing as many free trade deals as quickly as possible and at massive expense in pursuit of a press release and a picture with some TimTams is not the optimal trade policy that people deserve. Scotland’s farming and fishing sectors are paying the price for this public relations jamboree masquerading as trade policy. The UK Government’s own figures show domestic agriculture, forestry and fishing will suffer a £94 million hit just from the Australia deal. Scottish producers saw established routes to EU markets needlessly frustrated by this UK Government’s Brexit dogma. Will the Minister therefore apologise to Scotland’s economy?

I am disappointed that moving to having new free trade agreements with some of the great economies of the world is considered unseemly haste. We are working at pace and alongside all our UK businesses with a clear and mandated consultation process to ensure that we are pitching for the areas of business in which our businesses want to see growth. The EU market continues to be there under our fantastic markets. Part of the work that the Export Support Service is doing is to ensure that those who already export can do so more easily and indeed that, for those who have not yet considered exporting to the EU, the opportunities and the support services are there to assist them.

In 2019-20, trade in goods and services between Australia and the UK was valued at £20.1 billion. Currently, the trade in meat products between the two countries is very small. Specifically, I want to ask this: what steps has the Minister taken to ensure that there is more focus on the trade of meat produce from the UK to Australia, to the advantage of people and farmers in Northern Ireland?

One of the new tools in our armoury will be the trade and agriculture commissioners—experts who will be there to help UK businesses that want to take their products into new markets, including Australia. I have no doubt at all that, just as we enjoy Australian wine, we will have the opportunity to see Northern Ireland meat on the plates of the Australians.

Free trade agreements should be fair to both partners. The Australian FTA—dare I say it, like the Ashes cricket series—is a bit one-sided in favour of Australia. Will my right hon. Friend reassure the farmers in Cumbria and across the UK that the safeguard mechanisms in the agreement will have teeth? For instance, if the Australian meat market were to pivot away from Asia towards Europe, would the tariff rate quota mechanism be effective in turning down the supply of meat so that our fantastic British farmers are not undermined?

Yes, I am confident that the safeguards we have brought in, which I am happy to set out again, will support the most sensitive parts of the UK farming community. They include a general bilateral safeguard mechanism that provides a safety net for all those products, staged liberalisation, tariff rate quotas and specific safeguards for beef and sheep meat, which will be there to support fantastic British produce. Again, I encourage everyone to sing loudly about how fantastic our British produce is. It is eaten from plates across the UK and around the world. We will continue to see that finest produce enjoyed by all.

US Steel Tariffs

6. What recent discussions she has had with her US counterpart on the tariffs on UK steel exports to the US. (905106)

I was pleased to meet virtually with the US Secretary of Commerce, Gina Raimondo, yesterday to discuss the application of US section 232 tariffs. As set out in our joint statement, which was published last night, the US has agreed to commence negotiations with the UK. I welcome that positive development, and I will push for a deal that is right for the UK. I will continue to work closely with industry throughout the negotiations. The UK accounts for less than 1% of US steel and aluminium imports in volume terms, so UK imports do not affect the viability or the national security of the US steel or aluminium industries.

The International Trade Secretary will recall the Hallowe’en agreement from last year, when the US gave tariff-free access to the EU for steel and aluminium exports from the beginning of this year. That means that the EU will now have a 25% price advantage over UK steel and aluminium exports to the US. In fact, any UK steel, even if worked on in the EU, will still attract tariffs in the US. Is that what the Prime Minister meant when said he said Brexit was about taking back control?

As I said, it is a Government priority to secure a good deal and ensure that we find the right way forward to get out of the section 232 tariffs, which we are doing at pace. The US Secretary of State for Commerce and I will work to ensure that that imbalance is removed as quickly as possible.

At the start of last month, I wrote to the Secretary of State about those steel tariffs, which have been in place since 2018 and have already done great damage. In 2017, exports of steel and aluminium to the United States were more than 350,000 tonnes. In 2020, that had fallen to 200,000 tonnes. The situation is urgent, because as my hon. Friend the Member for Preston (Sir Mark Hendrick) set out, the EU gained a competitive advantage on new year’s day, with the US having lifted tariffs for EU member states but not the UK. I welcome the opening of those negotiations, but will the Secretary of State confirm that in advance of those talks the Prime Minister raised the issue personally with President Biden?

I assure the House that I have been extremely robust in moving the issue along since coming into post. I am pleased that we were able to launch these negotiations yesterday. It is important that we sort out and remove those unnecessary and burdensome tariffs on the UK. The UK steel and aluminium industries are not a threat to the US ones. We were working closely at every level to ensure that we find a solution as quickly as possible.

The lifting of the tariffs is vital for jobs and livelihoods across the country, yet the Secretary of State could not confirm that the Prime Minister has raised the issue with President Biden. The truth is that the Prime Minister has been more interested in saving his own job than in saving jobs in the steel sector. The longer the tariffs remain in place, the more damage the Government allow to happen to our steel sector, a foundational industry that is vital for our economy. If the Secretary of State cannot even confirm that the Prime Minister has picked up the phone to the US President about that, are people not right to conclude that the Prime Minister is focused on saving himself and does not care about steelworkers’ jobs?

I hope that the right hon. Member will assist us in the negotiations by speaking to their counterparts and indeed all those across the US who want the tariffs removed. I reiterate that at every level of the UK Government we have raised the issue with the US, and we are therefore at the point where we are now starting negotiations, which will move at pace. I look forward to his assisting us to ensure a successful outcome.

International Trade Opportunities

The Department continues to work hard to boost prosperity in every corner of our country, helping businesses export, securing investment, negotiating free trade agreements, bulldozing trade barriers and championing free trade. Just last week, as my right hon. Friend the Secretary of State for International Trade said, we launched negotiations with India, an economy of 1.4 billion people worth £2 trillion. Our consultation on an FTA with the Gulf Co-operation Council closed last week, and I look forward to launching those negotiations soon. We continue to break through market access barriers. In 2020-21 alone, we resolved more than 200 barriers across 74 countries.

I thank the Minister for his answer. Will my hon. Friend expand on how businesses in Truro and Falmouth, as well as in wider Cornwall, can take advantage of free trade deals that the Government hope to secure in 2022, so that my constituents can reap the rewards and benefits that they will bring?

My hon. Friend is a great champion of businesses in Truro and Falmouth. The south-west is already benefiting from the Department’s work and will continue to do so. A deal with India would benefit the more than 600 west country businesses that exported more than £20 million of goods to India in 2020, and I am sure many more will do so in the future. Food and drink producers—even those that use imported ingredients—now qualify for nil tariffs in a deal with Australia, which is good news for fans of Cornish pasties down under.

Imports from Xinjiang, China

9. If she will take steps with Cabinet colleagues to ban the import of Chinese cotton and solar panels from Xinjiang. (905109)

We continue to keep our policy response under close review and are working with international partners to hold China to account for any violation of human rights.

China is the largest cotton producer in the world, with 84% of cotton coming from the Xinjiang region. The region also produces 45% of the world’s supply of the key component in solar panels, polysilicon, which means that the supply chains are tainted with forced Uyghur labour. In a response given in the other place, the Government outlined that they would

“continue to pursue a positive economic relationship with China and…increase trade with China.”—[Official Report, House of Lords, 21 October 2021; Vol. 815, c. 252.]

In light of the genocide against the Uyghur Muslims, does the Minister think that is an acceptable approach, and will the Minister now follow in the footsteps of the US and ban imports from China’s Xinjiang region?

First, I thank the hon. Gentleman for raising the issue. The more we can talk about it, keep it on our agenda and raise the profile of such matters consistently, the more helpful it is. We are looking at what other nations are doing and we keep our policies under review. He is right: we need a mix of targeted responses against states and also companies that have those practices. We have a good track record on combating modern slavery and being a global leader in this field, but we also need the transparency and tools for consumers and customers of those businesses to find other suppliers if they have concerns. We will keep the matter under review, and I can tell the hon. Gentleman that we take those matters very seriously.

EU Veterinary Agreement

10. What assessment she has made of the implications of the Australia and New Zealand free trade agreements for concluding a veterinary agreement with the EU. (905112)

Nothing in the UK-Australia or UK-New Zealand agreements prevents the UK from reaching a veterinary agreement with the EU. Our agreements allow the UK to co-operate with both Australia and New Zealand and with the EU to avoid unnecessary sanitary and phytosanitary barriers to trade in agrifood, without constraining the UK’s right to regulate in those areas. We are open to discussions with the EU on additional steps to further reduce trade frictions.

The European Union will remain the UK’s largest export market for the foreseeable future, so the priority must be to remove all remaining non-tariff barriers, especially to help our UK agrifood exporters, and also to address some of the tensions around the Northern Ireland protocol. Does the Minister recognise that other free trade agreements risk restricting the nature of any EU veterinary agreement to one that is more limited and based around equivalence, rather than a more comprehensive one based on alignment? That will restrict our ability to trade with the EU to the maximum potential in the future.

We are clear that we want goods to be able to travel from Great Britain to Northern Ireland without unnecessary barriers, and the Government continue to be in intense discussions with the EU with the aim of delivering those significant changes to the protocol, so that there should be a green channel for goods in and out of Northern Ireland and no further checks or documentation for goods moving between GB and Northern Ireland. This is an important part of that wider process, and our trade agreements with the rest of the world will continue to champion Northern Ireland as part of the United Kingdom.

Export Protection: Leaving the EU

12. What steps she is taking to ensure that protections for exports to third countries negotiated while the UK was a member of the EU are maintained following the UK’s departure from the EU. (905116)

Since leaving the EU, the United Kingdom has secured trade agreements with 70 non-EU countries, in addition to the deal with the EU. Many of those deals were negotiated to secure continuity of trade, and they cover 99% of the trade under trade agreements we were subject to when we were also subject to the diktats of the EU, which I am sure is not what the Labour party is advocating today.

I listened to what Mr Speaker said—I mean the Minister—[Interruption.] Of course we always listen to everything Mr Speaker says. The Minister’s description does not tally with the experience of my constituent, Danny Hodgson, whose clothes retail business Rivet & Hide made the Financial Times exactly a year ago because of the crippling new additional duties he faces in importing from the EU. This time it is even worse, because he is finding that all the goods coming in from Japan are attracting a 12% levy. That is slapped on erroneously and routinely seven out of 10 times, I think, and it is a bureaucratic, red tape, bookkeeping nightmare for him. Will the Government look into the case? They are meant to be the party of small and medium-sized enterprises and low tax, and they have trashed their reputation for all that. Can the Government urgently help my constituent please?

I am delighted that the hon. Lady recognises that this party is the party of business. That is great news and I welcome her remarks. She references a business that trades with Japan, but I note that she did not vote for the deal with Japan nor the deals with Canada, Singapore or even the EU. Of course we will happily look at any business that she wishes to raise with me in writing, but I point out that this party is the party of business. We are the party that is securing the trade deals that will benefit businesses across our country.

Manufacturing: Government Support

13. What recent steps her Department has taken to support manufacturing businesses to (a) increase exports, (b) participate in the global market and (c) compete internationally. (905117)

In 2021, the DIT launched a new exports campaign: “Made in the UK, Sold to the World”. The campaign, in line with our refreshed export strategy, celebrates the quality of the UK manufacturing sector and its potential to export worldwide. We are reaching out to businesses across all UK regions and nations to create opportunities for our manufacturers.

I thank the Minister for his answer. I recently had the pleasure of visiting Gestamp on the industrial estate in Newton Aycliffe in my constituency. It supplies thousands of subframes every day to motor manufacturers worldwide, but it has outlined to me concerns that have been raised with it by European companies about the rules of origin and potential tariffs on goods supplied from the UK. Will the Minister reassure Gestamp that it is absolutely safe for European businesses to trade with British companies and that our trade deal with the EU will not result in future tariffs? I encourage him to find time in his diary to visit that fantastic business.

My hon. Friend fights hard for his constituency. I am pleased to reiterate that the trade and co-operation agreement ensures that businesses in every part of the UK can continue to sell to their customers in the EU. We successfully negotiated a zero tariff, zero quota trade deal, which means that goods traded between our markets can qualify for zero tariff trade as long as they meet the rules of origin requirements set out in the TCA. We have secured modern and appropriate product-specific rules of origin that are tailored to the needs of UK business, including innovative rules for the automotive sector. I am happy to join him in visiting the company.

Barriers to Global Trade

15. What steps her Department has taken to reduce barriers to global trade for British businesses. (905121)

In addition to negotiating FTAs, as I have said, we are cutting through red tape and opening markets for British business around the world. Last year, we resolved over 200 barriers across 74 countries, which was an increase of 20% on the previous year—[Interruption.] I am delighted that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) is getting so excited about that success. We have secured British poultry market access in Japan, estimated by industry to be worth up to £13 million a year, and we have lifted the decades-long ban on British lamb exports to the United States, estimated by industry to be worth £37 million over the next five years.

Since being appointed the trade envoy to Pakistan, I have encountered a number of issues that hinder potential trade opportunities such as exporting meat and poultry to help our farmers and importing high quality granite and marble that is important to the UK burial industry, and difficulties for businesses gaining access to UK Export Finance. Will the Minister outline what he is doing to overcome those and other barriers so that trade can be open not just to Pakistan but across the globe?

I thank my hon. Friend for his great work as trade envoy to Pakistan. We are very aware of the challenges to exports in the farming sector posed by costly market access barriers around the world, which is why we are working closely with our counterparts in the Department for Environment, Food and Rural Affairs and engaging trading partners to remove them where possible, as I have outlined, so that Great British meat and produce can be enjoyed all around the world.

My hon. Friend mentioned UKEF, which has a £1.5 billion risk appetite to support exports in Pakistan with a specialist team on hand to discuss options available to British businesses of all sizes. He will also know that we will soon launch our developing countries trading scheme, which will look to further simplify trading arrangements with developing countries, including Pakistan.

In the interests of peace and harmony, I shall refrain from dwelling on the Ashes cricket series.

Small businesses are simply less likely to be able to afford the consultants, lawyers, trade experts and advisers necessary to navigate the complexities of the hard Brexit customs checks that this Government insisted on. Despite that, the Government have now closed the SME Brexit support fund and not replaced it, although a Channel 4 investigation found that 26% of SMEs that trade with the EU are now considering moving some of their European operations outside the UK, while 16% said they had already done so. A Lords report published in December said it is absolutely vital that it is reopened with wider eligibility criteria, and the Federation of Small Businesses has also been calling for that for months. Will the Minister listen to the small business experts?

First, I am sure the hon. Member would want to direct all businesses to our export support service, which will help British businesses get the answers to the practical questions they may have about exporting to Europe, accessing cross-Government information and support all in one place. She will be pleased to know that the statistics actually show that monthly exports to the EU are now £13.6 billion, which is 12% higher than average exports in 2020. That shows that significant progress is being made in our exports from businesses of all sizes up and down our country.

UK Trade Levels

16. What recent assessment she has made of trends in the level of UK trade with the (a) EU and (b) rest of the world. (905122)

Official statistics up to end of November last year show that UK trade in goods with the EU has seen three consecutive monthly increases, with November showing an increase of nearly 3%. Goods trade with the EU is now above average levels for 2020, although still below 2019 levels. UK trade in goods with non-EU countries is at record monthly levels, with recent increases due to the high fuel prices we are seeing across the globe. UK trade in services with EU and non-EU countries continues to show small increases as covid restrictions on the movement of people ease, but trade remains below pre-covid levels.

Ireland has seen goods imports from Great Britain drop by more than a fifth since Brexit. Ireland has also, in that time, increased its goods exports to GB by more than 20%, and imports from Northern Ireland to the Republic jumped by more than 64%. Is it not the case that, by becoming independent, Scots will open the gate to 27 other markets and that Scotland can access that bridge to economic prosperity, as trade levels in the Republic and Northern Ireland are proving to us now?

On this side of the House, we continue to know that the Union is the strongest way that Scottish businesses can continue to export. Some 75% of exports are to the rest of the United Kingdom, and we want to make sure that, as well as trading with all of us, they have the opportunities our free trade agreements will make and find that selling their fantastic goods and services across the world becomes easier. However, we continue to say that the best way for Scottish businesses to do that is to stay within the UK.

Last week at Expo in Dubai, I was struck by the number of trade reps and investors from across the Gulf who told us just how much easier they have found doing business visits to London in recent months compared with other cities internationally. Does my right hon. Friend agree with me that such remarks underline just how important it was for us as a Government, from a trade and investment perspective, to get right those big decisions about the vaccine roll-out and relaxing the covid restrictions to give us a head start as the international trading community recovers from covid?

My right hon. Friend is absolutely right. The Prime Minister has taken some incredibly tough decisions, and in doing so has made sure that our economy has stayed open and our population has remained safe. We have been world leading not only in vaccine production, but in distribution, so ensuring that the trade and enterprise so vital to our constituents and across the world supports healthy economies and, indeed, makes sure that everybody is in as good health as possible. It is lovely to hear those messages. What I hear as I travel around the world is that the UK is open for business, and we are seeing the benefits of that across the piece.

Purchasing managers index information shows that in December 2020 the United Kingdom was the only economy in the entire western world to see a fall in exports. Who is responsible for that?

To go back to my earlier point, as we see markets open up and opportunities for amazing UK businesses to discover not only the markets some are in already but new markets, the export support service and the team at the DIT stand ready to support all those who want to expand and share the UK’s amazing goods and services with the rest of the world. “Made in the UK, Sold to the World” is our campaign motto, and that is what we want to support everybody to share and get out there.

Topical Questions

The Department’s five-star year 2022 has begun at pace with the launch of our India free trade agreement negotiations, the signing of the sovereign investment partnership with Oman, discussions with Brazil towards an economic trade partnership, the launch of our new and improved trade show programme, and the virtual African investment summit taking place today. As I mentioned earlier, yesterday I met with US Secretary of Commerce Gina Raimondo to start negotiations with the US on the section 232 tariffs. These have cost the steel industry over £60 million per year; I am firmly pressing for their express removal and am confident we can now make fast progress towards this to ensure that trade works in the interests of all UK businesses and workers.

Further to my earlier question with regard to US steel tariffs and section 232, what are the chances of our getting those tariffs lifted, given that the Prime Minister is playing fast and loose with security policy on Northern Ireland, particularly through doing his best to trash the Northern Ireland protocol?

We will be pushing for a deal that is right for the UK steel industry and I am confident that the long-standing alliance between the UK and the US, built on a rich history of shared values and free and fair trade, will ensure that the negotiating outcomes are what we need for UK industry. The UK and the US work together across the piece in so many difficult areas at the moment and I hope that those in all parts of the House will continue to give support as we take on some of those challenging security issues.

T2. With over £2.6 billion-worth of exports, I am sure my right hon. Friend agrees that the Black Country is, and will remain, the beating industrial heart of the west midlands. As she goes out with ministerial colleagues to bat for the Black Country on the industrial stage, what is she doing to ensure that supply chain issues in particular are at the forefront of our trade negotiations, and that businesses such as KJV Furniture in Oldbury are able to import and export smoothly; and will she ensure that once again other areas of the world can see the fantastic wares that are made in the Black Country? (905126)

My hon. Friend raises an important point. A key challenge facing the UK and other major exporters is shipping container costs, and there is ongoing engagement across Government, including the Department for Business, Energy and Industrial Strategy, the Competition and Markets Authority and the Department for Transport, to ensure that we understand the background causes of price rises and their impacts, such as by contacting the shipping lines and engaging with international partners where necessary to address the key issue of supply lines that my hon. Friend raised.

Given the Government’s underwhelming performance on trade to date, even the small gains from joining the comprehensive and progressive agreement for trans-Pacific partnership would be welcome, but one issue that the previous Secretary of State always ducked was China’s interest. Given President Xi’s reaffirmation on Monday of China’s desire to join the CPTPP, can the Secretary of State clarify whether Britain would have the right to veto China’s accession?

The hon. Gentleman raises an important point. These issues are very complex, but what I will say is that we are first in the queue to join CPTTP, and after that all things are up for review.

T5. The last couple of years have been extremely difficult for the shell fishermen in Cornwall, include those on the River Fal, which has one of the most historic and sustainable fisheries in the world. That said, fishing communities across the UK will benefit from the £75 million boost to the sector; can my right hon. Friend the Secretary of State assure me that the Department will work with the Cornish fishermen benefiting from this investment and help them further capitalise on it by ensuring that they are able to play their part in the Government’s “Race to a Trillion” strategy? (905129)

My hon. Friend raises an important point, particularly for her constituency, and I can give the assurance that the Government will continue to work closely with Seafish and the Shellfish Association of Great Britain to encourage their members to look at new markets and drive awareness of UK seafood in international markets. We have a network of trade advisers in the UK and overseas who can support the sector to trade successfully, and I am happy to put any of her businesses in contact with them.

In December, the Government snuck through a change to the UK’s arms export rules, and charities such as Oxfam have warned that these changes will lessen transparency over arms exports and could see UK arms being used against civilians such as those in Yemen. What steps is the Minister taking to ensure that UK arms exports are not used to commit breaches of international humanitarian law?

The Government have not “snuck through” such changes. We are very open and transparent about the policies that sit behind our very good arms export controls, which are also scrutinised by this House. The Department is due to meet a number of stakeholders; I can check whether Oxfam is part of that. We meet regularly to discuss these issues. We have one of the best arms export regimes in the world; it is flexible and changes as situations change. The hon. Lady will know that we recently made some new changes because of what is happening in parts of the world. She should be confident in what we are doing on that.

T6. The Government will be aware of the global shortage of semiconductor chips. The impact of that is being felt far more by SMEs than the largest companies, which can make large purchases years in advance. What steps are the Government taking to support those SMEs to import semiconductors so that they can keep operating? If I write to the Department, will they look at a specific constituency case of mine? (905130)

My hon. Friend raises what is a vital point in a global economy. The Government are carrying out a review of the UK’s international and domestic approach to semiconductor supply chains. The Department for Digital, Culture, Media and Sport is leading that review, supported by the Department for International Trade. We also support growth in the UK semiconductor sector by driving investment—for example, by promoting the world-leading compound semiconductor cluster in south Wales, as part of our high potential opportunities programme. If my hon. Friend would care to write to the Department, we will of course take up the constituency issue.

T3. The European Union secured a comprehensive exemption from the section 232 steel tariffs way back on 30 October 2021. Here we are, almost three months later, and talks with the UK Government are only just starting. To ensure that the talks proceed smoothly and rapidly, we need to understand the cause of the delay. Does the Secretary of State agree that the probable cause is the Government’s shambolic handling of the Northern Ireland protocol? If she does not think that is the cause, perhaps she will enlighten the House about what she thinks the cause of the delay has been. (905127)

As I have outlined today, I am pleased that yesterday we were able to formally launch our negotiations with the US to find a solution to the section 232 tariffs, which have been unreasonably imposed on the UK for a number of years. The EU quantum of steel was of importance to the US, which wanted to start those negotiations because the impacts on both sides were great. We are very pleased that the UK is now able to progress on what will be a very important impact, and release some of the pressures on our excellent steel industry.

T9. As some of my colleagues have already pointed out, it would be wrong to say that there is not some nervousness in rural Scotland about what the deal with Australia will mean. Some of that is caused by the anti-trade scaremongering on the SNP Benches, but will the Minister expand on the opportunities for Scotland as a result of our deal with Australia? (905133)

The UK-Australia free trade agreement could boost Scotland’s economy by about £120 million. The deal will help boost Scottish exports by removing tariffs of up to 5% on Scotch whisky and through additional commitments to release goods from customs quickly. Scotland’s services firms will also benefit from access to billions of pounds’ worth of Australian Government contracts. Staff will be able to travel for work with easier access to temporary entry visas.

T4. Can the Secretary of State confirm whether she is still undertaking discussions with UK trade partners on inserting clauses on investor-state dispute settlement systems into future trade deals? There is evidence that they are opaque and could open the UK to law suits from multinational corporations. Will she confirm whether she is still pursuing them? (905128)

Every free trade agreement is negotiated in relation to the other country and we will continue to work with those as we build these, to look at how we best bring together free trade agreements that will be beneficial to UK businesses and consumers.

Last Friday, along with a number of local businesses, I took part in a meeting of the parliamentary export programme for my constituency businesses. What additional initiatives do Ministers have to encourage small and medium-sized enterprises, in particular, to look at and engage in the export market?

I am grateful for my hon. Friend’s support of the parliamentary export scheme. It is about to be refreshed and relaunched so that we can provide additional support to any of our parliamentary colleagues who wish to engage with companies in their constituency about exports. I ask him to hold fire while we relaunch it, and he will be one of the first I contact.

T7. May I bring the Secretary of State’s attention to the analysis published recently by the Scotch whisky industry, showing that even a phased reduction of the 150% tariffs on its products sold into industry could bring back a £1 billion increase in exports and something in the region of 1,300 UK jobs? As she continues with the dialogue with India about a trade deal, will she give us some commitment that the reduction and elimination of that tariff would be one of her biggest priorities in an early harvest agreement? [R] (905131)

As I said, the negotiations with our Indian counterparts have just begun. We will not discuss the details of the negotiations while they are going on, but I have been very clear with the Indians and through our consultation process that we will want to see movement on issues such as high tariffs on some of our iconic UK products.

My apologies for not being here earlier, Mr Speaker. Clearly, the start of the talks with our friends in India is extremely welcome news, particularly for Scotch whisky exporters, who could gain tremendously. Will my right hon. Friend update the House on the projected timetable, and will she publish some objectives in relation to what we are attempting to achieve with our friends in India?

Following our discussions last week, Minister Goyal and I were very clear that we want our negotiating teams to crack on and get a clear picture of the areas that we want to bring together in our free trade agreement with India. We have set our negotiators an initial target to see whether we can bring this to a conclusion at the end of this year or in early 2023.

British wine traders have expressed concern that the Chancellor’s reforms to alcohol duty might lead to higher prices and less choice in wine. What discussions has the Secretary of State had with her Cabinet colleagues about the impact of these reforms on industry’s ability to trade effectively?

The Chancellor brought in duty reforms that are focused on health: the higher the amount of alcohol, the higher the tariff. Interestingly, as I have been travelling the world, I have mentioned the policy to other countries, and they see it as a really intelligent way to ensure that they balance the opportunities from the healthy management of alcohol drinking and the opportunities that fantastic producers—such as all of ours in the UK—have to reach a wider audience while ensuring that people always drink carefully and wisely.

Our co-operation with Saudi Arabia on defence and security helps to maintain hundreds of jobs at BAE Warton on the Fylde coast. What steps are the Government taking to further develop that relationship and the opportunities for trade with Saudi Arabia?

We have just finished a consultation with British businesses, citizens and civil society on their aspirations for a free trade agreement with the Gulf Co-operation Council, of which Saudi Arabia is an important part. My hon. Friend knows that that will provide the opportunity to reduce tariffs and streamline market access barriers. He will also be aware, from the excellent report by BAE Systems, that there are well over 500—maybe even 600—jobs in Blackpool because of the presence of BAE Systems in that part of our country, which shows the importance of our strategic exports.

This Government, as we know, have blundered many times, and now a lobster or a leg of chicken cannot be sold to any country in the world without five, eight or 10 bits of paperwork. I am trying to prevent another blunder.

The Chartered Institute of Patent Attorneys supports the accession to CPTPP, but cautions that

“we believe that if the UK were to sign up the CPTPP IP chapter as currently drafted, this could have unintended consequences”

for our reputation as an international patent leader, for innovative small and medium-sized enterprises, for UK GDP and for the UK patent profession. It asks that

“the UK…should take a very firm position and insist on carve outs for the UK from these provisions of CPTPP.”

Will the Department take up that ask and insist that it happens?

The hon. Gentleman raises a good point. It is in my diary to meet him in the next few weeks; I suggest that he brings that paper with him and we can have a more fruitful discussion.

Can the Minister outline how much cotton and how many products to construct solar panels have been imported into the UK from Xinjiang in the past year?

I can certainly write to the hon. Gentleman with the information that our Department and others may hold on the matter. May I reassure him again that it is welcome that he has raised it today and that we are taking it very seriously?

Earlier, I mentioned a company in my patch called Gestamp. The motor trade is a worldwide business; Gestamp supplies to Jaguar Land Rover, Nissan, Volvo and all their factories throughout the world. What is being done to help its research and development efforts to make sure that it remains a world leader?

I think that a letter is winging its way towards my hon. Friend about various issues that he has raised with us, which will outline what we are doing to ensure that we are competitive and creating the right environment to get inward investment. He will know that we have a huge focus and push on science and technology, spearheaded in part by the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Mid Norfolk (George Freeman), as Science Minister. The points that my hon. Friend the Member for Sedgefield (Paul Howell) has raised with my Department are being listened to and are well made.

Yesterday, the permanent secretary of the Department for International Trade told the Public Accounts Committee that 85% of post-Brexit trade deals have simply replicated the deals that we already had with the European Union. Does it really represent such a resounding success at knocking down trade barriers if 85% of the barriers that the Government are knocking down are barriers that they put up in the first place?

A lot of work needed to be done in all areas of Government, including trade, to roll over legislation to our statute book and move trade agreements to a new statutory footing. The opportunity has come for what we can do next. It is not just about the big economic benefits that we usually discuss in our meetings and sessions, but about what we can do to help developing nations. Many of the economic partnership agreements that have taken a long time to make, for example with countries in Africa, will not only provide economic benefits to the UK but lift millions of people out of poverty.

Talks on steel and aluminium tariffs have started, but Washington has still to confirm the apparent virtual plan. The British economy, instead of becoming global post Brexit, is not. My constituents at the Dalzell works in Motherwell want to see progress on the punitive tariffs so that they can sell to the Americans. The relationship between President Biden and the current Prime Minister is not particularly rosy, but can the Secretary of State confirm that whoever is Prime Minister in the upcoming time, she will ask them to intervene and get this sorted?

I am thrilled that we were able to launch the negotiations formally yesterday. I will make sure that I keep in touch with all across the UK steel industry as we move forward. The US Secretary of Commerce and I have been clear, through our teams, that we want to resolve the matter at pace, and that is what we will be doing.