For the second time today, I have the rather dubious honour of following the shadow Secretary of State after he made what was, yet again, a most extraordinary speech. Earlier, he spoke for 40 minutes without actually telling us what the Labour Front-Bench view was on CETA. Then we discovered not long afterwards that he was abstaining in the Division, even though last year he had been against CETA. More Labour MPs have voted in favour of the provisional adoption of CETA than have voted against it. The confusion continues. In that 21-minute effort by the hon. Gentleman, I do not think we got any closer to finding whether Labour agrees with the EU-Japan EPA or not.
The hon. Gentleman came out with some extraordinary statements. I think he said that the EU or the UK would be some billions of pounds worse off as a result of the agreement. That is not what the impact assessment says, as I know because I signed off on it. The impact assessment actually says that Japanese exports to the EU will rise more quickly than Japanese imports from the EU. That is not the same as saying that anybody is going to be worse off. Trade is not a zero sum game. He has bizarrely moved from the position of being anti-trade agreements to having some kind of Trumpist, mercantilist view of the world. From what I could interpret from his 60 minutes of oration today, he is the living embodiment of the Trump view on trade here in the House of Commons.
The EU-Japan EPA is a very good agreement. I will speak about three aspects. First, it is a good agreement in its own right. Secondly, it is very important for current trade policy and also for our future UK trade policy. Thirdly, there is what it means for free trade generally at a time when free trade is being challenge in different parts of the world. On its entry into force, the agreement will see 91% of Japanese tariffs eliminated overnight and 97% eliminated over the long term. There will be benefits for all of the UK in this agreement, whether in chemicals, motor vehicles, agricultural products, food and drink, processed foods, beer, wine, whisky and more. All will enjoy lower tariffs.
The agreement is also very good for UK services. With trade agreements, we must always remember the importance of services to our economy. Services provide 80% of the employment in our economy and 79% of GDP. One of the best and most exciting aspects of the future UK independent trade policy is being able to do more for UK services. We are the world’s second-largest services exporter. It is estimated that the agreement could be worth up to £3 billion to the UK economy each year. We are in a good position with Japan on trade. Last year, UK exports to Japan were up by 13.3% to a total of £14.3 billion.
This agreement is important, as was the CETA agreement, for the EU’s own trade agenda and for our future UK trade agenda. After five or six years of no EU trade agreement seeing fruition, we now have CETA. the EU-Japan agreement coming on track, important agreements with Singapore and Vietnam, modernised versions with Mexico and Chile, and the possibility of agreements with Indonesia and Mercosur. These are all really important agreements and steps for the EU.
I have been to the last four of five EU trade council meetings. Some people might say, “Why is the UK so enthusiastic about these EU trade agreements?” The answer is briefly this: trade agreements generally are good for trade, and the UK is a passionate supporter of free trade. This also gives us the potential to take the substance of the agreements that are being negotiated at the moment to put into a future UK agreement. In my time in the role, I have found myself being the most enthusiastic for the EU’s trade agenda of all the EU 28 member states sat around that table—ironically, at a time when we are leaving. It is important to recognise that, as my hon. Friend the Minister pointed out, the two Prime Ministers recognised that the substance of this agreement will establish a new economic partnership between Japan and the UK based on the final terms of the EPA.
This agreement and other agreements like it are very important for free trade generally. We need to be breaking down barriers. Most of the new barriers to trade that have arisen in the past 10 years have come in G20 countries. This is a big agreement between the EU and the world’s third largest economy. It is breaking down quite a few non-tariff barriers, particularly in services. This is a step in the right direction.
We look increasingly to our friends—countries such as Canada and Japan—when it comes to the debate about the importance of free trade and of the rules-based trading system. There are worrying developments in trade at the moment, such as the section 232 steel tariffs and what is going on with automobiles. Earlier today in my constituency, I bumped into John Warr of Warr’s Harley-Davidson in Fulham, and he is concerned about the potential for that trade dispute to escalate. We must never forget that trade is about real jobs, real businesses and the real livelihoods of our constituents.