Tag: Issue of the Week 2

Hugo Swire – 2023 Speech on the Australia/New Zealand Trade Bill and Maiden Speech in the House of Lords (Baron Swire)

The maiden speech made by Hugo Swire, Baron Swire, in the House of Lords on 9 January 2023.

My Lords, over the recent Christmas Recess, I spent some time—not all the time—reading some maiden speeches made by those coming into this place. It strikes me that there is an accepted formula in being uncontroversial while paying tribute to the friendliness, efficiency and tolerance exhibited by all the staff in this place, from the Lord Speaker and his office to Black Rod and her office, the clerks, the Vote Office and the doorkeepers, who are of course the people who run this place. I had thought that the kindness exhibited to me was exceptional but, clearly, it is a common experience; none the less, I wish to add my gratitude to them.

Having spent almost two decades in the other place, I am acutely aware that nothing must be more irksome to your Lordships than somebody coming here from there and thinking that they know everything. This place is different and all the better for it. I am therefore hugely indebted to my noble friend Lord Lindsay for helping me to avoid the many potholes and pitfalls. I am also indebted to my noble friends Lord Strathclyde and Lord Marland, of Odstock, who were kind enough to be my supporters and guided me what looked to be so effortlessly into place—no mean achievement as I am not very good at these things. I think I am the only living former Guards officer who went the wrong way in the Changing of the Guard on the forecourt of Buckingham Palace some 40 years ago, to the consternation and delight of hundreds of Japanese tourists.

It was never really my intention to make my maiden speech so soon, having come into this House only recently. I am still reminded of my maiden speech in the other place in July 2001, which, while perfectly workable, is never likely to be studied or quoted from. I remember on that occasion having to follow on, in a not ideal fashion, from the then new Member of Parliament for Henley, one Boris Johnson. While no such threat confronts me this afternoon, following on from not one but two former high commissioners to Australia, a PUS at the Foreign Office and the Government’s main trade negotiator presents challenges to me in themselves.

Having thought about this, I feel that I can no longer continue with my role as a Trappist monk, since there are so many issues before us that I wish to share my views on and hopefully contribute something useful to. Having served as a Minister of State at the Northern Ireland Office, I maintain a deep appreciation and understanding for Northern Ireland and the problems that it has confronted, and which confront it at the moment, not least with the protocol. I very much welcome the recent noise coming from Dublin, given the utterances from Leo Varadkar the new Taoiseach—obviously, he was Taoiseach before and is Taoiseach once more—which will hopefully go some way towards resolving what has become a stalemate.

Also, having spent almost four years as a Minister of State in the Foreign and Commonwealth Office, with responsibility for the Commonwealth as an institution but also with responsibility for Asia as part of my portfolio, I wanted to take part in this debate, since this trade deal is of great interest to me. In that role, I had the opportunity of visiting both Australia and New Zealand, and I am very grateful to my noble friend Lord Goodlad for his kind remarks about that.

As we have heard, the devil of these trade agreements is in the detail, and I have no doubt that there will be plenty of conflicting views about this one. It is of course right that we should debate it thoroughly and scrutinise it in detail, but for my part I very much welcome this trade deal. I am not quite 74, which is what my introductory biography in this place said—that was amazing, and there was a certain amount of squinting at me on my first day. However, I am old enough to remember the sense of abandonment that our cousins in Australia and New Zealand felt when the United Kingdom joined the EEC in 1973. Their consensus was that this represented imperial preference in reverse and threatened particularly their exports of beef and lamb. Therefore, it is somewhat ironic that one of the criticisms levelled at this deal is that it will disadvantage our own agriculture sector, particularly in beef and lamb, although this ignores the fact that Australia and New Zealand’s main export markets are now heavily weighted towards Asia. The sense of betrayal at the time was understandable, so I am pleased that half a century later, we can put this to rest and look forwards, not back. Australia and New Zealand are, and have always been, more than just allies and friends. We have so much in common, and no one should underestimate the importance of the Five Eyes agreement and the AUKUS partnership, not least at a time of rising belligerence and influence in the region from China.

I also applaud this Bill because it is the first post-Brexit trade deal to have been negotiated from scratch and, moreover, it is with two fellow members of the Commonwealth. I should at this point draw your Lordships’ attention to the register of interests and my role as deputy chairman of the Commonwealth Enterprise and Investment Council, a not-for-profit organisation revitalised and chaired so dynamically by my noble friend Lord Marland, which promotes intra-Commonwealth trade.

For too long, we have behaved as if the Commonwealth is an embarrassment and not an asset. During my time in government, it sometimes felt as if I was pushing water uphill whenever there was anything to do relating to the Commonwealth. Here I pay tribute to my noble friend Lord Howell of Guildford and the now retired Lord Luce, who at times appeared to be the only two parliamentarians keeping the Commonwealth flame alive. I intend to join them and all those who feel similarly in promoting the Commonwealth, which provides a unique and ready market for British business.

In a recent, not uncontroversial Netflix documentary, which some of us may just have seen—and others may not admit to having seen—one of the contributors labelled the Commonwealth “Empire 2.0”. Either this was deliberate mischief-making, or it displayed astonishing ignorance; perhaps it was both. What it was not was in any way an accurate description of what today’s Commonwealth is: a voluntary grouping of now 56 countries, some of which, not least the two most recent countries to join, namely, Togo and Gabon, owe nothing in their history to the United Kingdom, having fallen historically within the francophone sphere of influence. Of course, your Lordships will remember that the last Commonwealth Heads of Government Meeting in June was held in Rwanda, another country with nothing to do with the British Empire or colonialism historically.

This afternoon, we heard a call for the Government to come up with a comprehensive trade strategy, which I would welcome. If the Government do that, I would remind them that the modern Commonwealth is one such opportunity—a Commonwealth that has a population of 2.5 billion people, 60% of whom, critically, are under the age of 30. It represents a third of the world’s population—a billion middle-class consumers. The combined GDP of Commonwealth countries is estimated to reach $19.5 trillion in 2027, almost doubling in 10 years from $10.4 trillion in 2017. It also represents 40% of the global workforce and half of the top 20 global emerging cities. I am sure we will hear from other speakers about the Commonwealth advantage, whereby it is cheaper for one company in a Commonwealth country to trade with another company in another Commonwealth country, with a saving of 21%, based on a common language and legal system.

The opportunities for trade with Australia, New Zealand and the wider Commonwealth are clear. I welcome this trade agreement, which will increase the United Kingdom’s chances of joining the trans-pacific partnership, which is the bigger goal. I hope that the new Minister, my noble friend Lord Johnson of Lainston, will take this opportunity to reaffirm this Government’s commitment to the Commonwealth and everything it represents, and that we can rely on him to be a passionate advocate for it.

January 12, 2023
John Kerr – 2023 Speech on the Australia/New Zealand Trade Bill (Baron Kerr of Kinlochard)

The speech made by John Kerr, Baron Kerr of Kinlochard, in the House of Lords on 9 January 2023.

My Lords, I have made a new year’s resolution to try to be more congenial, so I need to start by saying that I warmly welcome the last three substantive points made by the noble Lord, Lord Frost. It has been a very long time since I have been able to say that I entirely agree with the noble Lord, Lord Frost. It is also a great pleasure to see the Minister back on the Front Bench, and I greatly appreciated the balanced and understated analysis he put forward. The noble Baroness, Lady Liddell, spoke of hyperbole. I heard no hyperbole; I heard no geese misclassified as swans. I believe that we will all benefit from such a calm, rational analysis. I think it would be as well that the Minister does not pay any early visits to the hill farmers of Scotland, Wales or Northern Ireland.

I have only two points to make on the substance of the Bill and two points on the agreement. On the Bill, I do not understand its rationale—I am like the noble Baroness, Lady Liddell. It is bizarre. The Procurement Bill—which has gone through this House and will have its Second Reading, I think, today in the other place—overtakes this: it confers on the Government powers to implement procurement provisions in trade agreements. So why do we need a separate and specific Bill, primary legislation, in respect of Australia and New Zealand? I really do not understand. It is not as if the Australian and New Zealand agreements were massive agreements urgently requiring to come into effect, or agreements with momentous procurement provisions. I am not against the Bill, but I did not hear from the Minister any convincing rationale for it. It may be helpful if he could go on record to explain why we are doing what we are doing.

I am a little more concerned about the substance of what the Bill says. It is a skeleton. That came as a surprise because the Explanatory Memorandum on the agreement with Australia told us that primary legislation on procurement would be required. The Bill, however, makes none of the apparently necessary changes to the current statute book and does not tell us what they are. Instead, it asks us at Clause 1 to delegate regulation-making power to an “appropriate authority”—not just power to make the changes required by the Australia and New Zealand agreement but power to make any changes that the appropriate authority deems appropriate. Clause 2 suggests that such appropriateness can be construed liberally. That all seems a little permissive to me. The wording of Clause 1 and, possibly, Clause 2 may need some careful consideration in Committee.

I also note that the regulations making the changes that the appropriate body thinks appropriate would be subject only to the negative procedure. I wonder whether choosing that, rather than the affirmative, procedure is necessary or appropriate. That, too, is a point the House may want to think about in Committee.

My third, more general point is that the Minister might find the House more relaxed about implementing legislation if the Government felt able to be more open—perhaps as open as the Australians and New Zealanders—about the process of negotiating trade agreements. As our EU Committee pointed out in 2019, the Constitutional Reform and Governance Act 2010, CRaG, which defines our role now, is

“poorly designed to facilitate parliamentary scrutiny”

of trade agreements. That did not matter much in 2010 because the EU was then our trade negotiator and the European Parliament was required by treaty to approve the mandate for trade negotiation, to be fully informed at all stages of the negotiation and to approve its eventual outcome. Because the European Parliament was fully in the picture, so were we. However, we now have none of its three means of scrutinising and controlling the process of treaty negotiation. Therefore, we can be taken by surprise, as the Scottish, Welsh and Northern Ireland hill farmers were, by the agricultural elements in the deals with Australia and New Zealand. Those concerns were not entirely justified—again, I am with the noble Lord, Lord Frost, on this—but greater openness would reduce the risk of such surprises and I hope that the Minister will look again at the International Agreements Committee’s proposals on how to mitigate the defects in CRaG and restore effective scrutiny of trade agreements. “Taking back control” did not have to mean slamming down the shutters.

My second-to-last point illustrates why I am one of those who strongly believe that we need a government strategic document setting out the trade policy strategy. Let me try to do that, this time, by giving examples of strategic issues which I am sure the Government and department are greatly concerned about, but about which we have been kept a little in the dark. First, and most urgently, I ask the Minister: where do we, and should we, stand in the debate touched off by the Washington agreement to invest nearly $750 billion in green energy under the Inflation Reduction Act? Over in Brussels, our EU friends still seem to be on their plan A, which is to seek to ensure that more non-US firms benefit from this enormous US investment. That is a rather unlikely outcome, particularly given the change in the composition of the House of Representatives. But if, as I expect, the European Union falls back on its plan B, which is to enact similar national preference provisions on energy investment, I would have thought that this would be rather detrimental to our interests. So, where do we stand in this debate, and what are we trying to do about it?

A second and equally strategic issue which could be addressed in a government trade strategy document is the trade policy consequence of our hardening attitude to China, given the increased belligerence towards Taiwan and our increased concern about supply chain resilience. I do not know what the agreement between the Foreign Office and the Department for International Trade is on the attitude we should take. I hope that there is an agreement, and I cannot see any reason why public debate should not be enhanced by the position being made known.

Thirdly, to what extent should our approach in trade relations with friendly third countries such as India take account of their compliance or non-compliance with our and our friends’ sanctions on Russia over the invasion of Ukraine? I do not think trade can be regarded just as a watertight compartment. As we try to negotiate a trade agreement with India, we need to know the Government’s view on how watertight that compartment is.

Fourthly, how does trade policy interact with environmental policy? To me, the surprise in the agreement with Australia was not the agricultural provisions—we clearly decided to give the Australians what they wanted, perhaps for good reason—but the weakness of the environmental provisions. We knew that the Australian Government were determined to protect their coal industry. We remember Alok Sharma’s tears at the COP in Glasgow; the Australians drove him into that corner. However, we knew that the then Australian Government were behind in the polls and likely to lose the imminent election, and that the incoming Government would take a much more constructive line on global warming. Since we were giving the Australians what they wanted on agriculture, why were we not trying to extract a price on environmental policy commitments? In addition, why the rush? Why were we not waiting for a Government whose views on global warming, like those of the New Zealand Government, were closer to ours—a Government like the one we have in Australia now? I do not know the answer to that question. Maybe Mr Lynton Crosby is part of the answer; I do not know. I think it would be easier for the Government to maintain a credible position in public debate if they set out the principles they see as governing the interaction between trade policy and environmental policy.

I have a final example of the sort of issue which should be covered in a trade strategy. By the way, I think that the trade strategy should be submitted for debate in Parliament on a regular basis. It should be renewed year on year and provide the basis for this kind of debate, but on a wider stage than just that of Australia and New Zealand. The elephant in the room for trade policy is how we can reduce the non-tariff barriers to trade with our biggest and closest market. If you look at the queue on the Dover road, you must think that this is a strategic issue with direct daily consequences to the detriment of British business.

One of my more poignant memories of 2019 is of the then Prime Minister proudly announcing that his trade and co-operation agreement contained not a single non-tariff barrier. I cannot remember any trade agreement that set up a non-tariff barrier. The purpose of trade agreements tends to be to take barriers down; on the other hand, leaving a customs union, a single market and an area of free trade and free movement is bound to erect barriers—it certainly did, and the treaty did nothing to mitigate them. However, there will be a review in a couple of years’ time and, in my view, mitigations are possible if trust can be restored.

So it is not too late—or, indeed, too early—to start thinking about a plan. I hope that the Government are thinking one up. I do not know whether this has been entrusted to the Department for International Trade; I fear that the matter may be being handled by the Foreign Office, which, in my view, would be unwise. The Government would do well to produce some inkling of what they think is the best way to reduce the barriers that have now made the channel so wide.

With that, I had better stop. If I do not, the House may think that I have forgotten my resolution to be congenial.

January 12, 2023
Barbara Young – 2023 Speech on the Australia/New Zealand Trade Deal (Baroness Young of Old Scone)

The speech made by Barbara Young, Baroness Young of Old Scone, in the House of Lords on 9 January 2023.

My Lords, I declare my environmental interests, as well as my interest as chair of the Royal Veterinary College. I had not really thought of declaring my Australian and New Zealand relatives until I was reminded by several previous speakers. I have umpteen of them. We were good Scots: we spotted the £10 immigration grant—the Ten Pound Poms scheme, as it was known—and took full advantage of it. I am a frequent visitor to Australia and New Zealand.

Noble Lords have remarked upon the fact that this Bill is very narrow in scope in that it deals only with the power to implement the obligations in the government procurement chapters of the two FTAs, but it is of course an open goal in terms of the opportunity to talk about the wider issues of trade agreements, including the scrutiny process. I would also like to focus on environmental standards. I hope that these broader comments will benefit future agreements.

On the scrutiny process, much of the scrutiny happens far too late. It needs to take place before things are set in concrete. I welcomed the assurances from the noble Lord, Lord Grimstone, about future ground rules and improvements in the processes, but they did not go far enough. We need full parliamentary debate and agreement on negotiating objectives before negotiation starts, and proper opportunity for parliamentary debate in both Houses before the agreement is signed, not after—or, in the case of these two agreements, never at all, as far as the House of Commons was concerned.

As the noble Lord, Lord Frost, said, we used to have such provisions in place for trade and other negotiations within an EU setting. It is slightly bizarre that we do not have such open arrangements now that we are allegedly free to do what we want. Perhaps the Minister will tell us how he intends to reinstitute those processes.

I would also like, in common with other noble Lords, to talk about trade strategy, or the absence thereof. All future agreements need to be set in the context of a proper trade strategy. The International Agreements Committee, the International Trade Committee and the EFRA Committee have all asked for a trade strategy, and I am sure that many noble Lords will today. I hope it will cover such crucial issues as whether the Department for International Trade has a clear role in promoting democratic values and environmental reform through trade.

I turn to some specific areas in relation to environment and agriculture. I was rather taken aback at how almost incandescently messianic the Minister was about the benefits of these two agreements; I thought I might have been reading two different agreements. Let me be a party pooper, perhaps, or diminish the messianic nature of the Minister’s rapture, and talk about some of the issues that some people are not quite so convinced about as he is in terms of the environment and agriculture.

On the process for environmental impact assessments, EIAs happen only after the signing; they take no account of cumulative effects of several trade deals; and they do not really cover such key issues as transport-related emissions and the potential for increased carbon leakage. There are no permanent bilateral safeguards to ensure that imports with lower environmental standards than those we set in the UK do not come into this country. So, the EIAs result in an incomplete picture which can obscure the true risk of offshoring climate and environmental impacts as a result of trade agreements. If we think that was a minor issue in the Australia and New Zealand agreements, we ain’t seen nothing yet—we are going to be dealing with much bigger fish to fry in the future.

I am still monumentally unclear about how environmental standards of imports are monitored on an ongoing basis. During our debate on the Trade Bill, the Minister assured us that systems were in place but gave us no detail. To be honest, at that stage I had almost given up the will to live in dealing with these issues and did not pursue it, but I entirely plan to continue to pursue it now. Will the Minister tell us what the systems are for monitoring environmental standards of imports on an ongoing basis? What review has there been so far of their effectiveness? What remedies are there, apart from the transient remedies in these two agreements, if such standards are infringed?

I turn to agriculture. I was never a great fan of the Trade and Agriculture Commission; it is pretty light on environmental expertise and comes into play only once FTAs are signed, which is a bit like shutting the stable door after the horse has bolted. The Trade and Agriculture Commission reported on the UK-Australia FTA, but this process needs to be strengthened by expanding the remit of the TAC and the scope of the Government’s report required under Section 42 of the Agriculture Act. At present, both are incredibly narrow, and that is compounded by the fact that the TAC also has very limited resources, including limited expertise, to conduct proper scrutiny of larger, more complex negotiations in future. That needs to be addressed before we start playing with the big boys, otherwise the Government will not get proper, early enough and wide enough advice from the TAC. In the Australia agreement, that has resulted in several outstanding questions being left unanswered. For example, how far can Australia’s less stringent regulation of pesticides interplay with and give an unfair competitive advantage to them over UK producers?

We want the TAC to be involved in and comment on how negotiations should be framed rather than only examining agreements once they are signed. I also believe that the TAC should be tasked on an ongoing basis to consider the cumulative impacts of trade deals.

What about the impact of the two agreements on farmers in the UK? It is interesting that the National Farmers’ Union is not so messianic about the benefits for British farming as the Minister is. The flaw in these agreements is that they offer us very small markets which already have only low-tariff barriers, so there is not a huge benefit in the agricultural sphere to this country. On the downside, both of the countries with which we are making free trade agreements are big exporters, which could swamp our smaller-scale UK markets. The temporary bilateral safeguards that are our freight quotas are just that: temporary. They are also bilateral and probably will not persist in the face of WTO arrangements. Can the Minister tell us how swamping UK markets can be prevented in future negotiations with even bigger producing and exporting nations? Or does he really want us to be a niche agricultural product nation?

I hope over the course of this Bill we can tempt the Minister down from his ecstatic heights at these two FTAs to address some very real concerns about these deals and the future processes. With our traditional relationship with, no doubt, hundreds of my relatives in Australia and New Zealand, these agreements were conducted on comparatively friendly terms. We need to sort out these processes before we start playing footsie with some bigger and more aggressive beasts in the trade jungle.

January 12, 2023
David Frost – 2023 Speech on the Australia/New Zealand Trade Deal (Baron Frost)

The speech made by David Frost, Baron Frost, in the House of Lords on 9 January 2023.

My Lords, first of all, it is a pleasure and honour to follow two such distinguished former high commissioners to Australia: my noble friend Lord Goodlad and the noble Baroness, Lady Liddell. I thank them for their interesting speeches, which provided such a depth of historical perspective on the very important relationship between these countries. I also thank my noble friend the Minister for his comprehensive opening statement. I thank the International Agreements Committee for the work it put into this last year, particularly the work of the noble Baroness, Lady Hayter, as its chair. The Select Committee published a thorough and very important report; it was the first report on a major trade agreement, and it covers all the angles that need to be covered.

As has been said, the Bill covers only the procurement aspects of the agreements that need to be incorporated into our own national law. I will not say too much on the detail of that, other than to note that, when I was conducting negotiations with the EU in 2020, many people advised me that we should simply incorporate into that agreement the EU’s existing procurement rules, as it was said that they were best things for the country. Of course, if we had done that, we would not now have the agreements before us. We worked very hard to ensure that the procurement chapter enabled sufficient flexibility to allow agreements such as these to be made, and I am sure that we will see repeatedly the value of that in future.

I take this opportunity to make a few remarks on the agreements and on our trade policy more generally. I do so because, when I was a Minister in 2021, my responsibilities included establishing cross-government positions on trade agreements in support of the then Prime Minister—a role which, I think, worked well at the time, although, to judge from the subsequent comments from some people involved, it seems that the disagreements within government were suppressed rather than genuinely resolved. However, as those disagreements have come out, I put on record, as indeed my noble friend the Minister has, my support for Crawford Falconer at the DIT, who has been a thoughtful, resilient and extremely important official within that department over the last few years; he was very important for these agreements.

I turn to the substance of the debate. Of course, I support both agreements; that is obvious because they are top-quality and modern agreements, and I particularly welcome the extensive removal of tariffs in both. I am afraid that I cannot quite give the answer that the noble Baroness, Lady Liddell, was perhaps looking for from my professional involvement with Scotch whisky, which is now receding into the dim and distant past. The agreements also include, as has been said already, the liberalisation of services and mobility arrangements for young people, which are all important parts of a modern trade agreement.

I will make three further points in the context of my very strong broad support. First, the aspect of the trade agreements that has been most debated is of course the liberalisation of agriculture, particularly of beef and lamb. As others have felt free to comment on that, again, I want to put on record my view that, in the end, the provisions were not ambitious enough. The very long transitional period of 15 years delays unnecessarily the benefits to our economy of cheaper and high-quality beef and lamb in our market. I have full confidence in the ability of our farming sector to adjust to competition, and we should have pushed for a slightly shorter period in the interests of the UK consumer. I say that while believing that the benefits of trade come primarily from imports and competition in own market, rather than exports to other markets—to think anything else is to take a very mercantilist view of these questions—and therefore I hope that the Government will be more ambitious in the many future agreements that will come forward.

Secondly, as has already been noted, today is part of the parliamentary scrutiny process for the two free trade agreements, and I admit to sharing some of the concerns that have been expressed about the scrutiny of agreements of this sort. I welcome the commitments by the Government in the exchange of letters on 19 May last year and recognise that those commitments on scrutiny go further than we have seen before, but there is more to be done.

Our exit from the EU means that we have repoliticised our trade policy. When I was the UK member of the EU’s Trade Policy Committee, known as the Article 113 committee, 10 years or so ago, I found it very hard to get UK Ministers—they were mostly Lib Dems, under the coalition—interested in trade policy because it was all decided in Brussels and had become depoliticised in our own politics. That is now changing, and I think it is a very good thing that we are having those sorts of debates. Unfortunately, the world has moved on from the early 1970s, when this Parliament and the Government were last fully in control of trade policy. Our arrangements for scrutiny should move on, too.

As I said to the Public Administration Committee in June last year, I think it is desirable that there should be a simple up/down, yes/no vote—at least in the other place—on all substantive trade agreements. As has been noted, there was such a vote when we were a member of the European Union, in the European Parliament, and it seems unsatisfactory to me that we give less scrutiny now that we have brought trade policy back home. Again, I hope that, in the future, the Government will think about this aspect and the value of politicising this and capturing the politics around trade agreements in a useful way.

Thirdly and finally, the Minister noted that the Government are often asked for a trade policy strategy, but we do not yet have one. It would be good to set out a strategy that not only covers trade but goes broader: one big advantage of taking back control of our trade policy is that we are able to integrate it more closely with foreign policy, and indeed development policy. There was a missed opportunity to bring all those departments together in 2020; perhaps that will be looked at again in the future. It would be useful if the Government could set out a trade policy strategy that is really a geopolitical strategy—one that relates to our broader foreign policy ambitions as well as pure trade policy. Our prospective adherence to the CPTPP is of course a major element of that and the Indo-Pacific tilt, but it is only one element and there is room to look at this more systematically, strategically and coherently.

I hope that such a strategy could also usefully set out how the Government see the balance between domestic liberalisation of tariffs—that is, reducing our own tariffs still further to increase competition and reduce prices in our own market—and offensive liberalisation of other countries’ trade arrangements that we seek in free trade agreements. Both are important, as is getting the balance right.

I hope that my noble friend the Minister can comment on these aspects in winding up. Meanwhile, I am of course very happy to support the Government in the Second Reading of this important Bill.

January 12, 2023
Alastair Goodlad – 2023 Speech on the Australia/New Zealand Trade Deal (Baron Goodlad)

The comments made by Alistair Goodlad, Baron Goodlad, in the House of Lords on 9 January 2023.

My Lords, it is a great pleasure to follow the noble Baroness, Lady Liddell, who made such a distinguished contribution to British-Australian relations when she was high commissioner—comprehensively erasing my footprints in the process, not least in bilateral trade and investment promotion, which is an important part of the job. It is a privilege to open the batting with her; I just ask her not to ask for any quick singles.

I look forward to the maiden speech of my noble friend Lord Swire, who also made a great contribution to British-Australasian relations during his period as Minister at the Foreign Office. I have some Australasian relations, descended from two uncles who migrated to New Zealand and Australia from the Shetland Islands when they were very young; those cousins were jolly supportive too. I welcome my noble friend Lord Johnson of Lainston to his new job and congratulate him on a very fine opening innings; I hope that we see many more of them.

This Bill is narrow and technical in nature. It is appropriate and important to recognise that our first post-Brexit ab initio—as opposed to rollover—trade agreements should be with Australia and New Zealand. They are important trading and investment partners already, as they have been for many years. They are also close intelligence and defence allies. We share a history that has led to the present deep family, cultural, educational, sporting, diplomatic and political relationships, together with legal systems rooted in the common law. The histories and destinies of our three countries are and will remain inextricably intertwined.

My noble friend the Minister has comprehensively and authoritatively set out the provisions and merits of the Bill. I shall address some of the criticisms that have been made. In a forthright speech in the other place last November, the right honourable Member for Camborne and Redruth pointed out that CPTPP negotiations are under way, as are those with Canada, and he sought to draw lessons from our recent negotiations with Australia and New Zealand. He said that the first and most important was that

“we should not set arbitrary timescales for concluding negotiations.”—[Official Report, Commons, 14/11/22; col. 425.]

In this case, that meant the then-forthcoming G7 summit. There is nothing new in that. I remember negotiations with Australia in the early 1990s, when I was a Minister at the Foreign Office, over our respective shares of the cost of cleaning up the Maralinga test site in South Australia. The senior Foreign Office official responsible rejected the Australian suggestion that the negotiations be conducted while watching a test match. Instead, they were conducted in the Foreign Office and concluded in good time for the Australians to be at Lord’s by 11 am, which is what they wanted. The senior official—who went on to be a very senior official—and I believed that the UK was the beneficiary of that tactic but, as in the present case, we shall never know.

The second lesson that the right honourable Member suggested was on changes to the machinery of government. I have no particular view on this, provided that the chains of command are clear and unambiguous.

The third lesson, which the noble Baroness, Lady Liddell, touched on, was on strengthening the role of Parliament in scrutiny and perhaps in agreeing the negotiating mandate. I am in full agreement on this. Other Members also commented on what some saw as defective scrutiny procedures for the Bill. For what it is worth, my experience, both in the other place and here, is that, in the long run, government has everything to gain and nothing to fear from effective parliamentary scrutiny, as other countries—notably Japan and the United States of America—have demonstrably found. But every Government have to learn their lessons in their own time and reinvent the wheel. I have no doubt that your Lordships will not let the side down in repairing any deficiencies in scrutiny of the Bill, as we always do with any legislation.

Reference was made in the other place to the possibility of triggering Article 32.8 and thereby giving six months’ notice of terminating the agreements. I hope it does not come to that; such a move would not bode well for our success in concluding other negotiations. As the noble Lord, Lord Kerr, rightly said in a different context, pacta sunt servanda. Whether or not a better agreement could have been struck we shall never know. Not every match can be a draw—if Ben Stokes has anything to do with it in the summer, there will be no draws at all. Trade agreements are not a zero-sum game; as in the present case, everyone is supposed to benefit. These agreements are popular with business in all three countries and deserve our support. I hope that noble Lords will give a fair wind to the Bill and all who sail in her.

January 12, 2023
Helen Liddell – 2023 Speech on the Australia/New Zealand Trade Bill (Baroness Liddell of Coatdyke)

The comments made by Helen Liddell, Baroness Liddell of Coatdyke, in the House of Lords on 9 January 2023.

My Lords, I welcome the Minister to his position. It is quite exciting to do your first Bill before any House and he has got off to a good start. I used to have a colleague in the other place who, at the end of a speech, would often say “it says here” because that way they could get out of any problems that had been created. I used to get notes from the civil servants saying, “Please read out paragraph 3 because that is the one that the judges need to hear about,” because I would quite frequently avoid doing that.

I have to announce to the House that I have no relatives in Australia or New Zealand, but I have spent a little time in Australia as British high commissioner. I followed in the footsteps of the noble Lord, Lord Goodlad, who had laid an excellent foundation for me and managed to keep me out of an awful lot of trouble.

Let me see if I have this right about this Bill. This Bill is needed to ensure that the procurement provisions of the trade deals with both Australia and New Zealand can go ahead with no delays. However, this Bill is to be superseded by the Procurement Bill that is starting in the other place in the next couple of days. That Procurement Bill will repeal this Bill, and both Bills have to go on the statute book around the same time. I have lost the plot here. I know that is not something I should admit to. Sometimes, I think I have followed my namesake Alice through the looking-glass, because this is the most bizarre arrangement I have ever come across in relation to a piece of legislation.

We are going to have to pass this Bill when we have been denied the full opportunity for scrutiny. That is a major issue. On both sides of the House, there have been arguments about the need for scrutiny of trade Bills. Furthermore, there is no published trade strategy, so how can we know whether these deals meet the criteria set for the negotiators? It is a very difficult thing to try to do. I am not casting aspersions on the Minister but there can sometimes be an addiction to hyperbole on the part of the Government. Not everything is an absolutely wonderful deal. There are failings in these deals; they are the first we have done since leaving the EU and it is no surprise that there will be difficulties. I can remember, as a Minister, standing at the Bar of the House and suddenly discovering from some of the experts on these Benches that I had completely ignored engineering in an energy Bill. I had to go back and table amendments. It happens; we do not get everything right all the time. I strive to get some things right occasionally, but my family say that I do not.

If we are to take these deals as setting the pace for trade deals around the world, we need to take into account things that are quite controversial, such as the CPTPP. We need more information and, again, more scrutiny, to be able to go down that path because in the CPTPP countries there are a number of examples of trade deals that we would be quite uncomfortable with—on both sides of the House—in this country.

One thing that concerns me about the Bill—it is very narrowly drawn Bill—is whether this is how we are going to be expected to scrutinise other treaties. Are we going to have to do everything by statutory instruments? That is not the right way to properly scrutinise something as significant as a trade Bill. It raises issues about the responsibility of government to Parliament. It is an unfortunate path to go down. I know that the Minister has met the International Agreements Committee, of which I have been a member since its inception, and we are enormously grateful for that, but we want to know: where are the transparency and openness in the debates and advice that have to be put before us? This very constrained Bill is the only opportunity that both Houses have to scrutinise these trade deals. The United States has better provision for the scrutiny of trade deals than we have in this country. That should be a warning to us that we need much better scrutiny.

Obviously, having spent time in Australia, I am going to concentrate on it. People do not seem to realise that Australia is 32 times the size of the United Kingdom. The United Kingdom can fit into the Northern Territory with quite a lot of space left over. When the noble Lord, Lord Goodlad, was trying to get it through to me that this was actually quite a big country, he showed me a postcard that had the United Kingdom in a corner of New South Wales. It is not just the fact that Australia is a big, big country; it also has 25 million people, while we have 67 million—and there are an awful lot of farms in Australia. They are known as properties and some of them can be the size of countries within the United Kingdom because of their scale. No wonder that we end up with a disparity between what the agricultural community says about the Bill and what the Minister has said from the Dispatch Box.

The Australians are delighted with this deal, as well they should be. But our Government gloss over the projected growth in GDP by 2035, which is only 0.08%. We have to bear that in mind and see what we can do to advance it. That could be why the Australian Government’s website is much more helpful to those of us who want to analyse the deal, while the UK Government have been remarkably coy. If you want information about this trade deal, go on to the Australian Government’s site and then you will get it.

I want to make one very particular point, given my Scottish accent. I want to thank the Australians for the deal done on Scotch whisky. That has suffered from what I used to describe as a nuisance tax, which was introduced to protect Bundaberg rum. I know that the noble Lord, Lord Frost, will be speaking in a few minutes’ time. The one problem that I always found with it was that Bundaberg is owned by Diageo, which owns most of the whisky distilleries in Scotland, so I could not quite work that one out. I have to be absolutely honest: Diageo allowed me to have a Scotch whisky evening every month so that we could promote the case for reducing the tariffs on Scotch whisky. Maybe the noble Lord, Lord Frost, knows the answer to that given his background in the Scotch whisky industry, because I have not a clue what it is.

Labour has said in the other place that the Bill will not be opposed. However, there are very real concerns about, for example, animal welfare, agriculture in general, and the lack of any provision for decent work and social goals through procurement. Lots of us know of young people who have gone out on two-year visas; some of them find themselves in pretty appalling circumstances. We need to make sure, as the migration period into Australia is increased to up to three years, that those who go as migrants are protected by the trade union laws and by the social and political goals. The TUC and the Australian Council of Trade Unions have made the same point, but in this country there seems to have been no interchange with the TUC about the difficulties around migrant workers in Australia. I recommend to the Minister that something needs to be done about that. A lot of Members on the other side, particularly in the other place, depend on rural communities, yet the most vociferous criticism of the deal comes from those communities. There is a problem here and it really has to be addressed.

It is significant that there has been a change of Government and now a much more engaged agenda on climate change in Australia. That could create huge opportunities for UK companies which are forging ahead strongly on renewables, carbon capture, storage and use. I refer to my entry in the register of interests as the president of the Carbon Capture and Storage Association. Under the previous Australian Labour Government there was considerable interest in CCS and use, with an experimental operation in Latrobe Valley. What attempts have been made to open the door to environmental businesses in this country in renewables and CCS and use? Under Prime Minister Albanese, who has made it quite clear he takes a completely different view on climate change from Prime Minister Morrison, there are opportunities to extend our success with the industry in Australia. During the passage of the Bill, we will want to know what prospects there are for that kind of improvement and let it be known that the lack of scrutiny afforded to Parliament casts the Government in a poor light. What are the Government frightened of when it comes to scrutiny?

Doing a deal with Australia and New Zealand is very important. Lots of people in Australia—a very high proportion—carry British passports. That is not true of politicians, because they have to resign their British passport when they enter Parliament, but they all take it back up when they leave Parliament; it is quite a nice little side deal for the Home Office to reissue these passports. We have some of our oldest security arrangements with Australia and New Zealand. They are our friends. It is good that our first deal is with them.

I look forward to the processes around this Bill, but I am deeply concerned that we are going to do scrutiny by statutory instruments. It is not the way in which a sophisticated Parliament should scrutinise trade deals.

January 12, 2023
Dominic Johnson – 2023 Statement on the Australia/New Zealand Trade Bill (Baron Johnson of Lainston)

The speech made by Dominic Johnson, Baron Johnson of Lainston, in the House of Lords on 9 January 2023.

My Lords, I draw noble Lords’ attention to my interests. They include an investment in a New Zealand-based asset management company, but what they do not include are the important personal references to my New Zealand and Australian heritage. Like so many in this House, and indeed in this nation, I have relations from both sides of my family in both countries. My ancestors on one side were part of the original Christchurch experiment in New Zealand, and on the other were founder architects and designers of Melbourne in Australia—an early example of the professional recognition chapters that we have included in this agreement.

I thank the International Agreements Committee, chaired by the noble Baroness, Lady Hayter. These conversations have been in depth and, I hope, open, and I welcome further discussion with Members of this House over the coming weeks as we progress through the Bill’s stages. I am sure that some noble Lords were delighted to receive my calls over the weekend as I made further inquiries as to their input into this important debate.

There is no doubt that, although the Bill is of a technical and necessary nature, it underpins the very essence of our post-Brexit vision of Britain. We are often asked for a coherent trade strategy and here it is—a global interconnectedness of trade deals, with this nation at the very heart of these new routes. It means opportunity for our businesses and citizens. It will result in new markets for our goods and services, and new ways to travel and share our cultures. But it also means change. We are aware of this, and we welcome the debate around this vision of our nation, which is now at the very centre of global trade.

The Bill will enable delivery of the UK’s first “from scratch” free trade agreements since leaving the European Union. They are modern and cutting-edge deals, including an astonishing level of innovation and flexibility. They are aligned with our values and well reflect our strategic ambitions, as well as our economic ones. I stress the cutting-edge nature of these FTAs and use this opportunity to congratulate the Department for International Trade and Crawford Falconer on the way they have been designed and negotiated.

It is important to note that these agreements were not built from a standing start. That is very relevant, since much of the discussion has seemed to assume this. We already trade with these countries. However, the agreements build significantly further on our already strong relationships with both Australia and New Zealand. The UK was Australia’s fifth-largest trading partner in 2020. That trade was worth £14 billion in 2021. In 2020, 15,300 businesses, employing 3.4 million people, exported goods and services to Australia. The UK was New Zealand’s fifth-largest trading partner in 2020, our trade being worth £2.4 billion, with 6,700 businesses, employing 1.8 million people, exporting goods to New Zealand. That is what we are already doing, so imagine what we can do if we cement these agreements. We expect annual trade to increase by £10.4 billion between the UK and Australia, and between the UK and New Zealand by £1.7 billion. These are not insignificant sums; they are life-changing. This is just the start, and does not include the other benefits of a closer relationship which these deals signify.

The Bill, considering what it entails, is uncontentious. It provides a power to give effect to our procurement commitments in these agreements, and improves three areas of our existing procurement legislation in the UK, to the benefit of our public services and our companies trading in these partner countries. By the way, this will unlock billions in government contracts in a more secure way than ever before.

The powers in the Bill will be used to amend the current set of procurement rules to provide guaranteed legal access to Australian and New Zealand suppliers to the procurement opportunities covered by the FTAs; to streamline the options for local government issuing notices for future procurement opportunities; and to clarify that contracts of undefined value are in scope of the trade agreements, which basically means that international commitments cannot be avoided by not adding values to contracts. Finally, it contains enhanced safeguards to ensure that contracting authorities cannot avoid international commitments by terminating the contract process where an international supplier is likely to win.

I assure the House that these changes to our current procurement rules all sit in line with the proposals in the Procurement Bill. The Bill, except the sections covering Scotland, will be repealed by the Procurement Bill, which has already undergone extensive scrutiny by this House and is currently before the other place. However, the rationale for the Bill is clear: we want to start taking advantage of these free trade agreements as soon as possible for the sake of our economy, and this Bill will allow that.

That is why the Australia and New Zealand free trade agreements deliver a number of important benefits, which are sometimes overlooked, and I think it is important to address them now. On mobility, we have agreed ambitious business mobility commitments. For the first time, UK service suppliers, including scientists, lawyers and accountants, will be able to apply for temporary work visas without being subject to Australia’s changing skilled occupation list. This is important: it is the furthest Australia has ever gone in an FTA. On trade in services, the deal goes further than Australia has ever gone before in giving UK services companies significant and non-discriminatory access to the Australian market, with unprecedented levels of regulatory transparency.

On trade in goods, the deal eliminates tariffs on 100% of UK exports, making it cheaper and easier to trade physical goods between the UK and Australia; and 98% of the estimated tariff reductions on UK exports will be eliminated as soon as the agreements, with noble Lords’ support and assistance, come into force. UK businesses will see duties of up to 5% immediately eliminated on the export of cars, whisky, motors, clothing and—I hope noble Lords have taken them down—even Christmas decorations.

The deal provides more opportunities for UK firms to trade digitally with Australia. For example, the digital chapter goes beyond existing precedent for both the UK and Australia. It contains the first dedicated innovation chapter and establishes a strategic innovation dialogue which will drive the commercialisation of new technology. This agreement also includes an ambitious environment chapter with Australia which goes beyond previous Australian FTAs. It includes a commitment not to derogate from environmental laws and affirms international environment and climate commitments, including the Paris Agreement. It also includes provisions to deepen co-operation in areas ranging from biodiversity, forests and fisheries to ozone-depleting substances. We have also secured the most substantive climate provisions that Australia has ever committed to in an FTA, with stand-alone climate change articles. What is more, this free trade agreement raises the bar globally by introducing the first ever animal welfare chapter of any trade deal. I consider this extremely important. My noble friend Lord Benyon was asked what world leadership we are providing on the environment and animal welfare, and I have just given probably the most sensational list ever released in this House.

With the New Zealand deal, the mobility chapter will make it easier for senior managers, executives and specialists to move on intra-company transfers. They will be eligible for visas to work for a period of three years, and family members will be able to join them. In relation to trade in services, we have agreed a professional services and recognition of professional qualifications annexe which will encourage regulators of all regulated professions towards recognition. Additionally, we have agreed a sectoral annexe on international maritime transport services—unprecedented for New Zealand—that will benefit UK shipping companies and ships flying the UK flag. On customs and rules of origin, we have committed to implementing single window systems, and the environment chapter breaks new ground for the UK and New Zealand in supporting our shared climate and environment goals, clean growth and the transition to a net-zero economy.

On agriculture, I reassure your Lordships that these deals deliver appropriate protections for the industry, including through tariff rate quotas, protecting UK farmers. These deals present enormous opportunities for our consumers and farmers. The Australian High Commissioner gave me a fascinating statistic the other day: UK firms own more than 10 million hectares of land in Australia. I am told that agricultural land in the UK totals about 20 million hectares, so, Britons are some of the biggest farmers in Australia. She also told me that her statistics show we export more agricultural produce in all its forms to Australia than we import. There are production differences between Australia and New Zealand which, frankly, we wish to take advantage of. We should welcome these expanded markets, as many farmers do. I read an interesting article in Farmers Weekly, which stated that these FTAs will

“help ensure UK products expand into new markets, taking advantage of our complimentary seasons, and increase consistency of supply to these markets, contributing towards targets, such as the NFU’s … ambition to grow food exports by 30% by 2030, to at least £30bn.”

I also welcome the Trade and Agriculture Commission’s work on these deals, which was, in my view, very clear about the protections still afforded us. It said that

“it can be concluded that the FTA does not require the UK to change its existing levels of statutory protection in relation to animal or plant life or health, animal welfare, and environmental protection.”

That is a direct quote from the TAC paper. Importantly, we take these issues very seriously and I will try to ensure that I provide further reassurance at the end of the debate in answer to the points raised by noble Lords.

To return to the Bill, I draw noble Lords’ attention to the fact that a number of statutory instruments will need to be laid, in addition to those that will flow from the Bill, to allow entry into force of the deals. These relate to rules of origin and tariffs, intellectual property and technical barriers to trade, specifically in New Zealand. Technical changes to the Immigration Rules have already been made.

As the procurement chapters of these agreements concern devolved matters, this Bill also confers powers on the devolved Administrations so that they can implement the agreements in areas of their competence. As concurrent powers, they also allow the Government to implement the agreements on a UK-wide basis where it makes practical sense to do so. They are entirely reasonable; they ensure that measures contained herein can be applied to all our procurement processes in a consistent manner. In my view, this is desirable. However, I reiterate the reassurance given at every stage of this Bill’s passage through the other place: the Government are committed to not normally using this Bill’s powers without the consent of the devolved Administrations, and we will never use them without consulting the devolved Administrations first.

We have two ground-breaking deals, both opening up new opportunities for Britain’s world-leading industries; an expected £900 million increase in UK household wages as a result of the deal with Australia; an expected £200 million increase in household wages as a result of the deal with New Zealand; ambitious mobility provisions for UK professionals and young people; two trade deals fit for the 21st century, including the first animal welfare chapter in a free trade agreement; modern digital and data provisions, ready for the economy of the future; as a key part of the vision set out in the integrated review, a tilt to the Indo-Pacific, thus building on existing strong ties, including the Five Eyes partnership and recent AUKUS agreement, to deepen our relationships with key allies in the region; and, finally, two values-based deals, which deepen our relationship with like-minded democracies sharing our beliefs in fairness, free enterprise, high standards and the rule of law.

Our Australia and New Zealand trade deals illustrate modern partnerships, and they reflect what the New Zealand Trade Minister said when the New Zealand Parliament was debating the deal—namely, that the partnership between our countries is

“grounded in common traditions, experiences, and values, strengthened and maintained by deep people-to-people links and made relevant by a close cooperation across the entire spectrum of engagement: economic, health, science, sport, defence and security.”

To further showcase this partnership, I believe the Australian High Commissioner has joined us in the Public Gallery today.

Crucially, these agreements are a central element of our work to build a network of trade alliances with the world’s most dynamic economies. These deals represent another step towards our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

This is a modern, flexible agreement, representing not an end point or a stop sign but a template for growth and deeper partnerships with two of our closest allies and key strategic partners. Importantly, it contains a series of important mechanisms to ensure that these agreements remain flexible and contemporary, including a joint committee to implement and operate the agreement and further sub-committees on intellectual property, services and investment, sanitary and phytosanitary measures, technical barriers to trade and trade in goods. It also includes side letters and dialogues on implementing protections around geographic origins, financial services regulations, professional qualifications, telecommunications, legal services and, of course, a detailed series of mechanisms to manage our tariff rate quotas. These are highly flexible agreements. They allow us to build on them and make alterations as deemed appropriate.

This Bill represents a historic step towards realising this Government’s vision for a forward-looking, sovereign trade policy that delivers prosperity to our citizens. I have every confidence that noble Lords will recognise these immense opportunities. I beg to move.

January 12, 2023