PARLIAMENTARY DEBATE
CPTPP: Conclusion of Negotiations - 17 April 2023 (Commons/Commons Chamber)
Debate Detail
I am delighted to announce that since we first launched consultations in 2018, and after nearly two years of talks, the UK has substantially concluded negotiations to accede to the CPTPP. We will become the first country to join since the original partnership was founded. I am also pleased to tell the House that we are delivering on our post-Brexit agenda for a modern, free-trading global Britain, and that this agreement represents the future of global trade. Our negotiators have spent 21 months working painstakingly, and often through the night, to secure the best deal for the UK, and that is what they have done. This is an outstanding deal for our country, giving access to a fast-growing economic bloc that will allow us to sell our goods and services without giving up control of our laws.
Before I continue my statement, let me thank former Secretaries of State for International Trade. I thank my right hon. Friend the Member for North Somerset (Dr Fox), who developed this strategy and without whom today would not have been possible. I thank my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), who first appointed me as Trade Secretary, and who launched the negotiations and ensured throughout her tenure that this was a deal that would be delivered. I thank the present Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), for her support and invaluable advice. I also thank my current and former Trade Ministers.
I am told that Their Excellencies the Japanese and Vietnamese ambassadors are with us today. It should not go without saying that both countries were extremely supportive of our accession. I thank the ambassadors and their countries, and the various negotiators and working groups, for everything that they did to help the UK to accede today.
The CPTPP will act as a gateway to the Indo-Pacific, one of the most dynamic and fastest-growing regions on Earth. The Indo-Pacific is expected to account for the majority of global growth by 2050. The CPTPP will grow nearly 40% faster than the EU over the next three decades, and membership of the bloc will enhance access to a market of more than 500 million consumers for the UK’s goods and services. That is why I described the CPTPP as representing the future of global trade. The brilliant terms that we have secured mean that British businesses will be able to target these dynamic economies, which will account for 15% of global GDP once the UK has joined. As the partnership grows, so will its role in shaping the rules of global trade. This alliance will help us to confront growing protectionism and unfair trading practices, putting us in a stronger position to withstand global shocks.
British businesses will enjoy new opportunities as part of the CPTPP. For instance, 99% of current UK goods exports to its members will be eligible for tariff-free trade, new tariff reductions with countries such as Mexico and Canada will boost export opportunities, and a new free-trade deal with Malaysia will open up a £330 billion economy to the UK.
We will benefit from reduced red tape and simplified customs procedures across the bloc, and from modern rules of origin that offer British businesses new export opportunities and could help support UK efforts to diversify critical supply chains. We have all seen what can happen to supply chains when economic shocks happen. This global flexibility with like-minded partners will help British firms to become more resilient and protect economic security. For supply chains, this partnership is the future of global trade.
As a Minister who represents a rural constituency, I understand the concerns farmers may have about trade agreements because they have told me about them many times, so I know that Members representing agricultural communities will be delighted with the opportunities the CPTPP presents. I would like to put on record my thanks to the President of the National Farmers Union, Minette Batters, for recognising the opportunity to, as she puts it,
“get more fantastic British food on plates overseas”.
As the world’s demand for meat and dairy changes, having better access to growing and dynamic economies in other parts of the globe will protect British farmers and food producers into the future.
Our farmers will benefit from increased market access on these products, including through tariff free exports to Mexico for beef, pork and poultry and new zero-tariff access to Canada’s butter and cream market, which we did not have under our existing EU roll-over agreement. Our cheesemakers will have new market access to additional shared quotas, equating to about 7.5 times the amount we currently export to Canada, and our distillers will benefit from the elimination of tariffs of around 80% on UK whisky to Malaysia within 10 years. So for food and drinks exports, the partnership represents the future of global trade.
The UK is already a services superpower. Our digital, financial and legal services, among many others, are the envy of the world. This world-leading agreement will help them to grow further still. In future, a British firm will be able to operate on a par with a Vietnamese one without setting up a Hanoi branch. British firms will face less red tape in doing trade and business travel will become smoother and easier. For the modern services and tech economy, the partnership represents the future of global trade.
As you will know, Madam Deputy Speaker, no trade agreement comes without a quid pro quo, but we have taken our time to get this deal right for the UK and we never compromise on food quality or animal welfare standards. Joining CPTPP is no different. We will not have to change our standards to join, including on chlorine-washed chicken and hormone-fed beef, as many detractors would like to have the British public believe. We have also made sure that our high environment and labour standards are protected, so the CPTPP agreement includes comprehensive chapters for environmental protections, anti-corruption and improving workers’ rights. We have secured appropriate protections for the UK producers, reducing import tariffs in a manner proportionate to the market access we have received, and maintaining protections where needed.
Membership will enable us to shape the future of the agreement, including its future membership, and it will increase our influence and that of the wider bloc in setting the rules of the global economy. CPTPP shows how sovereign countries can uphold high standards without being subject to foreign court rulings or membership fees.
Parliament will rightly want ample opportunity to scrutinise this deal before ratification. My Department will follow the process set out in the Constitutional Reform and Governance Act 2010. Parliament will also have the opportunity to scrutinise any implementing legislation, as was the case with the recent Trade (Australia and New Zealand) Act 2023. The people of this country have voted for the future of global trade, not the past. On goods, on services, on supply chains, on growth and on rules-based trade without ceding sovereignty or losing control of our borders, this agreement lives up to that instruction. We are securing a place for the UK in the future of global trade, and I commend this statement to the House.
We on the Labour Benches are pro-trade, pro-business and pro-worker. Accessing new markets is essential, and it is particularly welcome because of the Government’s dreadful record on trade. The Office for Budget Responsibility forecasts that UK exports are due to fall by 6.6% this year, which is a more than £51 billion hit to the UK economy. That will only further impact on our public services, which are already under incredible pressure, and make the cost of living crisis even worse.
What exactly Ministers have agreed to in these accession talks will need to be scrutinised carefully, because I have watched Ministers come into this Chamber to laud trade deals, only to criticise them when they leave office or, in the Prime Minister’s case, when they are temporarily out of office—he said the Australia deal is “one-sided.”
This announcement was slipped out on the last day before recess. Of course it is great that the Secretary of State is here, but answers are needed. First, other countries that have joined CPTPP have secured important safeguards and support for their producers. It is vital that Ministers set out the details of what they have negotiated. In her statement, the Secretary of State mentioned that all trade deals involve a quid pro quo, but she did not say what the quid pro quo is in respect of CPTPP.
Specifically, New Zealand put in place side letters with all the other signatories to opt out of the investor-state dispute settlement mechanism, which could give investors from abroad the right to sue the Government for choosing to regulate in a particular area. The Government seem to have excluded ISDS with Australia and New Zealand, but not with the other countries. Why have they done that, and what assurance can the Secretary of State give that the Government can legislate in the interests of the British people without the threat of being sued under this mechanism?
The Secretary of State mentioned maintaining certain protections for agriculture, but can she be more specific? What particular support will the Government offer to the agricultural sector and when, particularly given the strong feeling that Ministers sold out our farmers to get the Australia deal over the line? Have specific conditions been put in place to address concerns about the importation of palm oil, which has been linked to deforestation?
The Secretary of State did not even mention the devolved Governments in her statement. What engagement does she proposes to have with them? What detailed assurances can the Government provide that the CPTPP agreement will not undermine the Windsor framework?
The Secretary of State also mentioned our influence as a member of CPTPP. We know that China applied to join in September 2021, so what assurances on economics and security have Ministers asked for from existing members in respect of China’s application?
The Secretary of State also mentioned the chapters in CPTPP, including on workers’ rights, on which she will know there are concerns in particular member countries. How will Ministers assure us that the strongest possible workers’ rights are adhered to, to ensure that UK workers operate on a fair playing field and that vulnerable workers internationally do not face exploitation?
I know that the Secretary of State does not accept the estimate that accession is worth 0.08% of GDP but, rather than debate the figure, what proactive steps will the Government now take to support our exporters to ensure the figure is driven up?
First, the right hon. Gentleman claims that this deal has happened at the expense of the India free trade agreement, but I stood at this Dispatch Box and told him that it is about the deal not the day. I know the Labour Front Bench would like us to rush into a deal that does not get the best for this country so that they have something to criticise, but we are not going to do that. We are going to negotiate a free trade agreement that is of mutual benefit and meets the needs of both UK and Indian citizens.
The right hon. Gentleman is right to say that we have not got a US FTA, but that is because the US is not doing FTAs with any countries; this has nothing to do specifically with the UK. When Administrations change, we cannot control what the partner country wants to do. So instead of just moaning, we have got on and signed memorandums of understanding with US states. Indeed, the Minister of State, Department for Business and Trade, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) is not here today because he is on a plane to Oklahoma to sign such a deal. I am pleased to let the House know that.
The right hon. Gentleman talks about a quid pro quo, and this is absolutely right. One trade lesson 101 that I would like to give him is: you cannot agree a trade deal where you get everything you want and tell the people on the other side that they can have nothing. If he has a formula for negotiating a deal where we can sell everything to other countries and they cannot sell anything to us, he should come to the Floor of the House and explain how that can be done. A quid pro quo means having a deal that is of mutual benefit: we open our markets and they open theirs. When the legal text is done and we sign the agreement, there will be plenty of time to scrutinise—[Interruption.] He is chuntering from a sedentary position, “What is it? What is it?”. I would like him to read the statement or listen to it. We have said that 99% of goods will be tariff-free. That is something that we have negotiated across all parties. We have also talked about what we get from rules of origin.
The right hon. Gentleman was clearly listening to me on the radio when he heard me dispute the 0.08% figure. That is not because the figure is wrong; it is because it is doing something different from what he thinks it is doing. It is a model, not a forecast. What we do with models is quite different from what we do with forecasts. The model he is touting at the moment is not tailored for the specific behaviour and dynamics of the UK economy, it uses data from 2014 and it excludes growth in the membership of the bloc to those who have applied. So what we should not look at is the 0.08% figure, as it is purely a measure of what would happen if we did not have this trade deal—that is how the model works, and models are not forecasts. Instead, I ask him to focus on the facts, which I have repeated time and time again: the global middle class is going to be coming from the Indo-Pacific; we are talking about 500 million consumers; and by 2050, it is going to outstrip the European Union. We are getting in from the ground up and we are going to be shaping the future of the UK for future generations. This is not about trying to grow trade in the next five minutes. I have used the example previously, but this is like investing in a start-up and complaining that it is not brought any money in as soon as you have signed the agreement. We are thinking about the future, not the past.
The right hon. Gentleman also mentioned what we are doing for the agricultural sector, and I point to what the National Farmers Union said. We know that British farming is not going to succeed unless we can export. We have created an exporting deal; this is not just about the exports, but the services. All of that is going to benefit farmers and the agricultural sector, to the point that the NFU has come out to support this deal. I hope that Opposition Members can do that, even though it was us who negotiated it. I would like it if they would think about the country and not just about party politics.
My right hon. Friend is right to make the point about the figures and the modelling. This is a challenge that we face: there are many people who are, by and large, functionally innumerate and do not necessarily know when to use figures. The figures that we released from the Department were an impact assessment on the absence or presence of a trade deal. They are being misused by all sorts of detractors. [Interruption.] The shadow Minister says that civil servants do not tell lies. No, they do not. I have not said that the figures are incorrect; I have said that they are doing something quite different from what Labour Front Benchers think they are doing. I will explain it as much as is possible, but I cannot understand it for them. If they would like a lecture on what these forecasts and impact assessments do, I am very happy to give them one at a future date.
Previous Ministers—including the previous Brexit Secretary, no less—failed to understand the important role that the port of Dover plays in UK imports and exports. I would not normally consider this necessary, but I feel that I may have to explain, for the benefit of some of the sedentary chunterers across the Chamber, that the Pacific is quite some distance away from the UK, which is why even the Government’s own forecasts are predicting that the UK emissions of greenhouse gases will increase as a result of this deal.
The deal threatens UK food standards because it could open the door to pesticides that are banned in the UK for health and environmental reasons. Worryingly, it also includes text about investor-state dispute settlement clauses, with all the implications that carries, and for absolutely what? The Minister can dance on the head of a pin about the difference between models and forecasts, but the deal is still a pale imitation of the trade deals that we have left behind, with the 4% hit to GDP from Brexit.
Why are the Government so desperate to agree a deal that carries so many risks for so few potential rewards? Where is the support for the domestic agrifood sector? Finally, the Royal Society for the Prevention of Cruelty to Animals, ActionAid, Fair Trade and the Trade Justice Movement all say that the deal makes a mockery of this Government’s sustainable trade goals. Are they wrong?
It is completely untrue to say that this deal lowers food standards. Food standards are not part of a free trade agreement. This is not the EU. We are not joining a political union. Our regulations stay in the UK. Fundamentally, that is something the SNP and other Members do not understand. We make the rules about our food standards. That means that if something does not meet UK food standards, it cannot be bought and sold into this country. What this deal is about is trade, not regulation. If Scotch whisky representatives and other Scottish exporters had to listen to what the hon. Gentleman had to say, I think they would be most incredibly disappointed. He does not understand trade. He is yet another person who has just read a press release from campaign groups and has not tested the arguments. I am very happy to stand at the Dispatch Box and rebut all that rubbish.
Negotiations of the CPTPP involved a strong commitment from all member states, but will the Secretary of State join me in paying particular thanks to the Government of Japan for their strong support for the UK’s application and their hard work as chair of the accession group? Does she look forward, as I do, to increasingly strong trade and investment between our two countries and other member states, especially in areas such as offshore wind and automotive, as well as in fintech, of which an important delegation from Japan is visiting the UK this very week?
I congratulate the Secretary of State on her work on the trade agreement. She talks about the agriculture community; can she confirm that the Trade and Agriculture Commission will have a role in scrutinising the agreement? She also mentioned that under the Constitutional Reform and Governance Act 2010, there will be the opportunity for the House to scrutinise the agreement. Will that have to be done within 21 days? Will we have a vote and a debate on the agreement on the Floor of the House?
“reduced red tape and simplified customs procedures across the bloc”.
However, they want it rather closer to home, I think. Businesses such as Seiont Nurseries in my constituency find that the only practicable way of exporting plants to Ireland is via England, Belgium and France, before finally reaching our near neighbour—a country that is actually visible to us across the Irish sea. Can the Secretary of State tell the House in any detail how this agreement will benefit small exporting businesses in north-west Wales?
On 3 November, I asked the then Minister of State, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), about the place that lamb and sheepmeat and UK lamb and sheep farmers played in the CPTPP negotiations. Will the Secretary of State outline the benefits to those specific producers of sheepmeat that she has achieved in this deal, so that I can reassure the farmers of North West Hampshire—and, indeed, the whole of the United Kingdom—that our fantastic British lamb will appear on tables across the world?
One thing that I really want to emphasise, because there seems to be some confusion about this in the broader narrative, is that this is not a deal to replace our deal with the EU. We already have a free trade agreement with the EU—we did not leave with no deal—so we will be the only country that has such a comprehensive EU free trade agreement and is a member of CPTPP. That is quite a unique and fantastic position for the UK economy to be in, so I hope that that is something I have been able to clarify for Members across the House.
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