Examination of Witness

Trade Bill – in a Public Bill Committee at 10:47 am on 16th June 2020.

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Roy Freeland gave evidence.

Photo of Judith Cummins Judith Cummins Labour, Bradford South 10:51 am, 16th June 2020

We will now hear oral evidence from Roy Freeland from Perpetuum Ltd. This session can last until 11.25 am. Roy, could you please introduce yourself for the record?

Roy Freeland:

Good morning everyone. I am sorry, I am having some difficulty hearing.

Photo of Judith Cummins Judith Cummins Labour, Bradford South

If you could introduce yourself, Roy, that will be great. I will now ask members of the Committee to ask you questions. We can hear you fine, so do not worry.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (International Trade)

How would you want the Bill to be improved?

Photo of Katherine Fletcher Katherine Fletcher Conservative, South Ribble

Q Mr Freeland, I am going to relay the question, because we are in a big, echoey room. Gareth Thomas MP just asked you how you would like to see the Bill improved.

Roy Freeland:

I am broadly very supportive of the Bill because, as other speakers have said, we need to be pragmatic about the situation we are in. However, there are some issues. I am speaking as a representative of a high-technology SME supplying the rail industry that has particular problems or requirements for GPA, simply because many of our customers are effectively part of a Government procurement in their countries, so it is uniquely important to transportation businesses. I also have some comments on SME issues.

Roy Freeland:

The improvement that I have to suggest is the question of reciprocity, which has already been mentioned. Article 85 of the EU directive in 2014 talked about ensuring comparable and effective access for undertakings to the markets of those third countries. I would like to see the Trade Bill include a brief provision so that countries that are applying restrictions to UK exports can have similar restrictions applied when they are trying to export to the UK. This is a non-confrontational way to deal with the issue. It has major advantages, in that it would be fair, and would be seen to be fair, being based on reciprocity rather than unilateral protectionism. It would help to demonstrate the UK’s leadership on free trade and refusal to accept unfair restrictions. I think it would also provide a negotiating tool for us. Exporters to the UK would put pressure on their own Government—[Inaudible.] This whole process would provide a backstop and would provide flexibility to deal with Government procurement issues without—[Inaudible.]

Photo of Judith Cummins Judith Cummins Labour, Bradford South

Mr Freeland, are you still there?

Roy Freeland:

—ammunition for future negotiations, and some form of remedy in the short term.

Photo of Andrew Griffith Andrew Griffith Conservative, Arundel and South Downs

Q Good morning, Mr Freeland. To tease that out a little more if I may, my understanding is that the interoperation between the clauses relating to the GPA and the Trade Remedies Authority would achieve just what you are looking for—a set of reciprocal rules and sanctions, to the extent that those are not being applied. However, my understanding may be imperfect. Are you making a different proposal, or do you feel that the Bill as drafted achieves your objectives?

Roy Freeland:

I am afraid I am not an expert in reading parliamentary legislation, but I did not get the impression that the Bill is quite as explicit as I would like it to be. Certainly, the Trade Remedies Authority would be the right route to deal with this, possibly with a little help from a statutory instrument under the Taxation (Cross-border Trade) Act 2018. However, it is a very important issue.

The EU described the Buy America provisions of the Surface Transportation Assistance Act as one of the most fundamental obstacles to accessing to US procurement. The Transatlantic Trade and Investment Partnership fell over, and this Buy America provision was one of the issues. I am not advocating that we should have a—how can I put it?—Don’t Buy America Act, as much as I would like to see that. That might be rather provocative. However, we should have provisions to take action, and if a few US steel makers, for example, found that they could not supply High Speed 2 with rail track because of such rules in the Act, I think some reverse pressure might be put on the Americans to reconsider their position.

Photo of Andrew Griffith Andrew Griffith Conservative, Arundel and South Downs

I have no further questions. However, I think you should be reassured, Mr Freeland, and we wish you all the best with the successful exports of your business going forward.

Roy Freeland:

Thank you.

Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade)

Q Good morning, Mr Freeland. To follow up what you were saying about the Buy America provisions, rather than our taking a negative approach to procurement in America, would you like to see Buy British or something similar in the UK for SMEs such as yours?

Roy Freeland:

I am not convinced, as a supporter of free trade, that a Buy British element is appropriate. All I suggest is that we ensure adequate reciprocity, so that if a country effectively has Buy Local Acts, such as the Buy America provisions, we can respond by saying, “You’ve got that; we’ve got similar provisions.” Indeed, tenders could request confirmation from tenderers that their own country would not prohibit comparable and effective access in reverse. A simple requirement like that is appropriate at this stage, rather than prejudging the whole US FTA.

I should point out that the World Trade Organisation and the EU have noticeably failed to deal with Buy America. Therefore, one needs to look at it in another way.

Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade)

Q Are you a member of a small business organisation? The Federation of Small Businesses is probably the best known in the UK. Regardless of its membership, what do you think is the general view of small and medium-sized enterprises in the UK of what you have just been saying?

Roy Freeland:

No, I am not a member of the FSB. However, I was a member of the Rail Supply Group council running the SME workstream, and of the Rail Industry Association SME group, so I am very familiar with SMEs’ issues. Indeed, I consulted with the Federation of Small Businesses prior to giving this evidence.

The particular problems for the SMEs that will be affected by the Bill include the requirement for membership of the GPA. Large multinationals can get round the GPA by simply setting up factories in the respective countries. A lot of them in the rail industry have already done that. SMEs do not have that capacity. I am slightly concerned that SMEs do not have the resource to fight the sort of legal battles that are clearly going on in the current version of trade remedies, and they need some support there. Those are particular problems that SMEs can face, but they absolutely need the GPA.

Photo of Judith Cummins Judith Cummins Labour, Bradford South

Any further questions? Mr Freeland, we are experiencing some technical difficulties at this end, so if there are no further questions from Members, I propose that we wind this session up slightly earlier. Thank you very much, Mr Freeland, for your evidence. It has been very helpful to the Committee.

Ordered, That further consideration be now adjourned. —(Maria Caulfield.)

Adjourned till this day at Two o’clock.