Extracts from Parliamentary proceedings - Mar 2

Lord Whitty (Lab):...Our report describes two of the most comprehensive FTAs the EU already has with third countries: its trade relationship with Switzerland, which is complicated and based on more than 100 bilateral agreements within that framework, and the very recent and not entirely implemented Comprehensive Economic and Trade Agreement with Canada.

Although CETA has been branded the most comprehensive FTA in existence, our witnesses were quite clear that existing FTAs, including CETA, do not provide anything like as comprehensive access to the single market for businesses as membership of the single market as such would entail. In a free trade agreement, UK manufacturers for example may well have to comply with the rules of origin. These imply levies imposed by importing nations on the components of goods that originate outside the country. Exporting such goods would cause complications for most of our manufacturing industry...

Lord Aberdare (CB):...My third point is about planning for situations that may arise in the negotiating process. I will address this by posing some “what if” questions. What if, even with good will on both sides, a deal takes longer than two years to finalise? Given the challenge of reaching an ambitious and comprehensive bespoke FTA—and indeed in the light of the time needed to agree existing EU FTAs, such as that with Canada—the committee felt that it would not be possible to complete a deal within two years, even though it may be easier to do so as an existing member, already fully complying with EU rules and regulations, than for a country outside the Union. It is surely essential to have a plan B in place. Article 50 allows the possibility of extending the negotiating period beyond two years, but only if all 27 other member states agree. Can the Minister indicate what thought the Government are giving to whether and how this might be achieved?

Lord Lansley (Con):...My noble friend Lord Bridges touched on this on Monday evening and talked about how the US and Canada are able to achieve sophisticated supply-chain activity across borders where they do not have a customs union. He also reminded us, as other Ministers have rightly done, that digitalisation of documentation for customs purposes has proceeded apace, not least in the past decade. The United Kingdom is probably best in class for customs documentation by digital means. My noble friend said that,

“99% of customs declarations are received electronically and 96% are cleared in seconds”.—[Official Report, 27/2/17; col. 669.]

Lord Risby (Con):...As we have often heard, supply chains are uppermost in business’s mind. We could, in theory, see tariffs levied at different production levels across borders several times, with all the difficulties that that brings. While there appears to be a template offered by NAFTA, particularly between the USA and Canada, with simplified customs procedures, the issue of a pan-European supply chain is a hugely significant factor to manufacturers, most notably in the successful automotive sector. Both the supply chain and regulations on quality assurance are fundamentally important as we seek a new trade agreement with both the EU and others. We naturally would favour preferential rules of origin, and such rules apply currently, but I wonder whether my noble friend the Minister could expand further on how possible preferential rates of origin might apply as we leave the currently structured customs union, as presumably there would still be an issue of more burdensome administrative checks to be undertaken...

...In a recent speech my noble friend Lord Hill reminded us that there are 27 other countries now directly or indirectly engaged in our negotiation process—with all the potential pitfalls, as we saw in the Wallonia problem in the EU-Canada agreement. But it is interesting to note, on a rather more optimistic note, that the European Commission has just published a working paper on equivalence in financial services which at least accepts the need for compliance in international standards in tax and money laundering, as well as potential reciprocal trading rights with third countries. This is incredibly important for our financial services industry, and I hope that this sort of realism will prevail during our direct negotiations with the European Commission over the broad range of goods and services, rather than what my noble friend Lord Horam described as a fist to the face. Therefore it goes without saying—I emphasise this—in the language we deploy, a prosperous EU is completely in our own national interest, and we have to go on saying that...

Lord Green of Hurstpierpoint (Con):...I want to make a few points, all briefly—not least because some of what I was going to say has already been covered. First, the deep and comprehensive free trade agreement and the customs agreement with the EU will now be critical as the centrepiece of the Government’s strategy. As has already been underscored, this is unprecedented. It will be more ambitious than the ambitious Canadian agreement, the South Korean agreement and the Ukraine agreement—which we looked at in our deliberations. It will be different, too, from the Turkish association agreement. In a sense, “more than all of these put together” is the mantra. At the end of the day, it will be something sui generis....

...My second point has been made by a number of other noble Lords: there is close to no chance of accomplishing all this in two years. The Canadian deal took somewhere between seven and 10 years; the Japanese discussion with the EU is going surprisingly well but it is already into its third or fourth year and clearly will not be completed any time soon.

The complexities are enormous. They are not just about the short-term distractions of the EU elections and the high priority that will undoubtedly be attached by the EU to the budgetary questions and by all of us to the acquired rights questions. All these mean that that the process will take some time. On top of that, the trade discussions with the EU are inevitably related to other trade discussions—this is true on both the UK side and the EU side. The existing EU FTAs may be questioned by their counterparts. The South Koreans and the Canadians, after all, both signed deals with a market that included Britain. Will they want to review those agreements in the event of their no longer getting access to the British market?

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Extract from DEFRA questions

Chris Law (Dundee West) (SNP):...Scottish farmed salmon has experienced a significant increase in exports to Canada. However, why did this Government not propose any Scottish geographical indicators in the comprehensive economic and trade agreement, despite indicating that not doing so would put the Scottish food industry at a commercial disadvantage? [909015]

The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice): I reassure Scottish National party Members that I regularly promote Scottish salmon, most recently in the Gulf this week. Scottish salmon is one of our major exports, alongside Scottish whisky, and we champion it at every opportunity.