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I beg to move,
That this House
has considered trade deals and fair trade.
It is a great pleasure to move the motion during Fairtrade fortnight. The debate is about how to hardwire the ethics of fair trade into future trade deals as we break out of Europe. I stand here as a Labour and Co-operative MP. The Co-op has a proud tradition of fair trade, solidarity and social justice, and, on the retail side, promoting Fairtrade coffee, bananas, wine, chocolate, and so on.
I represent Swansea West, and I am pleased to say that Swansea has been a Fairtrade city since 2004. In fact, Wales became the first fair trade nation in 2008, and a lot of that work was done by the Swansea fair trade forum. I am also a supporter of the Fairtrade Foundation, which has tended to focus on cocoa producers in the Côte d’Ivoire and Ghana, where there are issues surrounding living incomes, gender inequality and environmental standards.
Coming to the crux of the matter, we are all aware that we face opportunities and risks in striking trade deals. Naturally, a lot of focus has been on the removal of subsidies and tariffs, and some of the focus has moved on to standards of products and services. However, I wish to talk about standards in relation to the environment, labour, and crop diseases and the like, which can be used to undermine free and fair trade by providing unlevel playing fields.
In a nutshell, fair trade is the principle that market actors should not gain a competitive advantage by adopting practices in other states that would be unlawful or unethical in their home states. The fair trade principle is that we should not outsource abuse—whether in terms of human rights or environmental standards—and then import products made under such conditions, creating unfair competition for domestic producers, who have to live up to high environmental and ethical standards. It is important that we do not import products that are produced below our standards and by virtual slave labour. Such imports naturally lead to people complaining locally that trade is uncompetitive, and to rhetoric about stopping trade and how everything is unfair to domestic producers, who miss out.
I congratulate my hon. Friend on securing the debate in Fairtrade fortnight. Does he agree that Britain needs to be a real example around the world in standards, and would it not be a good idea if the Government set out clearly that they intend to remain a signatory to the European convention on human rights?
Yes, that is crucial. There has been some ambiguity over whether we will continue with the European convention on human rights. Ministers have simply said, “We’re still in it,” when questioned. They have not ruled out leaving it, and that is of great concern. If we, as a country, decide on our own definitions of rights and human rights, other countries, such as China, Russia and others, will say, “Oh well, Britain is doing that.” We became a signatory 60 years ago. Winston Churchill was an architect of the convention. It is very important for our standing that we remain a signatory to it.
There used to be a commitment to including dynamic alignment on environmental and labour standards in our agreement with the EU, but that is no longer the case. If those commitments are not given, the EU will consider imposing restrictions based on the presumption that non-alignment might be a doorway to providing uncompetitive trade and an unfair advantage, by undermining rights, the environment and labour standards. I certainly would not want to see that.
International agreements tend to be policed by independent tribunals invoked by investor-state dispute settlements. Those settlements focus very much on the interests of the inward investor, and on any profit that they might lose from the host nation’s introduction of laws and restrictions. Such laws and restrictions are often introduced to protect the host environment, workers’ rights and so on, and such settlements make it possible for a fine to be levied against the host country. The Minister will know of cases such as Lone Pine fracking in Canada, which sued Canada for hundreds of millions of dollars because Quebec decided to have a moratorium on fracking. There are cases of companies suing Mexico on the grounds that it introduced a tax on fizzy drinks to protect people from diabetes. There are cases of such mechanisms being used against Slovakia when it tried to roll back privatisation.
The point that I am making is that such arrangements contain a chapter for the investor that completely overwhelms the balance of power in relation to human rights and the environment. There may be an environmental chapter in some of the agreements, but it will not have the enforceability that investor-state tribunals do. The Government should look at that in order to hardwire labour and environmental standards into trading agreements, and to help to sustain and grow fair trade. It would also be ideal to hardwire the Paris agreement and the convention on human rights into new trade deals. We know that in the US-UK negotiations, the US explicitly wants to rule out climate change and the Paris agreement, and that is of great concern.
I am moving towards suggesting to the Minister that trade agreements should allow states to penalise social and environmental dumping as well as economic dumping. At the moment, under World Trade Organisation rules, most trade agreements allow players to penalise other countries that overtly subsidise and dump products on their marketplace by way of tariffs, and so on, or they allow referral to a dispute resolution mechanism, as I mentioned. They do not include similar mechanisms for social and environmental dumping. I ask the Government to look at such mechanisms to ensure that countries are not undermined by the abuse of human rights and environmental conditions, thereby undermining prices in the market and providing unfair competition.
Some trading agreements include references to some of those things, but they are essentially unenforceable. There are warm words about hoping to look after workers and the environment, but they are not enforceable. When push comes to shove, that leads to disaster, particularly in very poor countries. If we are serious about taking back control when we leave the EU, we need a trade policy that respects the environment, public health, social justice and democracy.
I congratulate my hon. Friend on securing this important debate. Does he share the Co-operative party’s concern about the mooted winding up or merging of the Department for International Development? We need it to grow in order to tackle inequalities around the world.
That point is very well made. This is a critical time, during which DFID needs to be closely engaged in the whole issue of negotiating trade deals. It is helpful for DFID to be separate from the Department for International Trade. We do not want DFID to be absorbed, eliminated, pushed into the Foreign and Commonwealth Office or whatever; we want it to be a strong voice in a difficult time as we move forward, so that Britain can be seen to champion these values for others to follow, rather than undermining standards and leading people in the opposite direction.
Coming back to the point about democracy, it is important that we are all in this together, so to speak, by virtue of having democratic scrutiny and a vote on the mandate. The process should be as transparent as is sensible, and then there should be final scrutiny and a vote on the deal in Parliament. That is something that the US Congress enjoys, and democracy in trade deals is not much of an innovation. The US Congress looks at trade deals, and there is public consultation. Of course, the European Parliament also has a vote on trade deals. If we are taking back control, we should have similar or better rights ourselves.
My hon. Friend is making an excellent speech, and I congratulate him on securing this debate. Does he agree that the current avenues for public and parliamentary scrutiny of future trade deals are not fit for purpose; that the Government must be transparent about their negotiating priorities to ensure that social and environmental protections are adequate; and that they must provide scope for genuine parliamentary debate and influence in any and all trade deals?
Order. Can I just say to the hon. Lady that it is normally good practice to not intervene on a speech when you have not heard the beginning of it? The hon. Gentleman gave way, so I allowed the hon. Lady to speak, but it is not good practice to come in midway through a speech and intervene.
Thank you very much, Mr Stringer, and I thank my hon. Friend very much for her intervention. I agree with the points that she made, because in a mature and open democracy such as ours we do not want to have trade deals done in secret, and then find out that they contained all sorts of strange things that we did not want. By way of example, we would not want to wake up one day and find GM food scraps on our shelves. Neither would we want chlorinated chicken or hormone-impregnated beef, which provokes premature puberty in children.
We would not want certain things to be negotiated on the grounds of regulatory co-operation. That might include moving away from REACH—a process that the Minister will know about—on the chemical front. Under that process, if he were to produce a chemical, he would have to show that it was safe. If I were to produce a chemical in the United States, however, the Environmental Protection Agency would have to show it was hazardous. That is why asbestos is still for sale in the United States. We would certainly want to debate and scrutinise whether regulatory co-operation would lead to a much higher incidence of hazardous chemicals or poor food, which I would not want to see.
I know that the Government have committed to maintaining our standards of food production. However, the threat now is that while our farmers are delivering good food, the doorway will be left open for American farmers to pump in low-grade, low-price products that are consumed by poorer people who are under the hammer of austerity, and who end up feeding hormone-impregnated beef to their children, with strange medical side effects. I would not want that, and we would certainly want an open debate and discussion about it, so the intervention by my hon. Friend Preet Kaur Gill was well made.
In addition, we do not want our NHS to be undermined behind closed doors. The Government have said, “The NHS is safe in our hands,” and all that sort of stuff, but as we already know, the Americans will want to compete in areas of the NHS that are nationalised. They want access to patient data, and in fact a lot of patient data has already been leaked to private companies. They also want to increase medicine prices by protecting patents more effectively, and the World Health Organisation also promotes higher medicine costs. At this tragic time when we face the threat of coronavirus, and when we are talking about public health and equality of availability of drugs to deal with this and any future threats, such protections are essential.
We need democracy to shine a light and blow out the bugs in the system, so that we know what we are doing. Indeed, we want to eliminate any clauses about ratcheting and stand-still that are basically designed to stop the renationalisation of privatised utilities and industries. Clearly, people have different political views, but in a democracy the balance between public and private should be a matter of debate, discussion and public mood. It should be a moving target, rather than being fixed in one place or continuously going towards privatisation.
I will say a couple of words about what we might want to change and retain as we leave the EU. The Minister will know that the EU offers certain developing countries tariff rate preferences through its general system of preferences on everything but arms schemes. There is a risk that our bilateral trade agreements with other countries will lead to a relative erosion of those standards, or that developing countries will lose out as we carve up arrangements with developed countries.
I thank my hon. Friend for securing this debate. Do you agree with me—I think you do, from what you said earlier about dumping and the issues faced by developing countries—that the new deals must not erode the hard-fought preferences given to countries in the global south? There is a real danger that the new trade agreements that are brokered with other trading blocs will not be in those countries’ development interests. We need further public and Government scrutiny of those deals so we can be assured that that will not happen.
Order. I recognise that the hon. Lady is a new Member, but if she says “you”, she is referring to me, and I do not have a view on this. It is an easy mistake to make.
Thank you very much, Mr Stringer. agree precisely: it is important that as we move forward, Britain shows leadership in this area. As has been pointed out, DFID continues to exist to champion the needs of developing countries, including elimination of poverty, protection of our environment and sustainable development in the context of the Paris agreement, and to ensure those things are not undermined by future trade agreements made in private.
There is also the question of the EU’s economic partnership agreements for Africa, the Caribbean and the Pacific. There are problems with those agreements, because they undermine regional integration and domestic production in those zones. It would seem fair to have a balance of power between the different groupings of nations, rather than bigger powers making smaller powers less weak. Arguably, there is an opportunity for Britain to continue to lead here—unfortunately from without, as opposed to within—while keeping those trading preferences.
I know that a lot of people want to speak on this important subject, so I will simply say that this is a new chapter in Britain’s history as we move forward as a great trading nation. It is our responsibility to uphold the very best standards in human rights, workers’ rights, fair play, social justice, the environment and democracy. I hope that the Minister can give the reassurances that I have requested, and that we can go from strength to strength on fair trade, rather than using our EU exit as an opportunity to move in reverse.
It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful to Geraint Davies for securing this debate in Fairtrade fortnight. I will make four short points.
First, it would be wrong of us not to acknowledge that the Fairtrade establishment needs a considerable amount of reform. The poorest countries in the world, which are trying their hardest to participate in it, find it difficult to get Fairtrade certification, because they are poor and simply cannot meet its regulatory requirements. If we are trying to ensure an even spread across the world, we need to look at that so that we can access Fairtrade products.
To be clear, is the hon. Gentleman suggesting that Fairtrade should be reformed so that ethical and other standards are reduced, rather than maintained, to allow a level playing field? Surely we should invest further in international development to make sure that we level up.
The hon. Gentleman misquotes me. I am not saying that standards should be reduced, but there is a definite difficulty with the Fairtrade method when the poorest cannot afford the Fairtrade certification that is required to get their products to the rest of the world.
Secondly, on the human rights question, I am fully committed to the human rights that we have and to the European Court of Human Rights. As the hon. Member for Swansea West knows from our common membership for some time of the Council of Europe, I am absolutely committed to the Council and the ECHR. Recently, a Member in the other place asked about the future of the ECHR and the UK Government’s commitment to it, and I was pleased to note that the Minister responsible gave a firm commitment to the ECHR. There is, however, a serious corruption problem in the ECHR, which we need to acknowledge and do something about. The petition about it has already reached something like 13,000 signatures, including mine. It is apparent that several of the judges whom we elect—I reiterate that we as members of the Council of Europe elect the judges of the ECHR—come not from legal practice but from non-governmental organisations. They are the very NGOs that bring cases before the judges without a declaration of interest. That undermines the credibility of the ECHR in taking great strides forward on our human rights.
If the hon. Gentleman would like a defence of the ECHR, I am happy to provide that, but this is probably not the occasion. I point out, however, that about 96% of cases that are brought before the ECHR are dismissed by its secretariat as worthless and having no legal merit and do not get to a judge. In the few cases that are brought before a judge, we are by far the winners in the way that we defend them and that they are taken forward. I share his commitment to the ECHR and will do all I can to ensure that we stay part of it.
Thirdly, the hon. Gentleman mentioned the agreement with Africa. As he knows, I have been and still am the Prime Minister’s trade envoy to Nigeria. The UK’s involvement with the Nigerian economy is productive. The UK has gone out of its way to try to achieve good things for the Nigerian state and the UK, one of which is the abolition of modern slavery. Agriculture is a sector full of opportunities for modern slavery. When I went to see Unilever and its operations, I was pleased that it and its entire supply chain are working with organisations to eradicate modern slavery. There is an enormous opportunity for British companies to get into Nigeria and to work constructively with Nigerian companies. That is why a year and a half ago I was pleased to invite the Nigerian Federal Minister of Agriculture and Rural Development to see the entire supply chain of the agricultural sector, from growing to packaging and selling, and everything along the way.
Fourthly, on the standards of health foods, we have heard a considerable amount from the Prime Minister and the Government about the standards of our health foods not being open to trade discussion. I have discussed it with my farmers on numerous occasions and given that commitment to them. I am sure that that will remain something that we will take forward in our negotiations.
Despite that indiscretion, it is always a pleasure to serve under your chairmanship, Mr Stringer. You are certainly not the first person to make that mistake and I doubt you will be the last.
I congratulate my hon. Friend Geraint Davies on securing this important and timely debate, to which I will make a short contribution as co-chair of the all-party parliamentary group for Fairtrade. I offer my sincere apologies that due to Select Committee commitments, I am unlikely to be present for the contributions of Front-Bench Members.
At our annual Fairtrade reception two weeks ago, Rosine, a cocoa producer from Côte d’Ivoire, shared information about what fair trade means for her and how it has transformed her life and the lives of her family and workers in a region where a typical farmer earns just 75p a day. Hon. Members who came to support the event—we had a record number of people through the door, including more than 100 MPs—will have understood the power of what she shared and the value of fair trade.
The debate is timely not only because of Fairtrade fortnight, but because we as a country are embarking on probably the single biggest shake-up of our trading arrangements in modern times. Without a strong sense of trade justice and fairness at the heart of that process, we may make quick wins here and there, but they will be to the detriment of some of the world’s most vulnerable people. As we transition away from our membership of the EU, we will be looking to negotiate with the larger, stronger economies first, and having a close eye on existing market access for developing countries must be a priority as we go through that process. With that in mind, I call on the Government to consider the impact of any proposed changes to our international development aspirations. Without the right scrutiny, our ambition to get bilateral trade deals done may have a detrimental impact on other smaller and more vulnerable exporters, undercutting and marginalising Fairtrade producers.
There could be some positive opportunities for Fairtrade within proposed changes to the tariff schedules and agreed continuity of preferences within trade deals after 2021, but without proper impact assessments that focus on potential unintended consequences, there could be significant impacts on market access for developing countries, which will affect Fairtrade products and producers. I welcome the news that the Government have committed to the roll-over preferences currently granted to developing and low-income countries by the EU, but I understand that several countries that currently have preferential access via the EU have not yet agreed continuity arrangements with the UK; they include Ghana, Côte d’Ivoire, Kenya and Cameroon. I hope that the Government are in a position to update the House on that before too long.
My anxiety is that in our haste to sign off bilateral trade deals, we will approach the agreements as a means of securing quick wins for the UK and neglect to see them as the journey through which we can unlock the potential of farmers and producers across the developing world, satisfying our international development aspirations at the same time—resulting in a fair deal for all of us, if we get this right.
Does my hon. Friend agree that it is hugely worrying that investor-state dispute settlements were not ruled out in the Government’s objectives for the US and EU trade agreements? Those mechanisms hugely undermine nations’ sovereignty and the hard-won rights and regulations she is discussing?
My hon. Friend makes an important point. We want accountable methods of making sure that fairness runs through those trade deals, and we have to explore any and all opportunities to do that. Impact assessments are one of the ways of getting to that position, and the Government should take those issues into account, with an eye firmly on gender, inequality, pay and labour rights.
I pay tribute to some of the Fairtrade heroes we have in Halifax. When I first became a Member of Parliament, I was determined to make sure Halifax became a Fairtrade town; it was thanks to some wonderful people who had already been doing some great work promoting Fairtrade over a number of years that I was able to pull all that together to secure Fairtrade town status, which we have now had for three years.
Across Fairtrade fortnight we have had a number of activities. The brilliant fairandfunky have been in to deliver our annual Fairtrade schools conference at Halifax Minster. Just this weekend, the Albany Arcade at Halifax borough market hosted an exhibition of entries for our school poetry and poster competition. We had recipes and amazing samples of Fairtrade tiffin to try, made by Jane Simmons, and we had the absolute Fairtrade legends, Clive and Kay Holmes, who have been championing Fairtrade for years, holding stalls, making products available and sharing information. You could not meet two more wonderful people, entirely motivated by trade justice and fairness. I thank Ash Green primary school, Salterhebble, Warley Road and St Joseph’s for really getting behind the poster competition. The staff do an enormous amount of work in their schools promoting Fairtrade to their young people.
It would be remiss of me not to say that the APPG is always recruiting and always active; I encourage any and all MPs who are motivated by these issues to come along and get involved. As those trade deals come back to the UK Parliament for discussion, we will have to start doing some of the heavy lifting on scrutiny, in addition to the grassroots campaigning work that we have undertaken as the APPG up until now.
I apologise again that I will not be able to stay for the end of the debate.
I congratulate Geraint Davies on setting the scene so well. It is always a pleasure to follow Holly Lynch; her contributions are always very helpful to any debate. I also thank John Howell for his speech. He and I often spar—no, not spar; we are often together in this Chamber, he on the Conservative side and I on this side.
I have spoken on this issue previously, and I am pleased to again lend my support to the calls for ensuring that any trade deals we set up ensure that the first producers receive a decent wage. That is something that I have had in my heart for many years. Constituents contact me regularly about fair trade and some Fairtrade events take place—it is an issue of concern not just for myself but for many in my constituency. I have always said that we should be the example in this place—the example of how we treat each other, the example of how we treat our staff and the example of how we deal with those who are less able to stand up for themselves. That is what fair trade is about. It is about standing up for those who do not have someone to fight their battles, and doing our best for them. We have the opportunity in this debate to do so. Brexit discussions in this place showed that many of us failed in how we treated each other. I want to do my part to ensure that our trade deals reflect how we should treat the little man or the little woman at the start of the production process who has no one to speak for him or her, and demand fair play.
I was recently pleased to attend the Fairtrade event here at Westminster. I am a type 2 diabetic. We were sent away with a bag of Fairtrade products, including coffee, which I am a great drinker of, and there was also some lovely dark chocolate. For a diabetic, dark chocolate is not as bad as milk chocolate—I have convinced myself of that—so I energetically scoffed the dark chocolate by myself; I did not even offer it to anybody else. The event was of course a reminder of how important it is to support others across the world. Hearing the story of how one bar of chocolate comes to sit on our shelves has made sure that not only will I be thinking of my sugar levels when I consider whether to buy the bar of chocolate, but I will now be thinking of the origin and whether the pay has been fair.
The Fairtrade event highlighted that the UK chocolate industry is worth at least £4 billion each year—the girls in my office have told me they believe that to be a conservative estimate, as they think they consume that amount between them! I am not sure that is entirely true. In all seriousness, £4 billion is not a small amount. It is a massive trade and one that must be profitable, but that is not the case for those who farm the cocoa. The Fairtrade Foundation highlighted to me the fact that most cocoa farmers live in abject poverty. We may not know it when we eat a bar of chocolate or purchase it for someone else, but a typical farmer in Ivory Coast or Ghana earns less than 75p a day. Women farmers are worse off, which is disgraceful. They work longer hours and earn less. Pricing is not simply a matter of supply and demand; it is measured in how little they can get away with paying. Unfortunately, in 2020, women are still given the raw end of the deal. At home we talk about glass ceilings; these women farmers barely have a dirt floor.
Just 25% of women cocoa farmers own their land, and they work about a third more than men if we take childcare and domestic chores into account. In countries where housework is considered women’s work, too many women are expected and required to do it all themselves. It is tradition in many societies, which I know from personal contact with many across Africa and elsewhere. At home here, women work hard, and as my parliamentary aide says, “I work and he works, so whoever gets in from work first starts the dinner.” Things have moved on in many homes, and working women are often helped by their partner, although it should be acknowledged that many women do the work alone or rely on their families—but in third-world countries, women carry out back-breaking work, come home and take care of their families and get paid less for it.
I am extremely concerned that farmers, particularly women farmers in many countries, are not properly paid. When I was younger, my mother had a saying that “you earn the money by the sweat of your brow”. If they are earning their money by the sweat of their brow, and they are, they should be getting paid more than 75p a day. We need to take steps to ensure that our British pound is not part of this terrible chain. Brexit has afforded us a unique ability to re-evaluate our trade deals and to ensure that the lowest price is not the sole consideration, although it obviously plays a part.
I am a Brexiteer, which is no secret. The Minister is a Brexiteer. This country has taken the decision to leave the EU, which it did on
I ask the Minister, gently but firmly, to do everything in his power to change not simply the market in chocolate, which we all adore—diabetics or not—but our entire foundation of trade deals at this pivotal time in British history. The Minister is nodding his head, which indicates that he wishes to respond in a positive fashion. I very much look forward to hearing from him.
This is my first full contribution to a Westminster Hall debate, and I look forward to making more contributions. It is a pleasure to serve under your chairmanship, Mr Stringer, and I congratulate my hon. Friend Geraint Davies on securing the debate, which addresses an important issue as Britain prepares for life outside the EU.
Stockport is a Fairtrade town, and I am a long-standing supporter of fair trade. My local Stockport fair trade group is active throughout the year, to raise awareness about exploitation of some of the lowest-paid people in the world. In December 2019, the Fairtrade Foundation recognised Stockport fair trade group as the Fairtrade community of the month. I pay tribute to Sheila Townsend and Robert Twigg, who have led my local group as volunteers. They put in lots of hours every month.
Since entering Parliament, I have joined the all-party group for Fairtrade to help to promote the vital work that the movement does for workers in developing and low-income countries, such as helping to tackle exploitative employment practices and ensuring that workers are paid a fair price for their labour and produce. Fairtrade also sets the social, economic and environmental standards for employers and employees by safeguarding workers’ rights and ensuring that they are paid a Fairtrade premium, protecting the environment and establishing a Fairtrade minimum price to benefit businesses.
The fair trade community plays an important role in helping to tackle the climate crisis through initiatives such as Fairtrade standards, which ensure that all farmers reduce carbon emissions. That is particularly important because, in addition to facing economic hardship, many farmers in developing countries are also on the frontline of the climate crisis and require increasing support to sustain their livelihoods. Fairtrade is an established brand, which has raised awareness of exploitative practices for almost 30 years and has consistently proven to be highly trusted by British consumers, with recent polls showing that around 89% of the public trust the Fairtrade mark.
Across the UK, fair trade is supported by a rich network of more than 1,000 Fairtrade schools, in addition to more than 650 Fairtrade towns, faith communities, universities and local groups. The UK has a proud track record of being a global leader in the Fairtrade movement, which spans more than 73 countries and almost 2 million workers across the globe. As Britain leaves the EU and puts in place free trade agreements, it is absolutely imperative for the citizens of developing and low-income countries that those negotiations ensure that the rights of workers in developing countries continue to have the same protections and remain in line with the sustainable development goals.
This is a crucial time for the Fairtrade movement in the UK, and the Government now have the opportunity to increase their support for developing and low-income countries. Life outside the EU brings with it many uncertainties, but also opportunities. The Government should pursue the gold standard in trade for development policy, to support the world’s poorest people to escape poverty. The Government must also consider policies that enable developing countries to move up the value chain and that guarantee their current market access in a post-Brexit Britain. Although it is undoubtedly important that environmental and labour chapters form part of the current trade deals, they can be effective only if they are enforceable. Furthermore, it is essential that the Government consider the overall impact of trade agreements on different sectors, including the extent to which they improve human rights and encourage sustainable behaviour.
The Government must also prioritise securing continuity arrangements before the end of the Brexit transition period at the start of 2021, so that we protect developing countries that rely on continued trade with the UK as part of the £9 billion Fairtrade industry. Although the Government have made encouraging noises about rolling over the preferences currently granted to developing and low-income countries by the EU, there are concerns that a number of countries have yet to secure arrangements with the UK, including Ghana, Ivory Coast, Kenya and Cameroon.
I call on the Government to consider carrying out an impact assessment to identify whether any trade deal or arrangement that is put in place will support a country’s development, in addition to protecting its national policy space. For example, lowering or eliminating tariffs on Brazilian sugar could have a detrimental impact on producers and exporters in African, Caribbean and Pacific countries. Such assessments need to look beyond economic impact and take into consideration what effect they will have on gender inequalities, labour rights and the environment.
In closing, I join the Fairtrade Foundation in calling for a revised parliamentary process for the agreement of new trade deals, which would give Parliament the opportunity to scrutinise the legislative process. At present, MPs have no official mandate process, no clarity on transparency in negotiations and no vote on any trade deals. That is less democratic scrutiny than Members of the European Parliament or US Senators have. It is vital that we consider the EU process as a baseline.
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate Geraint Davies on securing this important debate.
I do not think anyone in this room would disagree that trade needs to be free, or that trade needs to be fair. I thank the hon. Gentleman for expanding what we mean by fairness. We are not just talking about ensuring that there is fairness between an investor and the state, or fairness for developing countries—by, for example, stopping the illegal dumping of excess goods to the detriment of their own economies. We need to ensure that there is fairness in subsidies and state aid, fairness in competition and fairness for Governments. That can be done by ensuring that businesses pay their taxes and that Governments are not restricted, or perceived to be restricted, in legislating for the common good. Fairness for citizens involves ensuring that corners are not cut and that standards—be they social or employment standards, product safety or food standards, or environmental standards—are upheld, so that we all play fair with the environment and do what we can to combat climate change.
To ensure there is a level playing field and fairness in all these areas, the Scottish National party’s view is that trade deals need arbitration and dispute resolution mechanisms that work not simply for investors, but for all of us. It is instructive that in its negotiating mandate for the UK-EU free trade agreement, the European Union has said that each of the areas I have mentioned should be subject to a dispute resolution mechanism. It is equally instructive to note that the UK Government—certainly at this stage in the negotiations—are trying to exclude subsidies, competition policy, labour laws, the environment and tax from any dispute resolution mechanism. If the UK’s Government’s intention is to exclude those important matters from arbitration, I am not convinced that it will fill the public with confidence that the Government are serious about fairness and a level playing field.
The hon. Member mentions dispute resolution. I declare an interest: after recent training, I am a mediator. Dispute resolution is an integral part of all current commercial negotiations, so I am not surprised to see it in these agreements.
Nor am I, but I am surprised and slightly disappointed that the UK Government’s stated intention is to exclude certain important matters from dispute resolution or arbitration. But—and this is a big but—not all arbitration and dispute resolution mechanisms are the same. Although the SNP will continue to support the inclusion of all the aspects of modern trade deals that I have mentioned, we would be deeply concerned if other future trade deals implemented the one-sided ISDS-type mechanisms that the hon. Member for Swansea West mentioned.
I am following the hon. Gentleman’s speech closely, and I agree with what he is saying. Does he agree that it is imperative that the UK stands up for dispute resolution mechanisms that include social and environmental matters and other areas beyond investment, as a precedent for when the EU—and indeed the UK, which is in a much weaker position—talks to the US or China? The EU will be the future of fair trade globally.
Of course I agree with that. It is important that the wide range of issues that form the basis of modern trade deals—not simply tariffs and quotas—are included. As I have said, however, not all arbitration mechanisms are the same, and I would not want one that operated on the basis of the secret ISDS-type schemes that we have seen.
That is primarily because of the potential restrictions that such mechanisms could place on Governments, including the UK Government, in legislating even on public health, for example. To demonstrate, I will give two brief examples of how ISDS-type arrangements are unfair and limit the Government’s ability to act in the interests of citizens. The examples are not new and the information has been around for some time.
In the first case, between 1995 and 1997, the Canadian Government banned the export of toxic polychlorinated biphenyl waste to comply with their obligations under the Basel convention, to which the United States was not a party. Waste treatment company SDMyers sued the Canadian Government for $20 million in damages under chapter 11 of the North American free trade agreement, which included an ISDS-type arbitration scheme. The claim was upheld by a NAFTA tribunal even though Canada had acted to comply with an international treaty—that is quite extraordinary.
In the second case, in April 1997, the Canadian Parliament banned the import and transportation of the petrol additive methylcyclopentadienyl manganese tricarbonyl, because of concerns that it posed a significant public health risk. Ethyl Corporation, the additive’s manufacturer, sued the Canadian Government—again under NAFTA chapter 11—for $251 million, to cover losses resulting from the “expropriation” both of its plant and its “good reputation”. The claim was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid Ethyl Corporation $15 million in compensation.
Those cases involved toxic PCB waste and a petrol additive that was deemed to have an impact on public health. In my view, it is quite wrong and unfair for large corporations to be able to sue Governments simply for taking steps to protect the wellbeing of their citizens, or for enacting public health measures that they believe to be right and fair, and for which they may well have an electoral mandate.
Although we welcome new trade deals, they need to be fair. As has been said, the process of agreeing them needs to be transparent and inclusive. For example, it must formally involve, at all stages, the Scottish Government and other devolved Administrations; and approval must be sought from and granted by Members of Parliament. That mirrors the point about democracy that the hon. Member for Swansea West made.
A clear understanding is required that although genuine dispute resolution mechanisms are vital for delivering fairness, free-trade agreements that include secret ISDS-type courts that limit, or appear to limit, the ability of Governments at any level to act in the best interests of their citizens are wrong, unfair and profoundly unacceptable.
I apologise to you and to other hon. Members for my late arrival, Mr Stringer. I congratulate my hon. Friend Geraint Davies on securing this fantastic debate, which is well timed given that the Fairtrade fortnight has just passed.
My hon. Friend started the debate by describing what he thinks of when he considers the subject of fair trade. It is not to gain a competitive advantage through market practices that would be unlawful or unethical in one’s own market. It is about avoiding abuses of human rights or environmental standards, promoting fair competition in domestic markets, and avoiding unfair domestic activity that undercuts or undermines domestic producers. That was a pretty good starting point for the debate, which has flowed from those remarks.
My hon. Friend Nick Thomas-Symonds spoke about the importance of high standards and rights around the world, to which I would add regulation. My hon. Friend Jim McMahon quite rightly mentioned the role of the Co-operative party and movement in promoting fair trade. He also spoke of the vital role that the Department for International Trade should play in tackling unfair trading practices around the world and raised his concerns about its potential merging into the Foreign Office. I add to that my concern that the Department does not have responsibility for the negotiations with the European Union, which accounts for nearly half of our international trade. That undermines the Department’s effectiveness.
My hon. Friend Preet Kaur Gill quite rightly spoke about the need for high standards to be maintained in the UK and promoted around the world. In response, my hon. Friend the Member for Swansea West spoke about the importance of standards in the chemical industry through the European REACH system. The film “Dark Waters”, which I recommend to you, Mr Stringer, and to all right hon. and hon. Members who have not seen it, depicts exactly what goes wrong when those standards are not in place. Historically, the United States has not had high chemical standards and the 70,000 population of the town of Petersburg, West Virginia, was put at risk by the irresponsible actions of the chemical industry there. That shows what can go wrong without good regulation.
My hon. Friend Fleur Anderson spoke of the potential for international trade agreements to undermine free trade if they are not negotiated in the right way. John Howell argued for fairer trade, and although my hon. Friend the Member for Oldham West and Royton responded to his point, I would simply add that given the way that economic partnership agreements have been rolled over, it is important that the Government continue to negotiate with countries in the developing world for improvements that benefit those who need fair trade the most. My hon. Friend Holly Lynch, who is not my hon. Friend Cat Smith, spoke about what fair trade means for workers and communities in the Ivory Coast and the importance of trade justice and fairness to them. That was reiterated by Jim Shannon. My hon. Friend Navendu Mishra made an excellent contribution in his first speech in this Chamber about the fact that Stockport is a fair trade borough. He also mentioned the importance of the sustainable development goals.
To pick up briefly on what Stewart Hosie said, I agree with him. I am sure we are speaking about the same things when we compare fair trade with free trade. Unfortunately, not everybody uses “ free trade” in the way he and I would use the term. It is very important that we consider, as he did in his analysis of some of the challenges in dispute mechanisms, what we mean by “free”. Who does free trade serve, and who is it free for? Similarly, when we speak of fair trade, who is fair trade for? The hon. Gentleman’s example was to do with investors with deep pockets. They have the ability to take on the public or environmental interest if dispute mechanisms that they can use are in place in the international agreements.
What is fair trade? Typically, we think of it as fair trade for farmers in the developing world, a badge on coffee, chocolate or wine that we see in supermarkets, the kinds of stories that we heard at the Fairtrade fortnight reception in the House of Commons, and the work of the Fairtrade Foundation, but there is so much more to the topic than that. There is the need for a rules-based system governed by the WTO, in which it is incredibly important that the United States plays its full part. I think I put that question to the Secretary of State last Monday: is it important enough to this country that in negotiations with the United States we insist on the United States taking its responsibilities to the WTO seriously, including it appointing to the appellate body?
Fair trade is about international trade agreements that support human rights and workers’ rights, combat exploitation and undermining of trade union activity, and support environmental and climate justice. It is no coincidence that those on the frontline of the climate crisis in the developing world are those who face the most difficult economic times and those most in need of support through a fair trade system. It cannot be right that this country continues to promote and fund the export of fossil fuel projects, which, sadly, the Government still do, as we saw most recently at the Africa summit. We should promote renewable energy and help the developing world to move to a low-carbon and net-zero future at the same time as we do at home. That would also be an opportunity for our domestic technology and export potential.
Not only in the agreements and settlement mechanisms mentioned by the hon. Member for Dundee East, but in the trans-Pacific agreement, we see the ability to undermine trade union activity and the ability for opt-outs in countries such as Vietnam. We already have significant trade with China, another country where there are significant concerns about human rights abuses and a complete absence of trade unions. That is what international trade and its agreements need to consider. It cannot be right that we trade at all costs; it must be right that international trade is done sustainably and fairly.
That brings me to the impact on our own economy. The result of a trade war—as we have seen with the tariffs imposed by President Trump—is an impact from dumping, which we see at the moment, with low-quality cheap goods on our market. Dumping is undermining our steel, ceramics and wood industries. Unless the Government get things right, we will see the potential for the United States to dump low-quality products on us, as a consequence of the type of deal that President Trump would like to negotiate.
It is not good enough to say, “We are going to have zero tariffs to benefit consumers,” because if the goods that come in as a result of those zero tariffs are of a low quality, consumers lose out. My hon. Friend the Member for Swansea West mentioned the problems of poor food standards and the prospect of the poorest in our society being fed chlorinated—or, now, acid-washed—chicken. Remember the reason that chicken is acid washed is the appalling hygiene and animal welfare standards in the United States, and that the United States has 10 times the level of food poisoning that we do in this country is those poor standards. That is what is at stake for consumers.
Our domestic producers will be undermined if cheap food is allowed in as a result of a US trade agreement. If domestic producers are forced by those low standards to compete unfairly, will they survive? Will they survive to take advantage of the reciprocal opportunity to export to the United States market? That seems unlikely, and that concern has been expressed not just by me but by the National Farmers Union and the farmers themselves.
Trade, historically, has been about power relationships. That is a reality. Do we take the opportunity available to us in negotiating new trade agreements to take our responsibilities seriously? The countries that are party to the economic partnership agreements that we rolled over want to revisit them. They want better terms, because of the unfairness of those agreements—concerns that have been expressed historically. Those countries have rolled the agreements over because they want to continue trading, but they have made it clear that they wish to revisit them.
That would be the responsible thing for us to do it but, equally, it would be wrong of us to accept—in a distressed state—whatever terms we are offered by the United States. We have discussed the poor standards that come with such an agreement and that are the consequence of the negotiating objectives set out by the Government. The Government include the dispute settlement paragraph—only a short one—but the problem, as the hon. Member for Dundee East set out clearly is that that dispute settlement mechanism is the back door to undermining, or running roughshod over, all the commitments not to allow US pharmaceutical companies access to our markets to sell their medicines, not to undercut workers’ rights, not to undercut our ability to address the climate crisis, and not to support our domestic manufacturing industries.
I expressed that concern in a question I put to the Secretary of State—I think the hon. Member for Dundee East put the same question. I checked and double-checked the Secretary of State’s responses, but that is the question she did not answer. Perhaps the Minister will take the opportunity now to make it absolutely crystal clear that he understands that the United States has those dispute mechanisms in its trade agreements because it and its investors use them to secure market access, to undermine our domestic producers and to sue the Governments with which the agreements are made. We must not have undercutting of our manufacturers, we must not allow access to public services, we must not have a reduction in workers’ rights, and consumers must not have to put up with lower standards.
When it is fair, trade is a force for good. When it is between equal partners—whether it is between us and the developing world or between us and a larger trading bloc—trade is essential to economic prosperity. Trade has the ability to transform the lives of local producers and communities in the developing world, but it must be balanced and there must be an opportunity for those countries to diversify away from a system that relies on the export of minerals and cash crops and towards a much more balanced economy. Trade must also be on the basis of a fair international rules-based system. It should mean avoiding both exploitation abroad and undercutting at home.
I call on the Minister to carry out the Government’s pledge to revisit the rolled-over agreements with the developing world and to rule out the use of a dispute mechanism in the United States agreement that is very different from what is envisaged for the EU agreement. Given the track record of the United States, that has the potential to undermine all the warm words on workers’ rights, the environment, consumers and access to the national health service, so I hope the Minister rules it out. Fair trade is an incredibly important aspect of what we do and what we support, but it has to be carried out appropriately. We must both act responsibly and ensure that we look after our own domestic markets.
It is a pleasure to serve under your chairmanship, Mr Stringer, for my first speech as a Minister in Westminster Hall. I congratulate Geraint Davies on securing the debate, and other hon. Members not only on their contributions but on their ingenuity in using this occasion at the end of Fairtrade fortnight to widen the debate into one about our future free trade agreements around the world, in particular with the United States. I also congratulate the hon. Gentleman on having been such a doughty advocate for the cause of fair trade over the years—a position that the Government share.
The Department for International Trade works very closely with the Fairtrade Foundation; indeed, the foundation serves on the strategic trade advisory group—the STAG—which I chair as the Minister responsible for trade policy. The global fair trade system reaches more than 1.5 million farmers and workers in more than 73 countries, many of which have historical ties to the UK, principally through the Commonwealth. The UK market for Fairtrade certified goods, which is underpinned by fair trade standards, minimum prices and direct payment of premiums to producers, has grown into one of the world’s largest. The Fairtrade mark continues to be trusted highly by the UK consumer, with more than 80% of the public saying they trust it.
Working towards a living income in domestic and global value chains is one of the keys to driving poverty reduction and economic development, and fair trade plays a crucial role in that. It also provides a means to create wealth, jobs and prosperity in local communities, in turn driving a country’s development and allowing it to grow into a trading partner of the future.
I will give some examples of how the Government, across various Departments, support free and fair trade. Between 2010 and 2016, the Department for International Development provided £20 million to Fairtrade International to help it to have a greater impact through its work and to make the global fair trade system stronger. DFID has also supported fair trade by investing more than £30 million in the responsible, accountable and transparent enterprise programme. That programme has helped to fund Shift, which works to improve companies’ human rights reporting through capacity building in business and human rights, and a new reporting database. It has also piloted and promoted Fairsource, a suite of supply chain mapping tools for use by companies to improve the sourcing of agricultural commodities such as flowers and cocoa, which was referred to by Jim Shannon. Fairsource dashboards are now available for more than 410 businesses and have been used by household names such as Ben & Jerry’s, Marks & Spencer and Starbucks.
Achieving the UN sustainable development goals by 2030 means achieving inclusive economic growth and decent jobs. The Government are committed to supporting that to spread opportunity ever more widely. We have the trade and investment advocacy fund to build developing countries’ capacity to participate in trade negotiations and fully engage at the World Trade Organisation. We have the SheTrades Commonwealth programme to enhance the competitiveness of women entrepreneurs in Commonwealth countries by connecting them to international markets. We have the Commonwealth Standards Network to increase awareness and the use of international standards across the Commonwealth in order to boost trade.
The Minister mentioned the good work of DFID in promoting fairness. Will he confirm, or press the Government to ensure, that DFID’s work continues and that it is integral to trade negotiations? There is some concern that the Department for International Trade is working in isolation and in the interests of investors, while DFID may be thinking about fair trade. It is important to hardwire the interests of fair trade into future trade arrangements.
I agree with the hon. Gentleman. I know that my right hon. Friend the Prime Minister, when he served as Foreign and Commonwealth Secretary —I was his Parliamentary Private Secretary at the time—was frustrated to a degree by the disconnect that sometimes existed between DFID and the Foreign Office in pursuing Britain’s overall development and foreign policy objectives. It absolutely makes sense that we should try to co-ordinate our activity across all the international Departments of Government to get maximum influence for the United Kingdom and, most importantly, the most positive outcomes. One of the key drivers that motivates us in the Department for International Trade is the opportunity of trade with some of the poorest countries in the world to increase the opportunity for wider prosperity there. That will be at the heart of trade policy as we develop future free trade agreements.
We give £15 million to support the implementation of the trade facilitation agreement programme, which helps developing countries to reduce inefficient border processes, excessive red tape and administrative bottlenecks, which are hindrances to effective trade. The UK is the largest donor to the WTO’s enhanced integrated framework, providing technical and financial support to build trade capacity in 51 of the poorest countries in the world and to increase agricultural productivity for both local consumption and export. Through our support for the Impact Management Project, more than 2,000 organisations are harmonising a global approach to managing impact, including robust global standards on measurement and reporting. We are also examining the potential for fair trade standards to encourage businesses to be more responsible and reach vulnerable people in their supply chains.
Let me turn to a point raised by the hon. Member for Strangford—who is currently being interfered with by my hon. Friend Bob Stewart, who has just arrived in his coat. The hon. Gentleman mentioned the terrible conditions in which some people work in some of the poorest parts of the world. We are absolutely clear that those people and providing them with opportunities are at the heart of our trade policy. That means engaging across the whole supply chain, working in partnership with businesses, NGOs, producers, investors and consumers to be more responsible and reaching vulnerable people to ensure safe and decent opportunities for all.
Now that we have left the EU, we have a superb opportunity to advance the agenda further. It will enable us to build a fully integrated training and development package, encompassing trade preferences for developing countries alongside our existing aid spending. We know that trade is a key driver of economic growth, helping to raise incomes, create jobs and lift people out of poverty. That is why the Government are working to place development and global prosperity at the heart of UK trade policy.
Free and fair trade has been a great liberator for the world’s poor. Between 1990 and 2015, the number of people living in extreme poverty globally fell by more than 1 billion, but as the hon. Member for Strangford indicated, there is still so much to do. I say to the shadow Minister, Bill Esterson, that fair trade also means free trade. Let me tell him and colleagues that by free trade we mean supporting the international rules-based global trading order to ensure that trade works in the interests of all countries, large and small. As an independent trading nation, the United Kingdom will prioritise fair trade and, in particular, trade that helps developing countries to lift themselves out of poverty. That starts with working to ensure continuity in our trade agreements with those developing countries.
Following the transition period, the UK will put in place its own trade preference scheme granting duty-free, quota-free access to 48 least developed countries and tariff reductions to other developing nations. Far from rowing back, as was suggested, we intend to use our new independence to go forward. I contend that while DFID is the Department spending 0.7% of gross national income on development, the Department for International Trade is also, in a very real and profound sense, a Department for development by providing opportunities for creation of wealth and prosperity through trade.
We have signed four development-focused economic partnership agreements with the Southern African Customs Union, and Mozambique and other specific eastern and south African states. We continue to work with our partners on arrangements for the remaining countries covered by EU economic partnership agreements, including Cameroon, Côte d’Ivoire, Ghana and Madagascar. As was alluded to by Holly Lynch, we are absolutely determined to get those over the line. In fact, only last week I met representatives from some of those countries to discuss how we could get those agreements rolled over by the end of the year. We are also using our influence in organisations such as the WTO.
The Minister will know that the history of investor-state dispute mechanisms is basically about protecting investors who invested in countries without established systems of law and protection for investors. These days, we need a system in which people can invest in the knowledge that the host nation will also protect its environment and workers’ rights. Will he endeavour to strike deals that ensure that those social and environmental rights will be protected alongside investors’ rights, with investors’ rights not trumping those rights and attempts in host countries to protect those vital interests?
We will first roll over our existing trade agreements, but we will then want to go further on many of them. We will want to ensure that the trade agreements we strike offer the opportunity to raise standards and consumer and employee protections. We do not see trade agreements as a race to the bottom. I will say a bit more about that in a moment, but I am also conscious of your stricture, Mr Stringer, to leave a little time at the end.
I will respond directly to more of the points made by colleagues. We heard quite a bit from the hon. Member for Swansea West about the national health service, medicine pricing and privatisation. I do not know how much more explicit the Government need to be in our resolve—those things are categorically not on the table. In fact, in the US negotiating bundle, we put that in black and white. Those things are not on the table. My right hon. Friend the Secretary of State has been clear that were the United States to expect or demand things of us that we did not think were acceptable, we would walk away. I understand the politics of it—it is a very useful message—but it is categorically not correct.
My hon. Friend John Howell does a great job as the Prime Minister’s trade envoy to Nigeria, which I hope to visit in the next couple of weeks—it depends on the virus. I hope to have a chat with him before we go. He made some excellent points. He talked about modern slavery, and one of the greatest achievements of my right hon. Friend Mrs May is the Modern Slavery Act 2015. I had the privilege to serve on its Bill Committee.
I referred to some of the points made by the hon. Member for Strangford. I will not get into the debate about whether milk or dark chocolate is best, particularly since we are in Lent and I have given it up. I congratulate Navendu Mishra on his first speech in this Chamber.
To Stewart Hosie, I point out that my Department does not lead on the UK-EU negotiations, which is regretted by the shadow Minister. We just have the rest of the world, which does keep us moderately busy, as I am sure colleagues understand. In terms of the dispute resolution, the critical difference between us and the EU at the moment is that it sees an ongoing role for the European Court as a judgment mechanism on some of these matters, whereas we are explicitly clear that we have left the European Union, and at the end of the transition period the European Court can have no jurisdiction in the United Kingdom; the supreme court in the United Kingdom will be the UK Supreme Court.
The hon. Member mentioned the involvement of the devolved Governments and devolved nations in the negotiations for future free trade agreements. I look forward to meeting my SNP trade counterpart, Minister McKee, this afternoon. We have had a successful programme, as acknowledged in all bar the SNP’s press releases, of sharing documents and information at an official level. We have been totally clear that we intend to negotiate on behalf of all nations and all regions of the United Kingdom.
I said in response to the shadow Minister that we do not lead on the EU; we have the rest of the world, and it is quite a big task. We are clear that we want reform of the WTO. The Secretary of State was in Geneva last week, taking our seat and making the first speech there by a Cabinet Trade Minister for almost 50 years. We passionately want a resolution to the Airbus-Boeing dispute. We hope that the United States will agree to appoint people to make the appellant body quorate again, but we agree with the United States that the WTO more widely does need reform. The Prime Minister has been clear that what we negotiate will be driven by evidence and science, not rumour and mythology, but we want the agriculture sector in the UK to take the opportunities of future FTAs, not least that with the United States, which will be incredibly positive for the sector.
In conclusion, on workers’ rights, manufacturing and environmental standards and the NHS, the shadow Minister was essentially saying that those of us on the Government side are motivated by bad values and want to do bad things. In a sense this is the big difference. I want him and the country to understand that we see great opportunities in free trade agreements for our citizens and companies to grow, with prosperity, wealth and opportunity for all, and to have free and fair trade, which has been the unblocker of liberty, social progress and political rights across the world. We see an opportunity opening before us, providing enormous chances to some of the world’s poorest people. In the months ahead, I will be very proud to advance that agenda.
It has been an interesting debate My response to the Minister is that if we agree on ensuring social justice, ensuring environmental protections, ensuring that human rights are protected and so on—we may do—we need to build those commitments into our trade agreements and not just hope for the best. Investor-state dispute systems are specifically focused on the interests of investors. Let us ensure that those values persist as we look at those relationships with the EU and, in particular, in the interests of the poorest—