Barry Gardiner

Working Hard for Brent North

Barry outlines Labour trade policy to CLASS event in Parliament

Barry set out Labour's progressive trade agenda to a CLASS event in the House of Commons on 18 April 2018.

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Thank you for the invitation to be part of this important discussion here this evening. I’m very grateful to CLASS for drawing us back to this crucial issue of how to build a progressive trade agenda for the post-Brexit era, because we currently find ourselves in a strange limbo when it comes to UK trade policy.

The government introduced its Trade Bill at the beginning of the year, along with the parallel Customs Bill – or, to give it its full name, the Taxation (Cross-Border Trade) Bill.

To begin with, the government restricted the scope of the Trade Bill so that it was no longer the legislation promised us in the White Paper on International Trade. Instead of a full debate on what we want the UK’s trade policy to look like post-Brexit, the government gave us a pathetic excuse of a Trade Bill that stretched to just six pages and four schedules.

In place of the crucial discussion as to what the principles should be behind our trade policy – and the process for deciding it – we were left with a Bill that provided only for ‘continuity’ in supposedly ‘rolling over’ the EU’s existing trade deals.

I led Labour’s attempts to restore the Bill to its original dimensions so that we could debate what we want our new national trade policy to look like, but we were repeatedly told this was not the moment. We were asked instead to wait expectantly for some mythical point in the future when the government deigns to grant us parliamentary time to examine the issue afresh.

But why isn’t this the time for us to be discussing the basis and the principles on which to construct a future UK trade policy? Surely we should be debating right now the mandate under which Liam Fox is negotiating our future trade relations inside the 14 working groups he has already set up with 21 countries – let alone all the other deals that may be done outside those working groups.

Even the CBI representative who gave evidence to the Bill committee was left asking: “If not now, when?”

We debated both the Trade Bill and Customs Bill in committee from late January into February, and we have been waiting ever since for the government to bring them back to Parliament. Still we have no clue when we might see the bills again for their report stage in the Commons or for scrutiny in the Lords.

It is almost as if Dr Fox and his friends are running scared of a debate they know they can’t win. But they can rest assured that we will be ready and waiting for them whenever they do decide to bring the trade bills back to parliament.

I have spent much of the last few months outlining the contours of a progressive Labour trade policy that is radically different from the government’s. And I am going to devote my eight minutes here this evening to looking across the various elements of that progressive agenda as we have developed it so far.

To begin with, our policy is based on securing the economic benefits and life chances that trade can bring working people. Or to put it simply: the opportunity of having high-skilled, decent jobs. Exports of goods and services account for 30% of the UK’s economic output, and trade unions in this country represent millions of workers in industries that depend on exports for their employment.

This is one reason why the Labour Party has been so insistent that the UK must not leave the EU without a proper trade deal in place. We cannot abandon those people who depend on trade with the rest of Europe for their jobs and their livelihoods, which is what will happen if the ideologues of the Conservative Party push us over the cliff edge and leave us trading with the EU on WTO terms.

As you will know, the Labour Party is calling for a new customs union between the UK and EU to ensure the most friction-free trade possible into the future. We are fully aware that this is not the ‘be all and end all’ of that relationship, and we are conscious of the many other elements that need to go alongside a customs union in order to build up a comprehensive trading relationship for the future. But we believe that a symmetrical customs union between the UK and EU is a crucial part of the new relationship that will enable us to minimise the dislocation caused by Brexit to our economy.

Beyond our trade relations with the EU, we need to think about the broader policy agenda that will direct our trade with the rest of the world, and the principles on which to base that trade. And I am going to outline just three of those overarching principles here tonight.

Firstly, we in the Labour Party see trade and investment not as ends in themselves, but as means to the higher end of shared prosperity. That’s why we are clear that new trade deals must not be allowed to undermine the economic or social prospects of the many, simply to swell the profits of the few.

It’s why I led the Labour team in our call for the Trade Bill to include explicit references to the UK’s international obligations on human rights, environmental sustainability, food standards, public services and animal welfare. We cannot have trade deals that jeopardise these fundamental values, as too many agreements have done in the past.

For our part, we have pledged to commission a full and independent assessment of each new trade agreement at the earliest stage in any new negotiation so we can get a sense of the potential impact on jobs, workers’ rights and social and environmental standards across the various sectors of the economy. And we will ensure that negotiations towards new trade deals include the most powerful provisions for defending workers’ rights and environmental standards, not just the window dressing of non-binding social chapters.

But even this will not be enough to take forward a positive agenda. As we stated in this year’s general election manifesto, we will also tighten the rules on corporate accountability for labour rights violations in supply chains overseas, and we will prevent decent jobs in this country from being undercut by dumping and other unfair trade practices elsewhere.

It is by addressing the power relations inherent in global value chains that we will have the best chance of taking forward a progressive labour rights agenda within the context of international trade.

Secondly, we have no intention of allowing an unbalanced trade agenda to undermine the rule of law. And there is no better example of this than the threat posed by the investor protection clauses of so many ‘new generation’ trade and investment agreements.

One of the key reasons that Labour came to reject TTIP, the Transatlantic Trade and Investment Partnership, and CETA, the Comprehensive Economic and Trade Agreement with Canada, is that both treaties included their own versions of investor-state dispute settlement (or ISDS), granting multinational corporations their own exclusive judicial system – unavailable to domestic firms, governments or anyone else – through which to sue host countries for loss of profits.

We now have the evidence of over 850 known cases from around the world of just what a threat ISDS poses to the rule of law, and many of us have been staggered at the audacity of the corporations and their lawyers in using ISDS to challenge the most progressive regulations introduced for social or environmental purposes.

And in case you didn’t see it, let me draw your attention to the extraordinary article in the Financial Times of 28 February, which reported that private utilities companies are now being advised to shift their corporate governance structures offshore into countries that hold bilateral investment treaties with the UK precisely so that they can use ISDS to claim the maximum compensation from an incoming Labour administration when we take back public services into public hands. And given that the UK’s bilateral investment treaties contain sunset clauses of between 10 and 20 years each, simply terminating the treaties may not be enough to solve that problem on its own.

Labour rejects the concept of ISDS, and has pledged to review all the UK’s investment treaties on coming into office. We believe that foreign investors coming to this country can be fully confident that they will receive the same justice as domestic British businesses and the rest of us, in the same courts. And we made a manifesto commitment to open a dialogue with our trading partners on alternative means of providing investor protection in other countries whilst guaranteeing equality for all before the law.

And let me say that I am really heartened by the fact that more and more governments around the world share our view on this. Not just the major countries that have long been sceptical of ISDS such as India, South Africa, Indonesia or Brazil. But OECD countries like New Zealand, whose Labour government has now rejected ISDS for all future trade deals, and even secured letters of understanding from five other countries – Australia, Brunei Darussalam, Malaysia, Peru and Vietnam – to exclude ISDS from the implementation of the TPP, the Transpacific Partnership, signed last month.

Thirdly, we need to construct a radically new set of principles for the UK’s trading relations with countries of the global South. You do not need me to tell you how important it is that we learn from the mistakes of the past when it comes to international trade deals between countries of North and South.

The trade liberalisation imposed on the countries of Africa and Latin America as part of the structural adjustment programmes of the 1980s and ‘90s was so disastrous for the industrial, agricultural and social prospects of those countries that even the IMF eventually admitted that it had got it wrong on trade.

This week sees the Commonwealth Heads of Government Meeting take place in London, and much of our focus has been on how a Labour government would develop a progressive relationship with our Commonwealth trading partners that is genuinely of mutual benefit to both sides.

We know that Commonwealth countries currently enjoy preferential access to the UK market worth £600 million per year, and the Labour Party will seek to maintain that access once we are no longer covered by the EU’s Generalised System of Preferences.

But as well as the opportunities, we must also be alive to the threats that so many trade deals pose to countries of the global South.

Should we continue to press for controversial Economic Partnership Agreements with those Commonwealth states that have so publicly rejected them? Or should we use the opportunity to look again at other alternatives that could offer greater benefits to local producers from those countries, in line with the shared principles of the Sustainable Development Goals?

This is what Jeremy Corbyn meant when he spoke to the Commonwealth Parliamentarians’ Forum this February about the need to “reset” relations between the UK and the member countries of the Commonwealth on the basis of “mutual respect, human rights and a partnership of equals”.

As Jeremy said, a Labour government will adopt a radically different agenda in our trading relations with partner Commonwealth countries. We will have nothing to do with Liam Fox’s warped vision of recreating an ‘Empire 2.0’ with those countries that suffered under the colonial yoke for so long.

I made the call over a year ago now for a new Just Trading agenda to direct the UK’s trade relations with countries of both South and North. We have been engaged in discussion with trusted partners in this country and with sister parties across the world to flesh out what the Just Trading agenda might look like. And we will be continuing that discussion into the future as we prepare for government.

But let me finish with this thought. With Brexit, the UK is taking back responsibility for its own trade policy for the first time in 40 years. This means we now have to choose for ourselves, as a country, what model of trade and investment we wish to see in the future.

We can follow the Conservative Party’s model that hands even more power to a tiny transnational elite and consigns our public services, hard-won labour rights and social standards to the dustbin of history.

Or we can choose a new model that maximises the benefits of trade and foreign investment at the same time as it safeguards people’s jobs, society’s needs and the environment’s future sustainability.

That is the new model which Labour offers. And with your help, I look forward to delivering a progressive, democratic trade agenda when we form the next administration in this country.

Thank you.

 

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