Motion to Resolve
To resolve that this House calls upon Her Majesty’s Government, in accordance with section 21 of the Constitutional Reform and Governance Act 2010, to extend the scrutiny period for the Agreement establishing an Economic Partnership Agreement between the Eastern and Southern Africa States and the United Kingdom of Great Britain and Northern Ireland (CP31), laid before the House on 6 February, by 21 sitting days.
Relevant document: 31st Report from the European Union Committee
My Lords, I am grateful for the opportunity of speaking to these three Motions in my name. First I want to set a degree of context before addressing some of the issues of substance raised by the EU Select Committee. The intention behind the Motions is to give an airing to the first three of what the Government term rollover, or continuity, agreements, which we have negotiated and signed with countries that have an existing trading relationship with the UK by virtue of our membership of the European Union.
The House will be fully aware that it was the Government’s intention that before exit day—whenever that might be—all our existing trading relationships would be rolled over. Indeed, the Minister’s predecessor, the noble Lord, Lord Price, stated that all the countries had agreed in principle to roll over the agreements. That was not the case, and only three have so far been scrutinised by the EU Select Committee. Next, the agreement with Switzerland will have to be considered.
I do not belittle our relationship with Chile, with the eastern or southern African regions or with the Faroe Islands—but they represent 0.1%, 0.1% and 0.1% of total UK trade. So there is a lot more to be done before exit day, if the Government intend to roll the agreements over. We know that some of them will not be rolled over, but there is still a considerable question mark as to whether, before exit day, we will see signatures on trade agreements with other countries.
The Faroe Islands, to give one example, are the UK’s 114th largest trading partner, and total UK exports there amount to just £6 million. To put that into context, that is one-fifth of the doomed ferry contract that Chris Grayling agreed. Again, I do not seek to belittle our relationship with those islands, but these are minuscule sums in the context of overall UK trade.
This issue was highlighted by the EU Select Committee in paragraph 5 of its report, which alerts us to a degree of concern that there is no prospect that the other agreements will be agreed ahead of the UK’s scheduled exit from the UK. It says:
“The risk of disruption to the terms of UK trade with many of its most important trading partners is now imminent and acute”.
That is a very reasonable, if slightly understated, description of the situation.
These three agreements are illustrative. In an interesting way, they are broadly representative of the type of arrangements that the UK has in its trading relationships. The ESA EPA is development focused: that is under- standable, given the trading context of our relationship with those countries. The EPA offers a beneficial trading relationship to Madagascar, Mauritius, the Seychelles and Zimbabwe. They cherish their trading relationships with the UK, even when in the context of UK trade, those are very small. In the context of those countries’ trading relationships, they are important.
The Chile association agreement is wide in nature. It is not simply a free trade agreement. It contains high-level provisions on political dialogue and provides for co-operation on economics, scientific issues and specific areas such as illegal migration, drugs and organised crime. It also includes a free trade agreement component. The Faroe Islands agreement focuses primarily on saving what the Government estimate to be £11 million in offsetting tariffs that would have been applied if we were trading with them on WTO terms.
That is a snapshot of the breadth of our trading relationships with Chile, with the eastern and southern African states and with the Faroe Islands. It is right for your Lordships to have an opportunity to consider these agreements on the Floor of the House rather than simply using a CRaG process that does not afford Members an opportunity to consider them.
I fully expect that this may well be a relatively brief debate and it may simply be one where we air some of the questions raised by the committee. But that process still has value—it is important. It is important for our trading partners to know that the Houses of Parliament consider them. I hope that it will also provide a degree of precedent going forward.
In that regard, I welcome the commitment from the Minister on the Report stage of the Trade Bill that we have been considering that it will be the Government’s intention to bring forward to the Chamber some of the trade agreements. I agree with the observation of the committee in calling for further consideration in the Chamber. It is not the job of an opposition party to bring forward Motions to have them debated and I hope that this will be the last time that Opposition Members will bring forward amendments to have trade agreements such as these debated on the Floor of the House. Instead, I hope that it will become standard practice for the Government.
I now turn to the issues raised by the EU Select Committee in consideration of the treaties. In doing so, I pay tribute to the thoroughness of the committee’s work and the considered work of the clerks of the committee and its members. Their first observation was that the Government have chosen to use short-form agreements—this may be right or wrong; I am neutral on this position. In other words, they highlight only amendments to the original underlying agreements with the European Union. But the committee said that to ensure transparency and consistency, the Government should publish the original text of the agreement that we had with the EU along with decisions by the Government for amendment, so that it is easier to compare and identify where there are differences.
I also respect the fact that it was the Government’s intention to publish reports concerning the areas where there were differences. The legislation says “principal or major differences”, but the Government are to be commended for saying that any differences will be highlighted. But in order for us to be aware of those rather than simply to rely on the Government’s statement in their report, it would be helpful if they published the text of the original agreements alongside any of the new ones, especially if they are using the short-form version. It will be helpful to know from the Minister whether the Government intend to do that.
The second observation of the committee to which I draw the attention of the House is over consultation with the devolved Administrations. Noble Lords who have participated in the Committee and Report stages of the Trade Bill will know that this has been a major part of our considerations. Indeed, the House passed amendments concerning consultation with the devolved Administrations. It should be the standard approach that draft texts of rollover agreements are shared with devolved Administrations prior to signature. The EU Select Committee found that it was “puzzling” that this did not happen with regard to the Faroe Islands agreement. There could not possibly be a clearer agreement concerning fisheries and the Faroe Islands and that text should have been shared with the Scottish Government. It was not. But again, I commend the Minister for recognising that that was an omission by the Government and saying from the Dispatch Box during the proceedings of the Trade Bill that that would not be repeated. I take her at her word and it is to be welcomed.
The Scottish Government’s concern was shared by the committee—I do not wish to put words into its report because it is clear to see—that it would be an unwelcome precedent were that practice to carry on. I accept that the Government have taken that on board and it will not be a precedent that the draft text will not be shared. That is a clear example with the Faroe Islands but, as we discussed in the Trade Bill, there are many aspects of legislative competence that are the responsibility of the Scottish Parliament and the Welsh Assembly, and they need to see the texts to understand if there are legislative consequences that may arise. Even with the Chile agreement on illegal migration, drugs and organised crime, there will be examples in the Scottish legal system and law enforcement agencies and others that may well have an interest in some of these issues when being implemented. If a precedent is being set, consultation should be carried out on the continuity agreements.
I mentioned, on the agreement with the Eastern and Southern Africa States, that the committee made a specific point to which it is worth asking the Government for a response. The agreement states that,
“Madagascar, Mauritius, the Seychelles and Zimbabwe”,
are included. However,
“the Agreement itself also lists Comoros and Zambia as parties to the Agreement”.
However, the Government’s Explanatory Memorandum and accompanying report do not reference the link with Comoros and Zambia signing the UK-ESA agreement. The committee asks for clarification on our intended relationship with those two states, and it would be welcome if the Minister were able to respond.
The committee also asked for clarity on how the Government see their ongoing relationship with the wider Southern African Development Community. This is of particular interest, given the umbrella of the Cotonou agreement and our relationship with SADC as an economic community. In the context of SADC and others across the African continent becoming a single economic area, moving towards a single customs union, our relationship with that union, through SADC and others as they emerge, will be very important. There are considerable opportunities. Far be it for me to highlight a potentially good element of Brexit, but, if we are to have a stand-alone trade relationship with the emerging African customs union, it would be helpful if the Government would signal what their intentions are. I know that other African countries that have a partnership agreement with the European Union are keen to know what the UK’s relationship with that customs union is likely to be.
The other aspect raised by the committee may be technical, but it is worth airing and giving the Minster an opportunity to reply. It concerns the relationship with Crown dependencies and British Overseas Territories, and the status and applicability of the agreements we have signed. The committee was right to ask what the position would be of the other agreements in relation to those territories.
The agreement with the Faroe Islands relates to securing access to the UK market for the islands’ fisheries and having a tariff-free relationship as regards imports to the UK worth £23 million, mostly of fish and crustaceans. I can understand that the imperative from the Faroe Islands’ perspective was to secure access to our market, rather than the other way around. That will be purely beneficial and I have no issue with a free trade agreement between us and the Faroes. However, the committee said that there was a difference in the preamble to the agreements, which is an issue of interest. The committee highlighted that the preambles to the agreements, while not having the legal force of the agreements themselves, set the context for them. The committee highlighted during its scrutiny that there was a difference in the text of the preambles. It may simply be that the language could not be directly replicated across, but the committee asked why the reference to the existing fisheries agreement between the Faroe Islands and the European Union, which will be ongoing after our exit, was not replaced by an alternative text in our preamble with them. It would be helpful if the Minister could respond.
Regarding Chile, the elements raised for consideration that will also have a consequence for other arrangements are the parliamentary committees and joint consultative committees that come alongside these reports. This was a point I raised in Committee on the Trade Bill. Many of the European agreements we currently enjoy have a parliamentary and dialogue system that sits parallel to the trade agreement. They operate with the European Parliament and they have been a very useful vehicle for ongoing parliamentary scrutiny of the implementation and impact of the trade agreements. When it comes to the EPAs with Africa, the link with the European Parliament and member states’ parliaments and assemblies has been very useful. Major lessons have been learned about some unintended consequences and negative impacts of trade agreements because of parliamentary scrutiny of the implementation. It has meant that, when feeding back to the Commission and the Council of Ministers, the negotiations of new partnership agreements have been different from earlier ones.
There is an existing parliamentary committee and joint consultative committee with Chile. It would be interesting to know how the Government see the opportunities for these to carry on. I understand and appreciate that it is not for the Government to say to our Parliament what the parliamentary relationships would be in these trade agreements. To some extent, it is up to our Parliament to be thinking proactively about establishing parallel parliamentary committees or dialogue groups to sit alongside these agreements. It will be important for the continuity agreements because, as we stated repeatedly in the Trade Bill, they are permanent. They are treaties, and they will be indefinite. While the regulations that arise from them may have a lifetime of three years that can be continued, they are treaty agreements and therefore a parliamentary relationship with those member states will be important. It will be interesting to know whether the Government have a view on this, in the context of the recent Command Paper discussing what the Government anticipate will be a beneficial role with Parliaments.
The final element with regard to the committee’s report is, in conclusion, that I hope that the points that have been raised can be addressed by the Government. It would be unwelcome to have to use the extreme measures under the CRaG process to try to delay the implementation of some of those agreements. That is not my intention; my intention is to bring this to the Chamber to allow there to be a debate in which these issues can be aired. Finally, I hope, as I said when I started, that when it comes to other agreements the Government intend that there will be an opportunity for them to be laid in the Chamber so that Members will have an opportunity to raise them. When it comes to agreements that represent more than 0.1% of UK trade, there could be major issues that we would need to discuss beyond simply having a report mechanism and moving an extreme action against the agreements. I hope that the Government will consider these issues as constructive and will welcome the opportunity for them to be raised. In so doing, I again pay tribute to the EU Select Committee, which has done a sterling job in making sure that these issues have been properly scrutinised.
My Lords, I rise as a member of the European Union Select Committee, which has reported on these agreements, and as chair of the External Affairs Sub-Committee, which considered the Chile and eastern and southern Africa states agreements. The committee’s 31st report is tagged alongside the three Motions. I thank the noble Lord, Lord Purvis, for recognising the hard work that the Select Committee does. There are one or two areas that he mentioned that I may refer to during my brief intervention.
I begin by pointing out that tonight’s debate is the first of its kind. Since parliamentary scrutiny of treaties was codified in statute in Part 2 of the Constitutional Reform and Governance Act 2010, neither House has debated a Motion like those that are being debated tonight. It was due to Brexit and the need for the Government to roll over a large number of existing EU international agreements that the Procedure Committee recognised the need for Parliament to scrutinise these agreements and decided that the European Union Committee should take on that task.
It has been a major task, and staff from across the EU committees have worked long and hard to ensure that we could deliver on that task. Today, we published our sixth report in six weeks. It scrutinised another, still more complex, agreement: the UK-Swiss trade agreement. This is demanding work for the committee, so it is important that noble Lords engage more widely in our findings. As a committee, we welcome tonight’s debate regardless of whether, as individual members, we support the Motions introduced by the noble Lord, Lord Purvis. Having this debate shows that the House understands the importance of these agreements and that it is prepared to commit time and resources to doing a proper job of scrutiny. It also puts down a marker for the future, when the Government may enter into fresh negotiations on major new trade deals with the United States or with other countries, that the House of Lords intends to be fully engaged. I hope tonight’s debate will be the first of many.
I will now briefly recap the points made by the committee on these treaties. I emphasise that we have not recommended that they should not be ratified—far from it. But we have raised some points that merit further debate, and I look forward to my noble friend the Minister’s response. First, there is the scale and sequencing of the Government’s programme of rollover trade agreements. The three agreements that we are considering tonight are tiny, representing in total around one-quarter of 1% of UK trade. The Swiss agreement, which I have just mentioned, is of course much bigger, so that is welcome progress. But important agreements with Japan, Canada and South Korea have yet to materialise. We would like to know when they will appear. If we leave the EU on 29 March, which will mean the default position in law, how will the Government mitigate the risk of disruption to the terms of UK trade?
Next we highlight the inconsistency of consultation with the devolved Administrations, which the noble Lord, Lord Purvis, referred to. We understand, of course, that international trade is a reserved competence. But, as the department’s recent paper on parliamentary scrutiny of international agreements acknowledges, trade intersects with many areas of devolved competence. The devolved Administrations should not be closed out of the process. The Government’s approach to consultation has been patchy. The devolved Administrations have been shown drafts of some non-trade agreements—such as the agreement with Ireland on social security and the agreement with Switzerland on citizens’ rights—but have not been shown drafts of the DIT’s rollover trade agreements. Is the Minister able to respond to that? If the aim of these agreements is to ensure continuity of the existing terms of trade, there is no need for secrecy.
The Welsh Government have written to us to say that the Government’s approach to these agreements has fallen very short of their expectations and that it should not set a precedent for the handling of future free trade agreements. Will my noble friend the Minister undertake that drafts of future rollover agreements—or at least relevant sections—will be shared with the devolved Administrations?
We also raised the question of the modification of free trade agreements. Ratification is not the end of the process. These agreements can be subject to amendments and modifications, so ongoing engagement with stakeholders and with Parliament is essential. As a committee, we have repeatedly asked for clarity on when amendments to agreements will engage the CRaG Act procedures, but we have yet to receive a convincing answer. Will the Minister undertake that the Government will state clearly in future Explanatory Memoranda the circumstances in which amendments to agreements will or will not engage the CRaG Act?
I note that we are tonight well beyond the point at which agreements could have been laid in time to complete the full 21 sitting-day CRaG scrutiny process before 29 March. Is my noble friend able to explain how the Government will approach scrutiny of future rollover agreements? Can she say whether in some cases agreements will be provisionally applied ahead of formal ratification, and how will the Government deal with those that cannot be provisionally applied?
As I said, scrutinising these agreements within the time limits prescribed in the CRaG Act has been a big piece of work. I realise that discussions on future parliamentary scrutiny are continuing and I welcome the DIT’s paper of two weeks ago. It showed a willingness to engage with committees earlier in the process. However, we need earlier, fuller scrutiny, and I hope that in her response the Minister will indicate her readiness to engage with noble Lords across the House, and with the EU Select Committee in particular, in developing those ideas.
My Lords, the question of FTAs must be taken extremely seriously and we must give them appropriate scrutiny, recognising that they are now very important to the United Kingdom. To borrow the words of the noble Lord, Lord Purvis, this is a brief but important debate.
The Government have long iterated on the importance that they place on parliamentary consultation and scrutiny. This afternoon, no lesser a person than the noble Baroness, Lady Fairhead, informed us of the Government’s vision of engagement with Parliament. We have learned the consequences of not being fully utilised as an experienced resource, so I urge the Minister to embrace these three straightforward Motions. In this regard, the parliamentary ratification processes moving forward should be expedited. The record of government thus far is patchy.
My Lords, I commend the noble Lord, Lord Purvis of Tweed, for initiating this debate and agree with many of the points that he made—for example, publishing the agreements and those that they replace together. I also agree that there should be consultation wherever possible—for example, with the Scottish Parliament on the Faroe Islands.
Like my noble friend Lady Verma, I sit on the European Union Select Committee. We have been helping the scrutiny process in this House by reviewing the international agreements laid before Parliament in accordance with Section 20 of the Constitutional Reform and Governance Act 2010. The EU Committee was asked to take on this task rather late in the day, and it has involved a commendable cross-party effort by the committee and its sub-committees. However, as has already been said by previous speakers, the main credit should go to the clerks and our expert advisers, who, frankly, have done a fabulous job, working long hours and diving into the wearying complexities of these agreements. As we have heard, we published our sixth report in this series today—HL Paper 315, for the enthusiastic.
I am not sure that I have the chutzpah to table a Motion on this issue myself when there is so much parliamentary business to progress. However, I take this opportunity to draw attention to our work on treaties and to mention the UK-Swiss trade agreement, on which we reported today. This example is “illustrative”, in the word of the noble Lord, Lord Purvis. I very much understand that my noble friend the Minister may not be able to comment on this agreement, although she is very good at pulling rabbits out of hats. Switzerland is the 10th largest trading partner for the UK. As a committee, we were disappointed that the Government, in bringing forward the UK-Swiss trade agreement for scrutiny, had not provided an explanation of the plans for future UK-Swiss services trade, which accounts for 52% of overall trade between the UK and Switzerland. Services are as important as goods to our economy. Given that they now represent nearly 85% of GDP, you might say that they are even more important to the wealth and success of our islands. I am sorry that the process gives them so little focus.
In the meantime, I support the words of the noble Viscount, Lord Waverley, about the importance of parliamentary scrutiny. I would like to see the three agreements before us passed without delay. I look forward to many further debates on the very important area of future trade agreements, which will potentially have big implications and lead to big changes to our country.
My Lords, I suppose this is in the nature of an experiment. This is the first time we have had an opportunity to go into detail about the new world that beckons, whichever side of the Brexit divide one is on. At some point in the future, whether sooner or later, the UK will certainly be faced with making a very large number of these treaties. We need to get used to wading through them and investigating in detail.
I had only a short time to go through the agreements on the Order Paper, but I was left reeling, not only from the pages that dealt with the individual tariff lines—I know I will have to do more work on these because of the Government’s announcement today. Even so, it was a pretty scary moment to try to realise exactly what was going on there, equally so to recognise the point made by the noble Baroness, Lady Neville-Rolfe, that a modern trade agreement is not just about widgets and physical objects but trade in services, attitudes, approaches, commitments to work together, future developments—all sorts of areas. It is a very complex area. I do not think one quite has a sense of how that works in practice until one reads the raw text.
The noble Lord, Lord Purvis, is right to ask us to dwell on how the process works. Obviously, the committee’s work is exemplary in this way. It may have been short of time and the necessary expertise, but it certainly managed to get access to quite a lot of information. It is full of information that would be very difficult to get if one did not have access to our expert support. It is very useful to give an initial sense of what we are really up against and to take the benefit of those who have gone before us. I do not think there is much more, other than to listen to the Minister’s response, which I am sure will be very fair and cover all the ground.
I want to flag up that I will be looking at these with one particular issue—investment—in mind. That should not be a surprise, since I have been raising this issue over all these trade agreements over a period of time. I looked through the agreements on the Order Paper today and could only find one reference to investment in Article 39 of the agreement establishing an economic partnership agreement between eastern and southern African states and the UK. Is this the only one with an investment chapter in it? Will the noble Baroness comment on whether that is a trend or just the way things are? I probably know the answer to that.
Given that this one has an investment chapter in it, what is the meaning behind paragraph 1(e) of Article 39? It says that the parties recognise the importance of investment and the objectives in this case are to,
“develop a legal framework that promotes investment by both Parties, with a view to promoting and protecting investment and work towards harmonised and simplified procedures and administrative practices”.
Does this mean motherhood and apple pie, or is it code for some new system of secret courts meeting in secret locations and taking decisions on investment with an adverse effect on the political and social economy of the countries concerned? I may have extended slightly to make my point, but I would be grateful for a response.
My Lords, I thank all of your Lordships who have contributed to this debate for the many insightful points raised and the informed speeches made. I join my noble friend Lady Neville-Rolfe in commending the noble Lord, Lord Purvis of Tweed, for raising what is, as the noble Viscount, Lord Waverley, agreed, a very important subject. It is critical that we transition these three trade agreements, which cover countries accounting for £3.5 billion of our trade.
The noble Lord, Lord Purvis, has raised a concern with the scrutiny processes with respect to these continuity agreements. Let me reiterate what has already been done on scrutiny to date. For the sake of clarity, these are existing EU trade agreements that we are transitioning to bilateral agreements between the UK and third countries. Therefore, they have already been subject to a scrutiny process at EU level, and this was overseen in our Parliament by our EU Select Committees. Ratifying these agreements means that we can provide assurance to business in the UK and third countries that there will be trade continuity in any EU exit scenario.
However, we hear the noble Lord’s concerns that Parliament should have appropriate opportunities for scrutiny, and it is absolutely an objective of the Government that Parliament is afforded these opportunities. That is why the Government agreed to go over and above the requirements as laid out in the Constitutional Reform and Governance Act by setting out in a report to Parliament details of any significant trade-related differences between the UK and EU free trade agreements, and explanations for the changes. These reports must be published 10 days before implementing regulations are laid under the Trade Bill or before ratification, whichever is earlier. Indeed, I will shortly take the House through a precis of the three agreements and the reports that were laid alongside the texts. I hope this will demonstrate the detail that they include to those who have not had the opportunity to go through them, and will reassure the House about our approach to transparency.
I start with the UK-Chile agreement, which reproduces the effects of the EU-Chile agreement as closely as possible, making only technical changes to ensure that the agreement can continue to operate between the UK and Chile. It means that our businesses can, for example, continue to sell cars to Chile on existing terms. In fact, according to HMRC data estimates, 2,400 VAT-registered businesses in the UK exported to Chile in 2017 alone. Trade in goods and services between the UK and Chile was £1.8 billion in 2017—the top goods imported from Chile being edible fruit and nuts, beverages, spirits and vinegar, while our key exports to Chile were machinery and mechanical appliances.
In transitioning the agreement, the tariff-rate quotas in the UK-Chile agreement have been resized from the original EU-Chile ones to reflect that the UK is a smaller import and export market than the EU 28. These quotas were agreed following examination of a range of evidence including historical usage data and trade flow data.
I turn now to rules of origin. When the UK leaves the EU, the designation of UK exports will shift from EU-originating to UK-originating. To ensure maximum continuity for business, the UK-Chile agreement provides that EU materials can continue to be recognised in UK and Chilean exports to one another. Furthermore, EU processing can be recognised in UK exports to Chile.
The noble Lord, Lord Purvis, raised an important issue on where the new agreement differs from the original, and that is with regard to parliamentary committees. The original EU-Chile agreement established an association parliamentary committee as a forum for members of the European Parliament and the Chilean National Congress to meet and exchange views. The EU-Chile committee may, for example, make recommendations to the EU-Chile Association Council. Given the principle of continuity, it has been our intention to replicate the institutional structures of the original EU-Chile agreement where possible. With respect to the association parliamentary committee, we did not consider it appropriate to bind Parliament to this commitment without prior consultation. We have therefore agreed treaty text which reserves the right of UK parliamentarians to their position until such consultations have been concluded. The association council provides a mechanism that allows for the establishment of the association parliamentary committee at the request of the parties. If Parliament considers that it wants this committee to be set up, then DIT officials will work with Chilean counterparts to seek to establish this committee at the earliest possible opportunity.
Turning to the economic partnership agreement between eastern and southern Africa countries and the UK, this maintains the effects of the ESA-EU EPA in a bilateral context. As the noble Lord, Lord Purvis, reiterated, EPAs are asymmetric in favour of developing countries and are therefore critically important to their progress. The UK signed the agreement on 31 January with Mauritius, Seychelles and Zimbabwe, and we expect Madagascar and Comoros to sign in the near future.
The agreement ensures that there will be no disruption to our trading relationship with eastern and southern Africa as we leave the leave the EU and will help to support jobs and economic development in ESA countries. It will allow continued tariff-free imports from eastern and southern Africa, and will remove the majority of tariffs on British goods to these countries, such as machinery exports, over the coming years. Consumers in the UK will clearly continue to benefit from more choice and lower prices for products such as clothes and tuna from Mauritius. I want to be clear that as there are no TRQs in the ESA-EU EPA, there are none in the ESA-UK EPA. The only significant change in the ESA rules-of-origin provisions is to allow EU accumulation and the resizing of the derogation quotas for canned tuna and tuna loins. The derogations themselves already existed under the EU EPA, but the quota has been resized to reflect the size of the UK compared to the EU.
The UK-Faroe Islands free trade agreement replicates the original EU-Faroe Islands FTA bilaterally. My noble friend Lady McIntosh raised a concern in our previous debate on this in the House that this agreement would increase duties. I discussed this with her, but she asked me to confirm in front of the House that this agreement would not increase duties. In fact, the £11 million figure in the Government’s parliamentary report on this agreement is an estimate of what the tariff impacts would have been if the EU-Faroe Islands FTAs were not transitioned to this bilateral agreement and instead reverted to the WTO MFN tariff rate.
As with the original EU trade agreement, our FTA covers only trade in goods, with the most important product being fish imported from the Faroe Islands to the UK. The agreement continues in line with government policy provisions on preferential tariffs and quotas, rules of origin and some customs and energy-related provisions. To ensure continuity of effect, TRQs have been resized to reflect the size of the UK compared to the EU. As with the Chile and ESA agreements, we are continuing current arrangements for the accumulation of EU content in goods traded between the UK and the Faroe Islands.
The noble Lord, Lord Purvis, said that the economic value of this agreement was relatively low, although he was not seeking to belittle it. I agree that one should not belittle it, because, although it is relatively small, it has significant sectoral importance. I disagree that this is principally of concern to the Faroe Islands, because this trade is very important for the UK’s fish processing industry, which is concentrated in particular areas such as Humberside and the Grampian region of Scotland. Through this agreement, UK consumers will continue to benefit from greater choice and lower prices for fish and seafood, such as Atlantic salmon, haddock and halibut. This agreement will allow imports to continue with zero tariffs, and will ensure that fresh, high-quality, affordable produce is readily available to our retailers and consumers.
The UK-Faroe Islands FTA is a continuity agreement in every sense of the word. Apart from very few modifications, for example to the veterinary protocol, the FTA effectively rolls over the EU-Faroe Islands agreement in its entirety. I know that the FTA is of interest to my Scottish colleagues in particular, because of the connection between the Scottish regions and the fisheries industry. It is important to take time in this debate—this was raised by the noble Lord, Lord Purvis—to set out the distinction between the trading arrangements and the fisheries arrangements with the Faroe Islands.
The EU-Faroe Islands fisheries agreement is concerned with access to waters, and the volume of what can be fished in specific waters. The current EU-Faroes FTA text makes reference to the separate EU-Faroes fisheries deal. In the event that the UK leaves the EU without a deal, we would no longer be party to that agreement. It would therefore not be appropriate to make a reference to it in our bilateral FTA, and we have removed that reference. My colleagues at the Department for Environment, Food and Rural Affairs are in ongoing discussions with the Faroe Islands about a UK-Faroe Islands fisheries agreement for a no-deal scenario. This would provide continuity for the remainder of 2019 in the event of no deal.
Having shared this detail in the reports on the three continuity agreements, I will provide the House with further reassurance that they will have appropriate scrutiny. Any instances where the Trade Bill power is used to make necessary amendments to domestic legislation as a result of transitioning these agreements will require a debate and a vote in both Houses. These requirements under the Trade Bill are in addition to the scrutiny required by the CRaG, which was passed by this House. Twenty-one sitting days in both Houses is the length provided for by that Act. In practice, the existence of parliamentary recess and non-sitting days does mean, as the House will be aware, that Parliament has had five calendar weeks to scrutinise these treaties, and in that time the House of Lords EU Committee has provided a report on the agreements.
I thank the committee, its officials and—as my noble friend Lady Neville-Rolfe said—its clerks and advisers, for this report and the extraordinary work that is done on a cross-party effort. It is genuinely helpful. It considered the Scrutiny of International Agreements; Treaties Considered on 26 February report. It was a robust report that drew special attention to these agreements, which the noble Lord, Lord Purvis, and my noble friend Lady Verma raised in their remarks. I will touch on them briefly, but I can assure noble Lords that I will be sending a letter to the chairman of the committee, the noble Lord, Lord Boswell, this week, and I will place a copy in the Libraries of both Houses.
One of the points was on the progress of the trade continuity agreements. This House has discussed the progress report that we have laid in a WMS. We have confirmed that alongside every agreement signed we will table a detailed report, such as the ones before the House. Particular concerns were raised about the short-form report—I understand that the committee believed it was a pragmatic way to expedite the process. On laying the original text, what the department has done instead, which it believes is more helpful, is create a link to the now-existing agreement, which is online, and all of the links will be shown in the letter. I hope that that will be even better than the original text.
On consultation with devolved Administrations, I hear the point from my noble friend Lady Verma clearly, and I have said on the Floor of the House that we have learned lessons and we will be sharing the initial texts with the devolved Administrations. The Government believe that the length of time—21 days—is appropriate for the scrutiny of pre-existing agreements that have been transitioned, and do not intend to extend it. My noble friend Lady Verma talked about future FTAs, and I would hope that the Command Paper addresses a number of the issues around future FTAs. While Brexit has increased the rate at which we are signing international agreements, the underlying issues regarding scrutiny have not fundamentally changed. The CRaG period of scrutiny was a long-held parliamentary principle even before it was put into legislation. While these three continuity agreements are vital, their effect is to maintain the trading relationships that our businesses and theirs already enjoy.
I confirm that where EU agreements with these countries provide protection for human rights, our agreement continues to provide such protection. The noble Lord, Lord Purvis, refer to the Cotonou agreement. The UK has replicated in the EPA the effects of the reference to that agreement in annexe five. I hope that provides reassurance. The changes in the agreements are limited to those necessary to maintain the effects as far as possible in a UK context.
The noble Lord, Lord Purvis, also asked about Zambia and the Comoros. In line with the Government’s commitment under the Trade Bill, the explanatory material gives details of and explains the reasons for any significant differences. This EPA is open to other eastern and southern African countries to join, including Zambia. There has been no change in their status or the accession process in the ESA-UK EPA. That is why we have not specifically mentioned these countries in the explanatory material. There was no intention to hide anything on this front. We would welcome widening coverage of these agreements if partners wished to join us.
The noble Lord also mentioned Crown dependencies and British Overseas Territories. The territorial application article sets out to which territories this agreement applies and how it applies to them. In the original agreement the territorial application article defined the EU’s territorial coverage by referencing the EU treaties. In the new agreement this has been replaced by an article which ensures that the agreement applies to the UK and the territories engaged in trade for whose international relations it is responsible, in the same way as the previous agreement. As the House will be aware, there are three categories of territories to which this agreement may apply, based on the application of the EU treaties under EU law to date: the Crown dependencies; Gibraltar, to which, broadly, provisions not relating to goods or customs apply; and the other overseas territories aside from sovereign base areas.
My noble friends Lady Neville-Rolfe and Lady Verma alluded to the fact that Switzerland has just been reported on by the committee today. I cannot pretend that I have read its report—I have mainly been on the Floor of this Chamber since that happened—but regarding the challenge and services, my understanding is that services currently are not part of a free trade agreement or trade agreement with Switzerland. Therefore, as this is about continuity, that is why we see limited reference to services. I again confirm that we see services as critically important, since 80% of our economy is services. We will seek to support them in other ways.
The noble Lord, Lord Stevenson of Balmacara, referred to the investment clause. I am happy to write to him if that would be helpful.
The Government’s existing approach allows for and provides the opportunity for scrutiny of these agreements. It is evidenced by the reports published by the House of Lords European Union Committee, and by the support that I hope officials from my department extended to that committee in its deliberations—I understand that they did—both in the form of the parliamentary report and in responding to queries before the report was published. I hope that the noble Lord, Lord Purvis, agrees that it is also evidenced by identifying parliamentary time to debate these Motions.
Given the level of scrutiny that these agreements have been subject to, we do not feel that there would be major benefit in extending the current sitting period by 21 more days, but we believe that there would be a cost.
Not having these agreements in place would mean uncertainty for our trading partners, our businesses and our consumers. It would create a cliff edge for these agreements simply to facilitate more time for scrutiny, which we do not believe is a desirable outcome for anyone. On that basis, I thank the noble Lord again for this rich debate, but urge him to support the Government’s policy to offer certainty to all by transitioning these important arrangements in good time. I therefore ask the noble Lord to withdraw his Motion.
Lord Purvis of Tweed: I am most grateful to the Minister for her very thorough response to all the points that have been raised not just by me but by colleagues—the noble Baronesses, Lady Verma and Lady Neville-Rolfe, from the committee, the noble Viscount, Lord Waverley, and the noble Lord, Lord Stevenson.
The noble Baroness, Lady Neville-Rolfe, suggested that I may have a little bit of chutzpah in bringing these Motions to the House this evening. I plead guilty, and do not demur from that at all. But, in doing so, I hope that it was a vehicle through which the noble Baroness, Lady Verma, was able to present the hard work that her committee members and staff have done. If nothing else, it demonstrated part of the work of the committees of this House and the value that they bring to other non-committee members on some aspects, as said by the noble Lord, Lord Stevenson.
Sometimes these documents are almost impenetrable without the expert support and advice we need since we cannot get the support that Ministers have from the Bill teams. It has been very welcome, and no doubt we will be able to say this on Third Reading of the Trade Bill, that throughout the proceedings the Minister, the noble Lord, Lord Bates, and the noble Viscount, Lord Younger, have been very engaged with me. It has been most beneficial. But when an individual Member comes in to meet the three Ministers and five officials from the department, that is slightly daunting—I am sure it is not deliberately so. Nevertheless, as the noble Lord, Lord Stevenson, said, these treaties we will be engaged in are often complex and wide-ranging. The reality, as colleagues have said, is that this will now be a major part of our work in engaging in the scrutiny and ratification process of trade agreements, and then in the continuous updating of them all.
I have two final points in welcoming the Minister’s response. First, the noble Viscount, Lord Waverley, made a point that struck me. If the Government see Parliament as a resource rather than as something to be afraid of, the process is much more beneficial. I know the Minister believes this, and that is very welcome, but we are having to find new ways of dealing with a new set of environments. Secondly, if we are moving and migrating some of the elements, including parliamentary activities, I am sure that there will be a call for some form of additional resource for Parliament to enable us to carry out our functions in some of the committees.
As the noble Lord, Lord Stevenson, said, if we are embarking on a new way forward, I will put on record—it is helpful that the Government Chief Whip is here—how helpful the Government Whips Office was in scheduling this debate straight after the Trade Bill. It has been a long day, but it meant that those who have been engaged in this issue have had an opportunity to air some of those aspects.
I look forward to the Minister’s letter; I am sure that the Committee does as well. We have simply whetted our appetite for the Swiss agreement and the other forthcoming ones. On the basis of the Minister’s very helpful response, I beg leave to withdraw the Motion in my name.