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Continuity Trade Agreements: Parliamentary Scrutiny

Volume 807: debated on Wednesday 18 November 2020

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Tuesday 17 November.

“In under two years, the UK Government have signed or agreed in principle trade agreements with 52 countries that account for £142 billion of UK bilateral trade. That accounts for 74% of the value of trade with non-European Union countries that we set out to secure agreements with at the start of the trade continuity programme. Since the transition period began, we have expanded the ambition of our programme above and beyond that original scope. In November we signed an enhanced deal with Japan, accounting for £30 billion of UK trade in 2019, and we expect to make significant progress in securing further deals before the end of the transition period. We believe that this is the largest set of parallel trade negotiations ever conducted by any country.

Parliamentary scrutiny is central to our continuity negotiations. All signed agreements would be subject to the statutory scrutiny process as set out in the Constitutional Reform and Governance Act 2010, providing a guaranteed period for Parliament to scrutinise and debate these agreements. Indeed, Parliament has held debates on six of our signed continuity agreements, and not one of those debates has carried a negative resolution. Further, we have voluntarily published parliamentary reports alongside all continuity agreements, explaining any differences from the predecessor EU agreements. I am pleased to see that our approach to scrutiny was praised in a recent report by the House of Lords EU International Agreements Sub-Committee, Treaty Scrutiny: Working Practices.

As we approach the end of the transition period, it is possible that the scrutiny window for remaining agreements will extend beyond 1 January into the new year. That means that we may need to use provisional application for a short period, in order to guarantee continuity of trade relationships and avoid any cliff edges. I thank the right honourable lady for her two letters on the subject to the Secretary of State last week. Provisional application is a well-established and widely used mechanism to give effect to treaties while domestic ratification procedures continue in parallel. Many EU trade agreements were or are being provisionally applied, including the Comprehensive Economic and Trade Agreement with Canada and the agreements with Ukraine and with the Caribbean Forum. I remind the right honourable lady that those EU agreements have already been comprehensively scrutinised at EU level and by this Parliament. In fact, the Government published a technical note in Parliament last year setting out our assessment of provisional application and the circumstances in which it might be used.

We will always take the time necessary to negotiate the right deals. Any agreement we sign must benefit British consumers and businesses, preserve our high food standards and protect the NHS, and they must share wealth across all our nations and regions as part of our levelling-up agenda. We look forward to submitting further continuity FTAs to Parliament for scrutiny once signed, and we welcome further debates on our independent trade policy.”

My Lords, in the Commons, the Minister stated that parliamentary scrutiny was central to the ongoing continuity FTA rollovers. That was good to hear. He also said that nearly half these treaties will be agreed under the provisional agreement mechanism, which excludes parliamentary debate before the FTA is implemented. That is not so good. We have the opportunity to put things right when the Trade Bill returns to your Lordships’ House in early December. Will the noble Lord the Minister agree to continue our discussions to see if we can formalise a protocol for scrutiny, building on his good work in ensuring that the International Agreements Sub-Committee of this House has the papers and information it needs to carry out its valuable work?

My Lords, I welcome the constructive exchanges which the noble Lord and I have had on this matter. We have a mutual interest in ensuring that Parliament is able to carry out its scrutiny processes effectively. I look forward to continuing our debate on this important topic during Report on the Trade Bill.

My Lords, the Government’s statement on the potential benefits of the Japan agreement indicated growth of £15 billion. Any reasonable observer would have assumed that that meant growth of £15 billion for the British economy. As the impact assessment has shown, only 17.2%—£2.6 billion of exports—is UK growth. A massive 79.9%—£13 billion—is growth in Japanese exports to the UK. Scrutiny of any trade agreement must be full and allow Parliament a proper vote at the outset and at the end. I welcome the ongoing cross-party discussions with the Minister. Will he consider the amendment I have tabled to the Trade Bill, arguing the case for Parliament to have a vote on the agreement, as the Japanese Diet has done?

My Lords, I always consider carefully the points made by the noble Lord. Cheaper imports to the UK benefit the UK economy, so the FTA is not entirely one-sided. I agree that Parliament has to have the information available to allow its scrutiny processes to work effectively.

My Lords, I declare my interests as set out in the register. The scrutiny arrangements in the Trade Bill make no reference whatsoever to climate change or the environment, either in the economic impact assessments or in other reporting mechanisms. Yet the Government’s green recovery plan today shows how a green industrial revolution is essential and how much the future economic health of the UK will depend on success in these areas. Will the Minister look positively at how we can continue our discussions and amend the Trade Bill to include parliamentary scrutiny of these vital issues?

The noble Baroness makes a good point. It is important that the impact assessments that we produce for each of these agreements cover these matters fully. If Parliament has this information, our debates can be more comprehensive and effective. As she says, these are extremely important matters.

My Lords, I am a member of the International Agreements Sub-Committee. It is our job to report to this House on these continuity trade agreements. On 3 November, Ministers signed the agreement with Kenya which will come into force on 1 January. We have not yet seen the text of this agreement. If it is a copy and paste, why not share it immediately? If it involves new commitments, does not Parliament especially need to scrutinise them? When will we see it? How are we to conduct parliamentary scrutiny before it comes into force? If we do not, is this not unsatisfactory?

I pay tribute to the work done by the IAC. It is a very effective mechanism. My noble friend referred specifically to the Kenya agreement. Agreement in principle has been reached but some loose ends are still being tied up with the Kenyan authorities. As soon as the agreement is signed, it will follow the normal processes and there will be full parliamentary scrutiny allowed.

My Lords, I thank the Minister for his and the Government’s courteous engagement with the International Agreements Sub-Committee over the UK-Japan free trade agreement. The report will be published very shortly, in the coming days. My question is on the same theme as those of others who have spoken. Do the Government reaffirm the commitments, statements and aspirations contained in the DIT Command Paper of February 2019 on free trade agreements?

I thank the noble Earl for his comments about the Japan free trade agreement. Like other Members of this House, I am looking forward to our debate on it in a couple of weeks’ time. We are following the spirit—if not the letter—of the Command Paper to which he refers.

My Lords, in the House of Commons yesterday the Trade Minister, Greg Hands MP, said:

“We are negotiating better market access in markets such as ... China”.—[Official Report, Commons, 17/11/20; col. 196.]

Today Bob Rae, Canada’s ambassador to the United Nations, has called on the UN to investigate the horrors being perpetrated in Xinjiang. Some 180 human rights groups say that many of the world’s biggest fashion brands and retailers, along with suppliers of PPE to the United Kingdom, and companies such as Huawei and Volkswagen are complicit in the forced labour and human rights violations of millions of Uighur people in Xinjiang. Atrocities include torture, forced separation and the compulsory sterilisation of Uighur women. Is it a case of business as usual, or does the Minister believe that, where allegations of crimes against humanity or genocide are made, these should have consequences for trade with China? Will he therefore accept the amendment on genocide that I have tabled to the Trade Bill?

The noble Lord always speaks on this topic with both expertise and passion. We understand the importance that noble Lords attach to these matters. The Government are studying them actively and carefully.

My Lords, it is good that the Government have confirmed that we have the bandwidth to conclude the agreement with Canada in short order. Can the Minister confirm that his department is at the same time discussing with Canada that country’s approach to our possible accession to CPTPP, and can he give a date by which the Government intend to notify CPTPP formally of our intention to accede? Can he confirm that there will be an opportunity to debate our accession before it is applied for?

My noble friend recognises, as I do, the importance of reaching an agreement with Canada. Of course, the agreements that we will reach with Canada, those we hope to reach with Australia and New Zealand and the agreement we have reached with Japan are all vital precursors to fulfilling our ambition to accede to the Trans-Pacific Partnership. It is a complex matter; there are 11 countries in that partnership, and it will take time to bring all this to the point where the meal can be served, as opposed to just being cooked. Once we get to that point, Parliament will be fully involved.

Can the Minister assure the House that our continuity trade agreements with our African partners will support rather than undermine regional integration and the African free trade area?

The noble Lord makes a good point. The free trade agreements are vitally important for the African countries; we are well seized of that. We have an active dialogue with them, and look forward to strengthening those agreements as we go forward.

I am afraid it is in fact Lady Kennedy of The Shaws—there was a mistake in the listing. It is clear from many of our debates that the House does not want trade to be elevated above human rights. The noble Lord, Lord Alton, put his finger on the particular problems regarding China. The Government give the right rhetorical support on this, but it is difficult to have confidence when the Minister is on record as saying that

“everything in China gets associated with politics, but we have to look through politics to help get successful business with China”,

and that:

“The fact that Xi is prepared to give such strong authoritarian guidance within the context of a market economy is great for companies like mine

I am afraid that this does not give a lot of assurance to those of us who are concerned about the horrors taking place in China.

My Lords, the noble Baroness refers to comments that I made in my previous life, when I was chairing a major business in China for the United Kingdom. It is important to realise the context within which those comments were made but, as I have said previously at this Dispatch Box, I have no patience with authoritarian regimes and I am completely in agreement with the Government’s policy in relation to China.

Sitting suspended.