Asked by
To ask His Majesty’s Government which of the world’s three
largest economies—the United States of America, the European
Union, and China—they will prioritise in seeking to improve
trading relations.
(Con)
My Lords, we are engaging with all three trading partners to
remove trade barriers. In the year ending June 2022, the US was
our largest single trading partner, accounting for 16% of total
UK trade, worth £234.7 billion. In this period, the EU remained
our largest trading partner overall. We exported goods and
services worth £298.1 billion, which is 42.9% of our total trade.
China was our fourth largest single trading partner, with £92.9
billion of bilateral trade, which is 6.3% of total UK trade.
(Lab)
My Lords, I thank the Minister for that Answer. Given that trade
with the EU makes up around half our imports and exports, it is
vital that FTAs with larger non-EU markets, such as the US, China
and India, are advantageous to the UK economy. In recent
departmental questions in the other place, Ministers seemed
unable to put an estimated net value to any future trade deals
that the Government are pursuing, including CPTPP. Is this
because the estimates do not exist or because the Government are
unwilling to share them? Will the Minister therefore provide an
estimate of net values to the UK of trade agreements currently
being negotiated, either now or in writing if he does not have
the figures at his fingertips?
(Con)
I certainly will. I will read Hansard tomorrow, in terms of what
I am about to say. We have agreed trade deals with 71 countries,
plus the EU—partners that accounted for £814 billion of UK
bilateral trade in 2021. As the noble Lord will know, we have
signed FTAs with Australia and New Zealand and a digital economy
agreement with Singapore. We have in progress India—a long way to
go—Greenland, Canada, Mexico, the Gulf Cooperation Council and
Israel.
(CB)
My Lords, what does the noble Viscount say about having a trade
deficit with the People’s Republic of China of some £40 billion,
when China is upgraded by the Government themselves as being a
threat to the security interests of the United Kingdom, and about
spending some £10 billion—the size of our entire overseas aid and
development budget —on items associated with Covid, not least 1
billion lateral flow tests, bought from the People’s Republic of
China? Is it not time that we increased our own manufacturing
capacity to ensure that such items could be made in the United
Kingdom by British workers? Surely we must see that the lack of
resilience and too much dependency at a time like this, given
what has happened with Ukraine and Russia, is not something that
this country should follow.
(Con)
I always listen carefully to the noble Lord. He makes some good
points. I start by saying that 61,000 jobs in this country are
reliant on Chinese companies. However, human rights are a major
issue; I hope that chimes with the remarks made on many occasions
in this Chamber in providing evidence of the extent of China’s
efforts to silence and repress the Uighurs and other minorities.
It is important that we create a balance between continuing trade
with China and the fact that we are not looking at forming an FTA
with China at present.
(LD)
My Lords, we were promised that there would be no friction in our
trade with Europe. There is enormous friction. We were also
promised by now a full FTA with America that would mop up any
slack in our trading relations with Europe. That has not
happened. As the noble Lord, Lord Alton, said, we now have the
largest trade deficit in our nation’s history with one
country—China—making up £40.5 billion. Is it not now in our
strategic interest to reduce the barriers between us and our
nearest neighbours—democratic countries—and to make sure that our
economy is no longer wholly dependent on imports of goods from
China? Why are the Conservative Government making the UK
dependent on goods from China?
(Con)
I do not believe that we are doing that. On the noble Lord’s
points, I say that our free trade agreement negotiations with the
US—it is, as we know, a very important market—are paused at the
moment for reasons he will know. On the EU, we know that progress
is being made. Obviously, some extremely difficult and sensitive
negotiations are ongoing, but we are firmly of the belief that we
will be able to resolve these.
(Con)
My Lords, with all the talk about deficits and the mercantilist
mood in the House, will my noble friend the Minister take this
opportunity to remind the House that imports are a prize, not a
concession, and bring prices down—especially for people on low
incomes? As pointed out as long ago as 1776,
there is no point in amassing great surpluses except in so far as
they pay for imports. Would it not be a good thing if we cut some
of our own tariffs unliterally to stimulate this process further
and grow our economy?
(Con)
Well, it is imports versus exports. My noble friend makes a good
point: the Government’s vision is to create a UK that trades its
way to prosperity. We will achieve this by championing free and
fair trade multilaterally, plurilaterally and bilaterally through
engagement at the WTO, our free trade agreements and our
bilateral market access work. As I said, this allows us also to
export using our great skills in services, digital, science,
technology and advanced manufacturing.
(CB)
My Lords, the Minister says that an agreement with India is some
way away, just 10 days after the target date for completing the
negotiations. Can he explain why that target date was not
met?
(Con)
I understand that the target date tied in with Diwali rather
neatly, but I am sure that the noble Lord, with all his
experience, will tell me that it is right to have a date that
people can work towards. India is a huge prize for this country.
It is a dynamic, fast-growing trade partner and offers a terrific
opportunity to deepen our already strong relationship, which was
worth £29.6 billion in the four quarters to the end of quarter 2
in 2022. However, there is a lot of work to be done on this deal.
It is right to have a deadline but we certainly need to work hard
on the deal.
(Lab)
Can the Minister give any details of work that the Government
have undertaken, or ensured that others undertake, to ensure that
no products coming into this country from China contain cotton
grown in Xinjiang? During our debates earlier in the year, two
Ministers stood at that Dispatch Box and agreed to check products
containing cotton, such as mattresses and nurses’ uniforms, to
see whether the cotton was grown in Xinjiang. You can do that
from the product. What have the Government done about that,
because they have never reported any results?
(Con)
The noble Lord makes a good point. The Government are committed
to tackling Uighur forced labour in our supply chains and are
taking robust action. Over the past year, we have introduced new
guidance on the risks of doing business in Xinjiang, introduced
enhanced export controls and announced the introduction of
financial penalties under the Modern Slavery Act. These followed
the Government’s announcement in September 2020 of an ambitious
package of changes to the Modern Slavery Act.
(CB)
My Lords, will easing border formalities be in the sights of the
Government? They serve as a major barrier to trade, particularly
in relation to the European Union. While the sentiment behind the
Question is clearly understood, does the Minister equally
recognise that emerging markets present great opportunities for
British companies and government? What strategy is there to
persevere with those opportunities?
(Con)
I mentioned earlier a number of countries that we are actively in
discussion with. However, we also have 32 hard-working trade
envoys covering even more countries. Now that we are outside the
EU, our aim is to reach out wherever we can. We cannot do it all
at the same time but, wherever and whenever we can, we aim to
agree deals with as many countries as we can that are in our best
interests.
(LD)
My Lords, will the Minister not accept that it is misleading the
House, and his headquarters is misleading the country in its
leaflets, to say that the Government have signed 71 new trades
when the only two new deals have been with Australia and New
Zealand? In the other 69, “the EU” has been Snopaked out and
replaced with “the UK”.
(Con)
No, it is right that we say that we have agreed trade deals with
71 countries plus the EU. That is a fact, that is what I meant to
say and that is what I will stick by.
