Leaving the EU: New Trade Agreements

International Trade – in the House of Commons at 12:00 am on 23rd November 2017.

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Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes 12:00 am, 23rd November 2017

What assessment he has made of his Department’s capacity to negotiate new trade agreements after the UK leaves the EU.

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

What assessment he has made of his Department’s capacity to negotiate new trade agreements after the UK leaves the EU.

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

Before I begin, I would like to offer my sincerest condolences to the family and friends of Simon Speirs, who tragically lost his life while on board the Great Britain yacht during the Clipper round the world race last weekend. Our thoughts and prayers are with his family at this very sad time.

The Department for International Trade is building a world-class trade policy and negotiation capability for the long-term future of our country. Since July 2016, our trade policy group has grown significantly, from 45 to more than 400 today, and it is continuing to grow. We have also established a series of working groups and high-level dialogues with key trade partners to explore the best ways of progressing our trade and investment relationships. Those partners include the United States, Australia, Mexico and Japan.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I thank my right hon. Friend for his reply. The business community in my constituency is eagerly looking forward to the opportunities the new trade agreements will bring. Will he clarify which elements of the Trade Bill refer to the free trade agreements?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

The Trade Bill is about maintaining the effects of our current trading arrangements to ensure continuity for businesses, workers and consumers as we leave the European Union. That means the powers in the Trade Bill will be used only to transition our existing trade agreements that the EU has already signed prior to exit. Work is ongoing to establish how we will deal with future free trade agreements, but I am afraid that to claim that the current Bill allows Ministers a free hand to write future FTAs is simply untrue.

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

Businesses and constituents in Newark believe it is essential that the existing EU FTAs are transferred and rolled over as expeditiously as possible, but we should not confuse that with signing new FTAs. Will the Secretary of State therefore confirm that there will be an entirely separate consultation with the public and with Parliament on how we handle those separate new FTAs?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

Yes, there will be. The trade White Paper, which is of course very separate from the Trade Bill, asked for views on what a future engagement and scrutiny framework should look like on trade. We are considering the responses and we will engage in the coming months. Given the changes we see, with Pascal Lamy describing a move away from the protection of producers to consumer precaution, we will have to take the views of consumers far more into account in future trade agreements than we have in the past.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

When I was a little boy, my grandmother used to say, “Shame the devil and tell the truth.” When will this Secretary of State tell the truth? He has been, with his colleagues, going around the world begging for a trade deal and everyone is telling him, “We want to trade with the European Union, a much bigger trading group.”

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

Absolutely not, and I did not mean to imply that he would. I thought the House would like to know what my grandmother used to say to me about the importance of veracity.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

No further explanation is required. We are immensely interested in the hon. Gentleman’s grandmother, and his ruminations on that matter will doubtless be found in his memoirs, which will be deposited in the Library and we can consult in the long winter evenings that lie ahead.

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

We will want to see what the best deals we can get for the UK are, how we can get our trading volumes and value up, and what opportunities we can take as we leave the EU. Of course we are pleased to continue to go along with the British public’s view on the referendum, and the hon. Gentleman will no doubt want to do the same, as his constituency voted overwhelmingly to leave—that is no doubt a view he will endorse.

Photo of Vincent Cable Vincent Cable Leader of the Liberal Democrats

Can the Secretary of State explain the likely impact of a no deal Brexit in respect of the 57 or so countries with which we already have association agreements through the European Union?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

We will want to ensure that those are replicated in United Kingdom law on the day we leave the EU because, whether there is an agreement or not, we will have to have a legal basis for trading with those countries.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

Will my right hon. Friend confirm the position on trade agreements when we leave the EU: after April 2019, we will be negotiating such trade deals and look forward to actually signing them when we break free from the shackles of the EU?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

Again, to make it clear, before we leave the European Union we have to be able to transition the existing EU free trade agreements to give ourselves the legal basis to trade. Of course, up to that point and beyond, we will want to see what new opportunities are available. If, during an implementation period, we decide that we are not going to introduce and put into effect new trade agreements, we will still want to negotiate and sign them.

Photo of Patrick Grady Patrick Grady SNP Chief Whip

The Secretary of State is repeating what he told Politico recently: that his Department wants to copy and paste the trade deals because it does not yet have the capacity to negotiate new ones. As there cannot really be a better trading relationship with the European Union than membership of the single market, is that not actually the best idea? If taking back control simply means duplicating what we already have, why not take the easy and obvious path and stay in the single market?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

I shall help the hon. Gentleman out of his confusion. As I have said on numerous occasions, it is not possible simply to copy and paste the existing agreements. For example, we must take into account the disaggregation of tariff-rate quotas, so it is not quite that simple.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Do the Secretary of State’s officials trudge into work, full of doom and gloom-laden, thinking it is all going to be too difficult, or do they bounce into his office, full of energy and enthusiasm, seeing Brexit as a wonderful opportunity for Britain to be at the forefront of leading the world into the bright sunlit uplands of freer trade?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

Not all that many people bounce into my office, although they regularly bounce out of it. We are an incredibly optimistic Department and we look to the future with great confidence. Let me give some figures: the most recent time we advertised jobs in the Department, there were 1,698 applicants for the 92 jobs available. That suggests to me that there is a great deal of optimism, even in our civil service.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Secretary of State for International Trade

The Secretary of State is indeed an optimist, and it is good to hear him so upbeat about all the trade opportunities that he thinks await us in the post-Brexit world. Perhaps he can explain why, when the Red Book shows trade in the world economy increasing year-on-year by 4% over the next five years, it shows the UK’s export growth decline from 3.4% next year to 1.2% in 2019, and then plummet to just 0.1% in each of the following three years. Is the Secretary of State perhaps an optimist who can find no rational grounds for his optimism?

Photo of Liam Fox Liam Fox The Secretary of State for International Trade and President of the Board of Trade

It is nice to see that “Project Fear” never dies. Rather than going on projections, let me tell the hon. Gentleman what our economy has actually done. He is right that global trade has been growing at around 3%, but UK exports have been up 13.1% in the past year—in goods they are up by more than 16%. That is the real performance of the UK economy. There is incredible slack in our ability to export further and we should be encouraging British exporters to do so.