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Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Volume 736: debated on Tuesday 18 July 2023

(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on the comprehensive and progressive agreement for trans-Pacific partnership.

The Secretary of State for Business and Trade signed the accession protocol to the comprehensive and progressive agreement for trans-Pacific partnership on Sunday 16 July in Auckland. The UK will be the first new member since CPTPP was created. With the UK as a member, CPTPP will have a combined GDP of £12 trillion and will account for 15% of global GDP. Accession to the agreement sends a powerful signal that the UK is using our post-Brexit freedoms to boost our economy. It will secure our place as the second largest economy in a trade grouping dedicated to free and rules-based trade. It gives us a seat at the table in setting standards for the global economy.

The agreement is a gateway to the wider Indo-Pacific, which is set to account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come. That will bring new opportunities for British businesses abroad and will support jobs at home. More than 99% of current UK goods exports to CPTPP countries will be eligible for zero tariffs. The UK’s world-leading services firms will benefit from modern rules, ensuring non-discriminatory treatment and greater transparency. That will make it easier for them to provide services to consumers in other CPTPP countries.

In an historic first, joining CPTPP will mean that the UK and Malaysia are in a free trade agreement together for the first time. That will give businesses better access to a market worth £330 billion. Manufacturers of key UK exports will be able to make the most of tariff reductions to that thriving market. Tariffs of around 80% on whisky will be eliminated within 10 years, and tariffs of 30% on cars will be eliminated within seven years. Joining CPTPP marks a key step in the development of the UK’s independent trade policy. Our status as an independent trading nation is putting the UK in an enviable position. Membership of that agreement will be a welcome addition to our bilateral free-trade agreements with more than 70 countries. I pay tribute to the many officials and Ministers who have worked on this deal over the past two years, some of whom are in the Chamber today.

Thank you, Mr Speaker, for granting this urgent question.

The Government published a written statement yesterday that the CPTPP had been signed on 16 July. Unfortunately, Members have not had an opportunity to scrutinise the agreement, or to ask the Secretary of State questions about its impact. The CPTPP contains controversial provisions that will potentially undermine British health and safety standards, as well as those in place for the environment and animal welfare. Organisations from trade unions to the RSPCA have expressed their concern. It is apparent that clauses in the arrangement will allow large companies to sue the UK Government behind closed doors if they believe that their profits have suffered from changes to laws or regulations.

Palm oil produced in Malaysia will have tariffs of 12% eliminated, including from areas that have been deforested. There is apparently no mechanism to ensure that imports of palm oil have been sustainably produced. On food standards, the agreement excludes eggs as a sensitive sector, meaning that egg products will be allowed to be imported from countries that are CPTPP members, but where egg production relies heavily on battery caged hens, which were outlawed in Britain in 2012.

For other animal products, sow stalls, the use of antibiotics, hormone treatments and pesticides that are outlawed here will all potentially be imported in greater numbers. Imports that have a lower production cost but a much higher animal welfare and environmental one, risk undermining our world-leading British farmers and food producers.

The Business and Trade Committee, which provides important scrutiny of the process for free trade agreements, produced a report last week that lamented its inability to scrutinise all elements of the trade agreement.

I have the following questions for the Minister. What steps are his Government taking to ensure that the British public can be sure that the food they buy has been produced to the food safety and animal welfare standards that they rightly expect, such as those of the British Lion code of practice? What estimate has he made of the long-term impact on British farming of this agreement, which will bring an increase to GDP of only 0.8% over a decade?

I am disappointed that the hon. Lady does not see the opportunities for farmers and for this country as a whole from CPTPP. If she shared the confidence in British producers and British services that we have on the Government Benches, she might be able to look at this deal with a glass half full, rather than a glass half empty, but I know that would be a fundamental change of attitude.

The hon. Lady is simply wrong in many areas. It is important that we stop peddling these myths about standards related to CPTPP or any trade deal we are doing. Let us be clear that this deal does not lower any UK product or quality safety requirements. The import standards and import rules that we had the day before we joined CPTPP will be exactly the same the day after. The deal does not alter safety standards, but gives us an opportunity to engage and talk with colleagues and friends around the world on how we would like to improve and work on important issues, such as the environment, which she mentioned, and there is indeed an environment chapter. For example, the UK is committed to tackling illegal deforestation within UK supply chains, and this deal will not change that. As part of concluding CPTPP, the UK and Malaysia have issued a joint statement to reaffirm and strengthen joint work to support sustainable production, particularly of palm oil, in our supply chains.

Despite what the naysayers on the Opposition Benches might say, is it not true that this deal benefits counties and nations across these isles and gives our farmers the opportunity to export to parts of the world that will pay a premium for their great products?

My right hon. Friend is absolutely right, as always, and I thank him for his work in making this deal a reality too. He is absolutely correct that this deal creates opportunities across the whole range of food and beverages, including Scotch whisky, which I have already mentioned. This deal should be welcomed by Scotland for the opportunity it gives, but in many areas of food we are opening up markets, such as in dairy produce. He is absolutely right to point out that we estimate that CPTPP will bring benefits to every single nation and region of the UK. I would hope today that we hear about those positive strides on CPTPP from all those in the Chamber who represent different parts of the country.

I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this urgent question. We on the Opposition Benches are pro-trade, pro-business and pro-worker, and we welcome the opening up of new markets for UK exporters. I have met representatives from the CPTPP signatories and made clear to them our commitment to driving up trade. However, we now must scrutinise the full details of this agreement because, with this Government, the devil is always in the detail.

What provisions are in place to ensure the highest possible workers’ rights and that UK workers are operating on a level playing field? The Minister mentioned the sustainability agreement with Malaysia. Can he tell us exactly how that will deal with the concerns raised on palm oil? Can he also tell us whether the Government have put in place any side-letters, as the Government of New Zealand have done, to exclude the operation of the investor-state dispute resolution mechanism? Can he confirm that the agreement will not undermine the Windsor framework? On China’s application to join CPTPP, what approach will the Government take to safeguard British interests? We have raised the issue of the scrutiny process on free trade agreements many times. Can he set out what the scrutiny process will be?

The Government’s own modelling suggests that this accession will add 0.08% to GDP. At the same time, the OBR predicts that exports will fall by 6.6% this year—a hit of more than £51 billion. Promised trade deals with the US and India are not even in sight. Is it not the reality today that we have a Government out of ideas and bad at negotiating, and it is the economy that suffers?

I am sorry to hear the Opposition yet again never miss an opportunity to talk Britain down. This is a great opportunity for businesses right across the UK. Already, CPTPP countries sustain about one in 100 jobs in the UK, and that will only go in one direction—it will increase because of the opportunities, including in investment, that open up. The shadow Secretary of State mentioned investor-state dispute settlement. There is coverage of ISDS. It is a good thing and it helps ensure confidence in international trading and international investment. He mentioned China. He will be well aware that we are not yet fully ratified members of CPTPP, so it would be inappropriate for us to comment on any individual application. However, what I can say is that we know after two years of negotiation what an incredibly high bar exists on membership of this fantastic organisation.

Does my hon. Friend agree that this is not only an important trade deal, but an important geopolitical event that allows Britain’s shared values, which the Labour Prime Minister of New Zealand and the Labour Prime Minister of Australia say they share, to be brought to the partnership and to strengthen the partnership as it goes forward?

My right hon. Friend is making a powerful and important point about the importance of pivoting to the Indo-Pacific, where there is so much global growth. We want to be part of that growth. I thank him for the incredible work he does as one of the Prime Minister’s trade envoys. As well as more trade, this deal will lead to further co-operation. When we trade with countries, we talk to them more, we have agreements and discussions on a whole range of issues, some of which go beyond the strict terms of a trade agreement. There are many opportunities to come out of this deal, and I am pleased that many Members on the Government Benches recognise them.

It feels unnecessary to repeat this, but this Government seem willing to sign up to any trade deals. My party is in favour of good ones, and we are against poor ones, and that is why we oppose this deal. [Interruption.] The concerns that we have, despite the heckling from those on the Government Benches, about the lack of mechanisms to safeguard workers’ rights and about the potential impacts on domestic standards, particularly in the agrifoods sectors, do not go away with blustery repetition and flat contradiction, which seems to be the stock-in-trade in all that Government Front Benchers have to say about this deal.

The Secretary of State gets aerated whenever it is pointed out that the Government’s own figures show that GDP is estimated to increase by only 0.08% over the next 10 years as a result of the deal, at the same time as the Office for Budget Responsibility forecasts a 4% hit to GDP through Brexit. Ministers have had an awful long time to find out what the figure actually is, if they do not believe that 0.08% figure. Without reference to vague opportunities, the number of middle-class consumers in the Pacific rim or the GDP of countries in the CPTPP, and without deviation, repetition or hesitation, what exactly will the impact be on UK GDP as a result of this deal?

Again, I am disappointed to see the hon. Gentleman talk negatively about a deal that will benefit Scotland as well as all other parts of the United Kingdom. It will add significant amounts. We estimate that in the long run, at least £2 billion a year will be added to the UK economy, including in his constituency. Perhaps he would like to welcome that, rather than be negative about it. Also, this is a growing area of the world. There are likely to be new members, so we anticipate considerable opportunities going forward. In Scotland, 547 businesses are already owned by CPTPP countries, employing more than 20,000 people in Scotland. Perhaps he would like to welcome that.

As someone who has served as the Prime Minister’s trade envoy for the past seven years in Chile, Colombia, Peru and Argentina, I warmly welcome this announcement. I urge the Minister to make sure we are using the time between now and finally joining CPTPP to make sure that in the sectors that we think will be hugely beneficial to us, we are ramping up that British industry presence and are working with His Majesty’s trade commissioner for the area to identify opportunities.

I thank my hon. Friend for his work as a trade envoy as well as all the trade envoys for the important work they do. He makes an important point: signing the deal is one thing, but we need to ensure that it is used. The Secretary of State has said that again and again. We will be making sure that there is full benefit, using export support services and all the training, trade advisers and so on to promote the deal, as we have with the Australia and New Zealand deals, because it is important that we get the full benefit of the deal and maximise those benefits right across the country.

UK car manufacturers are currently changing their supply chains to buy components from either the EU or the UK so that they can continue to export their cars into the EU. However, under CPTPP, those same companies ought to be buying parts from Vietnam to export their cars to Mexico. That is quite confusing. Will the Department publish guidance for business that highlights the regulatory conflicts between trade with the European Union under the trade and co-operation agreement and trade with members of the CPTPTPP? Sorry—you know what I meant. [Laughter.]

It trips off the tongue eventually. The hon. Gentleman is underestimating the opportunities, but he has given me the chance to point out one of the key benefits of CPTPP, which is cumulation, with products and parts being used—of course, supply chains can be complex across CPTPP—and still benefiting from the lower tariffs. So there are huge opportunities with CPTPP for the reasons that he outlined.

I congratulate the Minister as well as all the Ministers who have contributed to this significant moment, with the UK striking a trade deal with some of the world’s fastest-growing economies. Does he agree that this provides a great opportunity for all parts of the United Kingdom where we have significant strengths in terms of driving exports? What action is he planning to take to promote the trade deal all around the UK so that manufacturers, food producers and other suppliers take the opportunity that he has provided?

I thank my right hon. Friend. Again, I really appreciate the recognition that the deal will benefit all nations and all regions of the UK. In Wales, for example, there are currently 281 CPTPP-owned businesses employing more than 16,500 people, and we expect that to go up. There are trade opportunities in so many areas covering both goods and services. That is a really important point: as we negotiate a lot of trade deals around the world, one thing we notice about many of the deals done by the EU on our behalf is that they did not cover services, yet services are over 70% of our economy, so it is great that we are now negotiating deals that fit our modern economy.

Even if the world was flat—for the benefit of the Minister’s Back Benchers, it is not—the Pacific would still be very far away compared to Europe, so how does the deal benefit fresh seafood producers and shellfish producers on the west coast of Scotland who cannot get their fresh produce into the much-closer European market as a result of Brexit? How on earth are they supposed to get that fresh produce even more quickly halfway around the world?

Again, I am sorry to hear hon. Members conflate different points. We have left the European Union—that was a democratic decision—and we have a good free trade agreement with the European Union that will continue. CPTPP creates opportunities in areas of the world with considerable growth where we did not previously have deals. Surely the hon. Member must recognise that that is a positive thing right across the country, including for his constituents?

This is good news. I am delighted that the Government have signed up to this huge trade partnership. We are the first non-founding member to have done so. While it may not be in the convenient party political interests of some Opposition Members, it is very much in the national interest and, dare I say it, in the interest of Shropshire businesses—small, medium and large—who will now be able to export tariff-free or towards tariff-free to places such as Malaysia and Vietnam. What progress, if any, has the Minister heard about the United States potentially joining the partnership as well? That, of course, would be a huge boon to everybody.

My hon. Friend makes an important point about the role that small and medium-sized enterprises can play. We are working to encourage even more SMEs to export through export support services and the trade advisers network given the opportunities that this and other deals will present to them. He will be aware that the US is not entering into free trade agreements with anybody at the moment. I have spoken to congressmen and women in the US, and there are mixed views, but many have great enthusiasm for the CPTPP.

Despite all the Government fanfare, the CPTPP trade deal will contribute merely 0.08% to our country’s GDP over the next decade. Laughably, the Secretary of State is now disputing her own Department’s modelling. As part of the spring Budget, the OBR forecast said that in 2023, due to Government incompetence, the hard Brexit and failure to sign other free-trade deals, UK exports are set to fall by 6.6%. That is a staggering £51 billion hit to our economy. How exactly will the Minister compensate for that loss with respect to the signing of the new CPTPP deal?

Again, I am so disappointed to hear Opposition Members never missing an opportunity to talk Britain down. CPTPP will benefit every nation and region of the UK, to the tune of billions and billions of pounds—[Interruption.] The hon. Member says that is tiny, but if we put it in his bank account tomorrow, he would probably be quite happy. We are talking about huge amounts of money and lots of jobs right across the United Kingdom. It would be great to see the Opposition support one of these deals, which will benefit their own constituents, at some point.

I join others in congratulating the Secretary of State, her predecessors and all the Ministers involved in delivering this excellent deal, which, as has been said, is really good news for the UK. It is depressing to hear Opposition Members’ comments; they clearly have little confidence in British companies. Businesses in the Yorkshire and Humber region will certainly benefit from the new deal. Will the Minister elaborate a little more on how he sees those businesses being able to take advantage of it?

I thank my hon. Friend for his work in championing international trade over many years. He is right that signing this deal and other deals is one thing, but we must ensure that businesses are aware of the opportunities. Therefore, we will be, and are already, working through export support services, trade advisers and other programmes to ensure that we take full advantage of the opportunities available. We want businesses large and small, some of whom have probably never exported before, to realise that there is a whole world of opportunities out there in the EU, but also way beyond that.

Great emphasis has been placed on the diplomatic benefits that the UK will see through joining the CPTPP. What further steps are Ministers taking to cultivate positive diplomatic relations in the Indo-Pacific region?

There are multiple ways in which we are doing so. In fact, the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), is doing exactly that right around the Indo-Pacific on an ongoing basis. As well as advancing our trading opportunities, there are many opportunities to have discussions on a wide range of issues that concern us and our constituents, whether that is the environment, labour rights or a whole bunch of others. Some of those are part of trade deals, but many go beyond them. We have discussions across multiple Government Departments on those issues.

I thank the Government for this excellent announcement and congratulate all of those who have made it possible. It is beyond question that joining the CPTPP is absolutely the right thing to do. May I please ask the Minister what message he has for the doomsters who think that Britain should not have a global role, who think that Britain is in permanent decline and who think that we would be better off back in the European Union?

Let us not be churlish—this is a good deal and the Government deserve some credit for it. I sometimes despair when I hear those negative comments. When something is good, let us say that it is good. In the light of this tremendous deal secured by the Business and Trade Secretary, will the Minister further outline how his Department will work with FCDO Ministers to ensure that such deals further the aims and terms of our moral duty and international obligations? Again, I congratulate the Minister and the Government on their hard work well achieved and a deal done.

I thank the hon. Member for his always gracious and considered comments. He is right that we are committed to ensuring that all nations and regions of the UK benefit from this deal, including Northern Ireland, which is doing great things with export opportunities. In fact, there is a Northern Ireland investment summit coming up and, therefore, many opportunities. We will work constantly with the Administrations to make sure we take full advantage of this and all deals.

I congratulate my hon. Friend and everyone involved in securing this deal. The impact of exporting services across the world is clearly vital. Will he outline the advantages for the services deals available, particularly to London and the digital economy, which can be reached from anywhere in the world?

My hon. Friend makes a sensible point that is pivotal to our future trading arrangements. We are the second biggest service exporter in the world. Those services are increasingly being transported, and therefore physical distance does not matter—they can be delivered at the press of a button. We have an excellent reputation on those. He makes the point about London; more than 3,000 businesses are owned by CPTPP members, and over 100,000 jobs are reliant on those businesses. That will only increase over time. It is important to stress that London is benefiting from our relationship with CPTPP members, but more than 75% of the benefits are outside London.

In contrast to the negativity from the Opposition Benches that oozes across the Chamber, I positively welcome my hon. Friend’s update. Is there anything comparable in recent history or down the tracks as good as the agreement and partnership that has been entered into?

Let us bank this agreement for the positive benefits it will bring. My hon. Friend knows I am a yellowbelly, and Lincolnshire people always talk common sense, as does he. There are a lot of opportunities, but this is one of many deals we have already signed and inked—more than 70 since we left the European Union. We are in negotiations with many areas including India, Switzerland and others. Importantly, we are focusing on services as well as goods, because some of those deals do not cover services at the moment.

In the 1975 European Economic Community referendum campaign, Barbara Castle asked:

“what kind of internationalism is it that says that henceforth this country must give priority to a Frenchman over an Indian, a German over an Australian, an Italian over a Malaysian? This isn’t the language of internationalism… It is Euro-jingoism.”

Does my hon. Friend agree that, with the signing of the partnership, the era of Euro-jingoism is dead, and once more we are truly an international trading power?

My hon. Friend speaks eloquently and is absolutely right. Europe will continue to be an important trading partner of the United Kingdom, but there is a whole world out there that we have not yet taken full advantage of. The Government are committed to working on behalf of our constituents to recognise the benefits from around the world, through our relationships with Commonwealth countries and developing countries that can significantly benefit from international deals. The EU will continue to be important, but there is a whole new world out there and we want to be part of it.