Topical Questions

International Trade – in the House of Commons on 11th July 2019.

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Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan Conservative, Berwick-upon-Tweed

If he will make a statement on his departmental responsibilities.

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

My Department is responsible for foreign and outward direct investment, establishing independent trade policy and export promotion. I am proud to announce that, on 17 July, my Department will be launching the MP Exporting toolkit. This will highlight the role that all MPs can play in helping to promote local businesses in their own constituencies. It says “Become a Trade Minister for your constituency”, and 650 Trade Ministers would be even more effective than the Department for International Trade.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan Conservative, Berwick-upon-Tweed

My right hon. Friend is a brave man to let us all loose like that. He will be aware that the Royal Navy has done incredible work in the past couple of days to protect our British shipping as it moves through the Strait of Hormuz. Does he agree that, given that 95% of our goods travel by sea, it is imperative that our armed forces have the resources they need to keep all those exports and imports safe?

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

Contrary to international law, three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz. HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and to issue verbal warnings, which caused the vessels to turn away. Our thanks go to the crew of HMS Montrose and to all those who protect the safety of vital international maritime traffic. It is our duty as a Parliament to ensure that all those forces are adequately resourced.

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

Last month, the Department released the worst foreign direct investment statistics in five years. New projects were down 14%, new jobs were down 24%, and investment to safeguard existing jobs was down 54%. I know that the Secretary of State will want to explain the reasons for this to the House, but will he also tell us whether he still thinks he was right to announce that, in the event of a no deal, he would unilaterally drop more than 80% of our tariffs to zero for a period? I ask this because Canada has said that it will not now conclude a roll-over agreement conceding preferences to the UK because the Secretary of State is offering market access for free. In June, he boasted to the Select Committee that the roll-over was 99% there. Now, it is 100% not there. Was he right, or is Canada?

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

As ever, it is nice to know that the hon. Gentleman is consistently wrong. He talks about our investment figures, but investment into the United Kingdom was the third highest of any country in the world, and it was the highest in Europe. At a time when global foreign direct investment fell, it continued to rise in the UK. When it comes to tariffs, one reason the Government introduced the temporary tariff scheme was to stop a price shock in the UK, and one of the reasons for that is that those on lower incomes spend more on goods than services. Introducing liberalisation will help to protect consumers on lower incomes, and I would have thought even today’s Labour party might have supported that.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

Can market access agreements be even more important than free trade agreements?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

My right hon. Friend is absolutely right. There are some huge opportunities in market access. Indeed, we have identified one potential change in China that, if negotiated, might be worth £10 billion of turnover over a considerable period through one regulation alone. Resources at the Department at the moment are necessarily skewed towards FTAs, because of the trade agreement continuity process, but they will in due course shift towards market access, which is terribly important.

Photo of David Linden David Linden SNP Whip

Can the Secretary of State explain what his Department is doing to encourage the EU and US to resolve the Airbus and Boeing subsidies dispute without resorting to tariff retaliation in unrelated sectors, including UK agri-food products?

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

I had a number of discussions in the United States about that issue this week, as the hon. Gentleman may have guessed. It is likely that tariffs will be applied following the WTO determination of the level of tariffs that the US is allowed by law to set following the judgment on Airbus. Of course, the judgment on Boeing, to which he alluded, is also coming. At some point, we must ensure that both European countries and the United States are able to give appropriate support to their aircraft industries, because the alternative will be market access for China, which will be in the interests of neither.

Photo of Jack Brereton Jack Brereton Conservative, Stoke-on-Trent South

As South Korea is the third largest export market for ceramics, does the Secretary of State agree that the recently signed outline free trade agreement with South Korea is a huge boost for the ceramics industry?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

The transition agreement will replicate the effects of the preferential market access in the existing EU-South Korea FTA, providing certainty for businesses and allowing them to continue trading on preferential terms. It will provide a firm basis for the further strengthening of our ambitious trade and investment relationship as we work together in future.

Photo of Ian Murray Ian Murray Labour, Edinburgh South

The Secretary of State promised this House that all bilateral trade deals between the EU and other countries would be rolled over by 29 March, including a bilateral trade deal with the EU itself. How many will be done by 31 October?

Photo of George Hollingbery George Hollingbery Minister of State (International Trade)

I could just ask the hon. Gentleman to look up the answer that I gave a few moments ago. We have signed roughly two thirds of the deals already and we expect there to be more. As for the number, it is well over 50%, and a large number of the countries in there are agglomerated into blocs, but we are confident in terms of trade that we will have two thirds or thereabouts.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South

The Secretary of State rightly said that we will need an agreement with the EU to allow a GATT 24 basic deal to apply, but does he not accept that GATT 24 and a temporary FTA would save the EU £13 billion in tariffs and the UK just £5 billion, so the EU has every incentive to back it?

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

My hon. Friend makes an important point, but an article 24 agreement would cover tariffs and quantitative restrictions; it would not cover services, standards and regulations. An agreement covering those latter elements would have to be negotiated separately and would probably take longer to strike. In the meantime, the UK would be subject to the full array of existing third-country checks and controls carried out as standard by the EU. In other words, even if we both did agree an article 24 continuation, it would not cover access to the single market—it would not be trading as usual.

Photo of Thangam Debbonaire Thangam Debbonaire Opposition Whip (Commons)

Further to the question from Patricia Gibson, is it not time that the Department for International Trade undertook a thorough review of all 29 or 30 countries identified as countries of concern for human rights by the Government’s own Foreign Office?

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

We do, and we act in line with the consolidated criteria of the EU. We look at all those elements. In fact, the Court of Appeal was clear that the Government were rigorous and robust in doing so.