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Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Volume 834: debated on Thursday 14 December 2023

Committee (2nd Day)

My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division bells are rung and resume after 10 minutes.

Amendment 12

Moved by

12: After Clause 5, insert the following new Clause—

“Artist’s resale rightWithin 12 months of the passing of this Act, the Secretary of State must lay before Parliament an impact assessment of the possible benefits of seeking to extend the Intellectual Property Chapter of the CPTPP to include provisions on the artist’s resale right.”

My Lords, this group of amendments concerns the arts and creative industries; although, in the case of intellectual property, not exclusively so. It therefore picks up directly from where the first day in Committee ended a week ago. I did not participate in that debate but recognise the faces of some who did around this table. It is noticeable that those in the House most closely associated with the arts—I emphasise the word “most”—do not tend to talk about copyright or intellectual property issues because it is such a technical area. I pay tribute to those—including present colleagues, the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, and one or two others—who, over a long time, have been keeping a watching brief on this important area. I also pay tribute to outside organisations such as the Alliance for Intellectual Property, whose briefing I am grateful for, and its member organisations.

Artists are acutely aware that a bad or compromised deal for the creative industries will directly affect the rights and livelihoods of UK artists not just in their work abroad but at home too—as was very much borne out in a debate on intellectual property in Grand Committee on 20 November in relation to new regulations. This is a corrective, in a sense, to the view of some of the public, who believe that these kinds of agreements are about conquering new markets and nothing else.

In this group I support Amendment 24, on the Intellectual Property Chapter, in the name of the noble Lord, Lord McNicol, and Amendment 28, on performance rights, in the name of the noble Lord, Lord Foster of Bath. Outside this group, I also mention Amendment 30, in the name of the noble Lord, Lord Purvis of Tweed, because there needs to be a debate on the effect of the CPTPP after the passing of the Act which also includes its implications for the creative industries. However, the concern about the extension of performers’ rights beyond this agreement needs to be sorted urgently.

My own Amendment 12 relates to the artist’s resale right, which is one important aspect of the wider landscape of concerns about rights for creators, in particular, the reciprocal rights—or potential lack of such rights—that this treaty has thrown up. Reciprocity is a key concept in much of this debate. I am grateful to the noble Lord, Lord Foster, and my noble friend Lord Freyberg for their support. Unfortunately, owing to illness my noble friend cannot be here today, but he has kindly passed on to me some notes for the speech he would have made.

The artist’s resale right is a vital element of our visual arts culture and is hugely important to our artists. It is a fundamental IP right that provides a royalty to artists on the secondary sale of their work. It has been introduced in some form in more than 90 countries worldwide, Mexico being the latest, in 2023. The noble Lord, Lord Clement-Jones, expressed it very well in Grand Committee on 20 November, when he said that he felt confident that these rights

“are now bolted fully into our intellectual and moral property rights”.—[Official Report, 20/11/23; col. GC 52.]

In the 17 years of its existence in the UK, the artist’s resale right has provided artists and estates with £120 million—moneys paid out by the not-for-profit organisation the Design and Artists Copyright Society, whose briefing for this debate I am also very grateful for. Artists invest ARR royalties into their practice which, in turn, supports the arts ecosystem. It is therefore not just individual artists who benefit but the culture as a whole, particularly since estates will also use the moneys to archive and restore work. It is important to note that, contrary to erstwhile concerns, there is no evidence that ARR has negatively impacted the UK art market or diverted sales to non-ARR markets. The UK art market is currently ranked second in the world, and ARR royalties represent only 0.1% of the market’s value.

I gave a very full speech on the artist’s resale right in the debate on 20 November on the new regulations. I refer the Minister to that. I will not say much more on ARR specifically, particularly as the Government should not need to be persuaded of the value of this right. I was very happy, in the circumstances, to back the Government in that debate on introducing the regulation that turned EU law on ARR into UK law. Of course, we now have reciprocal agreements on this right with two CPTPP member states, Australia and New Zealand, through separate trade agreements. I understand too from the letter that the noble Viscount, Lord Camrose, sent to us after the aforementioned debate that the UK is in discussion with Japan on this—a country, I believe, which does not yet operate this right. Could the Minister expand on that? Indeed, DACS has said:

“ARR should be introduced into more countries so that national artists benefit from this right, and UK artists get their due royalties for international sales”.

My noble friend Lord Freyberg has pointed out to me, with figures he researched, the particular significance of the Asian art market. This in part relates to Amendment 24’s reference to future agreements. Japan is a CPTPP member, while China and South Korea are among formal and potential applicants. Together, their art markets were worth around £10.5 billion in 2022 and are likely to continue to grow. My main question to the Minister is: what is the Government’s overall strategy for reaching agreements on this, both through this treaty with other member states, and with those outside it? Has this been broached in relation to this treaty, or will there be negotiations on the treaty so that provision for this will find a place in the chapter on intellectual property? That would be a preferable solution but if that is unrealistic, I would like to hear that from the Minister. I look forward to his reply. I beg to move.

My Lords, I entirely support the amendment in the name of the noble Earl, Lord Clancarty, and that of the noble Lord, Lord McNicol. Noble Lords will be aware that I made it clear at Second Reading that I had real concerns that our accession to the CPTPP was done on the basis of failing to get many of the improvements sought by the creative industries. I pointed out that I suspected that that had happened because we were being a rule-taker rather than a rule-maker.

That argument was well demonstrated by the Minister, who, in a subsequent letter, made it very clear that the CPTPP was “a pre-existing agreement”, and therefore we have little choice in this matter. However, I have been heartened by a further paragraph in which he says that

“we intend to be a constructive member of CPTPP and will champion our values and priorities, including through the committees and councils set up by the agreement. Our ambition is to play a full role to strengthen the high standards of CPTPP”.

He goes on to say in a subsequent paragraph that our accession

“will not limit our ability to seek more ambitious agreements, including with CPTPP partners”.

All I would say to him is that I hope very much that we will look to find ways of improving some of the current IP protection arrangements within the CPTPP.

However, I wish to concentrate specifically on performers’ rights—an issue we debated at some length in our last session. I confess at the outset, first, that I will have to speak for rather longer than I would normally hope, and secondly, that I remain somewhat confused about what precisely the Government are proposing. I am not alone in that. I have talked to a number of organisations that are concerned about intellectual property rights and the Bill’s implications for those. They too are confused. If I have got things wrong, I hope the Minister will be able to correct me and give a clear enunciation of exactly what the Government are proposing in the Bill.

Much of this is based on the concerns of the music industry, although I acknowledge that the issue goes somewhat beyond it. It is worth just reminding ourselves that the UK music industry’s contribution to our economy is enormous: £6.7 billion last year, with exports from the industry generating £4 billion. It is an important industry and it is founded on the fact that in the UK we have an incredibly robust IP rights regime, which includes performers’ rights.

The issue is extremely complicated, as the Minister acknowledged during our deliberations in the last session. However, in terms of artists’ rights we are talking, predominantly but not exclusively, about broadcast performances. If a recording of a UK artist, composer, publisher or record label is aired on a UK radio channel, we know that royalties have to be paid via the collection agency PPL and then distributed via an agreed split between the various parties involved in that recording. If it is aired on a streaming channel, exactly the same applies, although the split may be different. However, if that recording is aired in another country, whether royalties get back to the UK depends on the deals that we have done with those countries. That might be through a free trade agreement or other international treaties, such as the Rome convention or the WIPO Performances and Phonograms Treaty—the WPPT.

Rights are often reciprocal but in some cases they can be limited. For example, Canada wanted to protect its small radio stations and capped the amount of money that they have to pay, so the amount that comes back to the UK is effectively capped. It might be supposed that the CPTPP Bill would deal exclusively with the arrangements for handling these issues between the UK and other CPTPP countries, establishing a reciprocal arrangement, just as we have done with other FTA deals. In a letter to the noble Lord, Lord Lansley, the Minister says:

“We intend to lay secondary legislation under these powers in Parliament in February 2024. This will make technical changes that are necessary, along with the Bill, to comply with CPTPP and other treaty obligations. The secondary legislation will include changes to the rights that are extended to CPTPP Parties and the performers who have a qualifying connection to those Parties. In circumstances such as these—where the UK has little or no flexibility in how it must implement its international obligations—it would be inappropriate to consult”.

I have no concern about that whatever. However, the Bill goes much further and, as the BPI says, makes significant and broad changes overall to copyright law.

In the CPTPP Bill, the Government are proposing to make changes to copyright law that would introduce obligations for performers and rights holders to receive payment for public performances in the UK of their music via equitable remuneration. This would appear to apply to either all countries or some countries. I hope that in his response the Minister will make it absolutely clear which performers and which countries are intended to be covered. At the moment, as I say, there is considerable confusion about this.

In simplistic terms, as I see it, the plan is to extend an agreement whereby we would effectively be paying royalties to other countries and performers where there is a performance in the UK of their recording, either of the individual performer or that country, even when we have no reciprocal arrangements with them and then, at a later stage, to decide whether or not to limit those rights as, for instance, Canada has done. This could have a significant impact on the UK, with a potentially significant loss of income. For instance, we have no reciprocal rights with the United States of America, yet, until some limits are potentially imposed at a later date, we will end up paying royalties to the US and to US performers while they will pay no royalties to us for UK performances in the United States.

In his letter to the noble Lord, Lord Lansley, the Minister says:

“UK law currently does not provide this right to some foreign nationals. The measures in the Bill will indirectly result in more foreign performers becoming eligible for the right. The government is considering whether to make further secondary legislation on the powers in sections 206 and 208 to modify how these rights are provided to foreign performers”.

In other words, at a later date we will consider whether or not to impose limits on those rights. The Minister says in the letter:

“This is a complex and significant policy issue. The government intends to consult publicly to inform its approach and ensure that it continues to support the UK creative industries and UK users of recorded music. We expect that consultation to be published very early next year, and we intend to implement the outcome of it in parallel with the coming into effect of this Bill”.

We have a situation where something that is incredibly complicated could have a huge impact on resources coming into the UK or, more likely, resources having to go out of the UK, yet we are going to find out the real outcome only when the Bill comes into effect. We have no opportunity other than perhaps this debate to discuss what is going to happen, so it is not unreasonable to ask why this is happening.

It appears—again, the Minister can correct me if I have got it wrong—that because there have been some challenges there is a view as to whether we are correctly abiding with existing treaty obligations and the Government have therefore decided to use this Bill as a vehicle to resolve these issues. There are many—BPI, for example—who do not believe that the UK has got anything wrong and see absolutely no need for this step. I am not qualified to make a judgment, but I am clear that seeking to right a potential wrong with countries outside the CPTPP member countries has frankly no place in this Bill and should be dealt with separately, as is perfectly possible. I hope that the Minister will explain why we are using this Bill to address an issue that does not directly impact on CPTPP arrangements.

One further point is that we have absolutely no idea what the impact will be. In his letter to me, the Minister says:

“We do not expect the measures in this Bill to result in significant direct impacts on UK musicians and UK record labels, or on broadcasters, public venues, or other users of music, in the UK”.

He acknowledges in that letter that

“changes will result in more foreign performers becoming newly eligible for rights in the UK”,

yet he still concludes:

“As such, we expect the direct impact of the measures in the Bill on the UK parties to be small”.

I hope that he can explain the justification for the conclusion that he has come to when we have had no consultation yet—it has not even begun—on these issues.

I have proposed Amendment 28, which requires that we publish an assessment of the impact of performers’ rights provisions in the CPTPP on qualifying individuals in the UK. The Minister has told me in his letter that his conclusion is that it will be minimal. I have no understanding of the basis of that justification and I look forward to the Minister’s explanation.

I am well aware that I have not given the most brilliantly correct analysis of the situation. Frankly, that is because I have come across no expert who can give me that explanation. I look to the Minister to clarify these matters beyond any future concerns people may have. I look forward to his response.

My Lords, this group of amendments includes a number of calls for reviews and impact assessments of the intellectual property chapter of the partnership agreement.

I have listened with interest to the case made by the noble Earl, Lord Clancarty, for Amendment 12 on artists’ resale rights. He rightly draws attention to the importance of Asian countries to the international art market. Amendment 28 from the noble Lord, Lord Foster of Bath, seeks an impact assessment of the implementation of performers’ rights in the CPTPP. Amendment 24 from the noble Lord, Lord McNicol of West Kilbride, seeks a review of the intellectual property chapter within one year, which seems too short a period. The noble Earl’s Amendment 12 also requires an impact assessment within 12 months, which, as several noble Lords have said, would be too soon. Amendment 28’s requirement for an impact assessment within three years seems more realistic and reasonable. I hope my noble friend will respond positively to it. I also look forward to his reply on the points raised by the noble Lord, Lord Foster, on performers’ rights.

On the intellectual property chapter, I was happy to learn that the concerns previously expressed by the Chartered Institute of Patent Attorneys about possible conflicts between that chapter of the partnership agreement and the UK’s membership of the European Patent Convention have been satisfactorily resolved. Can my noble friend confirm that?

My Lords, I thank the noble Earl, Lord Clancarty, and the noble Lord, Lord Foster of Bath, for speaking to their amendments. I will touch on my amendment in this group. The detail the noble Lord has gone into raises a number of questions, and the detailed answers he seeks will cover all the amendments in this group.

My amendment is very straightforward; we have further groups later on seeking reviews of the negotiation. I understand the point made by the noble Viscount, Lord Trenchard, about this being within one year, but we are in a very new situation with the CPTPP. Learning lessons quickly, both positive and negative ones, is crucial to our making correct decisions in future on FTAs and other negotiations.

Amendment 24 seeks a review within one year of the day on which the Act is passed. The Secretary of State must publish both

“a review of the lessons learned from the negotiation of the CPTPP Chapter on intellectual property”—

as we have heard, there are still a large number of questions outstanding there—

“and … an assessment of how this experience might inform negotiations of future free trade agreements”.

It is very straightforward.

Like others who have spoken before me, I have had a number of representations from UK Music and the Alliance for Intellectual Property. I seek clarification from the Minister of one of the points made by UK Music. There is a concern that the CPTPP parties are allowed to opt out of some of the IP provisions—for example, not recognising protection for the use of recorded music in broadcasting and public performance, which was one of the issues touched on earlier. The AfIP’s point was that

“the rush to join CPTPP may result in the embrace of IP”—

intellectual property—

“standards that are significantly weaker than those present in UK law”,

and thus cause growth issues.

I turn to geographical indicators, which may well come up in some of the later amendments and was touched on during our first day in Committee. There is a specific issue concerning the UK-Japan deal, which was rolled over. Geographical indication brand protection was promised in the UK-Japan agreement but was never delivered on. When the agreement was announced in October 2020, the then Trade Secretary, Liz Truss, promised that 77 specialist UK food and drink products would be guaranteed protected geographical indication status, alongside the seven that were then carried over from the previous EU-Japan trade deal. The former Department for International Trade said that the protections would be in place by May 2021 for all 77 new products. I will not list them all, although I am more than happy to. They included some iconic brands: Scottish beef, the Cornish pasty, Welsh lamb and Wensleydale cheese, to name but a few.

The DIT also boasted that, thanks to Liz Truss’s agreement, the UK would benefit from a fast-track process for securing brand protection that would not have been possible under the EU-Japan deal. It said that:

“The EU must negotiate each new GI individually on a case-by-case basis.”

The EU has added an extra 84 products to the protected list since October 2020, including 28 fairly recently, and the number of EU GIs with Japan now stands at 291, while the UK is still stuck with only seven protected products, which we inherited from the EU-Japan deal. Given this, can UK producers of geographically identified products be confident in the measures in the CPTPP, and is there any danger of the same occurring now with British food and drink products, putting them more at risk? Finally, will the Government revisit the UK-Japan agreement and deliver on those originally promised protections?

I thank noble Lords for returning to this important discussion of the various ways in which they are looking to improve our CPTPP Bill. I hope I can give them some good answers, illustrating my belief that we have a very good deal, the integrity of which we should try to retain as much as possible.

I think the noble Lord, Lord Foster, who is an expert on many things, said that he had yet to come across an expert who could clearly explain artists’ and performers’ broadcast rights. I am well aware of this, as are noble Lords. I will try to do so today but, given that no one has so far managed to do so convincingly, I hope noble Lords will allow me to write giving further clarification and useful examples and anecdotes. It is certainly a complex point.

The CPTPP brings to bear on the United Kingdom an additional series of obligations regarding performers’ rights. Currently, if you are a performer of, let us say, British nationality, and/or your performance is in the United Kingdom, you are entitled to the performance rights. The CPTPP looks at performances and rights in a slightly different fashion. In the instance of a performance taking place in a non-CPTPP country—which is where the controversy of this issue has arisen—it could qualify for artists’ performance rights payments if it was released or produced in a CPTPP country or if there was another necessary association with a CPTPP country.

That is quite relevant. In all honesty, nowadays, music and performances are probably released globally at any one time, as a result of which it is highly likely that many performances not previously covered by the performance rights legislation will now be, simply because of the fact of the activity. I should clarify that the proposal is not to give global rights to all performances under all situations to anyone in the world, which is sometimes how this is misread. Signing up to the CPTPP is sensible for us because it protects our artists around the world and in CPTPP countries, which is very important. This is an additional way of allowing for the qualification of artists, but it is not as specific as people suggest. I hope that I was accurate in describing how the new process works and that noble Lords understood it, but, as I said, we are happy to clarify it further.

The noble Lord, Lord Foster, was right to say that we have not yet done a consultation. We will undertake a consultation, and it will begin very shortly, possibly in the new year, and we look forward to it. We are taking this very seriously. It is not as straightforward a situation as people suggest. It is very important that the IPO have the time and the bandwidth to do that consultation. It will report back relatively soon, I hope.

I am told that there are mechanisms for abrogating the potential unintended consequences of this legislation, particularly given the UK’s position in terms of performance and the relationship with the United States’ music. I am very sensitive to the points made by many noble Lords and people in the industry about reciprocity and the importance of trying to make sure that, where possible, we leverage off the reciprocity opportunities to get the best possible deals for our artists around the world.

I hope that I have clarified the point, although this will result in further complication, since it does not necessarily make it easy to identify what the specific situations will be. I want to reassure noble Lords discussing this important issue today that there is a consultation plan proposal, which we are confident will yield some useful and interesting pointers, as well as amelioration opportunities if it is decided that this is the right thing to do. This is an open discussion, which I am very comfortable to have.

I turn to the subsidiary point about consultations. I firmly believe that a lot of the impact assessment amendments tabled on these trade Bills are intended to enable a debate about a concomitant point, rather than an impact assessment necessarily. To have an impact assessment after one year on any activity as complex as a free trade agreement seems completely unhelpful, so I thoroughly recommend that, if noble Lords are going to table amendments under the cover of an impact assessment to allow broader debate, we say two or five years, which the Government believe is the right amount of time. We will do an assessment and review of the treaty after two years, and we have committed to doing one after five years. I personally think—I am not going against government policy by saying this—that even two years is a very short period in which to see the impact of many of these actions, but I accept the fact that in some instances, we are looking at the processes that led to the action itself.

I entirely take the point the Minister is making about the timescale for an impact assessment. Yet before we have even had the consultation on performers’ rights, the Minister is claiming that the impact will be minimal. I have not yet heard from him the justification for that claim. Also, while I am on my feet and to save interrupting him a second time, can he be absolutely clear that the details of the consultation on performers’ rights to which he referred will be available prior to your Lordships debating the Bill on Report? If we do not have those details and a clearer understanding of what is in the consultation and the implications of the Bill, we are put at a huge disadvantage.

I am grateful to the noble Lord for pointing out that I am already talking about the impact, while also saying that we should not have an impact statement after one year; however, I do not think that that is fair. We are trying to have a broad gauge—is this a significant, multi-million-pound issue that needs to be confronted with urgency, or a relatively manageable amount of capital change? The instance we are looking at is not significant in relation to the music industry overall—it was a few tens of millions. I do not have the figure in front of me, but the noble Lord will understand.

That is the reason why we are having a consultation. Our estimate implies that it would not result in significant distortions of the music market in this country. Remember, this is for broadcast media. It does not include streaming, which is how most people access their music at the moment. It will result in additional artists being included, but many artists already are.

We should be aware that we often talk in these debates about the issues facing us—it is always about us. I would like us to look at the opportunities our artists will now have in terms of being protected. British music is the greatest in the world, and among the most popular. The Beatles are at No. 1 again; that must mean something. All the great bands are reforming to take advantage of these new benefits of CPTPP and the enormous revenues they may be paid, so something must be working. We should not lose sight of that. I think that my noble friend Lord Cameron of Chipping Norton told me that Blur are getting back together again. He will know more about it than me.

This is a very important issue. We must not lose sight of the fact that on the whole, these measures tend to result in additional protections which did not exist for our artists in many of these countries. That is very important. We can get lost in the detail. I am not saying that the detail is not important, but we should keep things in perspective. I cannot answer the question from the noble Lord, Lord Foster, about when the consultation will be completed. It is unlikely that we will have the consultation back by Report, which is hoped to be the second or third week of January. I am aware of the time constraints and recognise noble Lords’ comments, but we will continue to work together to find a good solution. I am extremely comfortable having further conversations with the noble Lord and other interested Peers on how we can delve more deeply into this subject. I am very sensitive to the fact that we are trying to come to the right conclusion.

Turning to some of the other key points, the noble Earl, Lord Clancarty, made a very fair comment on artists’ resale rights. We have tried to propagate this position. It is a new concept globally and so far, 90 countries have taken up the opportunity to employ artists’ resale rights. Unfortunately, very few CPTPP countries deploy ARR in their legislation. The noble Lord was right to mention Mexico, and Peru is similarly beginning the process. However, it is at an early stage and has not functioned in a way that is advantageous to our artists, so while the systems have been set up, they have not started to yield the payments we were hoping for. Therefore, we are not in a position to introduce ARR into the CPTTP, because many of the countries simply do not have that legislation to hand. It would therefore not be appropriate for what is a collective multilateral treaty that we are joining.

The noble Lord rightly asks about our strategy. I am happy to come back to him on our plans for continuing engagement, but he should be reassured that we specifically negotiated this in the Australia and New Zealand free trade deals and that we are in negotiations with Japan to see how we can implement that.

The noble Lord, Lord McNicol, asked about Japan and geographical indications. I cannot make a significant comment in reply, other than to point to our commitment to continue negotiations on this. It was a very important part of the initial negotiations and the Secretary of State at the time was determined to ensure that these principles were magnified. I, my officials and the trade team will be happy to reassure the noble Lord, I hope, that we are moving forward.

I hope I have covered the questions raised. My noble friend Lord Trenchard kindly supported me with his point about impact assessments and timeliness, for which I am grateful. He also raised specific questions which I will answer in writing.

My Lords, I thank the Minister for his reply on my amendment, which I found reasonably reassuring. As far as I can see, the Government are moving in the right direction on this. Time will tell by how much and with what enthusiasm they can persuade other countries to reach reciprocal agreement with us on this important right. I detected a suggestion for a possible meeting about this with interested parties; that would be really helpful.

On the other hand, I think many of us are much less convinced on the other concerns, particularly those about performance rights raised by the noble Lord, Lord Foster. He asked whether we could have the consultation before Report. It is really important that the consultation precedes any secondary legislation. The Minister has said that that legislation is technical, but the experts, including the Alliance for Intellectual Property and people in the music industry, say that we cannot be so sure what the effect will be of widening rights to foreign rights holders. We are asking the Government to tread carefully, and not recklessly in a way that will damage the UK’s creative industries. The principle of reciprocity is paramount, as the noble Lord, Lord Foster, pointed out. It should be a guiding light. Crucially, stakeholders need to see precisely what is intended to be in the secondary legislation before it is made. As we know, once secondary legislation comes before the House, it is too late to change anything. With that, I beg leave to withdraw my amendment.

Amendment 12 withdrawn.

Amendment 13

Moved by

13: After Clause 5, insert the following new Clause—

“Review: inward investment into the United Kingdom(1) A Minister of the Crown must publish a review of the impact of the implementation of the CPTPP Chapter on investment on inward investment into the United Kingdom.(2) The review under subsection (1) should include a consultation of such persons the Minister of the Crown considers appropriate.(3) The review under subsection (1) must be published within 12 months of the passing of this Act and every 12 months thereafter.”

My Lords, it is a pleasure to take part in this second day of Committee on the CPTPP. In doing so, I declare my financial services interests as adviser to Ecospend Ltd and LEMI Ltd.

I will speak to Amendments 13 and 14 in my name. I also give a nod to the other amendments in this group and look forward to their introduction by noble Lords. In short, the purpose of my amendment is rooted in one simple premise: we need to increase our cross-border trade in financial services with other CPTPP nations. We have an extraordinary opportunity to do so. Chapter 11 of the CPTPP sets out the financial services requirements in the treaty and, as in any treaty, we need to play to our strengths. Financial services are obviously one such strength.

If I could have got it within the scope of the Bill, my amendment would have talked about strategies rather than impact assessments, because that is ultimately what we need here. However, for the purposes of these amendments, we are limited to impact assessments. In many ways, this is a development of many of the discussions we had on the Financial Services and Markets Bill 2023, not least what we achieved in your Lordships’ House in pushing through the international competitiveness secondary objective for the regulator. These amendments fit squarely with that intention and what we can achieve internationally with our financial services firms and ecosystem.

Turning to the specifics of the amendments, Amendment 13 looks at financial services and the potential for an impact assessment to see how our joining CPTPP can positively affect increased cross-border trade in financial services. The domestic barriers which currently frustrate this trade are set out in Annexe 3 of the treaty. Can my noble friend the Minister say something about the approach the Government intend to take to the removal of those current domestic barriers?

That naturally takes us on to the role of the regulator. We undoubtedly have some of the world’s finest regulators, not least in financial services. However, it is important that we look at how to develop their role, not least by looking outwards at what role they can play in the further development of the international regulatory landscape, a potential greater reduction in friction, and greater harmonising of the approach of the regulatory landscape for financial services internationally across the CPTPP nations.

Similarly, the amendment sets out the important issue of mutual recognition of professional qualifications in financial services. Let us consider the simple example of a loss adjuster having to go from London to, say, a disaster area, and remember the terrible events in Christchurch, on New Zealand’s South Island, and the important role the UK insurance market played in the aftermath. Importantly, to take one example, mutual recognition of professional financial services qualifications for loss adjusters would help to remove friction, resolve difficulties and get the best results for all concerned, particularly in traumatic situations and during the subsequent rebuild.

Amendment 14 looks at inward investment. In many ways inward investment and cross-border financial services trade are two sides of the same coin; again, our financial services regulator can play a significant role here. As a result of joining CPTPP, we can consider something others have mentioned—and I agree with the description: the need for a “welcome mat” for any individuals, institutions and businesses that wish to come and invest in the UK. We need a one-stop shop, so they do not have to find their way through various bits of the Whitehall machinery or put together their own plan to consider all the elements they will need to set up and invest in the UK. Rather, we need a dedicated inward investment team in Whitehall which can deliver on this need. We need our trade envoys—our trade commissioners—to be very much up to speed, in real time, with all the opportunities for inward investment in the United Kingdom.

If we needed any further convincing, other nations are, understandably, well on the way to achieving this. One example is Singapore and the work of the Monetary Authority of Singapore. What it is doing is impressive, and we can and must do something similar. Does the Minister agree that the concept of a “welcome mat” would be greatly welcomed by the Government and would increase inward investment as a result of our joining the CPTPP?

The CPTPP is a dynamic treaty—a dynamic document. We have various means of influence to bring about a positive impact for our financial services ecosystem, in both cross-border financial services and inward investment. I hope that, as a result of this treaty and these amendments, that will only be increased and that, when the Minister comes to wind up, he will be increasingly supportive of these amendments.

I have a final point: there is an obvious slip of the drafting pen, which I realised and now realise even more. On the timing for any of these impact assessments, I obviously meant to write “two years” rather than “12 months”, but I think that is self-evident in the coding of the drafting. With that, I beg to move.

My Lords, I rise to speak to Amendment 15 in my name, and I support other amendments in this group, notably Amendment 16 in the name of my noble friend Lady Willis of Summertown, as well as Amendments 18 and 29.

I am grateful for the support of the noble Lords, Lord Randall of Uxbridge and Lord Goldsmith of Richmond Park, alongside my noble friend Lady Willis, for Amendment 15. My intention in tabling it was twofold: to understand how the Government expect the CPTPP agreement to operate in the context of the commitments that they have made on forest risk commodities and how they will ensure robust monitoring and enforcement with the new countries that we will trade with in that bloc and, linked to this, to query when the Government will enact the forest risk commodities regulations under Schedule 17 to the Environment Act 2021.

On the latter point, I welcome the announcement at the weekend by the Environment Secretary on some of the content of the regulations. The letter that we received from the noble Lord, Lord Benyon, yesterday said that they will be brought into force as soon as parliamentary time allows. These announcements suggest that the regulations are imminent, so I hope the Minister can now clarify for us exactly when they will be brought in. Will it be January, before he comes back? If he cannot tell me that, can he confirm that the regulations will at least be in place before we accept the rest of the agreement? That is a crucial point.

It is critical that this happens as soon as it can, not least because, following the Financial Services and Markets Act earlier this year, in response to an amendment passed by this House, the Treasury is required to assess the extent to which regulation of the UK financial system is adequate to eliminate the financing of prohibited forest risk commodities. This review can happen only after the regulations in Schedule 17 are laid.

Moreover, the Environment Act received Royal Assent over two years ago and the consultation on this research closed over 18 months ago. In the meantime, Global Witness’s research in November showed that the UK’s direct imports of forest risk commodities such as beef, soy and palm oil directly contributed to areas of deforestation nearly twice the size of Paris. This has happened during the Government’s two-year delay. In that time, the EU has introduced its own rules, which have much wider scope, and has really moved forward with some ambitious thresholds.

This is important and relevant to today’s debate, because evidence shows that some countries that are parties to the CPTPP may engage in both illegal and legal deforestation. Indeed, although Schedule 17 regulations need to be implemented quickly, because we do not yet have any environmental requirements for what is imported, they are not perfect. They cover only illegal deforestation at the moment, which would not address the risk of the whole CPTPP treaty incentivising the production of deforestation risk commodities in countries where national laws are not sufficiently robust on deforestation or the rights of indigenous peoples, as was the situation in Brazil, as we knew, and is certainly the situation in Peru, from where we import quite a lot of stuff.

Will the Minister comment on how his department has reviewed this risk and what action we, the UK, will take to minimise it under the new agreement? With the Schedule 17 regulations expected imminently—but, as I said, I am looking forward to the clarification—could he also confirm that any forest risk commodities prohibited by the regulations will be prevented from entering our country, and how? Without having sight of these regulations, it is unclear how they will interact with the provisions of the CPTPP, which is what my amendment is aiming to clear up. Also, can the Minister confirm that, if these regulations are expanded or strengthened in the future, the agreement will not prevent the implementation of strengthened regulations? It is critical that we ensure that UK trade does not contribute to global deforestation, whether legal or illegal, but especially not illegal.

Turning to other amendments in the group, I am very supportive of Amendment 16, to which I have added my name. The health implications of some of the pesticides used in many of the countries party to this treaty are truly appalling. If anyone wants to go online and look up what kind of things will be coming in on fruit and veg and other products, they will find it scary. In Britain, when we were in the EU and still today, we had and have rigorous rules in place to prevent our children and ourselves having access to these pesticides, which are carcinogenic, affect fertility and do all sorts of weird and awful things. This is something that we have proudly fought for and should proudly uphold. Anything that allows stuff to sneak through under the wire has to be stopped; otherwise, it is not just a question of what it will do to our health but also completely undermines our high farming standards, which we all agree are terrific and have to be maintained.

I am also very keen that we support Amendment 18 on the assessments and procurement provisions, particularly in the Bill. That is something we should do for every trade agreement—and we should always go further and do comprehensive environmental impact assessments on detail, so that we understand our footprint. I will be very interested to hear the Minister’s response to the amendments proposed by the noble Lord, Lord McNicol.

Notwithstanding the TAC’s limited resources, it has a really narrow remit and is not tasked to do this. I hope I have made clear the importance of understanding the climate and environment footprint in joining the CPTPP, as well as the health implications, which the noble Baroness, Lady Willis, will outline in a second. I look forward to hearing what plans the Government have.

I shall speak to Amendment 16 and to Amendment 15 in the name of the noble Baroness, Lady Boycott, on which we have just heard her speak. I am grateful for the support of the noble Lords, Lord Randall of Uxbridge and Lord Curry of Kirkharle, as well as the noble Baroness, who have added their names to my amendment.

In introducing my amendment, I pay tribute to Amendment 34, in the name of the noble Lord, Lord Davies of Brixton, on mitigating risks to the environment of food safety, which I support as highly relevant to the amendment that I have tabled and will talk about briefly today. Amendment 16 would ensure that the pesticide testing regimes at the UK borders are fit for purpose, when we have an increased number of food stocks for animals and humans arriving from CPTPP member countries. It specifically aims to ensure that our testing regimes are robust enough to monitor and prevent those foods that have these pesticides on them—because they have been used in the production of the food type—entering the countries.

As the noble Baroness, Lady Boycott, just said, our UK pesticide standards are some of the strongest in the world, and we should be very proud of that. In fact, they are stronger than those of all other CPTPP member countries. If noble Lords have not seen it, I recommend the Toxic Trade report, published in 2021 by the Pesticide Action Network. It revealed that 119 pesticides were banned from use in the UK but were still permitted in CPTPP member countries. Even more worrying than this, 67 of these are classified as highly hazardous pesticides, a UN concept that identifies pesticides that cause significant human harm.

I shall give two examples from when we ask whether we are over-worried about significant human harm. The first is Chlorpyrifos, an insecticide. To give noble Lords a hint of its problems, it was originally developed as part of a family of nerve agents during World War II and is now one of the most toxic and widely used pesticides globally. It is used by our CPTPP partners in Australia, Chile, New Zealand and Peru. What does it do? It has been identified through scientific research as a developmental or reproductive toxin. I checked through the good research on this, which demonstrates that it can permanently and irreversibly damage the developing brains of children. It is also a suspected endocrine disruptor, which means that it may interfere with the body’s hormone functioning. It is a cholinesterase inhibitor, which means that it may interrupt normal nerve signalling in the body. For all these reasons and due to this scientific evidence, it was banned by the UK and the EU in 2019.

The second example is Carbaryl, another insecticide still used by a number of our CPTPP partners. It is a carcinogen that has all the potential health effects I have just listed and was banned by the UK in 2007 because of them.

However, we were promised that we would maintain our standards at the borders and that these things would not get through. This reassurance was given to us by the noble Lord, Lord Cameron of Chipping Norton, in his very good maiden speech as Secretary of State. He said of the Bill:

“Will it lower our own high standards on food and product safety, animal welfare, the environment or workers’ rights? No”.—[Official Report, 21/11/23; col. 675.]

He suggested that our quotas and transitional safeguards would be negotiated for agricultural imports. The problem is that we have a two-tiered system at the border for any foods that come in. The first, which I think everyone will be happy with, is mandatory testing via border control. The second is risk-based surveillance run by the port authorities. I give this detail because we have lost sight of this, despite a lot of the promises we hear about how it will all be fine at the borders.

Mandatory sampling is part of retained EU law. It requires certain countries’ commodities, such as beans from Kenya, to be added to the regulator’s annexes. That means that these products have increased paperwork such as export health certificates. Critically, a percentage of the product is tested at the border and, if the shipment exceeds those levels or has any of the pesticides I have just listed, it will be rejected. Another really important point is that the local authorities under which the border control operates can apply directly to the Government for funding for this.

That all makes sense, and I would be reassured if we were just using that system, but we are not. The second system, risk-based surveillance sampling, is applied to all food imports that are not in the annexes. This is a desk-based process. Officials go through case studies and use a WTO alert system, but there is no mandatory requirement for testing the foods that come in via that system. Even worse, local authorities are required to take the money out of their own budgets to test these products in this risk-based surveillance. Who will say, “Let’s prioritise testing wheat from Australia over social care or refuse collection”? It will not happen, and there is a lot of evidence to show that it is not happening.

The question is this: which route will potential CPTPP food and feedstocks coming into the UK go through? This is where the problem really emerges. The vast majority of agricultural imports coming in via CPTPP member countries will go through the risk-based surveillance system, not the mandatory testing system. In fact, only six crops are currently on the annexes, out of all those 119 pesticides that I mentioned, including some herbs from Vietnam—coriander, basil, mint—and Vietnamese dragon fruit. That is it. As things currently stand, everything else will go through the risk-based system, with the problems that I have highlighted. This is extremely serious, because the vast majority of foods being grown in these environments will come into our country with no testing.

These are not random, bizarre things that we have never heard of. They will include grapes—which come in from Australia, Chile, New Zealand and Peru and are grown in environments that use Chlorpyrifos—and wheat from Australia and Canada which is grown in environments using Carbaryl. That list of effects I mentioned earlier is what they do when they get into the human food chain.

With Amendment 16, I have tried to put in place a system to tighten up this review process at the border. It requires the Government to review this dual system for testing banned pesticides at the border and, when a potential risk is identified, to move those risks on to the annexes so that mandatory testing becomes part of what we do and we do not allow these pesticides to come into our country. We urgently need this. Going through the literature and the scientific evidence base has made me think that I will not buy some of the products from these countries, given the risk of the pesticides they will have on them. This is a very serious issue. We wrongly assume that our border control checks are currently fit for purpose. They are not and we need to look at this.

We have heard some assurances from the report of the Trade and Agriculture Commission on 7 December that this trade will have no adverse effects. I do not know where it got that from, but we should also note that it states

“the mere fact that CPTPP will increase imports from a variety of countries raises the question of whether it will have an impact on that regime”.

It notes that the increase of food sources coming in may well overwhelm the border control checks. That is a really important point.

I hugely support Amendment 15, tabled by my noble friend Lady Boycott, on deforestation. These forest risk commodities pose huge threats to biodiversity and our carbon drawdown. They also pose a risk to indigenous communities, as many of them come from areas where there are indigenous and forest people. There is so much evidence of dispossession of their collective customary lands, territories and resources in a number of CPTPP countries, including Peru, Mexico and Chile. The evidence base is strong. I hope the Minister can reassure us that recognition will lead to action and agrees that this amendment provides the Government with the opportunity to ensure proper monitoring and protection of these indigenous people’s rights. I look forward to his response on both amendments.

My Lords, I am delighted to follow the noble Baronesses, Lady Boycott and Lady Willis, since my Amendment 27 follows on neatly from the thinking behind Amendments 15 and 16, introduced so eloquently by them.

Clearly, I made a slip of the pen when I asked a Minister of the Crown within 12 months—for which read “24 months” or longer—to publish an assessment of the impact of the implementation of the CPTPP chapter on government procurement on environmental protection, animal welfare, health and hygiene. My noble friend was very kind to take me for a cup of tea to discuss these issues on previous legislation, so he is well versed in my concerns here.

Amendment 27 is meant as a probing amendment to ensure that there are not just opportunities for fair, better trade between the CPTPP block and the UK but that we are mindful of what our consumers want and what our farmers are being asked to deliver: high food safety and high food production standards. My probing amendment seeks a commitment and a reassurance from my noble friend that those high food production standards required of UK farmers and insisted upon by British consumers are met equally in these imported products. It also asks at what point, as the noble Baroness, Lady Willis, insisted, these products imported under this Bill will be checked at the external borders.

Why is this of concern and why is it necessary? The Government’s own advisory body—the Food Standards Agency—and Food Standards Scotland go into some detail in this regard in their latest annual report, Our Food 2022. I will not rehearse exactly what the noble Baroness, Lady Willis, said, but she was very clear that there are effectively two different schemes. One is the EU, which, the report says,

“still accounts for two-thirds of all food and feed imports, and 80% of all meat and other products of animal origin”—

that must be true because it is from the FSA. It continues:

“All food and feed imported from outside the EU is subject to a series of checks to make sure it is safe. The type of checks carried out depends on the type of product and the level of risk it may pose to public, animal and plant health”.

Then, of course, there is the category of the Windsor agreement—I accept I do not fully grasp it but my noble friend will be much more familiar with it. For the purposes of this afternoon, what concerns me is what the FSA focuses on at page 49:

“Currently, all food and feed of animal origin coming from outside the EU is subject”—


“to documentary checks (which confirm that appropriate documentation is supplied)”.

Therefore, we are entirely taking as read what the exporting countries are saying. The identity checks will only

“confirm that the product matches the documentation”,

and, as the noble Baroness said:

“Additional physical checks are carried out randomly on a pre-defined percentage”.

To me, that leaves a bit of risk.

The FSA and FSS go on to say:

“Overall, non-EU imports have remained largely compliant with import checks compared with”

the year before—2021—so they are saying that there is not any significant fallout. However, the FSA

“recently commissioned the food consultancy ADAS to identify measurable metrics and data sources for imported food production standards that might be used to give the public a fuller picture”.

The ADAS report highlighted three specific points, which I think are of concern this afternoon:

“A general lack of publicly available data and issues with the quality of the limited data available … A lack of measurable metrics or clear approaches to measure or monitor them”,


“The absence of frameworks to evaluate production standards”.

The FSA and FSS conclude:

“Although the current system of border checks gives us assurance on food safety, there is no similar system for food production standards. Being able to assess the production standards, like animal welfare or environmental standards, of imported food on a comparable basis to UK food, is essential if we as watchdogs are to be able to assess whether the food standards of the food the UK consumes has been maintained”.

That is the fundamental issue that Amendment 27 seeks to address.

I accept that the NFU regards this as a more modest and measured agreement, focusing on market access by removing trade barriers, which highlights opportunities for exporting UK products that to a high proportion have hitherto not been possible. I have not been able to find the details, but I understand that there has been an announcement of more agricultural attachés, which I applaud. The first one, which was appointed in Beijing a number of years ago, has had substantial results. We are way behind the Danes and other countries in this regard, so we are finally catching up, which is very good news indeed.

I conclude with a very simple question for my noble friend. Does he believe in his heart of hearts that there is enough in the Bill and its supplementary provisions to ensure that our consumers and our farmers, who adhere to the highest standards of food production, environmental protection and all the other things that this amendment would enhance, will not meet unfair competition from imported products from the countries that are party to this agreement?

My Lords, I will speak briefly to Amendments 25 and 30 and then touch even more briefly on Amendments 13 and 14.

Amendment 30, which will shortly be spoken to by the noble Lord, Lord Purvis, calls for a parliamentary debate on a CPTPP impact assessment. This is really important, because the influence of this House is not in the big decisions we take but over the Government—although it is too late when they have already signed a treaty—and the House of Commons. Although we do not normally tell the House of Commons what to do—I am sure the noble Lord, Lord Purvis, chose his words very carefully—in this circumstance it is really important.

In addition to the impact assessment, the International Agreements Committee, which the noble Lord, Lord Kerr, and I sit on, will also write a report on the treaty. We can get that to influence the real decision-makers down the Corridor only if this amendment is agreed and we ensure that a debate happens there. The request for an impact assessment is a nice little segue into a debate on our report as well. By concentrating on the wider impact assessment, it also allows a wider range of issues to be considered, such as prices. Nobody ever talks about the impact of these agreements on prices. We hope that and other issues will be very good for consumers but we need to see that, so a debate will be important.

Amendment 25, which my noble friend Lord McNicol will speak to, requests an impact assessment on labour and ILO standards. This is key. We want this and any other FTA not just to maintain but, we hope, to bolster ILO standards—not just through paper adherence but enforcement. I think we all agree that trade is good for jobs, consumers, our exports and the economy, but that must not be at any price. It cannot undermine any ILO standards. Indeed, I hope it will enable us and others to be rather more observant of them.

Very briefly on Amendments 13 and 14, I strongly concur with the noble Lord, Lord Holmes, about the importance of increasing investment. As I will make a wider point, I declare that I am a leaseholder and am on the board of the ABI, but I bring to the Committee an issue of core importance to prospective overseas investors that I have read about in the financial and specialist press rather than know about through any personal connection. In a completely different part of government, there is an attempt, with leasehold reform, to make retrospective legislation to reduce ground rents to peppercorn rents. That is very attractive for lots of people, but there is a real clash with the desire to increase overseas investment via the CPTPP, because many overseas investors—to say nothing of our domestic pension schemes—are concerned about non-compensated loss of property rights or contracts if their ground rents are suddenly taken away from them retrospectively.

That retrospective nature could undermine the Government’s welcome attempts to get more international investment into the country, because the attractions are not just over trade agreements such as this but over all the other things that we know we are known and valued for: stability, certainty and the rule of law. That needs to go hand in hand if the objectives of this deal are to be taken into account.

That was a little off-piste, but I could not resist it. My real point is that we need to know far more at a more granular level and after the event about what this agreement has produced. That needs to be debated in this House and elsewhere so that the influence of, in particular, my colleagues and the specialists we have heard from, who put so much into this, can be heard at the other end of the building.

It is a great pleasure to follow the noble Baroness, Lady Hayter, who was an extremely effective chairman of the International Agreements Committee. I have only two points.

First, in response to overwhelming demand across the Committee, I have agreed to repeat the extraordinarily boring technical point I made in our first day in Committee about deadlines. The majority of the amendments in this group set deadlines that hang on the passing of the Act. I respectfully suggest that what matters for reports is the date on which our accession takes effect. That might be in the course of next year—I hope it will be—but that is not certain. Some of these amendments would call for reports almost certainly before we have actually acceded. Accession takes place when the last ratification is received by the depositary power, so the right peg to hang it on is not the passing of the Act, which permits us to ratify, nor our ratification, but the 12th ratification, which allows us in. I know that these are mostly probing amendments, but I suggest to their drafters that it might be a good idea to use the peg of our actual accession rather than the passage of the Bill. I exempt some of the amendments in this group; this is only for the ones that hang on performance and how it is working out, because it would be well for us to be in before we require the Government to report on how being in is working out.

Secondly, I am a little concerned about Amendment 32— the accession amendment in the names of the noble Lords, Lord Purvis of Tweed and Lord Foster of Bath. It would require the Secretary of State to produce

“an impact assessment of the impact on the United Kingdom of the accession of countries that have submitted a request … to accede to the CPTPP within the last five years”.

That would include us; it would be jolly useful to have an impact assessment for us, but I do not think that is the purpose of the amendment. The deadline is

“within three months of the passing of this Act”,

which is the wrong deadline, for the reason I gave.

However, my point is more substantive than that. Apart from us, there are six countries whose applications to join the CPTPP have been received in the last five years: Ecuador, Costa Rica, Uruguay, Ukraine, China and Taiwan. The rules of the game, of course, are that consensus is required before a negotiation starts with any applicant country and consensus is required before a negotiation is closed, completed, and then the ratification process starts. It is also the case—not so much in our case but in previous cases—that there have been a lot of side letters and deals done in the margins of the main accession negotiation.

It is misleading to call for an impact assessment of what would be the impact of the outcome of any of these six negotiations. One cannot do that now. A very good moment for dialogue with the Government would be when CPTPP was considering whether to open negotiations. It seems that three months after the passing of the Act, one simply does not know. I add, on a personal basis, that I do not think that six negotiations will start in the foreseeable future. The applications of three of these countries pose serious political problems. In one case, there will be an enormous change to the nature of the CPTPP if the accession took place—a change that I think would be undesirable and, I believe, a majority of members think would be undesirable. There are, however, two other cases where considerable political problems arise.

Setting early deadlines and calling for the Government to go public with their analysis, which would in fact present the Government’s negotiating position, would be unwise. I do not think that we should ask our Government to go on the record in advance about a hypothetical negotiation which, in my view, in three of the six cases is unlikely to start in the foreseeable future. The Government would not be wise to act on that requirement, so I hope that they will resist that requirement—or, rather, I hope that the noble Lord, Lord Purvis, will have second thoughts about Amendment 32.

My Lords, I speak first to Amendment 35 in my name. The Government are keen to strike deals with countries with which we have not previously had economic trade, especially in farming. While it is important for the economy of both countries involved, it is also important to ensure that our UK producers, farmers and industry are not disadvantaged by these trade deals. A published impact assessment is essential for public confidence to be maintained.

Currently the UK farming industry is undergoing a period of considerable change. It is being weaned off the basic payment scheme, which was based on the amount of land owned, and on to ELMS, which should see greater benefits for the environment and biodiversity. Both these steps will eventually be good, but the current state of flux around the funding under ELMS is unsettling at a time when the BPS is being phased out quite rapidly, as some farmers believe.

Our UK farmers produce their crops and raise their animals to extremely high standards. These standards are not necessarily replicated in other member countries of the CPTPP. Sow stalls, which are banned in the UK, are used by CPTPP members. This is just one example where, if the British public were aware of it, it would lead to an outcry. The animal and horticulture imports that are likely to come under the new trade deals may have been exposed to pesticides and fertilisers which are banned in this country—I will speak more on this later. These imports will have been produced at a lower cost than the UK farmer can meet, and our farmers will be at a disadvantage as a result of being undercut.

There is an impression among some people that farmers are all wealthy landowners. This is not the case. There are many smaller farmers who struggle to make a decent living out of the land. In the days before universal credit, I knew a farmer who earned so little from his land that, had he chosen to claim, he would have been entitled to income support.

The price of food is important, especially when households are making choices about food or heating through the winter months. However, a healthy, nutritious diet is vital to everyone, especially children, if they are to thrive. A fair price for the food that farmers produce is essential if farmers are not to leave the land, which, in some areas, would then be snapped up for pony paddocks by those who are better off.

Farming is not an easy career choice. It is a way of life. Whether you are a large farmer with lots of staff, or a single-family farmer, someone has to get up in the dark and cold at this time of year to tend to their stock, often not finishing until late in the evening. The Government should be supporting these men and women and ensuring that they are able to continue to manage the land and their crops and herds for the benefit of the whole country. The farming industry should not be undermined by imports of an inferior quality. A farming impact assessment should be conducted for any trade deal as a matter of urgency, but especially one set up under the CPTPP.

I speak in support of Amendments 15, 16 and 27, in the names of the noble Baronesses, Lady Boycott, Lady Willis and Lady McIntosh of Pickering, respectively. The noble Baroness, Lady McIntosh, has detailed her arguments in support of Amendment 27 for an impact assessment for environmental protection, animal welfare, health, and hygiene under CPTPP procurement. I support her comments. Amendment 15 looks for protection for trees and the prevention of deforestation. In a letter received yesterday from the noble Lord, Lord Benyon, on Government’s measures to alleviate and prevent deforestation—which are welcome—he said that deforestation is now the second leading cause of climate change globally, after the burning of fossil fuels, and is responsible for around 11% of all greenhouse gas emissions. He said that forests host around 80% of the world’s wildlife on land and are home to many species found nowhere else—and it is therefore really important that we tackle this issue.

The loss of habitat for animals and homes for indigenous people is progressing at an alarming rate. Everything that can be done should be done to prevent further loss. I fully support this amendment and look forward to a positive response from the Minister, as requested by the noble Baroness, Lady Boycott.

Amendment 16 deals with sanitary and phytosanitary measures on contamination from pesticides in food and feed of plant and animal origin, which is dear to my heart. During the passage of the agriculture and environment Bills, I and the noble Lord, Lord Whitty, spoke about the need to regulate the use and type of pesticides on agricultural land, especially near centres of population where children might be playing, such as school playing fields. I have considerable concerns that goods will be imported into the country which will have been contaminated by pesticides, the use of which is not permitted here. As the noble Baroness, Lady Willis, has said, 119 pesticides that are banned in the UK are permitted across CPTPP members for agricultural use. A large proportion of these are deemed extremely hazardous and some are known to kill bees. The noble Baroness, Lady Willis, has given details of the effects of these pesticides, and they are pretty drastic.

I acknowledge that it may be difficult to pick up residues of these pesticides, but surely this is what border control is all about. As the noble Baroness, Lady Willis, so eloquently explained, alongside risk-based surveillance we need border control to take extra steps. Both checks are needed before food and feed enter the country and into our domestic food streams. I support the need for a published report on this matter within 12 months of the passing of the Bill, followed by a yearly update thereafter.

Those who have spoken on these measures are extremely knowledgeable and understand the risks for our own safety and that of our animals. Border control is clearly not fit for purpose at the moment. I fully support the comments of those who spoke before me, and I look forward to the Minister’s positive response.

My Lords, I wish to return to our invisible trade and speak in support of Amendment 13, on inward investment, and Amendment 14, on financial services trade, tabled by my noble friend Lord Holmes. I declare my interests as an employee of Marsh Ltd, the insurance broker.

There are significant advantages of being part of CPTPP in its early stages and being able to influence the shape and development of many aspects of the treaty, in particular financial services. To get the most from membership, we need to develop trade strategies that play to our economic strengths and ensure that we are working to remove barriers to cross-border trade that could benefit the UK.

I will take the two amendments in reverse order—it may be my upbringing in Ireland. The assessment proposed in Amendment 14 would inform a strategy about how the UK Government, working with our regulators, could seek to expand partnerships with CPTPP markets and address market access barriers, which would expand growth opportunities for UK financial services. In particular, the assessment should look closely at the regulatory barriers within certain CPTPP countries. They are set out within Annex III of the treaty, which lists the domestic barriers to cross-border financial services trade.

We need to consider how we can reduce those barriers, to the benefit of both the UK and our new partners. For example, the Government have rightly identified Malaysia as a crucial trading partner. Malaysia is much in need of the kind of support our world-class financial services businesses can offer. The London insurance market could play a major role in helping the country to protect itself against the increasing threat of cyberattacks. Malaysia has fallen victim to an increasing number of such attacks. Indeed, 62% of Malaysian businesses have put off digital transformation efforts due to fear of cyberattacks.

The UK’s commercial insurance industry is made up of global innovators when it comes to protections against these risks. However, Malaysia has an extremely protective, complex and restrictive insurance regime to be navigated before permitting offshore reinsurers to be offered a risk. Many other CPTPP countries operate with differing restrictions, making it hard for UK markets to trade. Reducing these barriers would help treaty countries such as Malaysia to reinsure their risks through London and out of the country, taking advantage of the global insurance capital that London can access and thereby gaining better protection by spread of risk. It is not just cyber risk; we can help protect from a myriad of other exposures as well. These are the opportunities that are on offer, and Amendment 14 would give us a plan and a set of priorities to consistently pursue.

I turn to Amendment 13. Growing cross-border trade and encouraging inward investment are two sides of the same coin. We must ensure that the UK is a welcoming, agile, easily navigable place to do business, and use the opportunities that agreements such as CPTTP bring to really sell what the UK has to offer to our trading partners.

My noble friend Lord Harrington’s review of foreign direct investment is a very welcome addition to this debate. His recommendations for a business investment strategy, for our regulators to be much more focused on inward investment, and for a consistent government strategy towards encouraging investment are all applicable to financial services and would greatly enhance our offer to CPTPP investors.

This is an approach that other CPTPP members are actively pursuing. As my noble friend Lord Holmes mentioned, the Monetary Authority of Singapore has a team dedicated to growing Singapore’s share of global industry, separate and distinct from regulatory colleagues but providing a joined-up and seamless service to those seeking to invest, create jobs and support growth. Another example is the Singapore College of Insurance, which is regarded as the most powerful insurance qualification in the Asia Pacific region, extending Singapore’s influence and shaping markets. Ours are extremely well thought of as well and should meld in. Australia is also looking ahead and has been growing its influence in the region, having signed a free trade agreement with Indonesia in 2020—a potential future and very significant member of the CPTPP.

Both these amendments would therefore help to ensure that we can take full advantage of being part of this living agreement, which is likely to be significantly developed in the years ahead. We need to prioritise the areas where we are economically strong and use our expertise to the benefit of our economy.

My Lords, I have a quick question for the Minister arising from Amendment 14. I need to declare an interest in the context of professional qualifications, and as a fellow of the Institute and Faculty of Actuaries. I heard what the noble Lords, Lord Holmes and Lord Ashcombe, said about the potential for financial services. There is a very big debate to be had on that, but at table 5, on page 46 of the impact assessment, the percentage change in trade shows a decline in the UK’s financial services and an increase in imports of financial services. Maybe the Minister could help the Committee by reconciling what the noble Lords said and what the impact assessment is telling us.

My Lords, I declare my interests as set out in the register as chair of Peers for the Planet and director of the associated company. I will speak very briefly, broadly on the environmental issues that have been raised in this debate and particularly to give my support to the general principle of impact assessments. The case has been made very clearly that we need in particular to understand issues such as farming and the environment, which I am sure the noble Lord, Lord McNicol, will speak to later. This is a complex area and unintended consequences are possible.

I want in particular to support Amendment 15 and the amendment from the noble Baroness, Lady Willis of Summertown. Amendment 15 relates to the very important commitments the Government made on preventing the use of forest risk commodities. We really do need clarity on this, and particularly when the Schedule 17 regulations will be laid. I hope the Minister can confirm that the regulations will be in force before we accede to the CPTPP. Although the agreement does not impact the UK’s ability to put these regulations in place, given that we do not otherwise have environmental requirements for what is imported, we should not enter into trade agreements that increase the likelihood of forest risk commodities being imported into the UK without those standards being in place.

The noble Baroness, Lady Boycott, also brought out very clearly the risk that the expectation is that our own regulations are unlikely to cover instances where domestic regimes of CPTPP parties legally allow deforestation which still impacts critical habitats and the human rights of indigenous peoples and local communities. I note that the EU regulation, in contrast, covers illegal and “legal” deforestation. I hope that the Minister can comment on how we will interact on these issues with CPTPP member countries.

Amendment 16 was very ably explained by the noble Baroness, Lady Willis. However, while the theory is there and we are assured that there will be no lessening of our standards on pesticides and the monitoring of pesticide residue, the explanation from the noble Baroness, Lady Willis, certainly made me very concerned that our UK border testing regimes may be unable to cope with the additional impact of growing agricultural imports. If that is true, we can on paper have the highest standards in the world, but it will not make any difference, so the implementation is extremely important.

The monitoring and enforcement actions that have been discussed in considering Amendments 15 and 16 are of course related to issues that the Committee will debate later in considering Amendments 26 and 33, on the effect of investor state dispute settlement provisions. I hope that I am not, in the words of the noble Baroness, Lady Hayter, about to go too much off piste. However, I want to apologise to the Committee for not being able to be here for that debate, and to say that it is important that we explore the potentially damaging effect on environmental policy-making of those provisions and understand whether the Government could be doing more to pursue side letters with CPTPP parties such as Canada, in order to obviate the risks that come with being bound by ISDS provisions. While I cannot be here to listen to what the Minister has to say on those issues, and apologise again for that, I will certainly read what he has to say with great interest.

My Lords, this has been a significant debate and has had a number of themes. One is how we use this accession to benefit UK business. The Minister heard me say on the first day in Committee that I am a passionate advocate for the proper operationalising and implementation of trade agreements, to the benefit of UK business sectors. But of course, as my noble friend Lady Bakewell and the noble Baroness, Lady McIntosh of Pickering, said, there are lingering concerns that we need to monitor very closely.

My noble friend and the noble Baroness made the case for their amendments very well, as did the noble Baroness, Lady Willis, who comprehensively laid out hers. I too look forward to the Minister’s reply to the very strong case she made, to which I will listen very carefully. I suspect that she and I are both grateful to Hansard for putting the Ts, Ps and Cs in their correct places as we have debated this issue.

I have a number of amendments in this group. On Amendment 30, I am grateful to the noble Baroness, Lady Hayter, for her support. I had some notes to make the case for it but she made it better than I could, so I simply acknowledge that. Her fellow member of the committee, however, is slightly more quizzical with regard to my Amendment 32. I always listen extremely carefully to the noble Lord, especially when he agrees with me, but I do so even when he does not. To some extent, this amendment is a wee bit like a child of many of the cases that he has made, arguing strongly for Parliament to have a stronger say in the early stages of when we enter into trade agreements. He has made the case, with his great experience in the United States, that members of Congress were able to use the power that they had to allow the US trade negotiators to have a stronger hand when it came to many of these discussions. That is what I have called for in many respects in previous trade debates, and he has made that case very strongly.

If we are to do that, we need some form of mechanism, such as Amendment 32, to allow us to understand who is seeking to accede to the CPTPP, what implications there would be for the UK and what are the particular areas with regard to those countries that are important to the UK. If I have a concern about an accession to a trade area rather than entering into negotiations on a bilateral FTA, it is that we will have even less ability in Parliament to understand the consequences. This is no way to undermine the UK’s trading relations with Ecuador, Costa Rica or Uruguay, but it is perhaps even more important when it comes to China and Taiwan. To have transparency in parliamentary debates about the implications for and impact on the UK in advance of their accession is therefore even more important. I hope the noble Lord might be able to reconsider his position on that.

On the noble Lord’s point about the amendments relating to the commencement of the Bill rather than accession to the treaty, he made that point very well on the first day in Committee before he had to go into the Chamber. If he had had an opportunity to see Hansard, he would have seen my reply, which was that there are powers even greater than he and I—namely the Public Bill Office—which ask us to put forward amendments in scope of the Bill. I have tried as much as I can to go beyond scope but, unfortunately, I was not able to do so, which is why I have these probing amendments.

On Amendment 31, I hope the Minister will notice that I am asking for an impact assessment within two years of the passing of this Act, and I expect him probably to simply accept this, with great humility. Regarding an amendment on further accession, we will have an opportunity to debate that when we come to the next group, specifically with regard to the potential consequences for China.

Finally, I just make reference to Amendment 29, because I have repeatedly raised this matter in relation to trade negotiations when the UK comes to join FTAs, bilateral FTAs or, as now, a trade area, and the consequences for developing nations and our trading relationship with them. We now have the UK Global Tariff and the Developing Countries Trading Scheme, which maintain preferences for us trading with developing nations outside the European Union. I had the pleasure of welcoming Minister Huddleston when he launched that scheme in Parliament in a meeting that I co-chaired with Theo Clarke MP on the All-Party Parliamentary Group on Trade out of Poverty. I support this trading scheme and commend the officials who have put it together. My concern is whether, when we join new agreements, especially the CPTPP, there will be preference erosion for those developing nations. One of the concerns is that, with the CPTPP, there will be and, indeed, that it may well set a precedent.

I give just one example of why this is important for UK trade. Regarding the concessions that we have given, the tariff rate quota for Mexico and Peru could well become a precedent if there are new members. As the trade area grows, it has the potential to erode trade preferences even further. One of the strongest examples of such erosion is the UK’s import of bananas. We secure our bananas from African nations, as well as those that may well join the CPTPP. For the British consumer, it is very important to receive their bananas but, for the producing countries, it is even more important. In Ghana, a Commonwealth partner of the UK, exports of edible fruits and nuts accounted for nearly 5% of all exports in 2021. For Côte d’Ivoire and Cameroon, it was nearly 9% and over 1% respectively. These are rural developing nations, so we are talking about 80,000 direct jobs, affecting the livelihoods of and sustaining half a million people in very rural areas. These are sometimes vulnerable economies which rely very much on the UK as both a trading partner and a sustainability and development partner. Anything that could impact that gives me concern.

UK consumers enjoy high-quality, cheap fruit. So much cost has been stripped out of the supply chains that a consumer in the UK buying a banana from Ghana pays the equivalent of the 1987 price, according to the Office for National Statistics. Given that we have had 180% inflation since that time, the real price of what was then a 50p banana would now be £90 if we included inflation. No one on earth is suggesting that the British consumer should pay £90 for a banana but, if we are not paying £90 for a banana and we are still buying our fruit from developing nations at 1987 prices, it shows that the economic value of producers in those developing countries has been suppressed considerably. This question will not be answered by anything that we can say in this debate, but it highlights one of my concerns about entering into new trade agreements: we are not giving sufficient consideration to preference erosion. It makes little sense to enter into new preferential trading schemes if those preferences are eroded by our entering into new agreements that have a meaningful impact on them.

I would be grateful if the Minister could say what consultation we had with our developing nation trading partners as part of the accession to the CPTPP. What mechanisms are in place for us to ensure that the benefits accruing from the new trading preference scheme will be protected when we enter into new agreements? How are the Government carrying out assessments? If they are not doing so themselves, and the assessments are not published, some form of amendment will be necessary, however it is drafted, whatever the timeframe and however it is linked. If we have trade preference agreements, they must be protected, and we have to ensure that there is no further precedent. I look forward to the Minister’s reply.

My Lords, this has been a very wide-ranging debate across a large number of issues. Many of the points on which noble Lords have gone into detail were picked up at Second Reading, so I shall take in the comments made then with those of noble Lords who have spoken to amendments today and feed in all the information that we need.

I tabled three amendments on climate and labour standards and I shall focus on the labour standards one, which has been touched only on in passing. I thank noble Lords who have offered support. I shall turn to Amendment 25 and then take a step back to climate and other issues. Trade unions all over the globe have found consensus in concerns regarding CPTPP’s inadequate measures properly to enforce the ILO standards, which is why the amendment calls for an impact assessment.

We all take the points made by the noble Lord, Lord Kerr, about the final accession agreement—the 12th one—being approved, which then allows us to access properly, rather than the passing of the Act. When we come to Report, I am sure that that will be taken into account. That is one of the joys of Committee, as the noble Lord, Lord Holmes, recognised.

To take the point made by the noble Viscount, Lord Trenchard, my amendments in this group call for two years, which gives us more of a timeframe. If we take that on from accession, that ties in very neatly with the Minister’s—or the departmental—first assessment of the impact of the actual agreement. As the noble Lord, Lord Purvis of Tweed, just said, I am sure that it will be a nice easy step for the Minister to add a little more detail about the specific areas in which we are looking for those impact assessments to be laid.

To turn back to labour standards, one concern is that the agreement includes a number of countries that allow significant abuses of workers’ rights to take place—again we touched on this in the first day of Committee and at Second Reading. Brunei and Vietnam have actually banned independent trade unions, which is a further violation of ILO standards. While the CPTPP includes a chapter on labour, which could theoretically impose sanctions on labour standards violations, this can proceed only if there is an identifiable relationship between the country’s alleged violation and the level of effectiveness of trade. This is not morally intact, as it implies that concerns are valid only because they impact on trade, not because workers’ rights violations are fundamentally wrong in themselves. Nor is it practical, as it is difficult to prove that there is a link between the two factors, even when one exists, meaning that most attempts to highlight a country’s labour standards violations will fail. To date, no Government in the CPTPP accession 11 has challenged another over labour rights violations, which leaves little hope that the UK would have the capacity to do so.

By making it easier for public procurement suppliers to come from CPTPP countries, the agreement increases the risk that public money will be spent on goods produced by exploited workers as labour rights are abused in many of the CPTPP countries. We heard this on day 1 about Malaysian rubber gloves, whereby even the United States stepped back from accepting those rubber gloves for one year, while reviews were taking place. CPTPP’s labour chapter refers only to the 1998 ILO declaration, which in itself is a low bar. It does not require members to have ratified the ILO’s eight fundamental ILO conventions.

More specifically, Brunei has ratified only two and Malaysia and Singapore only five. Five of the 11 CPTPP nations have not ratified the freedom of association convention, including Mexico, where companies regularly engage in union-busting, and Vietnam, where the union leaders at workplaces are often the senior managers. I would be grateful for the Minister’s analysis of and response to that.

On climate, the department has produced a fantastic impact assessment, which a number of noble Lords have touched on. There is a statement on page 79 on land use and deforestation that is worth putting on the record as it goes to a number of points raised earlier:

“Deforestation in CPTPP countries, where it occurs, has been driven by production of commodities such as cattle, timber and palm oil. The majority of CPTPP members are not considered to be at risk of deforestation, except Malaysia which has experienced a 29% reduction in tree cover over the last 20 years. This has been driven by agricultural commodities which accounted for 93% of Malaysia’s tree cover loss since 2001, implying that international trade plays a key role in the country’s deforestation”.

If we as a country believe in and want to support the protection of forests and high standards across the globe, taking the Government’s own impact assessment, how will they do that given the real concerns raised in my amendment and a number of others, specifically the one on pesticides?

The final paragraph on page 79 says:

“As part of the CPTPP process, the UK and Malaysia have agreed a bilateral statement setting out a shared commitment to work together to promote sustainable production of commodities and to conserve forests”.

This is excellent, but it goes on:

“The UK and Malaysia have also committed to regularly share information with one another about ongoing domestic developments related to the environment and sustainable supply chains and production. This includes updates to the Malaysian Sustainable Palm Oil certification scheme”.

It would be helpful to know in what timeframe the Malaysian-UK bilateral shared commitment will be reported back to the UK—to Parliament or otherwise—and what format it will take.

The noble Baroness, Lady Boycott, made an excellent point about not contributing to global deforestation, legal or illegal, which ties back to this. I fully support the comments of the noble Baroness, Lady Willis of Summertown, on the testing regime.

The one area where I have struggled is around the fact that the Minister and, as we have heard, the noble Lord, Lord Cameron, have argued in the past and will continue to argue that the CPTPP does not undermine UK standards. That is fine, but the question is: if products, good or services are being delivered through this agreement in the UK, how will we ensure that the quality of the goods coming in remains at our high standards and does not undermine our internal high standards? That is why many of the amendments in this group are pertinent; it is about making sure that analysis is done so that, one or two years down the line, that does not happen and the resources for testing are in place.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Purvis of Tweed, asked for a full debate in the Commons. It would be great to see that in both Chambers, as we heard at Second Reading, in order to look at this issue. With that, I look forward to the Minister’s response.

My Lords, I thank noble Lords for their input on this group of amendments; I will try to cover them in thematic order. As always, we are looking to have a good debate here and reach sensible conclusions, so I would be delighted to follow up with any noble Lord who wishes to do so. Actually, I think it would be helpful if, in the new year, we celebrated 2024 by noble Lords making sure that their first meeting is with me to cover specific areas of the CPTPP.

We can refer to the CPTPP as the FTA, if noble Lords wish to. I like “CPTPP” because, of course, it is relevant—especially in terms of all the aspects being covered today, such as the importance of ensuring that the effects of the trade agreement align with our commercial interests and our values. As noble Lords will remember, it was originally called the TPP—the Trans-Pacific Partnership—but Canada added the concept of it being both comprehensive and progressive. Noble Lords should be delighted that I am facing that now, because it is precisely what they are discussing; they should be reassured that the principles of comprehensiveness and progressiveness are very much embedded in the title itself.

I am glad that my view of a two-year minimum window for an impact assessment has now been broadly accepted. I have always wanted something to be named after me, rather like the “Grimstone principle”. Can this be called the “Johnson term”? I am not quite sure whether we are allowed to do that. Just because the impact assessment amendment line has two years in it does not necessarily mean that we would accept it—but I will briefly cover the crucial first point, which is about the principle of understanding the impact of these free trade agreements.

In our last debate on a trade treaty, many noble Lords looked at it in some detail and some Dispatch Box commitments were made. I do not have them in front of me, but I would be happy to come back to noble Lords on them at the next stage. I want to be clear about which areas the Government would look to review. There is some reluctance for there to be a codified, formalised, legislated-for, mandatory impact assessment because, as we have discussed in the past, these can be unadaptable and may not necessarily fulfil the requirement that this Committee is looking for, which is a true impact study in the key areas. Also, things will change, of course. So it is better that there is a flexible approach to this, where we get the right information.

From the point of view of this Government, who believe passionately in free trade and the benefits of this agreement, an impact assessment is something that we want to do in order to show the country the power of these free trade agreements and what they will result in. We will certainly look at the trade in goods and services, investment flows, the effects on the nations and regions of the UK, the effects on consumers and the effects on businesses. We will certainly establish the effects on border activity and, importantly, we will look at the effects on agriculture and the environment. I can say that those will not be areas to which the impact review will be limited; as I said, I would be comfortable to have further discussions around this.

Like other noble Lords, my noble friend Lord Holmes of Richmond rightly referred to the opportunities of the CPTPP. I am not going to grandstand and dwell on the opportunities just for the sake of it, because this is an important debate that covers some of the risk mitigation around these free trade agreements and I am comfortable making those points the focus of parliamentary scrutiny, as they should be. However, it is also worth looking more positively at the opportunities that we have, how we manage our relationships going forward with CPTPP countries, the value we think we can add as a result of that and where we can make further gains.

For me and many of my colleagues, the opportunity to join the CPTPP is not simply about the trade opportunities that it presents today. There are some specific opportunities relating to the recognition of qualifications, tariff reductions, the ease of high-level intercompany mobility, protections on copyright and so on, and those are relevant—but we have many such agreements already with many of the CPTPP countries. The key point is that it allows us to confirm our relationships in many of these areas and set them on a regulatory discussion path that allows us to do more. That is the point about trade; hopefully, this is the ratchet that will allow us to have freer trade and closer collaboration.

The one area that I have always thought was particularly relevant is the list of committees related to the CPTPP Commission. I think there are 19 such committees—forgive me if I have got the number wrong. There are a large number of committees that cover a range of areas. Clearly, there are areas that are goods-related, but some are services-related and they cover professional services, financial services, temporary entry for business persons and telecommunications, for example. There are other committees on e-commerce, competitiveness, business facilitation, SMEs, co-operation and regulatory coherence, all of which were raised by my noble friend Lord Holmes of Richmond regarding the importance of doing more to utilise the opportunities that the FTA presents to us.

It is important for us to have an opportunity to report back on the effectiveness of those committees, and one of the joys of joining this organisation will be our participation in them. As an applicant country, as I understand it, we already attend some of these committees. What level we are participating at I am not quite sure, but the fact is that we are now starting to engage, which is extremely important.

The second section that I will move on to relates to standards. This is an important discussion. It was a cornerstone element of the debate that we had over the Australia and New Zealand trade deal. I want to set out a few important principles around these FTAs, which not all noble Lords or commentators necessarily see from the first instance. Undertaking a free trade agreement with another country, or joining a multiparty FTA as in this case, does not change in any way our standards in how we manage our country. Today is Thursday. If we joined any FTA with any country—in the way that we negotiate them currently—and it came into effect at midnight tonight, there would be no noticeable difference in how product standards and safety measures were brought to bear.

It is important to note that we already trade with all these countries. We have trade agreements with most of them already. So, to suggest that there will be some sudden and unmanageable increase in trade activity is, frankly, unreasonable. We look forward to trying to reduce pricing for our consumers in certain areas. Other countries have different production standards, some of which are right for those countries in terms of what they may employ or deploy, but that does not change how we manage our borders and controls.

I refer to the commentaries from the noble Baronesses, Lady Boycott and Lady Willis, around some of the risks of pesticides and so on. I share the view that we do not want dangerous pesticides used on foods in our food chain. There seems to be a view that somehow the British Government want to encourage low standards. That certainly does not seem to be the case, so I would be very careful about misconstruing FTAs as having to do with standards changes. I have never really understood why that seems to have taken root in people’s minds.

A separate discussion can be had about how we police our borders, and my noble friend Lady McIntosh and I have had good discussions about this. I believe that the FSA said, in the report she quoted from, that we have continued to meet our requirements when it comes to policing our borders. I take the very firm view that it is absolutely right to take a risk-based approach to how we monitor our borders. I visited one of our ports a few weeks ago and saw the very effective work undertaken by the authorities. It would be completely impractical to test every single grain of wheat that came into the country, but it is very important that we do not use scare tactics to give people the impression that somehow we have porous borders. Our borders are well controlled.

I will refer to the Trade and Agriculture Commission report. I will just quote again, as I may have done in the first section, the answers to these two questions. I would be very grateful for noble Lords to hear carefully this point, rather than to believe that somehow there is an attempt to derogate the quality of safety that we offer our consumers. This is not the case; we are looking for higher consumer quality, better standards and closer trading relationships. The first question is as follows:

“Does CPTPP require the UK to change its levels of statutory protection in relation to … animal or plant life or health, … animal welfare, … and environmental protection?

The answer is:


The second question is as follows:

“Does CPTPP reinforce the UK’s levels of statutory protection in these areas?

The answer is:


That is very important.

I am very open to being tested on the quality of border control and resourcing. That is a very healthy debate that this Government are absolutely comfortable having. We believe that the resourcing is at the right levels, but clearly these are sensitive and complex issues, technology is changing continually, and threats are changing too, as new products and developments require us to be adaptable and versatile. I am not unwelcoming in terms of the principle of ensuring that we have the level of resourcing to ensure that we have the right controls, but there is no issue in terms of changes to our safety measures on account of our FTAs.

The point I was making, which I think is being followed up, is that there is a two-tier system. Right now, the Bill as constructed does not acknowledge that two-tier system. The problem lies in that two-tier system and the fact that all of these things that will be coming through with the pesticides on them will go through the risk assessment because they are not on the annexes, which they would be if they went into the first tier. It is those annexes that need to be looked at. I do not think that anyone is doing scare tactics, but I think there is a very big risk here that, as we get huge amounts of wheat coming in from Australia, there may well be pesticides on that wheat that we as consumers do not want to eat. I am not sure right now how the present system will address that.

I am grateful to the noble Baroness for raising those points, and I am happy to provide further reassurance in terms of how we control our borders. We already import products from Australia and have done for many years; the Australia-New Zealand FTA does not make any difference to that. In fact, I can turn now to the protections we have for our agriculture sector. I follow on from comments I made in the Australia-New Zealand trade treaty debates that protecting our farming community is absolutely paramount for us. We are very sensitive to the effects that global trade flows can have on industries and communities, and it is completely right that we do what we can to ensure that we take a very gradual and phased approach to the changes of our quotas.

However, I would say that for the CPTPP, the impacts on agriculture are significantly less significant—I am sorry to have not presented a particularly clear sentence in that instance—than they are for the Australia-New Zealand trade deal, in the sense of the areas where we have increased the tariff rate quotas, in particular areas such as whole shell eggs, pork and other products, which are not at significant import volumes from countries such as Mexico, Vietnam and so on. We have phased in our tariff rate quota allowances over 10 years; we have taken a very measured approach.

I spoke recently to the president of the National Farmers’ Union, and she was very pleased. I asked whether I was able to repeat her sentiments, and she said I was. She felt very comfortable and pleased with the way we have negotiated tariff rate quotas at the levels we have ended up with. I will defer to my colleague, if she wishes to make an intervention.

I am sorry to intervene. I do not have the Trade and Agriculture Commission report in front of me, but I think there may be a difference between food safety and food production standards. Will my noble friend take the opportunity to look at the ADAS conclusions and the conclusions of the Food Standards Agency on food production standards just to be absolutely sure before we proceed to the next stage?

Yes, I will reply on that point. As I said, there will be differences in food production standards, production capabilities and so on because we are looking at having trade agreements with countries in different parts of the world which have different weather patterns. In many respects, the whole principle is to complement our production. We are talking here about ensuring that the safety of the British consumer is not jeopardised through FTAs, and I am comfortable expressing that very important point.

My final point is on deforestation and other standards and relates to production standards rather than simply importing goods, particularly agricultural goods. As noble Lords will know, as a result of the Environment Act, we are bringing in further protections such that companies above a certain level are obliged to ensure that their supply chain is compatible with the legal framework. I understand that that will include illegally occupied territories that have been deforested.

I am afraid that I do not have an update on the timing of that legislation. As I believe my noble friend Lord Benyon said recently, it will be taken through when parliamentary time allows. I know from my conversations with my noble friend that this is an area of great interest for him. That was not a light-hearted comment meant to play for time. Noble Lords understand that we have a parliamentary calendar and have to make sure that this is done appropriately. I cannot comment on that, but I can say that the Government are committed to ensuring that these things run in sequence as closely as possible. As I said, we are already doing business with many of these countries and, in my view, a delay of a relatively short or reasonable period would not make a significant difference to the timing. They do not have to run concurrently, as they are not linked together.

I hope I have covered all the points. I am very comfortable coming back to noble Lords—I see I have not so I shall take some interventions.

I just press the Minister for some reaction to the fact that his department’s impact assessment shows a deleterious effect on our financial services sector. What is the department’s approach to those figures in its report?

On my Amendment 25, I am more than happy for the Minister to write to me and the rest of the Committee on labour standards and ILO conventions and adherence to them.

I thank the noble Lord for those comments. I can say firmly that our commitment to those conventions is firm and absolute. It is essential to us that we do not derogate our commitments to the supply chain. As the Committee is aware, a number of new policy frameworks have been put in place to ensure that the supply chain has the responsibility to ensure that it does not include poor practices. They are now in force, and I would be delighted to work with the noble Lord to reassure him that the CPTPP does not lead to a derogation of standards. In fact, we think that participation in this group will allow us even more influence to align other countries in the CPTPP with our labour standards. I am quite confident of that.

I will touch on one or two other points that were raised. The noble Baroness, Lady Hayter, rightly raised the importance of high standards in the UK in reference to the Leasehold and Freehold Reform Bill, which is currently going through the other place. I wholeheartedly agree with her that it is important that the UK retains its world-leading position as a country that respects the rule of law and property rights. I am sure that that Bill will do these things. I believe that a consultation is under way at the moment that will inform that debate, but I am not able to comment further on that.

The last point was about the impact assessment. If I remember rightly, it showed that there will be a growth in financial services exports and a more significant growth in financial services imports—if I have that right. The noble Lord, Lord Davies, must forgive me: I do not have his chart in front of me but I would be delighted to follow up on that. The impact assessment is a static one. It is not for me to criticise it because it says that there are several billion pounds-worth of additional trading opportunities that we can see immediately from CPTPP, which is to be celebrated. That is combined with the free trade agreement with Malaysia.

Is it worth our time today debating a multi-billion-pound benefit set out in a government impact assessment document? It absolutely is, but it is our convinced belief that not only will we have significantly more trade as a result of the CPTPP but it will give us the opportunity to do all the things that noble Lords opposite have been so particularly focused on: influencing the debates around labour standards, use of pesticides and how the environment functions, and how farmers can compete globally. Let us rejoice in the opportunities that it presents to our businesses.

The Minister has given quite an extensive reply, for which the Committee is grateful. At Second Reading, my noble friend Lord Fox raised preference erosion, giving specific examples of developing nations, but the Minister did not have time to respond to him. I met the Minister before Committee and said that I would raise it as an issue. I have tabled an amendment and given specific examples today. I am not doing that just as an academic exercise so that I can listen to my own voice. These are important issues regarding our relations with developing countries and I would appreciate a response.

I am grateful to the noble Lord for raising that point and I ask his forgiveness if I have failed to cover it. It is very important. I did look at his maths: the price of a banana, if it goes up 180%, goes to £1.70, not £90—I just point that out, if I may. Aside from that, it is very important to say that our developing nation commitments are not derogated by joining the CPTPP.

We are very aware of the importance of the prospect of preference erosion and it is quite right for the noble Lord to raise it. I am very comfortable writing to him in more detail about this, but we are very clear that our developing country trading programme is an important priority for this Government’s trade policy. We will ensure that any new trade agreements, including this one, are compatible with that policy agenda. I am very happy to write in more detail and have further discussions. If there is further detail where he believes that this is not the case, I again give my sincere apologies for that.

I am grateful to the Minister for writing, and I look forward to it. I am sure that would agree that cumulative inflation of 180% since 1987 would mean that £1 then is £180 now.

I will not get drawn into the debate on that, but I think that would be 1,800%, rather than 180%. However, the point is that the noble Lord is right to raise the matter of the estimated expected costs compared with the actual costs today, and the deflationary impact of global trade on some of our developing nation partners and the importance of ensuring that it can be mitigated in some way, regardless of the other trade deals that we are pursuing. I am grateful for his point.

My Lords, this has been an excellent debate. I thank all noble Lords who participated and the Minister for his response. I was pleased that financial services and environmental concerns were grouped together, because that is, in many ways, the fundamental point that is often missed. There is no purpose in talking about financial services and finance without ESG being gold-threaded through it all. I can sum up today’s debate, in many ways, as: what purpose profit if no planet to spend it on? I again thank all noble Lords who took part and, with that, I beg leave to withdraw my amendment.

Amendment 13 withdrawn.

Amendments 14 to 16 not moved.

Amendment 17

Moved by

17: After Clause 5, insert the following new Clause—

“Report: accession of the People’s Republic of China to the CPTPP(1) Before any decision is made by the Government of the United Kingdom on the accession of the People’s Republic of China to the CPTPP under Chapter 30 of the CPTPP, the Secretary of State must publish a report assessing the impact of China’s accession on the United Kingdom.(2) Both Houses of Parliament must be presented with a motion for resolution on the report under subsection (1).”

My Lords, I speak to Amendment 17, which was tabled by the noble Lord, Lord Alton, who is unable to introduce the amendment due to a long-standing commitment. The effect of the amendment would be quite simple. Proposed new subsection (1) would require the Government to produce a report on the impact of the People’s Republic of China joining the CPTPP, before any decision is made as to whether the UK could support the PRC’s accession. Proposed new subsection (2) would provide for a vote in both Houses on the UK’s position towards the PRC’s membership.

I do not believe that this amendment ought to be controversial. The prospect of the UK joining a trading bloc with China—one that has the potential to be the largest FTA zone, accounting for 53% of global GDP and 30% of global trade—has significant long-term implications for the people of the United Kingdom and beyond. As such, it ought to be a matter for parliamentary oversight.

I believe that the PRC should not be allowed to accede to the CPTPP, but it has become clear that what seemed like an impossibility a couple of years ago looks more and more possible. After the UK, China is next in line. China is a much more important trade partner for many CPTPP members. Close economic ties have already persuaded some CPTPP members, such as Singapore, Malaysia and Vietnam, to voice their support for China’s entry. Australia, which previously opposed it, has reportedly softened its opposition and Beijing is lobbying hard for membership.

There are three key reasons why the PRC should be kept out of the alliance, and why the UK must not be bounced into a position of support without the support of Parliament. First, China should not be admitted because it will not meet CPTPP standards. The CPTPP contains major commitments on labour, the environment, IP and state-owned enterprises regulations that China is unable to meet. As my noble friend Lord McNicol has already said, Article 19.3 incorporates the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and Its Follow-up of 1998, which provides the right to freedom of association and prohibits all forms of forced labour, child labour and discrimination in respect of employment. To further entrench these rights, Article 19.4 explicitly prohibits members derogating from these protections, meaning the labour laws cannot be weakened to encourage trade or investment.

The CPTPP also establishes a number of positive environmental obligations for members. Under Article 20.3, members must effectively enforce environmental laws and must not derogate from them to gain a trade or investment advantage. The environmental chapter is enforceable under the CPTPP’s broader dispute resolution mechanism. The CPTPP also recognises the sovereign right of each party to establish its own level of domestic environmental protection. Although China has recently made important efforts to address environmental concerns, including by announcing its goal to phase out coal investment abroad and by debuting its emissions trading system, CPTPP obligations may none the less prove onerous, given China’s status as the world’s largest emitter of greenhouse gases and the challenges it faces reconciling climate and pollution control with rapid economic development.

China will also be unable to meet the CPTPP’s data transfer obligations and standards, which eliminate data localisation and prohibits Governments of CPTPP members demanding access to an enterprise’s source codes as a condition of import, distribution or sale. Importantly, these provisions are subject to the CPTPP’s dispute settlement mechanism. Further, a national security exemption is not allowed to let members derogate from this regulation. Although China has made similar commitments on data transfer and data localisation, as a member of the Regional Comprehensive Economic Partnership, or RCEP, this agreement does not contain a provision prohibiting the forced transfer of source codes. Additionally, the RCEP’s digital trade provisions are not subject to dispute settlement, and members may use a self-judging national security exemption to circumvent these requirements.

Secondly, should China join the CPTPP, it would definitely block Taiwan’s participation, as it did with RCEP. Given Taiwan’s importance in the supply chain network, the island’s exclusion from the CPTPP will have significant implications for the restructuring of the global production network and for the setting of standards in key industries and technologies where Taiwan is the leader. Further weakening and isolating Taiwan is neither in the interests of the people of Taiwan nor aligned with the interests and values of the United Kingdom and our regional allies.

That brings me to the third reason why China should be kept out of the CPTPP. Accession will make China more powerful and increase its willingness and ability to act coercively. China’s joining of the CPTPP will not only expand the CPTPP’s weight in the global economy but increase its global influence. A significant driver behind the CPTPP was the region’s recognition of a need for an alternative to be able to de-risk from an overreliance on China. This is good practice.

The United Kingdom played a key role in supporting China’s accession to the WTO, which I firmly supported. China pledged upon its accession to adhere to WTO rules, to phase out subsidies, and to ensure fair competition. It promised that the state would not influence commercial considerations. As we were reminded by the US trade representative in 2021:

“After more than 20 years of WTO membership, China still embraces a state-led, non-market approach to the economy and trade, despite other WTO Members’ expectations—and China’s own representations—that China would transform its economy and pursue the open, market-oriented policies endorsed by the WTO”.

Good faith may have been reasonable 20 years ago. Sadly, China has changed, as has its global ambitions. We simply cannot afford to get it wrong again.

In closing, I urge us all to recognise the importance of the CPTPP to the United Kingdom’s future economic and geopolitical importance and interests, and to support this amendment, which would ensure parliamentary oversight of the UK’s position on China joining the CPTPP.

I understand why this amendment was put forward and presented so well by the noble Lord, Lord Leong, but I do not support it. I do not think it necessary or desirable.

There are three politically controversial applications to join the CPTPP. The Chinese application is, of course, much the most controversial. If I were asked to predict what will happen, I would predict that nothing will happen, and that the Chinese application and, sadly, the Taiwanese application will remain in the “too difficult” tray for a very long time. Unanimity among existing members is required both to open a negotiation and to end a negotiation by agreeing to accession, and that is not foreseeable under present circumstances. The amendment is unnecessary because the condition that it sets—the peg for the report it calls for, which is a decision on Chinese accession—is unlikely to happen in the foreseeable future.

It is also undesirable because, in general, there is quite a lot to be said for not requiring Governments to come clean on hypothetical questions. I admit that I used to work in government and, to put it in a pejorative way, it might be desirable to hide behind “There is no consensus”, rather than revealing which side one was actually on. That is conceivable and I do not think it is desirable.

So far, I hope I am being extraordinarily helpful to the Government. Let me now be extremely unhelpful to them: I think it is necessary to be much more open with Parliament on what our trade strategy is. What actually do we think is the future of the multilateral system? Do we think that plurilateral is the way it is going, or that there is any need to have a policeman—an authority? Does it matter that the WTO court is moribund and perhaps dead? Is there any way of reviving the WTO and what is the British philosophy on the future of trading systems?

We say that we believe in the global system of rule of law. It is collapsing before our eyes. The world is dividing into huge blocs. The policeman of the WTO is on its knees, if not on its back. I do not know what instructions we give our people in Geneva or what they are supposed to say about the future of the WTO. We look at trade relations through a narrow focus on particular bilateral relations and this very welcome accession to the CPTPP, which I am strongly in favour of, but we need a sort of philosophy.

In the United States, the USTR’s report is an annual event. I do not want to call what the United States has at the moment a trade philosophy—it is hard to dignify current US trade policy with the word “philosophy”—but the practice of the United States is set out in the USTR’s report. In many ways, the New Zealanders are an example that we should really try to follow. They encourage a public debate, which informs their Parliament. They discuss in public their record—what they have achieved in the past year and what they hope to achieve in the year ahead—against a coherent philosophy. They are strong free traders, as I hope we will continue to be, and as I wish the United States was.

The International Agreements Committee has, again and again, suggested to government that it might be quite a good idea to publish a trade strategy document— and renew it, year by year. That is the answer rather than amendments such as Amendment 17, which is not required and is mildly undesirable.

My Lords, I support the proposed amendment from the noble Lords, Lord Alton and Lord Leong. I take the point that it is sometimes a very good idea, as the noble Lord, Lord Kerr, said, for Governments not to reveal their hands. None the less, there is a lot to be said for having both Houses consider in Parliament the degree to which, without China having joined the CPTPP—as the noble Lord, Lord Kerr, said, it may never join it—it has already caused a global imbalance to supply chains, and the levels of dependency in other economies on Chinese production, right across a range of goods.

As far as I understand it, certain economic research, particularly in the US, suggests that we are far better off as states if we do not depend for more than 25% of our imports on any one country. If China were, for some reason or another, to be accepted as a member of the CPTPP, there would be a danger that the existing imbalance which we see already would grow, as would the powers to influence and destabilise the global economy and, indeed, the security of smaller countries on which it has its eye. For these reasons, I support the spirit behind the noble Lord’s amendment.

My Lords, it is a pleasure to follow the noble Baroness, and I agree with what she said. I start by apologising to the Minister. My maths in my intervention on him were wrong. I admit that and want it on the record—that prevents him mentioning it in the letter he will write to me, which I look forward to.

I support the noble Lord’s amendment, and the context of what he said is very important. Together with the latter part of the contribution of the noble Lord, Lord Kerr, it means that we must have a wider public debate about UK-China trade in particular. I acknowledge that China’s accession is a very large “if”, and I will come back in a moment to the many reasons why, but that would have an even greater impact on UK trade, because China already has five bilateral FTAs with CPTPP members: Singapore, Australia, New Zealand, Chile and Peru. It is also part of the two plurilateral frameworks which the noble Lord mentioned. We are already, in acceding to the CPTPP, entering into trading relations through FTAs with China.

This is even more important because, in 2019, according to the University of Sussex UK Trade Policy Observatory—I shall source my figures on this now—approximately 20% of Chinese exports were already going to CPTPP members, of which 50% were in intermediate products. What does that mean? It means that it is linked with what we debated on the first day of Committee: that when it comes to rules of origin, many aspects of UK trade will be involved with goods from China. That is notwithstanding the enormous trade deficit that we have in imports in our trade with China already. The Office for National Statistics report stated that, in 2021, China was the UK’s largest import partner. That is not to the extent of 25%, but 13.3% of all goods to the UK are imported from China. What gives me concern is that we have a £40 billion trade deficit in goods with China. When we look at certain key sectors, this becomes a strategic issue, not just a trading issue or one of the importation of goods. Our trade deficit with China in goods is larger than our overall trade with Italy, Switzerland or Norway, so this is of great significance. When we consider that Germany has a trade surplus in goods with China, it is a valid issue to debate.

The increase in Chinese exports to CPTPP countries has grown very significantly, including in services, which on average has grown by 11% a year. When we have been debating UK trade, moving away from the single market into the fastest growing part of trade within Asia, we know that we have a combination: we are heavily dependent on imports from China, and growth in Asian trade has been as a result of their relationship with China too.

On that basis, if we look at the position of China, what does the UK do? We know that we are heavily reliant on it, that the Government say our future is in this area, and that those countries are heavily reliant on China. The growth trajectory is based on Chinese growth, so when we look at aggressive military exercises, human rights challenges and abuses, or increasing territorial disputes—including of course with Taiwan, another applicant country or customs area—this becomes geopolitical. We have also seen clear examples of Chinese economic coercion against other trading partners. It probably would lead a rational assessment to consider that, if it was a choice for the UK between Taiwan and China, it should be Taiwan. But how do you make such a decision when we are so intertwined with the Chinese economy, as I have highlighted?

We are debating the various chapters for the UK. On digital trade, which we debate quite a lot in this House, we discussed concerns around China complying with standards on digital trade. Chapter 17 is on state-owned enterprises. These areas were debated considerably during the procurement legislation. Chapter 18 is about intellectual property, which we have debated quite considerably. The noble Lord, Lord McNicol, raised chapter 19 on labour and chapter 26 on transparency and anti-corruption. All of these aspects may lead to the conclusion that the noble Lord, Lord Kerr, gave: that this is a hypothetical situation.

That may be correct, but nevertheless it has applied. We will be a member; we may form part of the commission to discuss this, and we may have a key role in those discussions about consensus for the application. Up until the point that China withdraws, I believe that our Parliament needs to have regular debates and we need to be informed. That is why I am sympathetic to this amendment.

I thank noble Lords for their significant contributions to this important section of the debate. I will go through the key points one by one.

In joining CPTPP we are securing our place in a network of countries that is committed to free and rules-based trade, and which has the potential to be a global standards setter. The CPTPP acts as a gateway to the dynamic and fast-growing Indo-Pacific region, and expansion of this agreement’s membership will only bring further opportunities, in our view, for British businesses and consumers.

There are currently six economies with applications to join the CPTPP, including China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. As noble Lords will be aware, the CPTPP is a group of 11 parties and will become 12 when the UK accedes. It has been agreed within the group that applicant economies must meet three important criteria. They must meet the high standards of the agreement, have a demonstrated pattern of complying with their trade commitments, and command consensus of the CPTPP parties. It is very important that I clarify that for this discussion. These are strong criteria.

Our own accession was successful because we are demonstrably a high-standards economy with a strong track record, and we garnered the support of every party for our accession. This sets a strong precedent: the robust experience that the UK has been through has reinforced the high standards and proved the bar is not easy to meet.

As a new member of the CPTPP group, it is right that we work within the principles of the group to achieve a consensus decision, rather than giving our own individual narrative on each applicant, such as through the report proposed in this amendment. This is not a question about one particular economy. The UK is closely involved in discussions on this topic but will have a formal power to oppose an application only post-ratification, as I am sure the noble Lord, Lord Leong, will be aware. We joined first so that we would be on the inside judging other applications, not vice-versa. It is therefore crucial that the UK ratifies this agreement and becomes a party. This will ensure that the standards the UK has met and abides by are continually upheld under CPTPP, with every future applicant going through this same rigorous process.

I reassure the noble Lord and the noble Lord, Lord Purvis, who spoke so eloquently, that accession of new parties after the UK has joined will entail a change in rights and obligations of existing parties. Any new agreement requiring ratification by the UK would be subject to the terms of the Constitutional Reform and Governance Act 2010 as per the Government’s commitment surrounding the CRaG process.

I assure noble Lords that accessions will proceed only if applicants have met the rigorous criteria and have consensus of the CPTPP parties, of which the UK will be one only once we have acceded. We will continue to engage with the public and Parliament through the mechanisms I have just outlined, before any future negotiations. In this complex matter, I ask the noble Lord to withdraw this amendment.

My Lords, I beg noble Lords’ patience as I share my business experience of doing agreements in China. I still have scars on my back. My first visit to China was in 1999, when I was a much younger law publisher. This was before China’s accession to the WTO. It wanted to acquire the subsidiary rights to every mercantile law—what a beautiful name—and commercial and international law book. I was happy to enter into agreements with various Chinese university presses. Noble Lords will know that most businesses in China are wholly or partially owned by the state, so you can enter an agreement in good faith but whether the agreement is abided by or complied with is a different conversation. After many years of doing business in China, the managing of agreements took its toll and eventually we stopped doing business there.

I will share a simple analogy with noble Lords. It is as if you allow a friend into your house and then suddenly notice that some things have been taken away. Much later, more valuable things are taken away, and then the friend starts dictating the terms of your stay in your own house. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Amendment 18 not moved.

Amendment 19

Moved by

19: After Clause 5, insert the following new Clause—

“Impact assessment: local businessThe Secretary of State must lay before Parliament an assessment of the impact of the implementation of the CPTPP Chapter on government procurement on the level of procurement by local authorities from businesses in the respective local authority area, not less than two years, but not more than three years, after the day on which this Act is passed.”Member’s explanatory statement

This amendment requires an assessment of the impact of the procurement Chapter on local businesses.

My Lords, we are now on to the fourth group so we are getting there. We have been through the bulk of the detailed amendments, so these should be relatively straightforward. There are four amendments in this group, all in my name, so I will work through them. They all seek to have assessments of the impact of the implementation of the CPTPP after two years. If we come back to these on Report, we will look to change that timing to being from accession rather than from the Act being passed, which is eminently sensible. As the Minister has said, a review will take place on the four areas I have highlighted—local business, manufacturing, the job market and public services. I am sure that he will be more than happy to accept into it.

To go into a little detail within those four areas, we are concerned that the CPTPP could open up public procurement markets, restricting public authorities’ ability to support local businesses that recognise trade unions or pay the living wage, so there is a concern regarding the criteria provisions of the CPTPP and the fact that in some cases they are narrower than the UK procurement laws and could encourage more contracts to be based solely on lower prices rather than quality and access to integrity of service provision. On local businesses, we seek clarification from the Minister that this is not the case.

I turn to the manufacturing sector, where again we have concerns that the CPTPP could pose threats to jobs as it would make it easier, to take an example, for Vietnam to export goods to the UK that could include cheap Chinese steel or other manufactured goods such as tyres, cement and glass deliberately routed through Vietnam to avoid remedies and tariffs. The Trades Union Congress is concerned that this could increase the rate of trade dumping in the UK manufacturing sectors, putting thousands of jobs in steel and related supply chains at risk.

In 2017 the European Commission found that China had been shipping steel from Vietnam to evade tariffs, which led to dumping in the UK steel sector. The risk of increased dumping from Vietnam, as well as other countries, is compounded by the fact that the UK trade remedy system is currently too weak to be effective. The TUC is part of the Manufacturing Trade Remedies Alliance with the Unite, GMB and Community trade unions as well as a number of manufacturing employers’ associations. They are calling for stronger measures to deal with dumping from countries such as China and Vietnam in legislation and the removal of the public interest and economic interest tests, which prevent effective trade remedies being applied.

I turn to the job market. Following conversations with the TUC, I know there are concerns that the CPTPP may lead to job losses in some sectors due to increased imports from CPTPP countries. Of course there will be benefits from increased trade, but how do we ensure that important sectors of UK manufacturing are protected? I seek some reassurance from the Minister on that.

I turn to the public sector. CPTPP accession could also expose public services to further privatisation as it takes the negative list approach to service listings. This means that any services not explicitly exempted will be opened up to further privatisation. In the past, the Government have not adequately excluded services in trade deals to offer that protection. Meanwhile, the Government’s ability to exempt public services adequately in the CPTPP would be severely restricted as the UK would be joining the existing agreement with the 11, rather than at the start. This weakens and reduces our power to alter it. I beg to move Amendment 19.

I am grateful, as always, for the debate we have had around these important points. I hope noble Lords will agree that I have covered in previous groups the importance of reviewing these free trade agreements and how they impact our economy. As I say, I passionately believe that they will be enormously positive. The noble Lord, Lord McNicol, may be overestimating the threats in areas such as privatisation, steel dumping and so on. We have strong protections from the TRA protecting our economy in areas such as steel. This free trade agreement does not affect our ability to control that area of our economy.

I am afraid that I cannot see how this FTA would lead to increased levels of privatisation. We have been very careful about protecting key areas of our economy. To some extent, my job as Investment Minister is to encourage flows of capital into the UK, and we were asked earlier for impact assessments around that. I would be comfortable with seeing flows of capital from CPTPP member countries into the UK: we are aligned with them, and they are our allies—we want to do more trade with them—but I do not think it will lead to the negative consequences to which the noble Lord alluded. However, I am comfortable to have further discussions. As I said earlier, we should look carefully in these debates at the sorts of areas that we wish to review to make sure that the impacts around FTAs are properly understood, but I would be very reluctant to have them codified in amendments to this Bill, for obvious reasons.

I thank the Minister for his response. As he outlined earlier, there will be an opportunity to review the implementation of the CPTPP in two years. The point of these probing amendments was just to put on record the importance of the sectors in these specific areas. He has put in Hansard, in his own words, that there will be no derogations in those areas, and I look forward to holding him to that. With that, I beg leave to withdraw Amendment 19.

Amendment 19 withdrawn.

Amendments 20 to 25 not moved.

Amendment 26

Moved by

26: After Clause 5, insert the following new Clause—

“Review: Investor-State Dispute SettlementThe Secretary of State must lay before Parliament a review of the financial risk of the implementation of the Investor-State Dispute Settlement aspect of the Investment Chapter of the CPTPP, not more than 18 months after the day on which this Act is passed.”Member's explanatory statement

This amendment requires a review of the risk to the UK from implementing the Investment Chapter.

This is a small group of amendments from my noble friend Lord Davies of Brixton and me on ISDS and the mechanism that comes with it. I am sure the Minister will respond, “Don’t worry, it will all be fine, the UK hasn’t been sued”—but we have. We and the French Government were sued with regard to previous issues on this.

My concern relates to two areas. First is the accession of Canada, which has shown under previous trade remedies to be quite keen, or at least a number of businesses in it have been. We have seen that in recent years. The other issue I am keen to put on the record and on which I seek clarification from the Minister is around the UK, or individual countries, changing their approach because of possible threats. I know that that is hypothetical—we do not want to go down to hypotheticals—but often Governments do not move forward with specific issues because there is a possibility of disputes or because in other areas there have been disputes raised against them.

The investor-state dispute settlement allows foreign companies to sue a Government for any actions that they argue could affect their profits. Conversely, it allows British companies—the Minister may well pick up on this—to sue other Governments that breach ours. In the past, the ISDS court system has been used to challenge increases in minimum wage and countries’ internal attempts to bring public services back into public ownership. When New Zealand joined the CPTPP, it opted out of the ISDS system with the countries that invested most in New Zealand. Why have the UK Government not asked for such exemptions? As a result, rather than taking back control, with the CPTPP the Government are possibly handing multinational corporations huge powers to challenge the potential overturn of UK government decisions and laws.

The risk of ISDS is not just in losing an action against us, but also in the possible legal fees required to fight and defend against any challenges that are made; some of the other defences that the Australian Government had to make have cost millions of pounds. ISDS can also affect the decisions of Governments not to act—we have not stepped away from that or got side letters. We saw this in New Zealand, whose Government did not introduce plain packaging—despite it being their intention—after they saw the challenge Philip Morris had taken against the Australian Government, even though the Australian Government won that case.

There are some inconsistencies, so I seek clarification from the Minister on the Government’s position on ISDS. As we know, the UK has negotiated side letters with Australia and New Zealand to exclude ISDS provisions bilaterally. Though the UK Government have not confirmed that such exclusions will have been negotiated—I presume at the request of both those Governments and not of the UK Government—it would be interesting to know why we agreed to those side letters in those cases if the Government’s preferred position is to include ISDS provisions. The UK Government are clearly happy to accede to those requests, as these side letters mean there is clear precedent for agreements to be made with CPTPP members and other states. As we progress the FTA with Canada, will there be there any willingness from our Government or the Canadian Government to look at bringing in any ISDS measures or remedies?

My Lords, I speak in favour of Amendment 26 and my Amendment 33. As my noble friend has clearly explained, this is about investor-state dispute settlement mechanisms. This is a very important issue, so I make no apology for exploring it in further detail, even at this late hour for a Committee.

For the benefit of new readers of Hansard—I am aware that everyone here is by now more than aware of what we are talking about—the investment chapter of the CPTPP contains the ISDS mechanism. The provision allows companies to sue Governments over decisions that impact their corporate profits, even if those decisions are made in the public interest. That is the key point. In simple terms, ISDS allows firms to sue the Government for legislation that they have introduced for the general public good, where those decisions impact on company profits. This can have disastrous effects across the board of social and public policies, but particularly on policies on the environment and health and measures to combat climate change.

These concerns are widely shared and this is a big issue, which is why I wanted it to be discussed in a separate group. The noble Baroness, Lady Hayman, mentioned it, and she apologised for being unable to be here to support the arguments being made. ISDS has been used to challenge important environmental regulations under separate arrangements: water pollution controls in Germany, a ban on fracking in Canada and various regulations on mining in east Asia and South America.

I am a bit hesitant to mention the impact assessment because, effectively, the Minister suggested earlier that although I have read all 142 pages of it, I need not really have bothered. He did not seem to feel that what was in it should be taken seriously—but it does touch on this. There is one bullet point of 26 words, which covers the issue, and it says:

“A modern and transparent investor-state dispute settlement mechanism will ensure that UK investors can access an independent international tribunal should they not receive such treatment”.

Well, that is only half of what the mechanism achieves. The other half is foreign companies suing this Government for measures that they take. My view is that is the more important part, yet we have no assessment of its impact, which I would have thought is essential. The truth is there is a real proximate risk that ISDS would be used to challenge new regulations which are essential for fighting climate change.

There is also evidence that ISDS in recent trade agreements would be used to challenge health provision, labour rights and other important legislation. Here are some further examples. ISDS was used in Egypt to challenge an increase in the minimum wage. Philip Morris sued Australia for attempting to introduce plain-packaged cigarettes—albeit it lost, as was explained. However, it is the threat that is the real problem. Then Slovakia was sued for attempting to nationalise part of the health service.

I am not given to quoting the CBI—it is not my usual source—but it has expressed concerns. It stated in 2021 that there was,

“a risk of the UK becoming disproportionately targeted through ISDS”

and that

“there could also be environmental implications of the UK being exposed to the ISDS mechanism”.

That is the CBI expressing its concern. The UK did not include ISDS in its recent trade agreements with Australia, New Zealand and Japan, and the provisions were suspended in the rollover agreement with Canada. The Government could have sought explicit side-letters in CPTPP to be exempt but has chosen not to do this, which means that, if this treaty is passed, the UK will now, de facto, have ISDS agreements with Canada and Japan. This contract would effectively import these settlement mechanisms into the existing agreements, which the Minister has referred to.

In my view, the ISDS process is suspect in and of itself. Arbitrators appointed to reach a settlement are paid on a case-by-case basis and benefit from an increase in claims. Governments cannot do it the other way; they cannot use the ISDS system to sue investors, so arbitrators naturally have a bias towards companies or investors so that they encourage further investor claims and thereby benefit commercially.

There is a code of conduct for ISDS proceedings. It was established under the partnership to address legitimacy concerns that arise when a system allows adjudicators to act as an arbitrator in one case and legal counsel in another—so-called double-hatting. This provides some objectivity in the process, which other agreements lack.

However, if we look at the recent record, we find that the most utilised treaty for challenging climate action is the Energy Charter Treaty, under which many cases have been brought by western-based companies against Governments taking action to limit their expanded use of fossil fuels. So problematic has this flood of cases become that the largest European countries have now all signalled their exit from the treaty. The Government themselves have said that they are reviewing their Energy Charter Treaty membership and will

“carefully consider the views of stakeholders in business, civil society and Parliament”.

In this context, we are not really having a debate about the ISDS process in general—that is a big debate, and one we need to have—but there is a growing realisation that these clauses are an impediment to social policies and to climate action in particular. It seems perverse to sign us up to another ISDS clause in the partnership, exposing us to potential future lawsuits from companies with tens of billions of pounds invested in the UK.

I have two questions for the Minister. First, the impact assessment says that it is a “modern and transparent” mechanism, but what is modern and transparent about it? Secondly, should we not have an assessment of the likely impact of the mechanism where foreign commercial interests can require limits? In effect, they have a veto on our domestic policies. We are told that the whole point of leaving of the European Union was to take back control, as my noble friend mentioned, but these mechanisms reduce our control, taking it away from governmental bodies and handing it over to people totally outside any sort of responsibility to the public.

My Lords, I thank noble Lords for allowing us to raise very important issues relating to ISDS. We have previously debated these in considering trade Bills and particular FTAs, and I have a great deal of sympathy for the arguments that have been made. My party supports a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes. I have been studying the European Union’s recent proposals on moving towards a more global, multilateral element, and that is my party’s position.

As we have heard, these amendments are important because it is vital that the Government state their view. We knew that the noble Lord, Lord Grimstone, was a strong supporter of ISDS mechanisms because he said so during consideration of the Trade Bill, but, as has been mentioned, we then had FTAs that excluded them. There is now uncertainty regarding those who were excluded but who are now also members of the CPTPP.

Like other noble Lords, I have questions to ask the Minister. Does the UK support an appellate mechanism within the CPTPP? Will the UK, as an acceded member, seek to implement the mechanism through the CPTPP in our relationships with Canada and Japan? Without the side letter, there is uncertainty. Will a company or a member be able to choose to resolve disputes through the CPTPP process or the FTA process? I am not aware of how that would operate, so some clarity from the Government will be important.

It is vital for us to know because of the effect that the noble Lord, Lord Davies, indicated. We have discussed quite a lot about the potential chilling effect of both mechanisms being in place, but also their uncertainty as mechanisms. I am aware that, on most occasions, the UK is a beneficiary of ISDS processes: the statistics speak for themselves. Nevertheless, the UK can be a victim of these. We have to watch out for that.

We are making progress on removing the ability to have SLAPP mechanisms in other legal situations to remove what could well be vexatious approaches, and we would not want to see that through the mechanisms here. It is important that the Government provide clarity, not only with our relationships going forward but especially on Canada, because we are acceding to a treaty while negotiating an FTA where it has been agreed that part of the negotiations would be fed in by a review of ISDS. I simply do not know where we stand, so I hope that the Government might be able to provide some clarity.

My Lords, I thank noble Lords for this important series of amendments and the discussion that we have been able to have around them. Since this relates to investor-state dispute settlements and I have investments in CPTPP countries, I declare that and direct all noble Lords to my entry in the register of interests—although I do not believe that I have any specific conflict and I am always happy to answer questions on any of those points.

For me, ISDSs are a very important element of protecting our businesses’ investments overseas. I spend a lot of my time talking to companies that make significant investments in many countries and, where they do not feel that they have protections, it creates a far higher level of work for the Government in trying to support them when they have disputes and clearly increases the hurdles for the necessary rate of return. So, from our point of view, having mechanisms where investors feel protected when investing into the UK economy by the consistency of the rule of law and the application of that law is very important. We are very comfortable with signing up to investor-state dispute settlement mechanisms.

The question from the noble Lord, Lord Purvis, on whether the FTA or signing up through the CPTPP is linked to ISDS, is perfectly reasonable. My view is that it would not make any difference. I am very happy to confirm that in writing. You would not pursue an ISDS case according to a specific route: from the investment point of view, the country either has that relationship or does not.

To the noble Lords, Lord Davies and Lord McNicol, I say that an important element of our system is that we have protections for our businesses when they invest internationally and that international businesses investing in the UK can have a high degree of confidence. It does not, at any point, derogate or hinder our right to regulate in the public interest, including in areas such as the environment and labour standards. In fact, this right to regulate is recognised in international law, and CPTPP expressly preserves states’ rights to regulate proportionately, fairly and in the public interest.

The noble Lord, Lord McNicol, is right to say that we have received a claim from investors relating to an ISDS. I do not think that that came from a CPTPP country, and it was in conjunction with another country. That is a fact, but not one that is necessarily in contradiction with the point that we have never singularly, acting on our own basis, had a successful claim made against us. That is important. We have nothing to fear from ISDSs, and I reaffirm that our flexibility to enact the legislation and frameworks that we want to run our country is not impeded if we stick to the rule of law and understand and respect the rights of investors putting their money in the United Kingdom.

I thank the Minister for giving way. The bit I am struggling with is the contradiction, and I do not think that he has answered that yet: we signed side-letters excluding ISDS with New Zealand and Australia, yet the Minister says how important they are. How does he balance these positions?

I am grateful to the noble Lord. We did accede, in terms of their negotiating priorities, to do that. We have long-lasting relationships with Australia and New Zealand, and we are comfortable allowing that to be the case as part of the negotiating process. The point is whether we are willing to sign up for them, and my point to noble Lords is that we are. Clearly, we need to make sure these processes are properly followed and that they suit us into the future—but currently, today, we are very comfortable signing up for them. I think it gives us, and our businesses, benefit, and creates an overall higher level of investment confidence within CPTPP countries, and within the UK.

I would like to thank my noble friend Lord Davies for his detailed explanation of this. It may well be something we come back to on Report.

I thank the Minister for answering the question regarding the side-letters, who was pushing, and how they came to fruition. I think that was important. The Minister’s position is that this is about protecting our companies. The amendment proposed by the noble Lord, Lord Davies, is a bit more detailed, but my Amendment 26 is simply calling for a review of the financial risks. I think that works well with the Minister’s position, so at this point I withdraw my amendment, but I am well come back to this on Report.

Amendment 26 withdrawn.

Amendments 27 to 35 not moved.

Amendment 36

Moved by

36: After Clause 5, insert the following new Clause—

“Review: application in Northern IrelandWithin twelve months of the day on which this Act is passed and every twelve months thereafter the Secretary of State must lay before Parliament a review of the application of section 4 to Northern Ireland, including—(a) a consultation of such persons as the Secretary of State considers appropriate;(b) an assessment of the impact of European Union legislation relating to geographical indications and conformity assessment of goods listed in Annex 2 of the Windsor Framework on Northern Ireland;(c) an assessment of the impact of Northern Ireland being subject to different geographical indication and technical barriers to trade provisions to England and Wales and Scotland.”Member's explanatory statement

This is related to the amendment in the name of Baroness Lawlor to clause 6, page 6, line 42.

My Lords, my Amendments 36 and 37, to which I speak, relate to the proposed arrangements for geographical indications and conformity assessments for Northern Ireland.

First, I shall say a word on the background as to why I proposed the amendments. The Explanatory Notes to the Bill say:

“The GI and Technical Barriers to Trade … provisions in this Bill will extend to but will not apply in Northern Ireland. This is because, under the terms of the Windsor Framework, EU legislation relating to geographical indications and conformity assessment of goods, as listed in Annex 2 of the Windsor Framework, continues to apply in Northern Ireland. Article 15 of the Accession Protocol ensures that the UK can fulfil its obligations under the Windsor Framework”.

I have not been able to discover an accessible UK Government-consolidated version updating the withdrawal agreement and its Northern Ireland protocol with the changes under the Windsor Framework in Annex 2. This may well exist somewhere in Whitehall, but it is not clear how to find it. However, the EU has a consolidated version on its website, with Annex 2 in respect of decisions taken by the Joint Committee under the withdrawal agreement. The most recent version from September sets out these arrangements to which we refer in respect of the Windsor Framework.

Articles 15(2) to 15(7) of the CPTPP accession protocol deal with Chapter 29 of the treaty, on exceptions and general provisions, which provides for an exemption for the Windsor Framework clauses in respect of CPTPP where there is an inconsistency. There is also provision in Article 15 for the commission to review the implementation of the CPTPP.

I hope that noble Lords will forgive this tour of the relevant documents, but it is difficult to see from the Bill that its procedures in respect of geographical indications and conformity assessment procedures will not apply to Northern Ireland. It will instead be subject to EU law, as is clear from what I mentioned. I therefore have two reasons for tabling these amendments.

We do not know how the application of Section 4 on GIs and the designation of origin will work out for businesses in Northern Ireland by comparison with the rest of the UK in its trade agreements with CPTPP countries, nor do we know how it will affect businesses in respect of internal UK trade west to east. I therefore suggest that it is fair and proportionate to require such a review as I propose in Amendment 36—with a new clause after Clause 5—to assess the impact of EU legislation relating to geographical indications and conformity assessment of goods listed in Annexe 2 to the Windsor Framework and to assess the impact of Northern Ireland being subject to different GIs from those in the rest of the UK. Although the Minister made a fair point about the timing of such reviews in general, might he remain open to a shorter period of regular reviews for the assessment of the impact of EU legislation? This would not be a demanding exercise, given the proportionately small size of the economy.

It is important that the questions raised about the comparative impact of EU legislation on GIs and the conformity assessment of goods are a matter not of speculation but of fact, in so far as it can be established. We pride ourselves on consulting widely before laws are made, commissioning assessments on a range of areas potentially affected and measuring and reviewing the impact of a law once it is in operation. If Northern Ireland is to remain under EU law—itself a matter of some concern—it matters for Northern Ireland’s overseas trade, the smooth functioning of the internal UK market and the wider economy there that we have scope for such a review.

My Amendment 37 to Clause 6 is for the purpose of making it clear in the Bill that the arrangements for designation of origin and GIs extend to but do not apply to Northern Ireland. I suggest to my noble friend that inserting this at the end of Clause 6 would make for transparency and clarity and would remove the danger of appearing to brush under the carpet the non-application of arrangements in Clause 4 to Northern Ireland. With that, I beg to move.

I thank my noble friend Lady Lawlor for her Amendments 36 and 37. I can assure her that exporters in Northern Ireland will benefit from CPTPP in the same way as exporters across the United Kingdom. It is also right that the people of Northern Ireland have a say in how EU laws apply in Northern Ireland. I would be delighted to have further discussions with her; this amendment was tabled quite late in the day, I am afraid, so I would like to explore further and see whether there are any nuances I could assist her with to give her a degree of comfort about how the CPTPP will apply to the whole United Kingdom, particularly Northern Ireland.

Once the Northern Ireland Executive is restored, the Windsor Framework will provide them with access to the Stormont brake, which is a powerful lever that enables them to block specific laws impacting Northern Ireland. There will also be regular opportunities for the people of Northern Ireland to have a say via the consent vote. For these reasons, Amendment 36 is deemed unnecessary, along with Amendment 37, as the clause relates to provisions that apply only in Great Britain, and the Windsor Framework makes clear which EU regulations apply in Northern Ireland.

On technical barriers to trade and conformity assessment, the clause’s application is limited to Great Britain, so under the Windsor Framework only EU legislation relating to conformity assessment of goods applies in Northern Ireland. The protocol for the UK’s accession to the CPTPP provides that nothing in the CPTPP will undermine the Windsor Framework. Therefore, the EU regulations on accreditation will continue to apply in Northern Ireland, rather than the requirement for national treatment of conformity assessment bodies.

The measures relating to geographical indications will also apply only in Great Britain—we debated this earlier—and will not apply in Northern Ireland, in line with our commitments under the Windsor Framework. Under the terms of the Windsor Framework, the EU’s GI schemes continue to apply to Northern Ireland, and our accession to CPTPP does not alter this. I do not know whether my noble friend will find this reassuring, but I have stated the case as it is. I am happy to have further discussions, but I would be grateful if, in this instance, she will withdraw her amendment.

I thank my noble friend for his reply and I look forward very much to discussions. It is important that since the Bill includes exceptions, we should include this exception as well, and it should be clear in the Bill what is proposed and what is not, if only to give reassurance to the different parts of the United Kingdom. Otherwise, it is rather difficult to find all the information gathered together. We have reviews of the arrangements under the CPTPP as they apply to members, and we have arrangements under the Windsor Framework as it applies to those parties. However, it would also be helpful to have some potential for considering the arrangements as they specifically affect Northern Ireland, which is an exception to the arrangements for GIs and conformity assessments under the CPTPP and therefore appears to be in limbo. I look forward to discussing these points, I thank my noble friend, and I beg leave to withdraw the amendment.

Amendment 36 withdrawn.

Clause 6: Extent

Amendment 37 not moved.

Clause 6 agreed.

Clauses 7 and 8 agreed.

Bill reported without amendment.

Committee adjourned at 4.48 pm.