UK Accession to CPTPP

We now come to the Select Committee statement. The Chair of the Business and Trade Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), will speak for up to 10 minutes, during which no interventions may be taken. At the conclusion of his statement, I will call Members to ask questions on the subject of the statement, which should be brief and not full speeches. I emphasise that questions should be directed to the Select Committee Chair, not the relevant Government Minister. Front Benchers may take part in questioning. I call Liam Byrne.

I am grateful for the chance to make a brief statement about an excellent report that the Business and Trade Committee published on Monday, to coincide with the opening of the period of reflection, under the Constitutional Reform and Governance Act 2010, on the comprehensive and progressive agreement for trans-Pacific partnership.

It is timely for me to make this statement because, like many in the Chamber, I am old enough to remember that a major Brexit benefit was, allegedly, the freedom for us to negotiate free trade agreements more quickly than the EU, and to sign those free trade deals in a way that suited the UK. It is fair to say that, since Brexit, we have learned some hard truths about the difficulties of negotiating free trade deals, not least because the world has changed since then. Economic security is now a much more significant issue, which makes trade barriers harder to bring down. We have to navigate new imperatives on economic security and there are new dilemmas, which is why statements such as this are so important.

The Government have discovered that they cannot just rely on bluff, bluster and a bit of boosterism to get trade deals over the line. I remember the manifesto produced by His Majesty’s Government at the last election, which said that 80% of our trade would be covered by trade deals. We are at about 60% now. The Government promised around £1 trillion in exports by 2030—I am not sure that we are on track to hit that. The Australia trade deal was criticised by UK farmers for being a giveaway, and the Canadian trade talks are in a state of some confusion. The India trade deals, after 14 gruelling rounds, have some hurdles before the Indian elections. The broad point is that we have all learned a lesson about how difficult trade deals are. That is why it is important that the Government do not oversell the deal before us. The role of the Select Committee is to throw some light on what has been put before us, so that we can have a proper debate in this House.

On behalf of the Labour party, I thank my right hon. Friend and indeed the other members of the Business and Trade Committee for their sterling work. We referred to much of the Select Committee’s work in the Bill Committee earlier this week. The Minister will be aware of some of the amendments tabled by Labour, and of the concerns not just of the Labour party, but of civic organisations and bodies such as the Trades Union Congress, on issues such as workers’ rights and investor-state dispute settlement. I hope that the Minister will take on board all those various points.

Does my right hon. Friend agree that it is imperative that before the CPTPP is finally ratified—Labour is firmly of the view that that would be in the national interest—it is important to iron out those concerns? To do otherwise would be to the detriment of our country. We also look to the Minister for clarification on issues around parliamentary scrutiny, on which there was an amendment in Committee.

I am grateful to my hon. Friend for that question. I think the Minister made the point in the Bill Committee on Tuesday that this is not necessarily an under-scrutinised treaty, as it has been the subject of quite a lot of debate; my Committee has certainly taken lots of evidence on it. However, when we left the European Union, one of the big arguments made was that this Parliament would reassert its sovereignty and—in those infamous words—take back control. That means that this House needs to have a strong hand in scrutinising trade agreements.

We hope that there will be many more free trade agreements to come. I know that they are getting harder, but this House none the less needs to develop expertise in scrutinising free trade agreements, so that we can ensure they are genuinely in the national interest. That is why I hope the Government will, within the 21-day CRaG period, find Government time for debate on an amendable motion, to give the House the opportunity to delay ratification, if that is the judgment we all come to. That is the process; we have to test it, use it, and make sure it works.

We have to get much better as a House at navigating the dilemmas of free trade in a world where economic security is a much sharper imperative than before. That means we have to have better debates, but also better numbers. We cannot have a situation where we produce models using very old data—going back to 2017 in the case of the models used for this treaty’s impact assessment —and when the Secretary of State comes to our Committee, she resiles from the models of her own Department. That is not a good way of producing evidence-based policy.

I hope we can have a discussion across the House on how to ensure that the economic models that we use are good. Free trade agreements are choices, and sometimes free trade agreements in one part of the world rule out those in other parts of the world. We have to judge what is in the best interests of the country, and it is difficult to do that if the numbers are flaky.

I would like to pick up on the point from the hon. Member for Slough (Mr Dhesi). During the passage of the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill through this place, many concerns have been raised about investor-state dispute settlement arrangements. It is good to see that the Select Committee is calling for a debate to resolve some of the contentious issues around that. However, does the Select Committee Chairman consider the provisions of the CRaG legislation to be sufficient, or might this be an opportunity to look again at how the specific requirements of trade deals are dealt with by Parliament?

That is an excellent question. The hon. Lady may have seen a really good report produced by not our Committee, but the Public Administration and Constitutional Affairs Committee, on 29 January 2024, which makes precisely that point. We need a better way of scrutinising trade agreements. The CRaG structure allows us to delay things, but not necessarily veto them. When CRaG was introduced back in 2010, it was an innovation, because in the past, that was something that Governments did without any scrutiny whatsoever. Now we are in a different kind of world, in which we are signing free trade agreements at, I hope, increasing pace. However, the House will still have to navigate when we want open trade, when we want to de-risk trade, and when we put economic security first and free trading second. These are dilemmas in which there is not an obvious answer. We cannot prejudge the answers to those questions; they will have to be debated case by case. It could well be that a Government will come to the wrong conclusion about that balance between open and free trade and maximising our economic security as a country, and therefore we in this House must be able to apply a brake —put a hard stop—to trade deals that we think are ultimately not in the national interest.

I represent a rural constituency in Devon. Farmers in the west country were alarmed at the sorts of concessions made in the Australia and New Zealand trade deal. Until yesterday, we thought that the UK and Canada were negotiating a roll-over trade agreement. Canada is a member of the CPTPP and it will be crucial, if the UK-Canada trade talks resume, for the UK to avoid paying twice, because we will want to avoid further market access concessions. Can the right hon. Gentleman offer any reassurance that, through CPTPP accession, we will not open up our markets to unmanageable volumes of produce that will damage British farming and put farming businesses in danger of going out of business?

The way that we approached our analysis was to look at food standards and whether they would be diminished by our joining the treaty. The Trade and Agriculture Commission looked at three questions, which are talked about in paragraphs 40 to 42 of the report. We reported the Trade and Agriculture Commission’s advice, which was that there would not be a diminution in the statutory protection of food standards in this country, and that we would, in fact, be allowed to reinforce some of those protections.

However, as the hon. Gentleman importantly flags, we are now finding that sometimes the devil is in the detail. Despite having joined CPTPP with Canada, we now appear to be struggling to get in place a free trade agreement with Canada. The Canadian Government are very clear that technical discussions have stopped. I understand that the Secretary of State, or a spokesman for her, told the Financial Times yesterday that discussions were ongoing, but discussions are not trade talks. If discussions were trade talks, we would be having trade talks with the entire world right now, because our diplomats around the world are in constant engagement with their counterparts in different parts of the planet. The hon. Gentleman is absolutely right to flag that issue. The reassurance that I can give him is that we do not see this treaty lead to a softening of the trade standards that we so treasure in this country.

I welcome the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and his report. I think that this is the first time that I have had an interaction with him since my return to the Department and since he became the Chair of the Select Committee. Of course, as two former Chief Secretaries to the Treasury, we are well used to a bit of sparring over the years. His report is good, strong and constructive, and he makes some strong points about FTAs being, of course, choices. I welcome his statement that CPTPP has been well scrutinised in this House.

I do not intend to give an answer to any general questions raised, because it is not me who is being asked. However, I point out to the hon. Member for Tiverton and Honiton (Richard Foord) that the National Farmers Union does welcome the UK joining CPTPP. I say to the right hon. Member for Birmingham, Hodge Hill that a new FTA implementation unit in the Department for Business and Trade is looking at the important point he raised about how, post-signature, we ensure that the agreements work for British businesses and British consumers. On investor-state dispute settlement, nothing prevents a right to regulate in this country and it can be of benefit to British businesses overseas, guaranteeing jobs at home.

My only question for the right hon. Gentleman is really just a clarification. He says that CPTPP represents 15% of the Indo-Pacific area, which I think is true in the sense that China and India are not in CPTPP, and that therefore it is quite a small economic bloc. But if I can just take issue with him, CPTPP is currently about 12% of global GDP and the UK joining would make that 15%. So he is not wrong in what he says, but if he could just acknowledge that the part of global GDP in CPTPP is also 15%, not just a portion of the Indo-Pacific trade.

I am grateful to the Minister for that question and for welcoming the report. We look forward to welcoming him before the Committee at some point in the near future to talk about some of our forthcoming reports on export-led growth. The point he makes is right and I am glad that, for once, he and I agree on the numbers—that has not always been the case. The reason we wanted to flag it is that the Government’s impact assessment states:

“CPTPP membership acts as a gateway to the wider Indo-Pacific region which is expected to account for the majority…of global growth between 2021 and 2050.”

We appreciate that all Governments need to hard-sell their policy achievements—that is the nature of the game we are in—but it is important that we do not oversell the treaty. The reality is that it accounts for only quite a small fraction of the Indo-Pacific market, which is trumpeted in the impact assessment and in the integrated review as one of the treaty’s virtues. We must be clear-eyed and hard-headed about precisely what gain comes from this treaty specifically, and it would help us all, frankly, if the Government set out their road map for growing the treaty in future.

I thank the Chair of the Select Committee for making his statement and responding to questions.