Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Accession)

Today’s launch of trade negotiations with Australia and New Zealand is an historic moment for this country. When we left the EU, we did so on the promise of trading more with friends and allies across the world. Deals with Australia and New Zealand are a powerful expression of our new-found independence and our intent to build a global Britain. I say to our old friends: Britain is back. These agreements will strengthen ties with like-minded countries who share our values and our commitment to free trade. They will create more opportunities for British businesses and more choice for British consumers, and provide us with greater economic security. Strategically, they will also help us to forge closer economic ties with the wider Pacific region.

The foundations for both deals are strong. We already have close ties in areas such as cars, steel, services, and food and drink, and 31,000[Official Report, 24 June 2020, Vol. 677, c. 4MC.] small businesses export to Australia. One in every five bottles of wine drunk in Britain comes from Australia. Free trade deals can build on those successes, boosting UK exports to both countries by around £1 billion. They will also show the rest of the world that Britain is prepared to defend and advance the ideals of free trade and freedom.

Deals with Australia and New Zealand are a key step towards membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, one of the largest free trade agreements in the world. Along with Japan, with whom we launched trade negotiations last week, both Australia and New Zealand support our membership, and today we have formally announced our intention to pursue accession to the agreement. We do so for three reasons. First, we do so to secure more trade and investment, to help our economy to overcome the challenges posed by coronavirus. Hitching ourselves to the fastest-growing part of the world will help to deliver on the growth and prosperity we urgently need. Secondly, it will help to diversify our trade and supply chains, to make our economy more resilient and open up new export opportunities in industries such as tech and digital, food and drink, and automotive. Thirdly, it is an important part of our strategy to turn the UK into a global trading hub. We want to put the UK at the centre of a network of modern free trade agreements.

CPTPP is a high-standards agreement, spanning four continents. Its members are 11 like-minded nations, all of whom believe in the principles of free trade, international co-operation and the rules-based system. Our trade with individual CPTPP countries is already worth more than £110 billion. By joining the agreement, we can open up even more opportunities for our go-getting businesses and turbo-charge trade and investment. Membership will help us to sell more British buses to Mexico, more life-saving antibiotics to Vietnam and more medical technology to Peru, and, of course, it will help us to export more of our world-class food and drink, including more Welsh lamb to Japan and Scotch whisky to Canada.

I thank the Secretary of State for advance sight of her statement and for always keeping the House up to date on the progress of her trade negotiations. On my count, in those six weeks, the Secretary of State has formally launched new trade negotiations with four different countries—the US, Japan, Australia and New Zealand—on top of the 16 negotiations that she is already leading to roll over our EU third country agreements, all of which, according to her own timetable, she wants signed and sealed within the next six months. In addition, we now have today’s statement committing the Government to begin negotiations on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP—I am going to pronounce it “C-tip” for short.

As the Secretary of State said, CPTPP currently comprises 11 members, accounting for 13% of global GDP, making it the third-largest free trade area in the world. So in theory, the UK becoming a member sounds like it deserves the fanfare that the Secretary of State has given it today. However, let us now look at those 11 countries. With seven of them, we already have free trade agreements, courtesy of our membership of the EU—that is Japan, Canada, Singapore, Mexico, Chile, Peru and Vietnam. With two of those—Chile and Peru—roll-over deals are in place to continue free trade beyond December. With the other five, bilateral negotiations are still ongoing to get roll-over deals agreed. That is seven out of the 11 taken care of.

Then, just this morning, the Secretary of State formally launched free trade negotiations with another two CPTPP members, Australia and New Zealand. Just to be clear, according to the Secretary of State’s plans, by the time we join CPTPP, we should already have bilateral free trade deals in place with nine of its 11 members, accounting for 95% of the UK’s current trade with the CPTPP area. In fact, the only new free trade agreements that we stand to gain from membership of CPTPP are with the kingdoms of Malaysia and Brunei, which, between them, accounted for just 0.37% of the UK’s total world trade last year.

I am not surprised that the right hon. Lady is trying to do down our efforts to secure trade agreements with the vast majority of the world and join some of the most exciting free-trade areas in existence, because the Opposition refused even to support trade deals with Canada and Japan when we were members of the EU. She talked about a continuity agreement, but she did not even support signing it in the first place. Only the Labour party could call low value a trade area where the UK has £100 billion-worth of trade. I do not know what mathematics or economics that relates to, but it is certainly none with which I am familiar.

Let me be clear with the right hon. Lady. The deal of which we would be part with CPTPP goes much further than the existing roll-over agreements that countries such as Canada have with the EU. For example, CPTPP has an advanced digital and data chapter. The UK is a data and digital superpower. We are third in the world for the number of billion-dollar tech companies, after the US and China. CPTPP has an advanced digital and data chapter to which the EU would not sign up. That chapter gives us access to that in Canada, Mexico, Peru and Chile across the agreement.

This agreement removes 95% of tariffs—again, going further than many of the roll-over agreements. We are talking about joining one of the most advanced trade agreement areas in the world. The measure goes far beyond what the EU was willing or able to agree, which is a huge opportunity for the UK. It is completely wrong to suggest that this is about Malaysia and Brunei, although I do not deprecate Malaysia, which is a fast-growing market and a good trade opportunity for the UK.

To say that CPTPP is simply equivalent to the deals that the EU is negotiating with those nations betrays a lack of understanding of the text of these trade agreements. I am very happy to share with the right hon. Lady the additional chapters in question.

I very much welcome my right hon. Friend’s statement. If Britain joins CPTPP, it will create a trade grouping of roughly the same size as the European Union, now that Britain has left, but without the political restrictions on the UK and with some new strategic advantages, not least vis-à-vis China. Of course, trade is not just about trade agreements, so can my right hon. Friend tell us what help will be given to British exporters to help them get into the markets of CPTPP, both here and overseas? Without trade, trade agreements are no more than a piece of paper.

First, I thank my right hon. Friend for all the work he did as International Trade Secretary in pursuing this ambitious agenda. It is great that I have the Under-Secretary of State for International Trade, my hon. Friend the Member for Beverley and Holderness (Graham Stuart), the Minister responsible for exports, on the Front Bench with me, and we are working on a new export strategy precisely to take advantage of the new trade agreements we are negotiating. One thing we are negotiating in all those agreements is a dedicated SME chapter to make it easier for our small and medium-sized enterprises to get through procedures, to get rid of a lot of the red tape and to get into those overseas markets. We will be spending this year helping those companies to do that.

I thank the Secretary of State for her statement and for early sight of it. I agree with her that forging trade links with the wider Pacific region is a good thing to do. I would also say that membership of CPTPP, if we can join on the right terms, may help to claw back some of the enormous losses that will result from Brexit.

At its heart, however, the Secretary of State’s statement was little more than hopeful rhetoric about the UK’s future trade prospects, and those prospects are by no means certain, as is evidenced by the rather modest rise in Canadian exports to partner countries. Her statement did not tell us in any detail what is actually proposed to be discussed, and it does rather beggar belief that she did not see fit to report to the House the challenges, difficulties and sticking points that she foresees in future negotiations; nor, I suspect, has she given any comfort to those who raised many significant concerns over accession in the last consultation.

What limits will the Secretary of State set in her negotiations on lowering barriers to allow for greater market access for foreign services suppliers? What limits will she place on the removal or weakening of behind-the-border non-tariff barriers, and what about important things such as workers’ rights, product safety regulations and food quality standards? What action does she propose to ensure that the monitoring of partner countries adheres to core International Labour Organisation standards, and that freedom of association is allowed in partner countries? What action will she take to avoid product dumping via partner countries becoming a very real problem? How will she allay concerns over investor-state dispute settlement provisions reducing the Government’s ability to legislate? Unless and until those and many other concerns are fully and transparently addressed, huge anxiety will remain in the public about whether CPTPP is even right for the UK.

What we are announcing today is our intention to accede, and we are talking to all 11 partners of CPTPP to have those preparatory discussions. Our formal application to CPTPP will require 11 different market access agreements to be sought with all the separate nations with which we are negotiating. We have absolutely no intention of lowering our food safety, environmental or labour standards, or any other standards. We are a high-quality, high-standards nation, and we want to work with the CPTPP countries on that basis. We believe in free trade and the rules-based system, and that is very much what CPTPP stands for.

The hon. Gentleman asked about investor-state dispute settlement systems. We have signed up to a number of those already, in a series of investor agreements that the UK has already made. Indeed, there are investor provisions in the comprehensive economic and trade agreement, which we are seeking to roll over with Canada. We will always ensure that the UK Government have the right to regulate, that we have control of our public services and that the NHS is not on the table. If we do not get those things in any of the agreements we try to negotiate, we will simply walk away.

There can be no doubt that my right hon. Friend is doing all she can to seize every possible opportunity as we grasp our new freedoms, not least for Melton’s stilton and pork pie producers. Does she agree that our joining CPTPP is important if we are to strengthen trading relationships with allies who respect international norms and values, better to isolate rogue trading practices by states that use trade as a weapon?

My hon. Friend makes an extremely important point. One benefit of CPTPP is that it is a free-trade, high-standards arrangement with countries that follow the rules. We want to create alliances with like-minded allies across the world and ensure that that is the way the world trade system operates. It is also important to diversify our trade, so that we are not dependent on single countries or regions for imports, or for where we export to. We must have options as a country and be able to work with those who share our values.

Many people in my party have long had their suspicions about the extent of the Government’s plans after Brexit, but I do not think that any of us, even in our wildest dreams, imagined that leaving Europe meant relocating to the Pacific. Given that the Government have such limited time and bandwidth while dealing with the pandemic, is this the right time to be entering into negotiations to join a partnership that currently represents just 8% of our exports? We are still a long way from agreeing a trade partnership with the EU, which represents 45% of our exports. What are the Government’s priorities?

As we seek to recover from coronavirus, it is incredibly important that we protect and expand our exports, which represent 31% of the UK economy and include vital industries such as the steel industry, the car industry and the food and drink industry. We must find new markets for those exports and link to fast-growing parts of the world. We must also protect against protectionism. One of the benefits of signing free trade agreements is avoiding tariffs on our goods and services, and CPTPP represents 13% of the global economy—16% if we add the UK—and includes fast-growing parts of the world. At a time when we are seeking to revive the economy, this is exactly the type of agreement we should be joining. In parallel, of course, we are negotiating with the EU to secure a good agreement with it. It is not an either/or; we need to be trading with all the world.

Montgomeryshire has many Japanese-owned manufacturing businesses and the UK’s largest livestock market ready to ship Welsh lamb across the world at the drop of a hat. I welcome my right hon. Friend’s statement. Given that Japan accounts for nearly half of the GDP of this partnership, what outreach have we done with our close economic friends and allies, what are the Japanese Government saying about our accession and what support can we rely on from our allies to help us accede to this great partnership?

Japan is a very important partner of the UK, and we are separately negotiating our bilateral trade agreement, but when I spoke to Minister Motegi, who is responsible for negotiating on Japan’s behalf, he was very clear that he supported the UK’s accession to CPTPP. We are also pursuing accession with Australia and New Zealand. These bilateral partnerships are a way of accessing that wider arrangement in Asia- Pacific. My hon. Friend is right—there are huge export opportunities for Britain into Japan and huge investment opportunities for British firms into Japan and for Japanese firms into the UK.

I too welcome the negotiations the Secretary of State has announced with Australia and New Zealand. New Zealand is an interesting case, because CPTPP includes provisions for an investor-state dispute settlement, allowing major corporations to challenge the ability of Governments to regulate in areas such as environmental protection. Will she follow the example of New Zealand and seek to exclude the UK from this mechanism?

In the negotiations, we are very clear that we will not allow any agreement to interfere with our right to regulate in areas such as the environment, food standards and public services such as the national health service. That is a clear red line for us.

In my constituency, we do not have any shipping ports, but we have plenty of computer ports that connect us to entire world. Can my right hon. Friend assure me that the CPTPP negotiations and discussions, and all the work being done, will enable all the digital businesses in my constituency to trade gladly around the world?

My hon. Friend is right that the advanced digital and data chapter in CPTPP will provide huge confidence for those seeking to buy products in that region from British businesses. It is extraordinary that the Labour party does not think that is of any value. It does not think that the EU, which is prepared to sign these digital and data chapters, has agreements any different from the type of agreement we are seeking to accede to, missing out a huge part of the UK economy.