EU Trade Agreements: Replication

(Urgent Question): To ask the Secretary of State for International Trade to make a statement on the progress he has made in replicating trade agreements between the United Kingdom and those countries with which the EU has a trade agreement.

As a member of the EU, the UK currently participates in about 40 free trade agreements with more than 70 countries. In 2018, the trade agreements in force constituted about 11% of our trade. They cover a wide variety of relationships, including free trade agreements, economic partnership agreements with developing nations, association agreements that cover broader economic and political cooperation, and mutual recognition agreements.

The Government’s programme for providing continuity and stability for businesses, consumers and investors in our international agreements is of the utmost importance. We are committed to ensuring that those benefits are maintained, providing for a smooth transition as we leave the EU, but the House will be well aware that the best way to provide that continuity and stability is to ensure that we have a deal with the European Union so the UK remains covered by all those agreements during the implementation period.

We have already signed a number of agreements, including with Switzerland—the largest in terms of our trade flows, representing more than 20% of the value of all our roll-over agreements. We have also signed agreements with Chile and the Faroe Islands, and an economic partnership agreement with eastern and southern Africa. The texts, explanatory memorandums and parliamentary reports for those agreements have already been laid in the Libraries of both Houses.

As we leave the EU, we have no intention of making our developing country partners worse off, as the Opposition would have us do by abandoning EPAs. It is important for the prosperity of their people that we maintain our trading relationships so they have the opportunity to lift themselves out of poverty. We have recently reached agreements with Israel and the Palestinian Authority, and we intend to sign them shortly. Just today, we reached agreement on the UK-Pacific EPA. We have also signed mutual recognition agreements with Australia and New Zealand, and will be closing two with the United States soon. A number of negotiations are at an advanced stage. All international negotiations—indeed, any negotiations—tend to go down to the wire, and I would expect nothing different from these agreements. That is the way that countries do business.

Yesterday, the Department’s risk matrix for the so-called roll-over agreements was published in the media. Of the 40 agreements that the Secretary of State famously promised would be ready one second after midnight on exit day, precisely four have been signed. Nine are off track, 19 are significantly off track, four cannot be completed by March 2019 and two are not even being negotiated.

Throughout the passage of the Trade Bill, Members repeatedly said that they were concerned that it would not be possible to replicate the terms of those agreements fully, and that many countries would seek to renegotiate terms in their favour. I therefore ask the Secretary of State to write to me to set out for each country what objections or demands to concluding a new roll-over have been presented, what concessions he has offered in respect of preferential access to UK markets in order to overcome such obstacles, and what assessment he has made of the impact on trade flows with the UK of a failure to conclude a new deal.

Many in the business community feel that the Secretary of State has diverted too many of his Department’s resources to entirely new free trade agreements, and so keen has he been to grandstand with the new that he has ignored the fundamental grinding work of securing what we already have. So I ask the Secretary of State to write to set out: the number of full-time personnel engaged on securing entirely new agreements; the number engaged on securing the roll-overs; and whether he believes his Department has been adequately resourced to handle so many trade negotiations at once.

Recently, the Secretary of State suggested the unilateral liberalisation of tariffs in the event of a no-deal Brexit. Will he explain to the House how he thinks negotiations would go with the remaining roll-over countries once he had given up our key negotiating leverage by reducing all tariffs to zero? Most Members might think that by doing so we were the ones being rolled over. Will he categorically rule out such a proposal? As we speak, goods are being loaded on to vessels that will be arriving in our markets from overseas after 29 March. How does he intend to support business with these transactions, given that nobody knows what tariffs and non-tariff barriers they will face when they arrive at their destination port? Increasingly, the Department for International Trade looks as though it has inadequate resources, focused on the wrong priorities, set by incompetent Ministers.

As ever, the hon. Gentleman gives us a rich menu of the things on which he is wrong. First, if we want to ensure that all our agreements are rolled over, the best way to do that is by reaching a deal with the European Union so that they will apply one minute after midnight. I voted for that continuity. Did the hon. Gentleman? Did his party? Secondly, he asks about the reasons why countries may not want to continue these things. I have had discussions with a number of Opposition politicians about this. Some countries have said that they did not like some of the human rights elements that were incorporated by the EU and they would like us to drop those in order to roll the agreements over. I am not inclined to do so, because the value we attach to human rights is an important part of who we are as a country. The hon. Gentleman was wrong in that, rather than diverting resources in my Department from roll-over agreements to future free trade agreements, I have done exactly the opposite, reducing the number working on potential future FTAs in order to give maximum resource for this. Finally, he was wrong as I did not advocate unilateral liberalisation of tariffs—that was something mentioned in a newspaper—and the Government will determine what their day one tariffs will be as a collective decision in the event of no deal.

My right hon. Friend is right to stress that if we were to leave on 29 March with no deal, it would have a disastrous effect for many industries, because we would suddenly lose very important trading agreements across the world that we have enjoyed for many years. I agree with him on that, but does he not accept that when we get into the transition period he is still going to face enormous difficulties and will need a very long transition period to start negotiating so many trade deals with so many important markets for our economy? Does he not accept that his principal problem is the lack of bargaining power that the UK has on its own compared with what the EU has as a bloc in carrying out bargaining arrangements? He mentions human rights and other things, but very important countries such as Japan and South Korea, and others, are going to expect better terms from the UK, at the expense of the UK, than they have had to give to the EU. He says that they will take it to the wire. He accepts that he is having tough negotiations. Would he contemplate urging on his colleagues, even at this stage, moving to some sort of customs arrangement and regulatory alignment with the rest of the EU which will rescue us from these chaotic negotiations and allow us to enjoy the benefits of trade agreements which, for the most part, were ones that previous Conservative British Governments urged upon our EU partners and took a leading role in getting put in place in the first place?

As ever, my right hon. and learned Friend raises interesting points. Although there would undoubtedly be a greater risk in the case of no deal, I do not agree that this would be disastrous, because we are likely to maintain a high proportion of the continuity of these agreements. Let me just remind him that five of those 40 agreements represent 76% of the trade, by value, that falls into this category. My Department has developed a great degree of expertise and knowledge in the process of transitioning to new agreements. There are those who say, “If we end up getting a deal, much of this work that has been done will be wasted.” I completely disagree with that, as it has created a body of knowledge, experience and expertise in the Department that will stand us in good stead. As for our ability to negotiate with other countries, we remain the world’s fifth biggest economy and many countries have said to us that it would be much easier to do an agreement with the UK as a single country which would then negotiate and ratify than to have to do it with 28 countries, as they do at the moment. On Japan, we have of course made clear our position and finished our public consultation on potential membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—CPTPP—a subject on which we are likely to have a debate in this House next week. Finally, he asks whether we should not stay in a customs union. That would preclude us from having negotiations on new agreements, such as with the United States, or even with China, with which the EU has no agreement at the present time.

The Secretary of State has just said that countries say it would be easier to do a deal with the UK. One might ask the simple question: if it was so easy, why have we not even been able to roll over more than half a dozen of the deals we currently have? The leaked documents paint a picture of unvarnished failure: with South Korea and Canada we are off track; and with Japan we have no chance of completion. These deals are not simply necessary in the event of a no-deal Brexit; they may well be required at the end of the transition period if the negotiation then is as miserable as what we have seen to date. So why does he not own up? The time to negotiate these deals has run out, and it is highly unlikely that the Prime Minister’s deal, which he supports, will be accepted by this House. This is now the evidence that he and others need to put their weight behind an extension to article 50 so that his Government and his Department at least can complete the simple task of rolling over the deals we currently have.

Again, I make the point: if Opposition Members want us to get trade continuity, the best way to do so is to vote for the deal that the Prime Minister has already set out. As for future FTAs, we could not negotiate those were we to follow the hon. Gentleman’s advice and remain in a customs union.

I have had a careful look at the passage of these agreements through this House in the first place. Every one of them was supported by my right hon. Friend but most of them have been opposed by the hon. Member for Brent North (Barry Gardiner): CETA—the Comprehensive Economic and Trade Agreement—in February 2017; the EU-Japan agreement in June 2018; and the EU-Singapore agreement in September 2018. He voted against those. Does my right hon. Friend share my consternation at this urgent question, given that the hon. Gentleman never wanted us to be in these trade agreements in the first place?

First, let me thank my right hon. Friend for the work he has done in my Department as part of this overall process. What stands out in this debate is the utter humbug we hear from the hon. Member for Brent North, who talks about the need to roll over agreements such as the one with Canada and asks why the Government are late in doing so. The Labour party voted against the agreement in the first place; Labour did not want us to have the agreement. So now, to come to the House asking why we are not rolling it over on time is, sadly, absolutely typical of the way he does business.

The serious matter here is that on 29 March, transition or no transition, the UK is going to be at the mercy of the sovereignty of 70 other countries in their agreeing to the trade deal roll-over. The EU seems to have been very good at these trade agreements, which include human rights. The Secretary of State wants to maintain those agreements, despite wanting to rip up trade agreements with the most important partners, namely the 27 countries in the EU trading bloc.

The importance of the 40-odd trade agreements with 70 countries is recognised by the Society of Motor Manufacturers and Traders, which warns that even if EU trade agreements are rolled over, advantages will not always be met. For example, the EU-Korea agreement allows for 55% automotive content, but the UK cannot reach 55% automotive content. As the Society of Motor Manufacturers and Traders has warned, that will put the UK at the disadvantage of not being able to fulfil the rates of the trade agreement, and we will be on the more disadvantageous World Trade Organisation terms as well. In the 40 agreements with 70 other countries, how many other instances are there of clauses such as the one on 55% content that cannot be met? People who trade and export from the UK need to know, and they need to know now, with 44 days to go.

The central premise of the hon. Gentleman’s question is that we intend to rip up our trade agreement with what he describes as our most important trading partner, the EU27. We have no intention of having a breach. We want to have a full, liberal trading arrangement with the European Union. We do not want Britain to be subjugated in a political relationship that the voters have told us to leave. When it comes to continuity, the Government have set out what we will do with the agreements. For each of them, we have set out to Parliament—this is in both Libraries—the text of the agreement, an explanatory memorandum and the political statement on where there is any change between the agreement in place and the one we are rolling over, if utter and complete replication has not been possible. We have done that already, and we shall do that with the others.

I heard the Secretary of State give the commitment on the guidance that he is going to give. My constituents who are seeking to export to countries now do not know, at the point of departure, what regime their goods will face on arrival. I note the Secretary of State’s attacks on the Opposition parties, but he may wish to recall that 117 Government MPs did not vote for the Prime Minister’s deal, many because of their ideological commitment to WTO rules. Given that we are 44 days away, when will that guidance be issued to companies in my constituency? I was one of the 40 Back-Bench MPs who supported the Prime Minister’s deal.

The Government are assessing where we are with each of the agreements. Where we believe that it will not be possible fully to replicate, we will set out a technical notice in the coming days. Let me give my hon. Friend the example of Turkey, which is part of the customs union: unless we get an agreement with the European Union, we will not be able to maintain the current pattern of trade with Turkey, although we would look to see where we could mitigate any problems that came up.

The past two and a half years have been a very painful process, as the wild and optimistic promises about what could be achieved from the Brexit process have collided with reality. That includes what the Secretary of State said to the Conservative party conference in the autumn of 2017. The question I wish to put to him is simply this: why does he think that it has proved so difficult to roll over all these deals, when he told that conference that it would be a very easy thing to do and he was confident of achieving it?

If we get an agreement via the withdrawal agreement with our European Union partners, that is exactly what will happen: those agreements will roll over. Let me explain to the House why: the United Kingdom will be deemed by the European Union to continue to be party to those agreements. We will get continuity, but we will not get the same continuity if we do not get an agreement with the EU. Those who continue, by their actions, to make no deal more likely will have to be responsible for the consequences.

I congratulate my right hon. Friend and Somerset neighbour on achieving a deal with Switzerland so effectively. Does he share my enthusiasm that this is the beginning of an opportunity for this country to trade more freely, to be able to cut the cost of goods coming into the country and to stop acting as a protectionist racket for inefficient continental European companies?