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If we want to achieve the permanent rebalancing of the economy more towards manufacturing and export-led growth, expanding markets for our goods and services and removing barriers to trade are essential. According to the OBR, two thirds of all UK growth between mid-2010 and 2015 was expected to stem from rising exports and business investment, but the most recent estimates indicate that less than a fifth of the growth over that period will come from those sources, and there are 300,000 fewer people working in our manufacturing industries, compared with 2008. This is adding to the United Kingdom’s growing problem with productivity. The proposed transatlantic trade and investment partnership that this House is considering today is vital to realising the vision of a higher wage and more highly skilled economy. As we know, this is an agreement that will expand global trade, not take trade away from other parts of the world.
We know that exports are likely to rise by 6% in the EU and by 8% in the United States, but we must recognise that this agreement has to benefit all in our societies, not just those at the very top. Reducing tariffs, securing regulatory convergence and aligning technical trading standards could make a family of four in the EU up to €545 a year better off. It could boost GDP in this country by up to £10 billion a year, according to the Government’s own impact assessment, and create up to 400,000 jobs.
As Which? found when preparing a briefing for Members before this debate, average import tariffs are 4%, but clothing imported from the US is subject to a tariff three times higher. Reducing roaming charges for communications and data services across the Atlantic and improving the co-ordination of food traceability would be tangible benefits for consumers from this agreement, but there will be areas where retaining separate regulatory systems, such as in financial services, will be absolutely vital without prejudicing the overall aims of the negotiations.
Mr Clarke used his formidable powers of advocacy to try to persuade the House that there was nothing in the proposed investor-state dispute mechanism about which Members ought to be concerned. I fear that, on this occasion at least, he was not entirely successful. He was right to point to the 91 agreements of a similar nature in bilateral investment agreements that we have signed with other countries, but perhaps he missed an important point. This agreement would bind 28 member states, which at the moment may have different standards in all these areas. We should do nothing in these negotiations to undermine the crucial role that the European Court of Justice plays in ensuring equal standards across the European Union.
We know that article 226 of the EU treaty permits member states that have breached treaty requirements to be brought before the ECJ for infraction proceedings, which bind all member states. The problem with the arbitration anticipated in some drafts of the negotiations is that it would not bind all member states: it would simply bind the parties to that individual dispute. We should emphasise that, in these discussions, the ECJ should be the final arbiter—the binding and conclusive arbiter—of whether member states have breached their commitments. We should do nothing to upset its position.
Removing barriers for EU exporters should not mean removing hard-won protections in the workplace. There should be a levelling up of standards, not a race to the bottom. We know that US workplace fatalities are three times as high as those in the EU. Simply by having a system of mutual recognition without recognising the protections we have at EU level could lead to concerns among workers. Neither should there be an expansion of competition into the national health service or other public services as a result of TTIP.
The maximum benefits of this deal to British business and consumers flow from the strength that the European Union possesses in negotiating on behalf of all member states. Bilateral agreements between the US and each of the 28 member states, or with clusters of member states, would not be achievable, would not have the same worth and would not provide the same potential boost to living standards or to trade. Those who envisage the United Kingdom’s destiny as outside the European Union must address this point: why remove ourselves from the clear advantages to consumers and manufacturing exporters of this potential deal, or believe we could achieve as good a deal bilaterally with the United States, when the US Administration have said that they are interested in securing only an EU-wide deal?
It took more than 30 rounds of negotiation to secure the trans-pacific partnership, so I hope that the fourth round of TTIP negotiations, due to begin next month, can, given the important politics behind this issue, proceed at a more accelerated pace. We know that there will be elections for the European Parliament this May, the installation of a new European Commission later this year and the US presidential election in 2016. I welcome the fact that the chief negotiators gave a press conference last year on the progress of the talks, but stronger mechanisms must be developed to ensure that national parliaments—which, after all, have to ratify any agreement—are more properly consulted and have an opportunity to comment on or shape the context of the discussions.
In conclusion, let us hope that an eventually concluded deal can lead the way to further such agreements across the world. We have to bring down barriers to trade if we are to rebalance the global economy. Our exporters expect no less, consumers expect no less and future generations of manufacturing and service workers will expect no less either.