EU Free Trade Agreements

(Urgent Question): To ask the Secretary of State for International Trade if he will make a statement on maintaining EU free trade agreements after the UK leaves the EU.

As a member of the European Union, the UK currently participates in around 40 free trade agreements with more than 70 countries. These free trade agreements cover a wide variety of relationships, including economic partnership agreements with developing nations; association agreements, which cover broader economic and political co-operation; and trade agreements with countries that are closely aligned with the EU, such as Turkey and Switzerland. Of course, more conventional free trade agreements are also part of the package.

Businesses in the UK, EU and partner countries are eligible for a range of preferential market-access opportunities under the terms of the free trade agreements. Those opportunities can include, but are not limited to, preferential duties for goods, including reductions in import tariff rates across a wide variety of products, quotas for reduced or nil payments of payable duties, and quotas for more relaxed rules-of-origin requirements; enhanced market access for service providers; access to public procurement opportunities across a range of sectors; and improved protections for intellectual property.

For continuity and stability for businesses, consumers and investors, we are committed to ensuring that the benefits I have outlined are maintained, providing a smooth transition as we leave the EU. The Department for International Trade, the Foreign Office and the Department for International Development are working with partner countries to prepare to maintain existing trading relationships.

With just 64 days to go, will the Minister confirm that not only is there the well-known Brexit risk of catastrophic disruption to 44% of our country’s trade, but now, on top of that, a further 12% of our trade could be thrown into chaos because of the Government’s failure to roll over our 40 trade agreements with 70 countries around the rest of the world in time for exit day?

Does the Minister recall the promise made by his Secretary of State at his party conference in October 2017, when he boasted:

“I hear people saying, ‘Oh, we won’t have any’”

free trade agreements

“‘before we leave.’ Well, believe me, we’ll have up to 40 ready for one second after midnight in March 2019”?

Was that bragging not made worse when the former trade Minister Lord Price tweeted falsely in October 2017:

“All have agreed roll over”?

Will the Minister explain why expectations were raised so high back then, when today’s reality is so dangerously disappointing? Can he confirm that the leaked memo reported in the Financial Times was accurate, and that he has been warned by his officials that most of the deals Britain is covered by will lapse because there is no transition period to keep Britain under the EU umbrella once Brexit occurs? Does he agree with the Government official quoted in the FT that

“Almost none of them are ready to go now”?

As well as the 40 free trade agreements, there are more than 700 other trade-related treaties and mutual recognition agreements, so when will we get an accurate update from the Government on how many of those will lapse in March as well? Some 2% of our trade is via the European economic area free trade agreement, with Norway and Iceland, which has still not been settled for roll-over; Canada accounts for 1.4% of our trade; Turkey, with which we currently have a form of customs union, accounts for 1.3%; South Korea accounts for 1%; and Switzerland accounts for 3.1%. All these and more add up to £151 billion of export and import markets. Will the Minister confirm that if we do not roll over the trade arrangements we enjoy by virtue of our EU membership, the full range of World Trade Organisation tariffs will start to apply?

That was a pretty long shopping list, and I am not in a position to answer all the hon. Gentleman’s questions, but I will make one point. I told him in Committee back in November that there was a wide range of reasons why some of these agreements had been challenging in many instances. For example, there have been changing incentives. If this House cannot make up its mind on what Brexit looks like, it will obviously be difficult for some of our interlocutors to decide whether we will be leaving the EU on 29 March. That said, a responsible Government make plans for any eventuality, and we are working extremely hard to make sure that the 40 agreements we have in place are available to those companies that use the preferences they guarantee.

I told the hon. Gentleman earlier that I believed the majority of these agreements would be in place by 29 March, and I continue to believe that, but it would not be appropriate to go into further details on an individual country basis, because these conversations are necessarily confidential, and our partners wish them to be confidential. To go into them, therefore, would not be proper. I am very happy to tell the House, however, that I believe we will have the majority of agreements rolled over, and it is absolutely our objective to have them all rolled over.

Finally, one small detail worth clearing up—it has been a matter of some press speculation—is that the Swiss agreement does not include any provisions on free movement.

It has always been very likely that the counterparties to these deals would want to keep them operable, as it is in their interests to do so, but may I highlight the stinking hypocrisy of the Labour party on this? It voted against adopting many of these deals in the first place—it voted against adopting the comprehensive economic and trade agreement in February 2017 and against adopting the EU-Singapore agreement in September 2018—and now Labour Members complain that the deals will no longer be operable next month. Does my hon. Friend agree that this shows the Labour party at its absolute worst on Brexit, with its members unable to agree among themselves, and unable to do what is in the UK national interest?

The Minister at least pays obeisance to, and I think has genuine respect for, etiquette, protocol and the principle of parliamentary courtesy, so it would not occur to him for a moment to descend into the swamp, disregard his ministerial responsibility to the House, and start prating on about the policy of the Opposition, but let us put it to the test and hear from the Minister.

First, let me pay tribute to my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) for all the work that he did in preparing this country for striking new trade deals, and indeed in maintaining the continuity of our existing free trade deals. He points out an inconsistency in the Opposition’s position on this matter. I agree with him that it is a fairly pointed one, and ask them to contemplate a bit. Yes, he is correct in his assessment.

The tiger that was previously in the library has now been removed, and the immediate danger has been averted. I think the Minister will be familiar with the Merchant Ivory film in which that exchange occurs. [Interruption.] It is fairly obvious, if one applies one’s mind to it.

My hon. Friend the Member for Nottingham East (Mr Leslie) asked a very simple and sensible question. The Minister’s long and rambling answer had a simple summary—clearly, it was no. The Secretary of State repeatedly told us that it was a simple matter to roll over deals on trade with approximately 70 countries, which constitutes 13% of our exports and 12% of our imports—it would be a cut-and-paste job. The Government would be ready on day one after Brexit, he told us. That was never true, was it? Those deals are entirely separate and independent from any deal that we may have with the EU.

If we leave with no deal, can the Minister confirm that these arrangements with third-party countries will fall away, as we have consistently warned? Will he confirm that, without new agreements in place, we could, in the absence of a deal with the EU, have no basis of trade with these countries after 29 March, and would fall back on World Trade Organisation rules? That is an argument for taking no deal off the table if ever there was one.

Will the Minister confirm that many of the terms of those agreements will need to be amended, and could be changed substantively as countries seek to improve on the terms that they have with the EU? Will he also confirm that agreements with countries that have economic partnership agreements are often regarded as being not fit for purpose and are alleged to have been signed under economic duress? The Minister will do well to listen to some of this, as this is the reality of what is going on in his Department. For example, North African countries want to sell their oranges and olive oil to us in far greater quantities than is allowed by the EPAs with the EU, which protect southern European producers.

In the Trade Bill debate in the Lords yesterday, the Minister conceded that the Department had no idea how many countries were ready to roll over their free trade agreements, how many would not, how many would have to adjust their constitutional arrangements, and how long that might take. Will the Minister for Trade Policy confirm that his colleague was right to say so?

The hon. Gentleman opened his question by expressing his view that I had given a long and rambling answer. I am pretty confident that the question was longer and more rambling than my previous answer.

Will there be no basis of trade if we fall out without an agreement? No. There will continue to be the basis of trade that exists for everybody, which is the World Trade Organisation. [Interruption.] Indeed, I do confirm that. That is why we are putting such an enormous amount of effort into transitioning these agreements. Will the terms be amended? Yes; plainly, the bilateral partners with whom we are negotiating have different motivations. That is something that I have made very clear to members of the International Trade Committee when I have talked to them. That has led to some extension of the discussions that we are having, but many of those discussions are going extremely well. I reiterate to the House that I am confident that the majority of these trade arrangements will be put in place by the time we leave the European Union.

The hon. Gentleman also treated us to his analysis of EPAs, saying that they were not fit for purpose. He gave us the example of oranges. The last time I stood opposite him in a debate, he gave us the example of the difficulty that EPAs cause Ghana and its chicken, and indeed Tanzania and its fish. On the Ghana agreement, the fact is—I remember this—that chicken had been completely excluded from the EPA. The point about Tanzania and fish is not entirely relevant to EPAs, as there is no EPA with Tanzania.

My confidence is strong on this issue. I believe that we will have the majority of these arrangements in place. Yes, some of them are challenging. One or two of them are even more than challenging; they are close to impossible. Turkey has clearly been identified as an area where the issue of a customs union makes a deal with it very difficult indeed. I have made these things absolutely plain to the House before. However, I believe that we will have the vast majority of these other arrangements in place. We will protect our consumers and our businesses, which will be able to carry on using preferences.

Obviously, behind the debate about the concept of trade are jobs. What assessment has the Minister made of the number of jobs at risk if these agreements are not put in place? Has he identified the companies that will struggle? Is he working with the Department for Work and Pensions on contingency plans for those communities that might be particularly affected by any failure to roll over the agreements?

We are in constant contact with all the businesses that trade on these preferences; we have written to them many times. We have issued technical notices advising businesses on the steps they need to take to ensure that they are prepared for that scenario. Plainly, it is much better to have these agreements in place than not, but as I have just discussed with the hon. Member for Sefton Central (Bill Esterson), a change in the arrangements does not mean that trade with those countries will stop; it simply means that the terms will change. I believe that we are doing all we can and should to prepare businesses for some of the deals potentially not being passed, and we continue to do that.

The EU has 14 service agreements with third-party countries and blocs, which UK professional services companies benefit from. Notwithstanding potential tariffs, non-tariff barriers and other regulatory burdens, can the Minister confirm for professional services companies whether there is even the legal basis for that trade with third-party countries and blocs to continue?

I am sorry to duck the question, but that matter should be referred to the Department for Exiting the European Union.

We trade very successfully with our largest bilateral partner, the United States. We do not need trading agreements, do we?

As we have already made clear, it is entirely possible to trade on WTO terms. However, it is far more preferable to reach trade agreements with third parties, because then we can trade on a preferential basis that allows us access to markets, the lowering of tariffs and the reduction in non-tariff barriers behind the border, which makes life much easier for our companies.

I want to ask the Minister a very simple question, to which I would appreciate a direct answer. How many of the 40 or so agreements on which an arrangement has been reached to roll them over have been signed as of this morning?

The answer is that there is not much more that I can say at this stage. [Interruption.] There are no deals that have yet actually been signed, but I want to make it absolutely clear—