European Union (Definition of Treaties) (Economic Partnership Agreements and Trade Agreement) (Eastern and Southern Africa States, Southern African Development Community States, Ghana and Ecuador) Order 2018 — House of Lords, 2018-11-27
Topic: Foreign Trade
Rona Fairhead (Conservative, Centre-right): My Lords, this order designates the economic partnership agreements with the Southern African Development Community, eastern and southern African states and Ghana and the protocol of Ecuador’s accession to the EU-Andean agreement as EU treaties pursuant to Section 1(3) of the European Communities Act 1972. This is a necessary step towards UK ratification of the agreements and works alongside the process of laying the treaty before Parliament for 21 days, as set out in the Constitutional Reform and Governance Act 2010, known as the CRaG Act The noble Lord, Lord Stevenson of Balmacara, has tabled an amendment to the Motion. I welcome the opportunity to set out the Government’s support for these agreements, and I will seek to respond to the points raised by the noble Lord in my opening remarks. Trade is an important tool in the fight against poverty. Over the last few decades, around 1 billion people have been lifted out of poverty, and international trade has played a very large part in bringing that about. By championing global free trade, we can help create growth and jobs across the developing world in a way that aid spending alone cannot. Before I address these agreements, I should note that they have all already been provisionally applied. They have already brought, and will continue to bring, benefits across a number of developing countries and to the UK I turn first to the three economic partnership agreements or EPAs. The UK is a long-standing supporter of EPAs, which differ from conventional free trade agreements in that they focus on the development needs of partner countries. Indeed, this House has already scrutinised and passed several other EPAs to date. I acknowledge the concerns raised about potential negative impacts of liberalisation on the economies of our developing country partners and the issues raised in the amendment to the Motion. As a responsible Government, we listen to such concerns and I am happy to reassure noble Lords that the agreements have taken them into account EPAs are deliberately and strongly asymmetrical in favour of developing countries. They give developing countries immediate duty-free access to our market, while EPA partners liberalise their markets gradually over a period of up to 25 years and to a lesser extent—protecting up to 25% of their product lines depending on their domestic situation. For example, the Seychelles, a high-income country, will liberalise 98% of tariff lines, whereas Mozambique, a least-developed country, will liberalise only 74% EPA partner countries have the ability to exclude their sensitive products from liberalisation, and they use it. For example, Ghana has excluded a number of agricultural goods such as meats, poultry, frozen fish and non-agricultural processed goods. EPAs also provide a range of safeguards for fledgling industries or for food security to protect African domestic products from possible EU competition. As the EPA partners gradually liberalise their markets over a period of many years, industries and consumers in Africa will benefit from cheaper inputs and consumer goods from the EU in non-sensitive sectors EPAs also take account of the social and economic circumstances of partner countries and provide development co-operation and assistance to help our partners address broader issues affecting trade, such as technical barriers to trade, labour rights, the environment, poor infrastructure or inefficient customs and border controls. Of course, they are negotiated agreements. The EPAs we are considering today can deliver real benefits for manufacturers and farmers in developing countries and their communities. Specifically, they eliminate tariffs on processed and manufactured goods, keeping more of the value chain in the developing countries. They also offer simpler and more flexible rules of origin so that, when a producer in one country uses inputs from another, they do not have to pay customs duties when they export their final products to the EU. Both the southern African and eastern and southern African EPAs help regional economic integration by joining up those smaller markets The EPAs also bring advantages at home by reducing the cost of imports for our consumers—from Botswanan beef to South African wine. They will bring new opportunities in the future for UK exporters as EPA partners gradually liberalise their economies. We estimate that UK exports will increase over the coming years and be worth an additional £35 million annually from 2035 onwards. I am confident that the impact of these EPAs is positive for the developing nations and the UK and that local agriculture, industry and commerce will benefit and will continue to contribute to the well-being of the wider population through increased jobs and greater prosperity I turn now to South America and Ecuador’s accession to the EU-Andean agreement. This agreement has been in place since 2012 and last year trade to the EU increased 7% for Colombia, 16% for Peru and 20% in the first year of implementation for Ecuador. It is estimated that Ecuador’s accession will be worth £37 million annually to the UK’s GDP in 15 years’ time. For the UK specifically, the impact assessment suggests that exports have been increasing since the provisional application in early 2017. UK consumers should already be benefiting from lower prices, particularly for fruit and vegetables. I am confident that the benefits of the FTA can be enjoyed by importers and exporters of any size, with British businesses free to tap into the Ecuadorean market with even greater ease, benefiting from greater access across a range of service sectors and the government procurement market, as well as the removal of remaining tariffs in industries such as chemicals, textiles and telecoms.