Motion to Approve
That the draft Order laid before the House on 19 July be approved.
My Lords, this order designates the economic partnership agreements with the Southern African Development Community, eastern and southern African states and Ghana and the protocol of Ecuador’s accession to the EU-Andean agreement as EU treaties pursuant to Section 1(3) of the European Communities Act 1972. This is a necessary step towards UK ratification of the agreements and works alongside the process of laying the treaty before Parliament for 21 days, as set out in the Constitutional Reform and Governance Act 2010, known as the CRaG Act.
The noble Lord, Lord Stevenson of Balmacara, has tabled an amendment to the Motion. I welcome the opportunity to set out the Government’s support for these agreements, and I will seek to respond to the points raised by the noble Lord in my opening remarks. Trade is an important tool in the fight against poverty. Over the last few decades, around 1 billion people have been lifted out of poverty, and international trade has played a very large part in bringing that about. By championing global free trade, we can help create growth and jobs across the developing world in a way that aid spending alone cannot. Before I address these agreements, I should note that they have all already been provisionally applied. They have already brought, and will continue to bring, benefits across a number of developing countries and to the UK.
I turn first to the three economic partnership agreements or EPAs. The UK is a long-standing supporter of EPAs, which differ from conventional free trade agreements in that they focus on the development needs of partner countries. Indeed, this House has already scrutinised and passed several other EPAs to date. I acknowledge the concerns raised about potential negative impacts of liberalisation on the economies of our developing country partners and the issues raised in the amendment to the Motion. As a responsible Government, we listen to such concerns and I am happy to reassure noble Lords that the agreements have taken them into account.
EPAs are deliberately and strongly asymmetrical in favour of developing countries. They give developing countries immediate duty-free access to our market, while EPA partners liberalise their markets gradually over a period of up to 25 years and to a lesser extent—protecting up to 25% of their product lines depending on their domestic situation. For example, the Seychelles, a high-income country, will liberalise 98% of tariff lines, whereas Mozambique, a least-developed country, will liberalise only 74%.
EPA partner countries have the ability to exclude their sensitive products from liberalisation, and they use it. For example, Ghana has excluded a number of agricultural goods such as meats, poultry, frozen fish and non-agricultural processed goods. EPAs also provide a range of safeguards for fledgling industries or for food security to protect African domestic products from possible EU competition. As the EPA partners gradually liberalise their markets over a period of many years, industries and consumers in Africa will benefit from cheaper inputs and consumer goods from the EU in non-sensitive sectors.
EPAs also take account of the social and economic circumstances of partner countries and provide development co-operation and assistance to help our partners address broader issues affecting trade, such as technical barriers to trade, labour rights, the environment, poor infrastructure or inefficient customs and border controls. Of course, they are negotiated agreements.
The EPAs we are considering today can deliver real benefits for manufacturers and farmers in developing countries and their communities. Specifically, they eliminate tariffs on processed and manufactured goods, keeping more of the value chain in the developing countries. They also offer simpler and more flexible rules of origin so that, when a producer in one country uses inputs from another, they do not have to pay customs duties when they export their final products to the EU. Both the southern African and eastern and southern African EPAs help regional economic integration by joining up those smaller markets.
The EPAs also bring advantages at home by reducing the cost of imports for our consumers—from Botswanan beef to South African wine. They will bring new opportunities in the future for UK exporters as EPA partners gradually liberalise their economies. We estimate that UK exports will increase over the coming years and be worth an additional £35 million annually from 2035 onwards. I am confident that the impact of these EPAs is positive for the developing nations and the UK and that local agriculture, industry and commerce will benefit and will continue to contribute to the well-being of the wider population through increased jobs and greater prosperity.
I turn now to South America and Ecuador’s accession to the EU-Andean agreement. This agreement has been in place since 2012 and last year trade to the EU increased 7% for Colombia, 16% for Peru and 20% in the first year of implementation for Ecuador. It is estimated that Ecuador’s accession will be worth £37 million annually to the UK’s GDP in 15 years’ time. For the UK specifically, the impact assessment suggests that exports have been increasing since the provisional application in early 2017. UK consumers should already be benefiting from lower prices, particularly for fruit and vegetables. I am confident that the benefits of the FTA can be enjoyed by importers and exporters of any size, with British businesses free to tap into the Ecuadorean market with even greater ease, benefiting from greater access across a range of service sectors and the government procurement market, as well as the removal of remaining tariffs in industries such as chemicals, textiles and telecoms.
This is not the direct subject of this debate, but I should mention that under the terms of the withdrawal agreement between the UK and the EU, the UK is to be treated as a member state for the purposes of international agreements for the duration of the implementation period. We continue to work to ensure continuity in all circumstances, with the withdrawal agreement providing the greatest certainty and confidence that there will be no disruption to existing relationships underpinned by international agreements as we move into the implementation period. On this basis, the EU-Andean agreement, now including Ecuador, and the three EPAs will apply to the UK during the implementation period. Our partners have broadly welcomed the implementation period and are keen to continue to work towards lasting agreements with the UK when the implementation period comes to an end.
We are making good progress on ensuring continuity for the SADC, ESA and Ghana EPAs after the implementation period. For instance, in August my colleague in the other place, George Hollingbery, Minister of State for Trade Policy, signed a joint statement with the Botswanan Trade Minister confirming that the trade agreement between the UK and the five Southern African Customs Union countries and Mozambique will be ready as soon as the EU agreement ceases to apply to the UK. The Government are also working towards new bilateral arrangements with the Andean Community which seek to deliver continuity for the effects of the EU-Andean FTA beyond the implementation period via a straightforward technical process.
Having sought to address the first two concerns of the amendment to the Motion, I turn to parliamentary scrutiny. The Government have remained committed to working with Parliament to ensure that EU trade agreements are thoroughly scrutinised as per the existing process while we remain an EU member state. This very debate is an opportunity for the agreements to be further scrutinised, and I note that the House of Commons has already debated and passed the Motion in support of these agreements.
The Government fully intend to continue to afford Parliament scrutiny of trade agreements. As set out in the Secretary of State’s Oral Statement of 16 July,
“the Government will keep both Houses updated on the progress of negotiations through statements and updates to the International Trade Committee”.—[Official Report, Commons, 16/7/18; col. 41.]
Although there is not currently a House of Lords committee with a specific remit to discuss UK trade policy, we will co-operate with inquiries conducted by related Lords committees on matters related to our work. Further, I welcome the thoughts and suggestions of noble Lords on the scrutiny process and am happy to explore this further with any of them.
To conclude, we have the opportunity through the ratification of the EU EPAs to demonstrate the UK’s strong commitment to these agreements and to helping developing countries reduce poverty through trade. These agreements are in the interests of the UK, the wider EU and our partner countries in Africa and South America. I urge noble Lords to support the Government’s Motion to ratify them. I beg to move.
Amendment to the Motion
At end to insert “but that this House regrets that the draft Order does not appear to take into account the substantive issues raised to date about the impacts on local agriculture, industry and commerce, and the well-being of the wider population in the partner states to each agreement; expresses serious concern at the fundamental lack of accountability and parliamentary scrutiny available at present for treaties and trade agreements; and calls on Her Majesty’s Government to come forward as soon as reasonably practicable with a series of proposals on how trade policy is to be determined after the United Kingdom’s withdrawal from the European Union.”
My Lords, I am placed in rather an unusual situation because I had understood the conventions of the House to be that the Motion in the name of the Minister would be moved, I would speak to my amendment and she would then respond to that, but she has given her response first, which is extremely good—and of course I am completely at a loss as to how to respond. I do not really have much to say because I do not have a speech that will address that way of progressing. It probably comes to the same thing. The Minister is looking a bit panicked about what I have just said but I wanted to explain why what I shall say will be repetitive, although I will try to adapt it. Hansard will have a great job following me in this, but that is the reason for it.
The narrow thrust of the response concerned the wording of the amendment but, with respect to the Minister, I think she has missed the main purpose of the amendment, which is to try to engage with the Government—although she said she would engage in future—on a much deeper question about how we do trade more generally. In a sense, that is where I shall end up.
I make it clear at the start that I am not opposing the ratification of the EPA and its South American extension, in the agreement with Ecuador, because it should go forward. The process may be flawed and we want to raise issues on it but it is not sufficiently problematic for us to oppose it. In saying that, I speak with confidence that I have support around the House. I have a copy of a letter sent to the Minister by the noble Earl, Lord Sandwich, who I think at that stage could not have spoken in the debate but may be tempted to address us later. I have also had correspondence with my noble friend Lord Judd, who is in his place and may want to contribute. Although what I will say is narrowly written, given what I thought I would be saying when I prepared it—this will have to be adapted as I read it—it comes with support from elsewhere around the Chamber.
The key question that we in Parliament have to address is: how do we assess trade, going forward? For almost 50 years, the EU has been negotiating economic partnership agreements on our behalf. We think there are probably about 40 of them involving over 90 countries, although the numbers are difficult to get. We recognise that they vary in scale and scope, as the Minister said, particularly when dealing with developing countries. The EU has developed a mature system for preparing, negotiating and seeking approval for these agreements on behalf of member states. At present, they cannot come into full force without being ratified by every member country. Although the systems are sometimes a bit different, the process we are in now allows the Government to ratify the agreements before us in a definitional way, rather than ratifying the individual wording.
It is a bit ironic that only now, at the very end of the process, is our Parliament—the interests that I have explained range further than this party—given a chance to consider these agreements. It is surely time to think again about why we do this, even if the opportunity that may come from the EU withdrawal Act allows us to put down something more concrete in future.
The amendment that I have tabled to the Government’s Motion expresses regret, but we will not pursue it to a vote. I have tabled it primarily to afford us the chance to debate these trade deals in the one and only time we have to do so; but secondly, in so doing to highlight the lack of proper scrutiny, consultation and debate given to these EPAs and the other agreement; and thirdly, to point out what needs to change if or when we regain control of our trade deals after Brexit day. This is material and important, and time is pressing.
To repeat a little of what the Minister said, the deals before us are a group of trade agreements which, taken together, share the noble aims of enhancing sustainable development and bearing down on poverty. That is to be welcomed. Some aspects of the deals that she mentioned respect the countries we are talking about. They differ from traditional trade agreements by ensuring that there are asymmetries in favour of the developing country, which include, as she said, long liberalisation periods, flexible rules of origin and the exclusion of sensitive products from direct competition. They also strive to increase regional integration, as she mentioned, through regional preference clauses that make countries in the same region provide the same advantages to each other as they will do to the EU.
However, the worry is that these agreements have not lived up to the intentions of the EU negotiators. Many of the least developed countries already had special access to EU markets through the non-reciprocal “Everything But Arms” scheme. But under these EPAs, developing countries are being asked to open up to 80% of their markets to European goods and services within a decade of signing. Opening up domestic producers to EU competition so fast has led some to fear that it will decimate their local domestic industries. Carlos Lopes, the high representative of the African Union, has said:
“Africans have serious concerns about how the EPAs would affect their industrial development and the African Continental Free Trade Area”.
Some of the partner states have also complained that tariff reductions have eliminated a crucial source of revenue, which Governments desperately need to provide basic public services and invest for future growth. According to the UN economic commission, Ghana alone could lose about $300 million in revenue if it signs the EPA. Tax collection is notoriously difficult in many of these partner countries, where tariffs were a reliable source of otherwise elusive government funds.
Spio-Garbrah, the former Ghanaian Minister for Trade and Industry, says that as the EPA also requires the Economic Community of West African States to open its markets over a period, it is Ghanaian manufacturers, not exporters, who, if they are not competitive, may face challenges from European imports that may be cheaper, of better quality and more attractive to consumers. Yao Graham, co-ordinator of the Third World Network, said:
“In the manufacturing and other industrial sectors, the EPA will cost about 40,000 jobs in ten years. We also anticipate that there will be a collapse of domestic industry especially in the … manufacturing sector … It will also undermine ECOWAS economic integration and the wider process of intra Africa trade and lead to the loss of government revenue from trade duties”.
There are also claims that EPAs might become a barrier to intra-African trade. Carlos Lopes said:
“In most areas, the EPAs will actually hurt intra-African trade, weakening trade revenues and undermining trade-driven industrialisation in Africa”.
There may be unintended consequences in trying to tailor each EPA to a specific country or region. The EU may have created contradictions in treatment between African countries. It is not surprising that certain African countries have claimed that they agreed to sign the agreements only under duress. It has been said that throughout the negotiations the EU threatened not only to remove the special least-developed country preferences available under the EU-African, Caribbean and Pacific group of states programmes but to withhold generalised system of preferences benefits from more advanced African economies.
Of course, we surely need some idea of how these deals will benefit the UK economy, but when you look for an impact assessment, no figures have been produced. The Department for International Trade recognises that there is no econometric modelling for the impact of some of these EPAs on UK trade and assumes, particularly in respect of the Ghana and ESA agreements, that the same modelling that has been applied to the SADC agreement will apply, while noting that,
“the econometric modelling available does not provide the impact of increased exports on UK GDP, so this cannot be included in the NPV calculation”.
So we are a little blind about where the benefits come from.
So, despite good intentions, these EPAs, some of which have been characterised as having colonial overtones, have come to represent the very worst of international trade policy—at least, so it has been argued. Instead of initiating African growth, we are initiating an African decline. Instead of spreading good will, we are spreading resentment. Instead of creating friends, we may be creating foes. Can the Minister shed some light on how the EU came to promote these deals, despite the concerns expressed by civil society and, more importantly, people in the countries themselves?
Surely the lesson to learn from this debate is that trade matters. It matters because it is so fundamental in shaping the world in which we live. Modern trade deals such as this are no longer simply about tariffs as they cover services as well as vast areas of public policy. Modern trade deals have to be constructed with proper consideration for the environment, workers’ rights and human rights if we are to live by our principles. At the very least, we must respect our international obligations, be they on climate change, endangered species or the arms trade. We should go further and ensure that trade is used to make the world a better place.
We do not yet know whether the withdrawal agreement with the EU will survive. Certainly, from what the Minister said, we have a few years in which we will be able to see how this works in practice. I hope she will accept that there needs to be preparation for a possible future post-Brexit trade policy. We should also be putting pressure on the Government, while they are still part of the rule-making process, to ensure that any other trade deals struck by the EU are based on enduring principles as well as a foundation of transparency and consultation.
For example, the Trade Justice Movement is proposing some red lines for future EU trade policy, and UK trade policy, should that be independent. The points it makes include that trade deals: should be developed with full democratic scrutiny which provides for the involvement of the public, civil society and Parliament; should not take precedence over other societal priorities; should not lead to a race to the bottom on labour rights; should preserve the right to make policy in the public interest and make sure of the precautionary principle; should exclude public services; should allow Governments to regulate and tax international investment; should exclude ISDS mechanisms; should ensure that e-commerce is properly regulated and taxed; and should not prevent government using public procurement to support local communities to achieve social and environmental goals. That is a very ambitious but rather good list of issues that we think should be addressed by any new policy.
Underlying all that is surely the by-now unanswerable case for Parliament being involved in all stages of trade negotiations. Consultation, with committees being sent information, is not enough. We must have a system that will extend to existing EU trade deals that we might wish to roll over from the EU after exit day and will begin the long and difficult process of preparing for new ones.
The Government keep insisting that now is not the time to bring forward new plans, but I see no reason not to use the stranded Trade Bill to establish a new system for considering trade. Indeed, if we ever get to Committee, we have tabled a number of probing amendments on this and related issues that are available from the Printed Paper Office. On procedures, for example, we are proposing a new Joint Committee of both Houses of Parliament, modelled loosely on the Intelligence and Security Joint Committee. It would be charged with agreeing the mandate for future trade negotiations, overseeing the progress of negotiations and producing reports on how the agreements would work for the benefit of our national interest as well as that of the partner state. Such a committee could be responsible for recommending trade agreements to both Houses of Parliament for approval and reviewing the success or otherwise of existing deals.
However, Westminster is not the only authority that needs a voice. Each of our devolved Administrations will have significant trade responsibilities in future, and we need to provide a robust mechanism for involving them meaningfully. Our Constitution Committee has already urged the UK Government and the devolved Governments to engage in constructive dialogue on this matter. In particular, it suggests that the parties need to decide whether the Joint Ministerial Committee (EU Negotiations) will be replicated for trade agreements in the Trade Bill. I would go further and argue that some form of structural arrangement will be necessary for many aspects of what is rapidly becoming a federated group of nations within our United Kingdom.
As I said, we will not divide the House on this amendment to the Motion. We do not want to disrupt the process or, indeed, stand in the way of these partnerships. It is vital that, as one of the world’s largest economies, we improve our trade relationships with some of the smallest. These agreements probably represent the best that could be done in the circumstances, but my argument today is that those circumstances need to change. We must learn from the mistakes laid bare in the processes used to scope, negotiate and ratify the current agreements.
Finally, we need to choose a different direction for our independent trading policy, should we have one, that prioritises transparency and works not only for our self-interest but for the interest of the developing world. I beg to move.
My Lords, I thank the Minister for her opening remarks. However, I should say at the outset that I am not quite as sanguine as she is about the benign nature of the EPAs. I also thank the noble Lord, Lord Stevenson of Balmacara, for tabling his amendment to regret this SI, drawing attention not only to the shortcomings of the current parliamentary procedures when it comes to accountability and the scrutiny of trade deals but also to the iniquities of the EU EPAs. Although we on these Benches will not oppose ratification, we think it important to draw attention to some of the issues that the EPAs will raise politically, both for ourselves and the EU and for the third-world countries in Africa that I will predominantly be talking about.
The economic issues raised will not be that immense but I think the political ones are problematic. EPAs are controversial. The key question that arises is: who benefits more from EPAs, the partner country from the ACP nations—African, Caribbean and Pacific—or the member states of the EU? That is a question worth asking because EPAs were conceived as drivers of change to kick-start reform and contribute to good economic governance, helping ACP partners to attract investment and boost their economic growth. However, I am more inclined to agree with Traidcraft when it says in its well-argued briefing that rather than doing what they say on the tin, EPAs instead undermine development and hinder regional integration. Take, for example, Tanzania in east Africa, part of the ESA EPA. Tanzania, as a least-developed country, currently with duty-free and quota-free access in the EU under “Everything But Arms”, obviously has little interest in an EPA that offers reciprocal preferential access. Why would it?
On the other hand, Kenya, a non-LDC, stands to lose preferential market access for flowers in the EU if the EPA is not signed. Your Lordships will see the problems posed by EPAs pitting one east African nation against another. That is certainly not conducive to regional harmony, let alone promoting regional trade integration.
This is especially problematic now that efforts have been stepped up about the African Continental Free Trade Area. AfCFTA is unlikely to be fully implemented for some time, but it is indisputable that Africa needs regional integration without distractions, so that African countries can give each other the same preferential access as they give the EU. In the words of Vera Songwe, executive-secretary of the UN Economic Commission for Africa, and formerly a country director and senior economist at the World Bank:
“There should be a strategic pause on the EPA negotiation processes until the finalization of the CFTA”.
Will the Minister comment? It does not need much imagination to see that premature liberalisation will undermine development of infant industries and domestic production, leading to a decline in manufacturing and industrialisation and increased unemployment.
How shall we proceed? One way forward as we negotiate further free-trade agreements once—or if—we leave the EU and the implementation period is over, would be to pursue a more flexible EPA agenda which addresses specific concerns of the ACP countries, for example allowing greater flexibility if it can be shown that specific clauses undermine regional integration. EPA support measures could be reinforced to satisfy the requirements to promote inclusive and sustainable growth, in keeping with the sustainable development goals.
In particular, we should strive to meet the overarching commitment to leave no one behind. Under SDG 9, “Industry, innovation and infrastructure”, the UK has committed to meet targets 9.1 and 9.2. Paragraph 9.1 commits us to:
“Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure”.
Paragraph 9.2 commits us to:
“Promote inclusive and sustainable industrialization”.
It would be useful to hear from the Minister what thought has been given to how the UK will approach trade deals with the developing world, should the unthinkable happen and we leave the EU with no idea of our destination—something that seems about to happen, maybe. I have little doubt that, should the opportunity to renegotiate these deals arise, they will be embraced enthusiastically by EPA countries.
Before ending, I raise reservations about the current process of ratification of international treaties and trade agreements. That this debate is taking place after implementation underscores how ludicrous is the current process, lacking accountability and parliamentary scrutiny. It is crying out for reform. The need for urgent reform is reinforced by the Government’s impact assessments, which are inadequate to say the least. Those for the Ghana agreement are a case in point. Within it are claims of unequivocal benefits from the agreement, despite acknowledging that there is a lack of quantifiable data to back up those claims. The assessment is one-sided and limited to the impact on the UK, with no mention of development impact. It makes unfounded claims that the Ghana EPA will support “more-integrated regional markets” and “simpler and more flexible rules of origin”, with no mention of the political friction created by Ghana signing a stand-alone agreement outside its customs union. Some might say that it was signed under duress.
Further, the impact assessments, although they concede a net deficit for Ghana, nevertheless, still propose that this is a developmentally friendly agreement. Examples can also be found in the other impact assessments, including the SADC countries—the South African Development Community—whose assessment states clearly that the impact on poverty reduction will be marginal.
It is clear that these impact assessments are not fit for purpose and highlight why greater parliamentary scrutiny of free-trade agreements is essential if the UK leaves the EU and moves towards negotiating its own trade agreements.
My Lords, as the noble Lord, Lord Stevenson, said, I was not sure that I would still be here this evening, but owing to changes in the timetable I am delighted to be here. The noble Baroness has already received advance notice of some of these remarks.
I support the amendment to the Motion because, from my limited understanding, ratification of these SIs has been a very disappointing procedure both in another place and in this House. It seems as though Parliament has somehow been the loser when it no longer has any influence in these international agreements. It is therefore perhaps inevitable that the Opposition have tabled an amendment, which deserves support from around the House.
I welcome the noble Lord’s remarks, first about the Trade Bill, because this is a preamble to what we expect to come; it is just a rehearsal. I also agree with the noble Baroness and the noble Lord that we need a committee dedicated to this particular subject—as we reorganise the EU committees, perhaps. There is no question about that.
Be that as it may, as we have heard, there are questions hanging around the EPAs from a decade ago that still concern many organisations with expertise on trade. I have worked with some of them over the many years that I have been working on development. Taking Africa alone, I can think of worries about rules of origin, GIs, reciprocity, and about tax—in short, about whether EPAs or interim EPAs are really worth having when you already have 100% access to EU markets through the EBA agreements and the GSP+. There is also a concern, as we have heard, about whether the regional groupings such as SDEC and ECOWAS can truly reflect the situation of individual states, which are all so different. Then there is education: how many citizens in these countries are sufficiently aware of the pros and cons of entering these agreements?
I know that I am bringing up very old concerns that have been expressed by civil society over many years. I hope that the noble Lord, Lord Judd, will follow me and show some of his experience of fair trade over many years. ActionAid, ODI and Traidcraft have done a lot of work on the effects of EPAs on wealthier countries such as Ghana and Kenya. But the question is whether our Government have provided enough answers. Should there not have been more impact assessments to accompany these SIs? The whole point of scrutiny is that you are given a proper opportunity to make judgments, and quite apart from the strange ratification process already referred to, it seems that proper briefing on this occasion has been sadly lacking. So does the Minister agree, apart from answering all the questions first, that this whole procedure is back to front anyway; and, secondly, does she believe that some countries affected are being dragged into this by the EU without proper consultation and examination?
My Lords, there is nothing I like more than to oblige the noble Earl, Lord Sandwich. It was good to hear what he had to say.
Central to our whole approach to European Union matters at this moment is the concept of bringing government home and of increasing our powers of scrutiny and accountability. Treaties of this kind, with their immense implications, opportunities and dangers for vulnerable and young economies, are no exception if we are to follow through the logic of what we have been arguing. It is not satisfactory to have an arrangement whereby the Government will listen to those committees with adjacent and valid observations to make. This House needs to have specific arrangements for scrutinising what is being done in this context.
That was my first point. Having made it, I want to stress another point. For those of us who have been involved in these matters for much of our lives, one of the heartwarming elements of the evolution of the European Union has been the increasing degree of co-operation and co-ordination in the work of member countries. As on much else, I am dismayed that we are proposing to cast this aside with no clear information about how we are going to put in place something to compensate for what is being lost in the European context. Of course, I am one of those who believed that the challenge was to strengthen the right things that were happening in Europe. I am not quite sure how we will be able to do that if we have just told Europe that we want to leave it. It is terribly important that we have some specific reassurances on the details of how the Government intend to compensate for what is being lost.
The noble Earl, Lord Sandwich, was kind enough to refer to my past involvements in these matters. My life has involved a lot of time working with vulnerable and sensitive economies in the world. I have frequently reflected that very little else is more important than the economic relations which those countries have with the world outside. It is often put forward that we must all strive for a level playing field, but there is a fundamental issue at stake here. There are many parts of the world where this is gibberish because they are in no position to stand up, let alone play in the common field that already exists. They have to be specifically assisted in being brought to a place where they will be able to fend for themselves. It is generous, kind and well intentioned to say that we want to help them with officials who can help them with the work involved and so on, but that is really rather patronising. What they want is to be able to stand up for themselves, on their own terms, and play their part fully. I have seen so many examples where outside investment comes in to countries with desperate poverty where there has been a very labour-intensive approach, particularly to agriculture. Going over to mass production of cash crops on a capital-intensive basis has done terrific damage to social justice in the countries concerned. There is a great deal at stake in this sphere.
I do not want to be churlish. The Minister has obviously taken the point: the emphasis on third world relationships in her introduction was encouraging and I am grateful. My noble friend’s essential amendment is helpful. It saves having to say that it is the detail that matters in these things. That is why it is essential to have reassuring arrangements in place, not least for scrutiny.
It seems to me that in a rational approach to economic affairs in the world, mixed economies are terribly important. I am a strong mixed economy man. However, having mixed economies involves a mixed approach to the private sector. There are some areas where labour-intensive approaches should be encouraged in the greater social cause, and others where capital-intensive investment should be encouraged in terms of the strength of the overall national economy. However, there are no sweeping theories as to how to get this right. It involves a very pragmatic approach that requires a lot of care, experience and knowledge.
I am not reassured by what is happening at the moment; in fact, I am very worried. Therefore, if the Minister is making a valiant stand in favour of the good, the amendment of my noble friend will provide the muscle to let it happen.
My noble friend is absolutely right to ask how trade policy agreements and treaties will be determined after we withdraw from the European Union. In fact, this is a matter that concerns your Lordships’ Constitution Committee, and it has launched an inquiry to investigate the efficacy of our role in the scrutiny of treaties and how this should be handled post Brexit. I am sure that it will welcome the Minister’s undertaking regarding consultation and engagement.
At the moment, these arrangements are scrutinised by the European Union Parliament and the Commission, and we receive them for approval as secondary legislation. The Secondary Legislation Scrutiny Committee looks at this but of course, as other noble Lords have said, there is very limited scope for comment because the arrangements have already been agreed.
I sit on the Secondary Legislation Scrutiny Committee and our work is to see how these treaties slot in and work with UK law. We had two examples at our meeting yesterday. One dealt with CITES, the arrangement regarding international trade in endangered species, and the other was the Nagoya agreement, which deals with animal tissues—both important matters. The purpose of the statutory instrument is to ensure that these arrangements continue after Brexit, and all the committee did was to make sure that the wording was more appropriate; it did not change anything else.
However, the Explanatory Memorandum promises a further document that will attract the affirmative procedure and transfer powers of enforcement from the Commission to the Secretary of State. So my noble friend is right: here, we are concerned only with the mechanics, not with the rights and wrongs of the arrangement.
My noble friend gave the figure of 40. A paper prepared by an experienced clerk to the Secondary Legislation Scrutiny Committee says that in the last seven years the UK has been party to 225 new treaties. By treaties, he means agreements with a specific country or with an organisation such as Euratom, or a thematic agreement such as the convention on pollutants. We have also had statutory instruments putting in place the mechanism for enforcing sanctions against other countries. For instance, we recently had one against North Korea.
The noble Baroness, Lady Sheehan, made the point that at present the principle of these arrangements is agreed elsewhere. Our work in future will be to scrutinise them from the point of view not only of UK law but of UK usage: the way we do things; compatibility with our values, way of life, standards and priorities, as other noble Lords have mentioned.
So my noble friend is absolutely right to raise this matter. These treaties will require a lot of scrutiny, consideration and careful thought. I join my noble friend in asking the Minister to come forward with proposals on how these matters will be determined after our withdrawal. I am sure that your Lordships’ Secondary Legislation Scrutiny Committee will also be interested in the Minister’s response. This is intimately bound up with my noble friend’s amendment calling on the Government for proposals on how trade policy will be determined. These treaties affect so many of the non-tariff barriers that noble Lords have raised. These non-tariff barriers are now much more important than financial tariffs, especially to a country such as ours, where services are a major part of the economy. I support my noble friend’s amendment.
I thank noble Lords for their contributions. If I breached convention, I offer my apologies particularly to the noble Lord, Lord Stevenson of Balmacara. I was aiming to address some concerns and did it in a different way. Some of these points are absolutely apposite to the SI, while others talk about the future; I will just glance on these, because I understand the issues.
The noble Lord, Lord Stevenson of Balmacara, the noble Earl, Lord Sandwich, and the noble Baroness, Lady Sheehan, talked about a number of challenges, such as the development benefits and merits of EPAs versus unilateral preferences. There is a little bit of history here, in that some of our previous unilateral preferences were deemed not to be WTO-compatible, so we had to move to a different mechanism. We have chosen EPAs because they are much more development-focused, and the aim is to promote and increase trade over time. Having studied EPAs and preferences, I have seen that not all but most countries get better access under EPAs than they would under preferences.
For example, two-thirds of markets are open to Ghana—which I visited recently—for tariff-free access under preferences, but 100% under the EPA. Its prepared fish, coffee beans and cocoa would be affected. I went to a tuna-processing factory while there and heard that they were particularly keen that we continue that EPA, because they saw the benefit. Opening up needs to be done over time, as we agreed, because these are developing countries and liberalisation takes time. In addition, we provide support through improving trade facilitation and customs rules. A lot of our development funding also supports these nations. We are here not to create foes but friends. We are here to build mature, long-term trading relationships, and to open them up asymmetrically. I am happy to confirm, by way of demonstrating that these are seen as attractive, that all parties to the EPAs have expressed an interest in rolling them over to provide continuity. If they were really so unhappy about them, I do not think they would do that.
The noble Lord, Lord Judd, raised a point about liberalisation. There is no doubt that we have to take into account the concern about this happening too quickly. That is the fundamental issue with liberalisation. But EPAs try to have proper timing and allow us to put control in the hands of the developing countries, which can choose sensitive products that they really do not want to be opened up. I agree that, if it was immediate and done with no protection, liberalisation would be an issue. However, even if we have not initially treated products as sensitive and cut them out, the EPA includes safeguards that can be applied: the tariff-rate cuts can be suspended and tariff-rate quotas can be applied. I agree that there are issues, but through these EPAs we try to address a number of those.
I am obviously heartened that the noble Baroness agrees there is an issue, but there is perhaps one specific aspect on which she might give us a word or two. In evolving situations, what is suitable at one point will not be suitable at another—she has alluded to this herself. We have to be careful about what may seem appropriate at one stage if, for example, a country wants to start processing its primary produce. That is quite a hot issue. Are we in favour of its development or are we not? If we are, how do we facilitate its becoming a player and marketing its manufactured and processed primary products? Such a country may become very competitive in the world economy—but then we keep hearing about how competition is a good thing. We need a bit more detail on this.
We are trying to make these countries long-term trading partners. We provide support to help build and encourage investment, and it is likely that that will increase the processing capability of some of their plants, and will, therefore, potentially create competition for some of our companies. In a sense, however, that is what we are trying to do: to bring up trade. As the noble Lord, Lord Stevenson, said, trade matters and can lift up nations. It is not about a single point in time; we are trying to encourage investment to help these nations move up and become long-term, mature trading partners that we can continue to deal with in the future.
I turn now to another area raised by the noble Lord, Lord Stevenson of Balmacara, the noble Earl and the noble Baroness, Lady Sheehan: the question of regional integration. The EU has been one of the biggest supporters of African integration and efforts to deliver a continent-wide agreement. The EU has aligned the EPAs with the existing economic and customs union, seeing that as the best way, according to the preferences of EPA partners. It is clear that they are numerous and overlapping, not by the design of the EU but because we have worked with the flow of what it has done. To try to support regional integration, we are encouraging the African states to extend to each other the same level of liberalisation. This is to make sure that they aim to prevent increased imports from the EU displacing imports from neighbouring countries.
The issue has not been raised—I can hear it coming—but the most-favoured nation clause that might result from that is specifically designed to ensure that it applies only to major economies, and that excludes most of the African nations. We are genuinely trying to work with the flow of regional integration.
On the point raised about the AfCFTA by the noble Baroness, Lady Sheehan, it is a cross- African CTA that is being worked on and, as she will know, it has taken a while. We will continue to support the efforts to do that but in the meantime we believe that EPAs are a way of allowing those countries to progress.
As to the economic benefits, because these are EPAs they are asymmetric in favour of the developing nations and that is why we are seeing limited benefits in the short and medium term to the EU countries, including the UK.
The noble Lords, Lord Haskel, Lord Judd and Lord Stevenson, the noble Earl, Lord Sandwich, and the noble Baroness, Lady Sheehan, raised the issue of parliamentary scrutiny. The noble Lord, Lord Haskel, was helpful in laying out what the current scrutiny is under the EU system. In taking forward the existing trade agreements, we have said that we will try to replicate them to provide as much continuity as possible. In the interests of providing parliamentary scrutiny, we will make sure that a report is prepared outlining any changes that have been made and provide opportunities for debates in both Houses to allow Members to comment on those change before ratification under the normal procedure. So we have tried to address the issue of trade continuity agreements.
This SI is not about future trade policy nor about our future scrutiny arrangements. As I said in my opening remarks, an Oral Statement was made in the other place by the Secretary of State, who laid out some of the ways in which we will engage. There will be a 14-week engagement across civil society, with unions and businesses, and that consultation is taking place on four potential free trade agreements. We will then create an outline approach which, again, will be made public and available to Parliament. Through that process, reports and accounts will be laid before both Houses.
In this House there are a number of Lords committees but none with a specific remit on trade policy. It is not for me to determine for the House of Lords what committee would be appropriate but, as I said, I am keen to talk to noble Lords and hear their ideas. At the moment we are working out our proposals but, ultimately, if any new committee were established it would be for the House of Lords to make its own decision on what that would be.
On the question of involving civil society on these existing EPAs, as I have said, we are continuing to engage actively with civil society. However, under the existing EU approach, there is a joint civil society engagement which takes place under the existing SADC EPA to allow those states’ approach to an effective implementation of the EPA, and it is on the implementation side where that civil society involvement is continuing.
I agree wholeheartedly with the noble Lord, Lord Stevenson of Balmacara—trade matters. We need to get that right. We remain committed to engaging further with Parliament as we develop an independent trade policy. We will continue to work with stakeholders across the UK to ensure that our policy delivers for this great nation.
I encourage noble Lords to support the UK’s ratification of these agreements, which will demonstrate to these countries the importance to the UK of agreements with them, as well as our commitment to development and global prosperity.
It would be conventional for the Minister to persuade me to withdraw my amendment, if she could. Otherwise, the implication is that the Minister is quite happy for it to be moved.
I would be grateful if the noble Lord would withdraw his amendment.
I am sorry about that bit of theatre. It just makes the point that the structure has to be right or we cannot get to where we want to be: a mutually agreeable situation.
I thank all speakers for participating in the debate. As I said, the aim all along was to have a debate on issues on which we agree. More about this issue unites than divides us, and it is good to have a chance of an open debate on issues of such importance. In fact, it was a special treat to have such expertise and experience represented by the noble Lords who spoke; we were able to pick up on some important points that I am sure we will want to take away and think about when we come to read Hansard.
In her contribution, the noble Baroness, Lady Sheehan, used the examples of Kenya and Tanzania. She made all the points that had been picked up elsewhere about the difficulties for two countries with common boundaries yet completely different profiles on where they want to get to as societies with different experiences and opportunities. As she said, the present arrangements are unlikely to result in regional harmony, let alone the growth in economic activity that we all want.
I will read the Minister’s second speech in Hansard quite closely. She used “we” quite a lot in relation to the way in which these treaties have developed. It is quite unusual these days to find Ministers of Her Majesty’s Government talking as if they were speaking on behalf of the organisation with which we are all involved—the EU—but I take it that she used that word in the sense of the EU trying to achieve certain aims and objectives. That may be a small point, but I enjoyed it. The EU has done some good work in this area; despite the criticisms we have all heard, there is something of value at the end of this process. We should recognise that.
However, the points made by my noble friend Lord Judd are very important. We must not fall into the trap of assuming that some sort of “Made in Brussels”—I do not mean that in a negative sense—mode of liberalisation is the right one for the range of countries we have to deal with. It must be a question of fitting what is appropriate to where the various areas and countries are. I take the point that, by working with the existing arrangements in Africa and South America, there is a better chance of those arrangements working and bringing us the benefits that we are looking for. On the other hand, it is clear from the comments I read out, which other noble Lords have mentioned, that there is some dispute about that. Again, that makes the point that this issue is important and we must not let it go by default; we must engage with it in some way. Even if we go down the routes being offered to us, the question of who assesses that and under what terms of reference—for example, what success looks like—is uncomfortable for those who spoke tonight. Perhaps the Minister could take that away.
Moving on to the future, I do not want to sound too critical but, although there was a welcome sense that engagement with Parliament is an important aspect of the work going on in the department, I did not get the impression that any of the proposals made by either myself or other noble Lords—such as my noble friend Lord Haskel on behalf of the committees he is involved in—reached out in a way that fits with the purpose of the amendment. We may need to go through the Trade Bill and pick up the points there, because there are amendments down that would certainly open up that opportunity. To make the point more fully, if all we are being offered is a bit more information, a bit more consultation at arm’s length, a bit more engagement with civic society, but no real sharing of the process of agreeing and moving forward the agenda, I do not think that fits where we are in terms of where people want to be on trade. Trade is important because it matters, and if it matters then people need to find an echo of that.
Although I mentioned them in my speech, I did not hear the Minister talk about the devolved Administrations. Clearly, it is not her departmental brief to do that, but if we do not get that right, we will all just go into a brick wall at great speed and it will not work. These matters will be devolved to these Administrations and they will have their own views. There has to be some structure, some constitutional arrangement, which gives them confidence that their justifiable and important issues will be raised as part of the process.
It may be that a Lords committee is the right solution, but I do not think that takes the trick. I will argue very forcibly in the Trade Bill that we need to think harder about what powers are given, to whom, and for what purpose, and what process will help to engage the country thereafter. There is a frustration that the lack of information and movement on this will build up. If I can leave the Minister with this, my feeling is that you cannot leave this too long. It may be that, if everything goes smoothly with the Prime Minister’s proposals, there will be a period of two years, or possibly longer, in which we can work these things out, but there is a lot of interest and expectation now and I think it would be a mistake not to recognise that going forward.
With that, and with the Minister’s strong request that I withdraw my amendment ringing in my ears, I beg leave to withdraw.
Amendment to the Motion withdrawn.