UK/US Free Trade Agreement

Question

15:09:00

Asked by

To ask His Majesty’s Government what progress they have made in securing a free trade agreement with the United States.

My Lords, I congratulate the noble Lord, Lord Hamilton, on securing this timely Question on this very important date in the US. We on these Benches offer our warm congratulations to President Trump on his inauguration. We have a special relationship with our transatlantic partners and strengthening UK-US trading ties is a priority for this Government. I will not get into any policy discussions, but we look forward to working with President Trump and his Administration.

Can the Minister confirm the reports in the paper today that the Government will be anxious to secure a trade deal with the US as quickly as possible? Can he further confirm that that would not be possible if we were still members of the EU? What will happen with the talks that have been pushed on with the European Union? Is there not a danger that one will conflict with the other and that it will not be possible to have a trade deal with the US and the EU at the same time?

I thank the noble Lord for making that important point. In Kyiv last Friday, and at the G20 summit, the Prime Minister said: “I have been clear that we would like to have discussions about a trade deal with the US, that we don’t accept the argument that there’s a binary choice between a reset with the EU and a deal with the U.S. and obviously the time for those decisions will be in the weeks and months to come”. The priority of the Prime Minister and the Government is economic growth. Free and open trade with our most economically important partners will be key to achieving that.

My Lords, the Question and the Answer illustrate the weakness of our current position. I have also been reading the papers, and we seem to be relying on the sentimental feelings that President Trump may have towards this country, which is a weak position for us. Does the Minister agree with the leader of the Liberal Democrats, Sir Ed Davey, that the best way to negotiate is from a position of strength rather than weakness, and that the best way of bolstering that strength is by establishing a customs union with the European Union?

I thank the noble Lord for his question. We are in a position of strength when dealing with the US and with the EU. There is no question of a binary divide, but we should not take that for granted. We have to work with our partners, and two of our partners are among the biggest trading partners in the world.

Does my noble friend agree that any potential benefits of a trade deal with the US are but a fraction of what we have lost by leaving the European Union? Does he agree that when, under President Biden, we attempted to have a comprehensive free trade agreement, it foundered on two main obstacles—the high food standards which we enjoy and the problem of Northern Ireland—both of which appear still to persist?

I thank my noble friend for that question. The US is our single largest trading partner, amounting to well over £300 billion last year. We have invested close to £1.2 trillion in both our economies, and employ almost 1 million people. The US is a country that we have to deal with, and our businesses ask us to work with the US.

My Lords, clearly President Trump will link his economic relations to wider policy objectives. One of the policy objectives that he will be looking for in this country, as well as in others within Europe, will be for European nations to take a much greater share of the burden for their own security. At present, this country and other European partners are doing that far too little and far too slowly.

I thank the noble and gallant Lord for that question. I do not think we should get ahead of ourselves. The President is being sworn in at this very moment. We will be looking towards working with his Administration. Any discussions about defence or trade will have to wait until his Government get in.

My Lords, are the British Government going to take any extra security precautions when they are dealing with the President of the United States, who is a convicted felon?

I thank the noble Baroness for the question, but I do not agree with her. We have to respect President Trump. He won an enormous victory and he has a massive mandate from the American people. That is democracy. We will work with President Trump and his Administration.

I wish the Government well in their attempts to get a free trade deal with the United States, but is it not time for a little joined-up thinking? While the Prime Minister says this is what he wants, over the weekend the Labour Mayor of London insisted on calling President Trump, essentially, a fascist, and said that we are on the road to the 1930s. This is not a special relationship—they are turning it into a sack of ferrets. Do the Government agree with the Labour Mayor of London, or will they repudiate the comments that he made over the weekend?

The noble Lord makes a very important point. I disagree with the Mayor of London. President Trump won the election; he has an enormous mandate, and we have to work with him. Sometimes, a period of silence would be most welcome.

My Lords, would the Minister join me in congratulating our ambassador, Karen Pierce, on her persistence and leadership in trying to get a free trade agreement over a period of some years? She worked with the team in the American embassy, with consuls around America and everywhere that she could influence Americans to gain us support. We hope very much that the noble Lord, Lord Mandelson, our new ambassador, with his skills from his time as a trade commissioner in Europe and his other contacts, will be able to continue giving such leadership to the team in Washington and here.

I thank my noble friend for that question. The appointment of my noble friend Lord Mandelson as the UK’s ambassador to the US shows how seriously we take our relationship with the US and the incoming President’s team. My noble friend Lord Mandelson has extensive foreign and economic policy expertise, particularly in the crucial issue of trade, with strong business links and experience at the highest level of government.

Can the Minister say who from this House or the other place is representing His Majesty’s Government at President Trump’s inauguration, and whether they will be having high-level conversations about trade and other matters with the new Administration?

I thank the noble Lord for that point. Our ambassador in the US will be representing the Government.

My Lords, I spent 60 years closely involved with defence and intelligence with the United States. Does my noble friend the Minister agree that the strength of the relationship is so immense that we should never forget that, even when it comes to these other issues?

I thank my noble friend for that point—it is absolutely true. As I said, our relationship with the US has to be strong. We have so many partnership agreements, whether it is on defence, trade co-operation and so on, so we have to work with the incoming Administration, come what may.

My Lords, the US is not just our single biggest market; it is bigger than our second, third and fourth markets put together, and nearly as big as our second, third, fourth and fifth put together. A million Brits turn up every day to work for US-owned companies, and a million Americans turn up every day to work for British-owned companies. Will the Minister confirm that, if we followed the suggestion of the Lib Dem Front Bench and joined the EU customs union, not only would we not be able to negotiate a trade deal, either with the US or with anyone else in the world, but we would be subjected to all the tariffs that Trump is likely to impose on the EU in return for no benefit whatever?

I thank the noble Lord for that question. We have taken back control. We work with the US, the EU and every other country. We are an open trading economy, and that benefits both our businesses and consumers.

My Lords, even though the United States is a great constitutional democracy, could my noble friend the Minister reflect on the previous Question about ISDS arrangements and make sure that any trade deal between our two great democracies does not privilege international corporations over citizens or workers, and respects both democracy and the rule of law?

I thank my noble friend for the question. No two trade agreements are the same, and ISDS is only one chapter in any trade negotiation. We have to negotiate for what is best for our country and for business.