Comprehensive and Progressive Agreement for Trans-Pacific Partnership — House of Commons, 2021-06-24
Topic: Foreign Trade
Liam Fox (Conservative, Centre-right): The right hon. Gentleman is quite right that we should ensure that as much is made in the United Kingdom as possible. The point is that consumers should be free to choose what they buy with their own money. If we can manufacture goods and services in the United Kingdom of the appropriate quality, and at the appropriate price, I am quite sure that British consumers would choose to buy those, but I do not believe in restricting the choice for British consumers because we are unable in certain sectors to produce those things Another important element of policy outside the European Union is our ability to help rebalance the global trading economy. That is why CPTPP is so important. The CPTPP, were the United Kingdom to join it, has about the same proportion of global GDP as the European Union minus the UK. It will provide us with an ability to rebalance within that. Why does that matter? It might help us get momentum in some of the areas that matter, where we were unable to get traction inside the European Union. We might get traction on a global agreement on e-commerce, for example, or an agreement on environmentally friendly goods—the environmental goods agreement—which is barely in existence or has any life at the moment. In this era, if we cannot agree to take tariffs off solar panels or wind turbines, what can we agree at a multilateral level? Putting our energies into groupings that may drive that forward is extremely important, not just for the UK, but beyond The final point that I want to make is that the real advantage of CPTPP is not what proportion of GDP it adds in value; it is strategic. CPTPP is primarily, in my view, a strategic alliance, and it relates to how we think about the issue of China. China promotes its agenda of state capitalism—though "state capitalism" is an oxymoron; capitalism has to be independent of state control—but, at present, sits inside the World Trade Organisation without having made the adjustments to market mechanisms that are required for the proper functioning of members inside the organisation. The measures that we have tried have not been successful in bringing China into a more acceptable position. The WTO has been unable to cope effectively with the abuse of state subsidies. The OECD has done a lot of work studying the data available across borders and looking at measurements of production, which offer some help, but the WTO seems incapable at present of dealing with the China question The United States was unable to deal with the China question through tariffs. All that President Trump’s tariffs on China did was reduce the trade deficit with China, but it did not reduce America’s trade deficit overall, because when consumers did not buy Chinese goods because they were too expensive in the United States, they bought them from elsewhere. The use of tariff policy to drive global trade in a particular way only results in trade distortion and diversion, exactly as we discovered If we were able to join CPTPP, there would be another prize, which the Secretary of State did not mention but I am sure she believes in: the ability to attract the United States back to the partnership. The decision by the Trump Administration to leave the trans-Pacific partnership was, in my view, a completely wrong decision. If we are able to get United Kingdom membership, the United States joining CPTPP becomes a lot more attractive to Members across the parties in Congress. The UK plus the United States joining CPTPP would take us to about 40% to 43% of global GDP, which is a much better counterbalancing measure to China than anything that we have seen so far I am therefore 100% behind my right hon. Friends the Secretary of State and the Minister for Trade Policy in taking this policy forward. Five years ago, we were on different sides of the debate in the European Union referendum, but there is nothing like the zeal of converts to take us forward. I congratulate the Secretary of State and the Minister of State—one of the finest Ministers I ever worked with—on taking this agenda forward. It is the right thing for the United Kingdom and, much more importantly, it is the right thing for global trade and to ensure that the developing world has a chance of finding a sustainable way out of poverty in the long term.