Oral answers to questions (Commons): International Trade - Dec 20

1. What estimate he has made of the number of trade agreements that the UK is party to as a result of its membership of the EU that would be rolled over on exit day in the event that the UK leaves the EU without a deal. [908317]

6. Which countries that the EU has a trade agreement with have notified his Department of restrictions on their ability to offer the same terms in a future trade agreement with the UK. [908324]

We will replicate existing EU free trade agreements and their preferential effects with partner countries as far as possible, while making the technical changes needed to ensure that agreements can operate in a bilateral context. We will inform Parliament and the public when agreements have been signed.

First, I wish you, Mr Speaker, other Members and staff a very merry Christmas. 

I would like to do something that I do not often do: thank the Secretary of State, his Ministers and his staff for organising a very helpful series of all-party briefings to Members. They are very welcome and informative.

The Secretary of State will know that as a result of our EU membership, we have 35 free trade agreements in place, 48 partly in place, 22 pending, and 100 sectoral arrangements with the US that go beyond World Trade Organisation rules. I would like to hear the Secretary of State say precisely when he expects all those to be rolled over.

I am grateful to the right hon. Gentleman for his comments. It has been extremely useful to have been able to raise, across the House, the understanding of complex trade issues that have not always been within the UK Government’s remit in recent years. 

As the right hon. Gentleman rightly says, there are a number of agreements. My Department is responsible for some of them, some are the responsibility of the Department for International Development, and some are the responsibility of the Foreign and Commonwealth Office—they cut right across the whole Government. We are making very good progress across a whole range of them. Of course, we have now initialled the first of those major trade agreements, with Switzerland, which is responsible for almost a fifth of the total trade within those agreements. Others will follow. The discussions are very often commercially quite sensitive, so we will inform the House when we have signed agreements, and not before.

Mr Speaker, like the right hon. Member for Carshalton and Wallington (Tom Brake), I wish you, the staff, Ministers and everybody else a merry Christmas and a happy new year. Have any countries indicated a preference for the UK delaying Brexit without a deal?

Not directly in the discussions that I have had with other countries, but there is clearly a desire to have an agreement, so that there is time during the transition of these agreements before they become a more bespoke relationship. The two-year implementation period set out in the Government’s proposals would enable that, so that is clearly preferable for both sides.

Can the Secretary of State confirm that if we leave with no deal, the sun will still rise on 30 March, Britain will remain a premier global trading nation and the current booms in exports and inward investment are set to continue?

I am grateful to my hon. Friend for his usual patriotic and optimistic tone. He is right that the country is in the middle of an export boom; our exports are at an all-time high. In the first six months of the year, according to the United Nations Conference on Trade and Development, the United Kingdom was second only to China in inward investment. It is truly a very positive picture, and we will be able to build on that, whatever our relationship with the European Union.

On behalf of our Front Benchers, may I extend Christmas greetings, particularly to the Secretary of State and his team? Mr Speaker, in Prayers this morning, your chaplain referred to the perseverance of the wise men; I think we all need that. 

What assessment has the Secretary of State made of potential trade partners being unwilling to conclude new roll-over agreements with the UK because of most favoured nation clauses in agreements that they have concluded with other countries, to which they are unwilling to give the same trade preferences as they do to the EU? I am thinking of countries such as Singapore, which might be unwilling to give other Trans-Pacific Partnership countries the same access to their telecoms market that the EU has enjoyed.

We discuss matters with other countries on a case-by-case basis. None of them has said to us that they do not want to continue to have an agreement with the United Kingdom; that is entirely understandable, as we are the world’s fifth biggest economy. Where we are able to translate elements into a bilateral context, we are doing so. We are working through those agreements. We are making good progress, and I will report to the House as and when each of them is signed.

2. What recent discussions he has had with members of the WTO on global (a) food security and (b) agricultural trade. [908319]

I add my Christmas wishes to you, Mr Speaker. 

Both issues have been covered recently in discussions with World Trade Organisation members. For example, agricultural global value chains were considered at the recent G20 trade and investment working group. As a supporter of the rules-based multilateral trading system, we believe that WTO members must continually look for ways of strengthening the system.

I understand that a number of important WTO member states have objected to the UK and EU splitting tariff rate quotas post Brexit. At the end of October, the Secretary of State announced that the UK would be entering into general agreement on tariffs and trade negotiations. Is that another illustration of the fact that we cannot unilaterally negotiate trading arrangements post Brexit with other countries, and that it requires agreement? It looks like it will be an incredibly lengthy and tortuous process that will not have quick results.

The hon. Lady will know that the vast majority of nations represented in the WTO accepted the deposit of our schedules. Some did not and we are entering article 28 negotiations with them, as is completely normal. We can trade on those schedules as deposited until then—the European Union has been trading on uncertified schedules since 1995, so it should not impede our trade. Yes, negotiations will continue to agree those tariff rate quotas.

You have had a bit of a week, Mr Speaker—we all have. May I take this opportunity to wish you a very restful Christmas and a happy new year?

Does the Department for International Trade accept that what one needs for international trade is willing buyers and sellers? Has the Department made any estimate of how much lower food prices will be to British consumers if we leave the European Union without the withdrawal agreement?

The situation after a hard Brexit—a no-deal Brexit—is a complex one and will rely on a large number of factors. Some Government policies are yet to be absolutely finalised. The pricing of goods in the UK market, particularly for food, is regarded as extremely sensitive, as indeed are the incomes and livelihoods of farmers throughout the UK who rely on selling those products.

Merry Christmas, Mr Speaker. 

The memo published by the European Commission yesterday was clear that, if the UK leaves with no deal and ends up trading on WTO terms, customs declarations and other checks will be required on exports into the EU. Have the Government estimated how much that will cost UK business?

The Prime Minister has brought back a deal from Brussels. I believe it is the right deal for this country. If it is put in place, what the hon. Gentleman describes will plainly not be an issue.

Happy Christmas to you from Taunton Deane, Mr Speaker. [Interruption.] I thought I would get that in.

The EU is the largest trading partner for agriculture and food for this country and, under our relationship with the EU, agriculture has blossomed. Margins are very tight. Will the Minister give assurances that, in the worst-case scenario, agriculture will not suffer under WTO rules? In the best-case scenario, does he agree that accepting the deal is by far the best option for our farmers?

I apologise, Mr Speaker—I was not listening carefully to the question. I am told by my Front-Bench colleagues that the answer is yes and yes.

I think we appreciate the Minister’s candour. There was no dissembling there, and we thank him for that.

Merry Christmas to everybody.

Will the Minister confirm that any future trade agreements will not undermine current environmental and animal welfare standards?

On this occasion I was listening and have the question in my mind. I deeply apologise to my hon. Friend the Member for Taunton Deane (Rebecca Pow)—she is listed as having another question.

My right hon. Friend the Secretary of State has repeatedly made it clear in the House that we will not lower our standards in pursuit of free trade agreements. To reassure the hon. Gentleman, apart from anything else it would be business madness to do so. A lot of our exporters rely on Britain’s reputation abroad for quality, and undermining it would simply not work. Further, large numbers of Labour Members did not vote for the comprehensive economic and trade agreement, which contained specific chapters—chapters 5, 23 and 24—that pursued exactly what he wants. Labour Front Benchers did not support it.

3. What steps he is taking to consult on potential new free trade agreements. [908320]

This year the Department for International Trade ran four public consultations on potential UK free trade agreement negotiations with the US, Australia and New Zealand, and on potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—otherwise known, snappily, as the CPTPP. The insights gained from our consultations will inform our overall approach and our stakeholder engagement plans during these potential free trade agreement negotiations.

I thank my right hon. Friend for his answer. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership represents one of the most exciting opportunities for the UK post Brexit. Can he confirm that he has consulted with the necessary stakeholders and partners to ensure that we can begin talks on our country’s accession the moment we leave the European Union?

Ministers have been engaging with all 11 CPTPP members. I have recently spoken to a number of Ministers, including from Singapore, Mexico, Canada, Australia, New Zealand and Japan, and the positive response to our engagement has been demonstrated by the supportive comments from some of the leaders of those countries—including Prime Minister Abe of Japan and Prime Minister Morrison of Australia—all of whom are very keen, as Prime Minister Abe said, to welcome Britain with open arms as soon as possible.

But isn’t the problem for the Secretary of State that these potential new free trade agreements will not be concludable until we know what the UK’s trade relationship with the EU is? Does he not now have to admit that it is not possible, realistically, to sign or conclude free trade agreements with all those other countries, because it will be several years—maybe two, three or more—before we conclude our trade arrangement with the EU?

Of course, the best thing that any of us could do is ensure that we have an agreement as soon as possible with the European Union, which Members of this House will be able to contribute to. Of course, if the House decides that we are not to come to an agreement with the European Union, there will be adverse consequences.

It has been very difficult for the International Trade Committee to scrutinise progress in the roll-over of current trade agreements because of the sensitivity of the negotiations. Will my right hon. Friend look urgently into establishing a confidential Commons Committee that has access to restricted negotiating documents, to ensure proper scrutiny of any talks over new free trade agreements?

My hon. Friend raises an important issue, which she has also raised in the Committee. The Government are looking at ways in which we can improve scrutiny without undermining the confidential nature of the discussions that we have. I will want to discuss the issues with the Opposition as well to see whether we can have a robust system that is also secure. That would be to the benefit of the whole House.

A merry Christmas from Feltham and Heston to you, Mr Speaker and to everybody else. 

This week, I attended an interesting seminar by Global Policy Insights on trade with the Commonwealth pre and post Brexit. The Commonwealth accounted for 8.9% of UK exports a couple of years ago—roughly the same as UK exports to Germany. Could the Secretary of State update the House on what discussions his Department is having with Commonwealth nations on the potential of free trade agreements and on what success he is having?

The hon. Lady raises an important point. Of course, we have a number of agreements already with a number of Commonwealth countries and groups of Commonwealth countries, and we are close to signing one, which we will announce to the House shortly. However, we are also concerned about the level of intra-Commonwealth trade and how we can use that very large population, often with common legal rules, to enhance it. At the Commonwealth Heads of Government meeting in London, we set out our plans for a trade audit tool to help improve it, and we have had very positive engagement on that. There is tremendous opportunity inside the Commonwealth to allow countries to trade their way out of poverty, and we intend to ensure that that is made possible.

It is vital to forbear from agreeing a price before negotiations begin and to maintain the ability to walk away, isn’t it?

Self-evidently.

Last year, the National Institute of Economic and Social Research told us that leaving the single market would result in a loss of trade of between 22% and 30%, depending on the nature of the Brexit. It also told us that concluding deals with the BRIC countries and the main English-speaking economies would result in an increase in trade of 2% and less than 3% respectively. So although I wish the Secretary of State well in his future negotiations, is not it time to concede that there is no number of new free trade agreements or trade deals he can strike that can possibly compensate for the loss of trade with the European Union?

First, it depends on our level of access to the European market. That is why the Government have put forward proposals to maximise our access to a European trade area. However, it also depends on growth in other markets and, as the International Monetary Fund has said, in the next five years 90% of global growth will be outside continental Europe. That is where the opportunities will be, and that is where Britain needs to be, too.

4. What proportion of his Department’s staff are supporting businesses that export to the EU in preparation for the UK leaving the EU. [908321]

Merry Christmas to you, Mr Speaker, the staff and all Members. 

We have a dedicated overseas European network of 253 staff promoting exports and investment. At home, we have sector and regional teams equally dedicated to the promotion of the UK economic interest. Every one of the 3,920 people in DIT, whatever their specific function, acts to support exports from Scotland and the rest of this United Kingdom.

I am delighted to hear it. Regardless of whether the disastrous agreement that the Government have reached with the EU comes into force, it is indisputable that unless we stay in the single market and the customs union, the UK will become a third country in its EU trade relations. Has the Minister included in the export strategy a position on whether businesses will have to get economic operator registration and identification—EORI—numbers if they want to export to the EU, our largest marketplace by far?

Of course, it is important to remember that for Scotland, the rest of the United Kingdom is its largest marketplace by far. More than 60% of trade from Scotland goes to the rest of the United Kingdom, whereas just 17% goes to the entirety of the rest of the EU. I suggest that the hon. Gentleman lean on his Front Benchers and try to ensure that his party, as the other Opposition parties should do, joins the Government in getting a deal with the EU that makes sure that Scottish exporters and those in rest of the country can have the best deal possible.

Mr Speaker, I wish you a happy Christmas and a calmer recess. 

I congratulate the three wise men on the Front Bench on the huge effort in exporting UK plc. However, it is my understanding that exports account for only about 30% of our GDP, compared with 47% in Germany. Where do they think the greatest opportunities are, within or outside Europe, to narrow that gap and export more to the rest of the world?

I thank my hon. Friend for that entirely useful question, which highlights the importance of increasing exports. As a percentage of GDP, our exports have been in the 20s seemingly for time immemorial. We have got the figure over 30% and we have set a target of reaching 35%. The whole country needs to engage in this more. We think that there are more companies that could export and do not than there are companies that can and do. That is why the Department has been set up and why are we are dedicated to trying to increase that percentage. We want to improve performance in all parts of the United Kingdom. For example, in Scotland, exports constitute just over 20% of GDP, whereas the figure is more than 30% in the United Kingdom overall.

5. What steps he plans to take to ensure that future trade agreements deliver economic benefits to all constituent nations and regions of the UK; and if he will he make a statement. [908322]

This Government are committed to working closely with all nations and regions to deliver a future trade policy that works for the whole of the UK, and we will continue to engage with the devolved Administrations. I visited Cardiff on 15 October, where I discussed this topic with Assembly Members. The Board of Trade will also ensure that the benefits of free trade are spread throughout the UK.

A very merry Christmas to you, Mr Speaker. I am grateful to the Minister for his answer. However, will he elaborate on his work with the Welsh Government to ensure that when trade agreements are made, regional investment happens across the south Wales valleys, north Wales and mid Wales and benefits the whole of Wales rather than focusing, for example, on cities, so that valley communities like mine can really benefit from the economic development that comes from trade agreements?

We are currently working on a concordat with the Welsh Government, through which they can contribute directly to the process for free trade agreements. I would expect them to make those points to us and tell us where the industries that matter to them are. We can therefore construct our free trade policies around that input.

Increased trade inevitably leads to more business for our major ports, such as Immingham in my constituency. Does the Minister agree that free trade zones and free ports are worthy of serious consideration post-Brexit?

All I can say at the moment is that anything that can be done to increase free trade in the future should be looked at. Indeed, free ports have been looked at and I know that my hon. Friend has been a great champion of the idea. We will continue those discussions.

Supporting our regional economies through trade agreements is about more than just growing exports and opening markets to our producers; trade agreements should also be used to unlock and encourage investment across the UK. A recent report by the Centre for Towns shows that in 2017 nearly 60% of foreign direct investment went to the UK’s biggest cities, that 70% of that went to London, and that towns and communities elsewhere have seen FDI decline or remain flat. When will the Government listen to Labour and take the action needed to rebalance the economy and attract FDI right across the country?

I thank the hon. Lady for her question and, indeed, the whole Labour Front-Bench team for our associations and discussions during the year, which have, on the whole, been friendly and constructive.

The hon. Lady will be glad to hear that the Government absolutely understand the issue. Our foreign direct investment programme has begun to look at pre-packaging offers out in the regions, particularly in smaller towns, which quite a lot of major potential investors will not know of—they will not know about the skillsets there or about the availability of land and so on. They have been pre-packed into larger blocks so that foreign direct investors can be presented with them as places where they can take their investment outside London and the major cities.

T1. If he will make a statement on his departmental responsibilities. [908347]

My Department is responsible for foreign and outward direct investment, establishing an independent trade policy, and export promotion. I am pleased to announce that this morning UK Export Finance has provided a loan of £27.9 million, under its direct lending facility, to support UK water and waste specialists Bluewater Bio to upgrade water treatment in Bahrain. This announcement shows the continuing demand for British expertise across the globe.

Constituents have written to me to say that we should sit over Christmas to get a meaningful deal. That is not going to happen, so let me wish you a very good one, Mr Speaker. 

Given the pictures of the Prime Minister with the Crown Prince of Saudi after Khashoggi was chopped into pieces, and our Government lavishing praise on Bangladesh, a country whose status has recently been downgraded from democracy to autocracy by several human rights non-governmental organisations—not to mention Trump stating that we drop what he calls “unjustified” food and agricultural standards before signing a UK-US trade deal—has not our desperation for bilateral post-Brexit trade blinded us to all ethical and moral considerations before the ink has dried on a single deal?

Absolutely not. This country takes very seriously its international human rights and ethical responsibilities. In fact, I would go so far as to say that, rather than being an apologist, the United Kingdom is a great supporter and champion of those very values globally.

T2. Mr Speaker, I am sure you will join me in condemning the mindless thug who threw a bottle at man of the match Dele Alli last night. I will indicate the 2:0 score so that you do not have to read my lips. With UK exports to Israel up 30%, what steps will my right hon. Friend take to ensure that we increase trade with Israel as we move forward outside the European Union? [908348]

Israel is a very important trade partner for the United Kingdom, and our bilateral co-operation has increased. When I met Prime Minister Netanyahu a few weeks ago, we agreed to have a bilateral trade and investment conference in 2019, to increase those relations as far as possible.

Merry Christmas to you, Mr Speaker, and to all staff and all Members.

Chambers of commerce across the country contribute to export success through the brilliant advice they deliver all year round. Their direct local knowledge and expertise is much better than the signposting on any website that the Secretary of State might care to mention. In the spirit of the festive season, will he take this opportunity to guarantee the renewal of the contract with the British Chambers of Commerce for the delivery of export advice?

We constantly review the mechanisms by which we can give that advice. One of the things that came across clearly from our consultation on the export strategy was that businesses were looking for peer information rather than information from higher sources. That is why the Government have taken on extra staff for our online community for businesses, so that they can get real-time information from similar businesses.

T4. People in Japan, Singapore and China are getting a taste of Somerset, because Sheppy’s cider from my constituency of Taunton Deane is increasingly being exported to those countries, which is really exciting. Can the Secretary of State give us some news about the work we are doing with China on potential trade and investment? [908353]

As part of the UK-China joint trade and investment review announced in January 2018, officials of both countries took part in the third series of technical discussions in Beijing in November. I am happy for my team to be promoting the benefits of Sheppy’s, but I want them to ensure that people also enjoy the wonderful taste of Thatchers, made in North Somerset.

T3. According to the north-east chamber of commerce, businesses in the north-east are concerned about the future of international trade deals, and especially about rules of origin, after March next year. What can the Minister say to reassure our north-east businesses? [908349]

That the House of Commons should vote for the Government’s proposal, which will deal with those very issues, to ensure that we get continuity of trade.

T5. I wish you, Mr Speaker, the staff of the House and all colleagues a very happy Christmas. What early assessment has my right hon. Friend made of UK exports in this festive period? [908354]

British business continues to export strongly. For example, we are working with companies such as Hawkins & Brimble to maximise global retail opportunities. I am pleased to say that, thanks to help from the Department, the business will be lining the shelves of 300 stores in Canada and the United States with its range of male grooming products—a subject that I know is close to my hon. Friend’s heart—after securing £500,000 of contracts

How many freedom of information requests has the Secretary of State’s Department withheld on grounds of cost?

I am not aware of the exact statistic for cost, but I will happily admit to the House that our record on freedom of information requests in the past has not been good enough. However, a great deal of effort has been put into trying to ensure that we respond on time, and in the latest quarterly report from only yesterday we managed to reach 90%, which is what we were trying to achieve. If the hon. Gentleman wishes, I will happily write to him with an answer.

The UK Israel Tech Hub estimates that the tech partnerships that it has created have an economic impact on the UK of around £800 million. What can we do to continue to grow this mutually beneficial relationship?

The Tech Hub has been a huge success and a great example of the sort of model that we should be looking at, but we hope to be able to expand that relationship through the trade and investment conference that we will hold in 2019, which will be a celebration not only of our record of trade with Israel, but of the future of our trade with Israel.

Sheep farmers in my constituency export 92% of their produce to Europe and beyond, but have absolutely no idea what is going to happen to their product after 29 March next year. What comfort can the Secretary of State give those sheep farmers to allow them to enjoy a happy Christmas?

Were there to be no deal, that would be a problem for the export of sheepmeat to Europe, so there is one clear answer available to the right hon. Gentleman, which is to support the Government’s proposal, which will enable his constituents to get the market assuredness that they want. 

May I finish by wishing you, Mr Speaker, the Members of the House and particularly the staff of the House of Commons a very happy Christmas? Earlier the shadow Secretary of State mentioned the words about the wise men that we heard in Prayers this morning. We would do well to remember that if the wise men had not been carrying cross-border commodities of gold, frankincense and myrrh, we might not be getting the same messages we get today.

I thank the Secretary of State for his characteristic courtesy.