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Backbench Business — Transatlantic Trade and Investment Partnership

Part of National Insurance (Renaming) – in the House of Commons at 3:44 pm on 25th February 2014.

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Photo of John Spellar John Spellar Shadow Minister (Foreign and Commonwealth Affairs) 3:44 pm, 25th February 2014

Thank you, Madam Deputy Speaker, for calling me to speak, and I will truncate my remarks.

I start by congratulating my right hon. Friend John Healey on securing this debate. I apologise for not being here in the Chamber for his comments; I was chairing a meeting elsewhere in the palace.

A number of colleagues have spelled out the considerable economic advantages of a transatlantic trade and investment partnership. the US is Already our most important single market and trade with EU countries is a major part of our trade, even if—encouragingly—we are making significant advances in other markets.

An EU-US agreement would encompass more than 40% of world GDP, and along with EU agreements with Canada and Japan would encompass more than half of world GDP. Removing tariffs, however limited they are, and—more significantly—removing artificial restrictions would also provide a welcome fillip to these major economies, benefiting not only themselves but the rest of the world. The Foreign Office has made an interesting and useful assessment of the impact of such agreements on individual American states, and it would be very welcome if it did the same for both the countries and the regions of the EU as well.

However, it is clear from many of the articles that have been written and from some e-mails that we are receiving that we may have to take the debate back to first principles, starting by explaining why free trade is not only a good idea but why it has been a major driver in the removal of a massive number of the world’s people from poverty during the past two centuries, particularly during the past 30 years. The mass migration of hundreds of millions of people in China, the development of Chinese cities and infrastructure, and the raising of the Chinese people’s living standards have been awesome. That does not mean that I am oblivious to many of the faults, problems and stresses in Chinese society; given my political history, it would be surprising if I was. However, everyone must recognise the seismic shift that has happened on the back of the world’s freer trade environment.We must also consider the effects of that shift on wage distribution and the environment in other countries, and understand that generally protection does not benefit the worker or the consumer; mainly it benefits the monopolist, the corrupt bureaucrat or the profiteer and black marketeer.

As I have said previously, the argument about free trade goes back over the past two centuries. In our great industrial cities, we have monuments to the historic battles against the corn laws, and we may have to fight those battles again. If we do, the Conservatives would be particularly worried as the corn laws tore their party apart. However, we do not have the time available to us today to explore that issue further.

We must deal with three particular issues: the relationship between the EU and the US; the broader strategic approach of that relationship; and the vexed question of the dispute system, which is causing considerable agitation.

Too often, the debates on this subject have been focused on and posed as a choice between either the US or the EU. This agreement clearly shows that the US is not interested in having 28 separate agreements; it is interested in doing a deal with the EU—and not just about trade. A lot has been made in the defence field about the so-called “pivot” of the US between the Atlantic and the Pacific going from 50:50 to 60:40 in favour of the Pacific—by the way, that is still a huge presence from the world’s only superpower. The transatlantic alliance has served us and a stable world extremely well, and reinforcing it would be important in its own right. Agreements between the EU and the US, Canada and Japan make a much better context for maintaining a liberal trading and political environment, because although I have acknowledged the huge Chinese achievement I would not wish to see the economic and political muddle of China dominating the international trade scene. In particular, I would not wish to see the arbitrary use of state power against workers and citizens.

However, there are legitimate concerns about whether some trade deals can undermine the terms and conditions of workers; my hon. Friend Jim Sheridan raised that issue. That has been the particular concern of the American unions about the impact of the North American Free Trade Agreement, including the agreement with Mexico. However, having met representatives of those unions, I know that they have considerably fewer reservations about a deal with the EU, because of the higher level of protection for workers, consumers and the environment that we have in the EU. Indeed, the level in the EU is higher than in some southern states in the US. Only recently, we have seen a massively funded and vicious anti-union campaign against representation in Volkswagen’s plant in Tennessee. This time it was not even the employer, but feral right-wing Republicans—the buddies of some in the Conservative party—who were behind that action. The American Federation of Labour and the TUC have therefore gone into the matter in considerable detail—I congratulate them on their realistic appraisal—to seek reassurance about the impact of any deal on workers’ wages and conditions, as well as on the public provision of health and education, although such provision is not so much about the trade deal as the policies of the elected British and American Governments.

The Minister rightly drew attention to the impact of particular clauses. We have about 92 investment agreements with other countries, but only two have led to cases, neither of which related to public policy. We welcome the result of the World Trade Organisation agreement in Bali, yet the WTO has many arbitration provisions, several of which impact on such issues as tobacco packaging, which we have already considered in relation to investor-state dispute settlements. We need to be clear that investment must be encouraged, but both countries have mature judicial systems, so we must consider whether it is worth the argument about this to achieve the greater goal of what will be a beneficial agreement.