Oral answers to questions (Commons): International Trade - Feb 22

1. What recent assessment he has made of the effectiveness of the trade envoy programme. [903859]

The Prime Minister’s trade envoys do a great job engaging with countries where trade and investment opportunities have been identified. Last year, trade envoys helped contribute to export wins of more than £15.5 billion in their markets. Based on an outlay of just under £250,000 for the programme over the same period, each trade envoy, on average, supported £700 million in exports.

Does my right hon. Friend plan to appoint any further trade envoys beyond those already appointed?

That is the least disguised job application that I have heard in some time. There are 30 trade envoys covering 60 markets around the world. The programme is reviewed regularly in consultation with our overseas team and any new suggestions are put to the Prime Minister. I will let my hon. Friend know as soon as possible if any vacancies occur.

Before these trade envoys do anything else, will the Secretary of State bring them all together and allow them to have the same briefing from the CBI that many Members from all parties had this week? That CBI briefing on the impact of leaving the EU says that it will be a disaster for working men and women, industry and manufacturing up and down the country.

As I often point out to the hon. Gentleman, the working men and women of his constituency had a very different view about the reasons for leaving the European Union. I make sure that our trade envoys get a much wider range of briefings than simply one—a highly suspect one in that case.

I call Mark Field—sorry, Mark Prisk. I beg your pardon.

As the Prime Minister’s trade envoy to Brazil, I have been immensely impressed by the UK companies already operating there, but frankly there are not enough of them. May I urge the Secretary of State to challenge business membership organisations, including the CBI, to ensure that they put exporting at the heart of their work?

There is more than one Field in the House, but there is only one Prisk.

First, I pay tribute to the work that my hon. Friend has done. We have a growing and increasingly improving trade relationship with Brazil, but he is absolutely right that we require business to put exporting at its heart. The positive signs in recent times are that that is happening and we will export more than 30% of our GDP this year for the first time in a considerable while.

What parliamentary scrutiny is there of this programme?

There is cross-party ability to look at the programme. We have an International Trade Committee and questions in this House, and I have just reported to the House the value that we think the programme has.

As trade envoy to Ethiopia, last week I had a meeting at the African Union about the continental free trade area agreement, which is incredibly important for the future of all countries in Africa and for the United Kingdom. Does my right hon. Friend see roles for the trade envoy programme in engaging with these free trade areas, which cover more than one country?

I would hope that our trade envoys, along with our posts in those various African countries, would understand the value that increased intra-African trade can bring both to those countries and in increased opportunities for UK exporters.

2. What estimate his Department has made of the number of new institutions required to replicate the terms of existing trade agreements with the EU after the UK leaves the EU. [903860]

The Government are committed to seeking continuity in our trading arrangements to minimise disruption to businesses, consumers and our trading partners. We will ensure that the institutional provisions of existing agreements are met as the UK begins to operate its independent trade policy.

What parliamentary shared goals do the Government have in mind for the new arrangements that will come into place?

To be absolutely clear, if the hon. Lady is referring to the Trade Bill, what we are looking at is the transitioning of existing trading arrangements with the EU. All those agreements have already been through parliamentary scrutiny. If she is referring to future trade agreements, we will bring that subject back to this House in due course.

One of the new institutions we shall need to set up as we leave the EU is a trade remedies authority. I recently travelled to Canada and the US with the International Trade Committee. They are two countries that have robust trade remedies authorities whose impartiality can be critical in reaching economically sound judgments. What assurances can the Minister offer the House that the UK Government are similarly committed to an independent TRA that will be free from undue political interference?

I congratulate my hon. Friend and the other members of the Committee on their recent visit to the United States and Canada. Those are two of the countries whose trade remedy systems we have studied, along with Australia and, in fact, the European Union system itself. As my hon. Friend says, it is common, although not universal, for the investigation process to be independent of Government, but there is still a political decision at the end of the process by a Minister who is accountable to Parliament. It is worth pointing out, by the way, that all the Opposition parties voted against the creation of the trade remedies authority in the first place.

I do not know whether a bridge counts as an institution, but I wonder whether the policy of the Department for International Trade, like that of the Foreign Office, is that a new fixed link between Britain and France is required to continue to improve trade after Brexit.

We have been absolutely clear throughout this process about the importance of maintaining our trading relations with the European Union. That is why we are seeking to ensure that trade is as frictionless as possible, and why we are seeking a comprehensive free trade agreement with the EU.

The EU does not have comprehensive free trade agreements with some of the world’s major economies. Does the Minister believe that the United Kingdom is likely to strike such deals more quickly than the European Union?

We remain supportive of the European Union’s negotiations with some of those trade partners while we are still a member of the EU, because we are strong believers in free trade. We have also set up 14 trade working groups with many of the leading economies, including China, India and the United States, and we look forward to making further progress with those arrangements in due course.

Our current trading relationships with many partners ranging from Switzerland to Mexico are overseen by joint committees of the EU and those other states. Will the Minister tell us how many of the committees will be replaced by UK equivalents after Brexit, and what progress his Department has made in establishing those institutions? Will he also tell us where the staff and expertise will be sourced from, and at what cost to the taxpayer?

Let me say first that the UK played a leading role in establishing the European Union arrangements with countries such as Mexico and Switzerland in the first place. As for the question of where we go from here, our priority is to maintain continuity in our trading relations, ensuring that all the 40-plus trading agreements we have with 70-plus countries become UK arrangements as we leave the European Union. The precise format of the further discussions that we will have with those partners will be a matter for future arrangements.

3. Whether he plans to replicate the terms of EU free trade agreements in trade deals with Switzerland, Norway and Turkey after the UK has left the EU; and if he will make a statement. [903861]

As we leave the EU, the Government intend as far as possible to maintain the effects of existing EU free trade agreements and other EU preferential arrangements. That includes agreements with Switzerland, Norway and Turkey.

I am going to pursue the questions asked by my hon. Friends the Members for Hornsey and Wood Green (Catherine West) and for Bradford South (Judith Cummins), which the Minister for Trade Policy did not answer. In 2016, the Secretary of State told the International Trade Committee that he would prioritise securing an agreement with Switzerland. The current relationship between the EU and Switzerland is overseen by some 20 joint committees. Very specifically, how many of those committees will be replaced by UK-Swiss committees, and how far along in the process of setting up those institutions is his Department?

I met Swiss Ministers in Geneva recently, and we discussed what the future arrangement would be. Clearly, how we oversee the arrangement depends on what the arrangement itself is, and that is currently under negotiation.

We do not need trade agreements to trade, do we?

No.

The Secretary of State has told us that he plans to replicate all the provisions of the trade agreements that the UK has, as a member of the EU, with Norway, Switzerland and Turkey. Those provisions include free movement of people in the cases of Norway and Switzerland, and a customs union with Turkey. Will the Secretary of State confirm that it is the Government’s policy to replicate all of them?

In our transitional arrangements, we have made very clear that the key element is continuity. Until we create bespoke arrangements with those countries, we will maintain the provisions that exist today.

4. What steps he is taking to strengthen UK trading relations with Australia, New Zealand and other Commonwealth countries in the Pacific. [903862]

We have the opportunity to enhance our global trading relationships, including those with the countries with which we share bonds of history and friendship. My right hon. Friend the Secretary of State travelled to Australia and New Zealand in November to promote free trade and deepen those trading relationships. The April Commonwealth summit here in London will provide an opportunity for us to continue that work with all member states.

Has my right hon. Friend considered how UK agriculture will compete with our Commonwealth cousins when we agree a free trade deal after leaving the customs union?

I praise my hon. Friend for his distinguished business career in the sector before coming to this House; it means he brings real expertise to the House. He will know that we have established trade working groups with both Australia and New Zealand to explore possibilities in trade and investment. They will include agriculture, but it is too early to be sure how it will be covered in those and other future trading arrangements. The New Zealanders are very interested in this—the New Zealand High Commission recently wrote to the International Trade Committee saying:

“Given the complementarity of our two economies and our deep bilateral ties,”

they want to do something with us, and we very much agree.

On negotiations with New Zealand, the Minister will be aware that Wales has a large lamb industry—it is one of the great prides of the United Kingdom—so can he give an absolute assurance that in his negotiations with New Zealand he will not put any Welsh farms and the Welsh lamb industry at risk?

I am keenly aware, as are my right hon. Friend the Secretaries of State for International Trade and for Environment, Food and Rural Affairs, of the importance of British agriculture in all parts of the United Kingdom and of making sure we have the necessary protections in place on animal welfare standards and so on, and also of promoting the opportunity to export our excellent British goods. Food and drink is one of our fastest-growing export sectors, and we want people to take advantage of opportunities across the UK.

What importance does the Minister attach to deepening and broadening our trade relationships with countries such as India, which has a widening middle class among its population of 1.25 billion?

The Prime Minister’s first bilateral trade visit in November 2016 was to India, accompanied by the Secretary of State and myself. We have recently completed a trade audit with India that looks at all the barriers. India is at times a difficult market for British exporters to crack. We have a lot of advantages in doing business there, and the trade audit and the joint economic trade committee talks led by the Secretary of State last month are taking us in the right direction.

5. What recent assessment he has made of the effect on UK trade of the UK leaving the EU single market and the Customs Union. [903863]

By leaving the customs union and establishing a new ambitious arrangement with the EU, we will be seeking to maintain as frictionless as possible trade in goods between the UK and the EU, and the freedom to forge trade relations with partners around the world.

The Norwegians have a saying: “Nothing is in as much of a hurry as a dead fish on the back of a lorry.” Like Norway, Scotland exports most of the fish it catches to the EU, which is why Norway has chosen to be a member of the single market, in particular to avoid non-tariff barriers so the fish can cross borders quickly. What assessment has the Secretary of State made of the impact of leaving the single market on the Scottish fishing industry?

Of course, the majority of Scotland’s exports go to the rest of the UK, not the EU. The hon. and learned Lady talks about the value of the single market; it is just worth pointing out that, despite our membership of the single market, we have had a growing trade deficit with the EU at a time when we have had a growing trade surplus with the rest of the world. We want to establish the conditions for all our exports from all parts of the UK to be able to access the growing markets of the world, and, as the International Monetary Fund has pointed out, 90% of global growth in the next 10 to 15 years will be outside Europe.

What is the Secretary of State’s preferred method of ensuring frictionless trade between the Republic and the north of Ireland?

Our preferred option is to do that through a widespread and liberal agreement in trade with the European Union, as set out in the Government’s memorandum in December.

6. What progress he has made on arrangements for the GREAT Festival of Innovation in Hong Kong planned for March 2018. [903864]

The GREAT festival will be held in Hong Kong from 21 to 24 March 2018. With more than 70 confirmed speakers, the festival will showcase the best of British innovation, the potential of the UK economy, and the strength of our world-class service sector.

Britain is becoming a world leader in artificial intelligence, big data and the fourth industrial revolution technologies that will power future export growth. Will my right hon. Friend ensure that those technologies will be widely promoted at next month’s festival?

They will indeed be widely represented. For example, UtterBerry, an AI-based infrastructure monitoring technology that has been used in this country in projects such as the Thames tideway and Crossrail, will be showcased. The festival will be an opportunity for us to show off the best of British innovation in general.

7. What progress he has made on his Department’s overseas direct investment strategy. [903865]

We are making great progress on supporting UK businesses to invest overseas, as this can have a substantial positive effect on the UK economy. The Department for International Trade has developed a suite of products and services that address market failures, to support British businesses.

What update can the Minister provide on his Department’s overseas direct investment pilots? Will he also explain what opportunities ODI offers to British businesses?

My Department’s ODI support pilots have successfully demonstrated the impact that the Government can have in supporting UK businesses to overcome barriers to market access and to expand overseas. By harnessing the private sector wherever possible and focusing Government interventions only on market failures, my Department has successfully supported overseas investment for a range of UK businesses in six global markets.

8. What recent estimate he has made of the UK’s trade deficit in goods and services. [903866]

In 2016, the UK had a trade deficit with the EU of £70.97 billion, and a trade surplus of £39 billion with non-EU countries, up from £33.6 billion in 2015. The latest trade figures show that in 2017, the UK’s trade deficit in goods and services narrowed by £7 billion to £33.7 billion.

Balance of trade figures were once regarded as pivotal. They were even thought to win or lose elections. Given that we are now going to escape from the constraining clutches of the European Union, will my right hon. Friend invest again in old friends and rejuvenate our relationships in the realm with allies such as Australia and New Zealand? What steps has he taken to ensure preferential arrangements with such old allies?

My right hon. Friend asks a very good question. First, I should like to put on record my thanks to him for leading various Government trade delegations in recent years, including one to Colombia. I know that he takes a strong interest in this subject. As I said earlier, we have set up trade working groups with Canada, the United States, Australia and New Zealand, and, unlike the Opposition Front Benchers, we also voted for the comprehensive economic and trade agreement, the EU’s free trade agreement with Canada. The Secretary of State has been in all four of those markets in the past year, leading efforts to break down trade barriers and to seek new trade agreements.

I am sure that the right hon. Member for South Holland and The Deepings (Mr Hayes) enjoyed going to Colombia. Quite what Colombia made of the right hon. Gentleman is not recorded.

The creative sector in Bristol West—particularly the music industry—is important, and trade in that sector is a service industry. What steps are the Government taking to ensure that the creative industries, particularly the music industry, are supported as we leave the EU?

The hon. Lady is quite right to point out the importance of services to our trade. Overall, services represent 80% of our economy and 79% of jobs. My right hon. Friend the Secretary of State and the whole team are working closely with the Department for Digital, Culture, Media and Sport to ensure that we continue to grow exports from our creative sector and that investment from abroad continues to come into the sector. We often visit places such as Tech City UK and techUK, and we are working closely with them to ensure that we have a flourishing future for our creative industries.

Last week, as co-chair of the all-party parliamentary group on Kosovo, I visited a British company in Pristina that has a £20 million investment there. What opportunities does the Minister foresee for widening our trade in goods and services with Kosovo and the neighbouring western Balkan countries?

This is a very good opportunity. That is a part of the world that I know well, and I think that the company to which my hon. Friend refers is called Fox Marble—a highly appropriate name for this particular Question Time. It finds top-quality marble in Kosovo for export, and it should be congratulated. In regard to the wider region, we work closely with the Foreign and Commonwealth Office to promote trading opportunities throughout the region.