Oral statement to Parliament

Minister Hollingbery supports EU-Japan EPA as foundation for UK deal

Minister for Trade Policy George Hollingbery addresses Parliament calling on MPs to support the EU-Japan Economic Partnership Agreement.

George Hollingbery

Madam Deputy Speaker, I beg to move the motion in my name on the order paper.

Madam Deputy Speaker, I am delighted to be here today to debate the EU-Japan Economic Partnership Agreement. The agreement is broad and ambitious, offering excellent opportunities to the UK. The government has long-supported the EPA and I welcome the opportunity today to set this out in my new role.

However, before I start, let me first take a moment to thank my Rt Honourable predecessor, The Honourable Member for Chelsea and Fulham, for all his work as Minister of State for Trade Policy. He did an excellent job in promoting UK businesses around the world and shaping our future independent trade policy, I very much recognise that I have big shoes to fill.

Madam Deputy Speaker, the government has an overarching commitment to free trade. Free trade is a fantastic and progressive means of stimulating economic growth, creating jobs and providing greater consumer choice. The UK has been, and will continue to be, a leading voice in support of free trade globally.

We will continue to support the EU’s ambitious trade agenda whilst we remain an EU member state. This includes some 40 trade agreements, including the EPA with Japan. Ongoing UK support for these agreements, including of signature and conclusion of the Japan agreement in July, will send a positive message about our commitment to global free trade, now and as we prepare to leave the EU.

Madam Deputy Speaker, Honourable Members will have seen from the government’s detailed and comprehensive impact assessment that the EPA is estimated to be worth up to £3 billion to UK GDP annually in the long run. UK imports are due to grow by up to £8.4 billion per year in the long-run, which reflects reduced input costs for British businesses which in turn is expected to lower prices for consumers. UK exports will increase by up to £5.4 billion, with the largest gains in the chemicals and automotive sectors.

These benefits arise from an array of ambitious provisions within this comprehensive agreement. For instance, the EPA will see 91% of tariffs eliminated at entry into force, and 97% eliminated fully over the long-term. The remaining tariff lines will be subject to partial liberalisation, through tariff rate quotas or tariff reductions, all of which ensure that exporters will be able to tap in to each other’s markets with reduced costs.

Key UK products will benefit from ambitious reductions, such agricultural products, processed foods, beer, wine, and whisky exports, helping British business to thrive in the Japanese market.

Madam Deputy Speaker, the UK’s automotive sector will do well from the agreement too, with Japan and the EU agreeing to follow the United Nations Economic Commission for Europe standards on product safety and the protection of the environment. The EU-Japan EPA will also lead to the removal of many of the regulatory barriers for accessing the Japanese car market, helping to open up broader opportunities for our widely acknowledged expertise in this area.

The treatment of UK services suppliers will be fairer as a result of the EPA, and comparable to that of Japanese suppliers. This, Mr Speaker, is good news for UK priority sectors such as finance, postal, telecommunications, and maritime.

Madam Deputy Speaker, the National Health Service is a national treasure and I know all too well the importance that fellow Honourable Members place on safeguarding the NHS for generations to come. I share this view, and I want to be clear with the House today that the delivery of public health services is safeguarded in the trade in services aspects of all EU free trade agreements, including the EU-Japan EPA. Mr Speaker, can I just say, for the avoidance of doubt, that this incontrovertibly includes the NHS for the UK.

Whilst investment protection is not featured in the agreement, investment liberalisation provisions will help to improve market access for British companies. Honourable and Rt Honourable Members should note that the EU and Japan will continue to engage going forward to negotiate a standalone investment protection agreement.

Madam Deputy Speaker, for the first time in an EU trade agreement there is a dedicated chapter on corporate governance, which sees the EU and Japan reaffirm their commitment to the OECD Principles on Corporate Governance. The UK played a key role in agreeing these principles at the G20 summit in 2015, and I want the House to be clear that inclusion of corporate governance provisions in the EPA do not unduly limit the UK’s ability to act further in this area at the national or international level.

Commitment to labour rights and environmental standards is explicitly referenced in the agreement, and neither Party will seek to reduce these thresholds in order to boost trade.

Madam Deputy Speaker, the EU’s principled long-term ban on imports of whale products will not be lifted by the agreement and the UK and the EU remain strongly committed to the international Convention on Trade in Endangered Species and the work of the International Whaling Commission.

The UK has a wealth of experience in producing the finest foods and drinks across all corners of this great country. The agreement secures protection of ‘Scotch Whisky’, ‘Scottish Farmed Salmon’, ‘Irish Whiskey’, ‘Irish Cream’, ‘West Country Farmhouse Cheddar’ and ‘White’ and ‘Blue’ ‘Stilton’, and I am proud that these products are safeguarded by the EPA.

Madam Deputy Speaker, in light of the European Court of Justice Opinion on competence in the EU-Singapore FTA of May 2017, which helped to clarify the scope of the Common Commercial Policy, the Japan EPA is to be concluded as an EU-only agreement. This means that it will enter fully into force once Japan has ratified should the European Council and the European Parliament support its conclusion.

I am aware of the implications of this approach on the role of parliament in the scrutiny and conclusion of the EPA, and of EU-only trade agreements going forward, as this means that ratification by Parliament isn’t required for an agreement to enter fully into force. Mr Speaker, I am also acutely aware of the interest of Parliament in the government’s approach to scrutiny of future UK trade policy.

This is one of the reasons I welcome the opportunity to debate the EU-Japan EPA today as it rightly ensures that Parliament has the fullest opportunity to scrutinise this agreement, under the current EU scrutiny structure. I am pleased to be able to go beyond what is simply required ahead of signature, in-line with the government’s commitment to transparency.

Madam Deputy Speaker, my department will continue to work with the European Security Committees to identify appropriate ways to ensure thorough scrutiny of similar EU-only free trade agreements whilst the UK remains an EU member state.

The government is currently considering the legislative framework for future trade agreements, but the government is committed to ensuring that Parliament will have a crucial role to play in the scrutiny and ratification of the UK’s future trade deals when we bring forward proposals in due course.

Madam Deputy Speaker, The EU and the UK agreed at the March European Council that international agreements which the UK is party to by virtue of its EU Membership - which at the time of exit will include the EU-Japan EPA - should continue to apply to the UK during the implementation period; and text to this effect has been agreed in the draft Withdrawal Agreement.

We continue to advance our dialogue with the Japanese government on the shape of our future bilateral trade and investment relationship to come into effect after the implementation period, and I look forward to making progress as we continue to foster our post-Brexit relationship with the Japanese.

Madam Deputy Speaker, As Members will know, in August 2017 the Prime Minister and the Japanese Prime Minister, Shinzo Abe, agreed to ‘work quickly to establish a new economic partnership between Japan and the UK based on the final terms of the EPA’ as the UK leaves the EU.

The UK-Japan Trade and Investment Working Group, established last year by the Japan-UK Joint Declaration on Prosperity Cooperation, is tasked to deliver on this commitment and met for the second time in May.

To conclude Mr Speaker, the EU-Japan EPA is an excellent agreement for the UK that will benefit UK exporters, importers and consumers.

During the implementation period, the United Kingdom will seek to retain access to EU free trade agreements whilst gaining the right to negotiate, sign and ratify new trade agreements. Japan’s commitment to establish a new bilateral economic partnership with the UK based on the final terms of the EPA is clear.

Colleagues can rest assured that the UK will continue to be a strong advocate of free trade globally, and a defender of the multilateral rules-based system. The government is committed to a truly Global Britain as we leave the EU, where we seize the opportunity to engage with partners around the world in the shared pursuit of prosperity and security.

As to future scrutiny arrangements, the government is clear that Parliament will have a crucial role to play in the scrutiny and ratification of the UK’s future trade deals, and proposals will be put forward in due course.

Madam Deputy Speaker, the EU-Japan EPA has a positive role to play for the UK, the wider EU and global free-trade in general. I look forward to the UK demonstrating our support for the agreement when Council adopts decisions on conclusion and signature, and I urge my fellow Honourable Members to support the government’s motion to this effect today.

Published 29 June 2018