The
Committee consisted of the following
Members:
Chair:
†Annette
Brooke
†
Banks,
Gordon (Ochil and South Perthshire)
(Lab)
Chapman,
Mrs Jenny (Darlington)
(Lab)
†
Davey,
Mr Edward (Parliamentary Under-Secretary of State for Business,
Innovation and
Skills)
Dodds,
Mr Nigel (Belfast North)
(DUP)
†
Esterson,
Bill (Sefton Central)
(Lab)
†
Gapes,
Mike (Ilford South)
(Lab/Co-op)
†
Greenwood,
Lilian (Nottingham South)
(Lab)
†
Mitchell,
Austin (Great Grimsby)
(Lab)
†
Morgan,
Nicky (Loughborough)
(Con)
†
Newmark,
Mr Brooks (Lord Commissioner of Her Majesty's
Treasury)
†
Pugh,
Dr John (Southport)
(LD)
†
Smith,
Julian (Skipton and Ripon)
(Con)
†
Uppal,
Paul (Wolverhampton South West)
(Con)
†
Vickers,
Martin (Cleethorpes)
(Con)
†
Weatherley,
Mike (Hove) (Con)
†
Wharton,
James (Stockton South)
(Con)
Wood,
Mike (Batley and Spen)
(Lab)
†
Zahawi,
Nadhim (Stratford-on-Avon)
(Con)
Mark Oxborough, Committee
Clerk
† attended the
Committee
Seventh
Delegated Legislation
Committee
Thursday 4
November
2010
[Annette
Brooke
in the
Chair]
Draft
European Communities (Definition of Treaties) (Central Africa Interim
Economic Partnership Agreement) Order
2010
8.55
am
The
Chair:
Given the temperature of the Room, I have given
permission for hon. Gentlemen to remove their jackets if they so
wish.
The
Parliamentary Under-Secretary of State for Business, Innovation and
Skills (Mr Edward Davey):
I beg to
move,
That
the Committee has considered the draft European Communities (Definition
of Treaties) (Central Africa Interim Economic Partnership Agreement)
Order
2010.
The
Chair:
With this it will be convenient to consider the
draft European Communities (Definition of Treaties) (Côte
d’Ivoire Economic Partnership Agreement) Order
2010.
Mr
Davey:
It is a great pleasure to operate under your
chairmanship, Mrs Brooke, and to move that the Committee has considered
these orders to ratify the agreements with Cameroon and Côte
d’Ivoire. The economic partnership agreements with Cameroon and
Côte d’Ivoire set in place a secure trading arrangement
between those countries and the European Union to promote
development-friendly trade, and to be compatible with World Trade
Organisation provisions. The agreements mean that Cameroon and
Côte d’Ivoire will continue to receive duty-free,
quota-free access to EU markets. Without them, those countries would
face tariffs on up to 25% of their exports, including on industries
critical to their economies such as bananas and cocoa. The EPAs allow
Cameroon and Côte d’Ivoire to remove their own tariffs
gradually, over a period of 15 years, and each contains safeguards
enabling them to protect infant industries and prevent import surges.
However, in accordance with the wishes of Cameroon and Côte
d’Ivoire, the EPAs do not include provisions on services,
investment, procurement, intellectual property or other “deeper
integration
issues”.
Each
agreement also contains a chapter on development. That will ensure that
Cameroon and Côte d’Ivoire receive the development
assistance that they need to make the most of the opportunities created
by the EPAs. As a first step, in September 2009 the EU signed off a
€97 million package for Cameroon, to accompany its EPA and to
help to boost its economy and trading activities. The UK is committed
to monitoring that money closely to ensure that it is spent wisely and
achieves the maximum impact on poverty reduction.
The benefits
generated by duty-free, quota-free access to the European market and
from improved rules of origin are the areas where the EPAs will most
quickly bring benefits. For example, without them, the tariff on banana
imports from Cameroon and Côte d’Ivoire would be
€148 per tonne. However, in the longer term, the biggest
benefits will come from the increased trade and investment that will
flow from Cameroon and Côte d’Ivoire removing their own
tariffs and moving towards more open
economies.
No
nation can achieve prosperity by closing its borders to trade. Indeed,
the World Bank’s 2008 “Global Monitoring Report”
calculated that removing all trade tariffs could reduce the headcount
poverty index by 5 to 6.5 percentage points over a 10-year period. A
1% increase in Africa’s share of world trade would
generate about $70 billion of additional income annually. That is about
three times the total aid that Africa currently receives. Therefore, by
removing tariffs and promoting free trade, the EPAs will deliver
lasting benefits to Cameroon and Côte d’Ivoire, and
indeed to
Britain.
To
secure those gains for Côte d’Ivoire and Cameroon, we
need to ratify these two EPAs. By agreeing to the orders today, the
Committee will allow us to proceed without delay. I thank hon. Members
for the contributions that they will make. I hope that we can pass
these
orders.
Austin
Mitchell (Great Grimsby) (Lab):
The Minister is a great
enthusiast for Europe and all its fiddles, and these being former
French colonies, there is bound to be some kind of fiddle involved, so
can I ask him this? What will the effects of this treaty be on
us—on our trade and on our commitment to finance European aid?
The Minister said that aid would be reduced, so I presume that we shall
have a lighter burden in that respect. Also, what is the constitutional
position of these two former French colonies? I thought that
Côte d’Ivoire was part of the French Union and therefore
sent delegates to the National Assembly. Indeed, I thought that it was
part of the glorious voting fiddle in the French referendum over the
Maastricht treaty, where the votes of France Outre-Mer outweighed those
from—
The
Chair:
Order. I think that that is
enough, Mr
Mitchell.
Austin
Mitchell:
Will the Minister also tell us about the
constitutional position of these two
colonies?
Mr
Davey:
I am grateful to the hon. Gentleman, because he has
engendered a certain je ne sais quoi in our debate this morning. I am
sure that he has friends from France, but the sorts of accusations that
he has made are extremely ill placed when the French Government have
worked very hard to help other EU member states, including ourselves,
to bring about these agreements. Far from this being a French fiddle
involving some colonial pals that have dodgy constitutional
arrangements, the hon. Gentleman ought to know that Côte
d’Ivoire and Cameroon are proud independent states, which are
making real progress in promoting economic prosperity and reducing
poverty in their countries. I hope that he does not have too many
friends from Côte d’Ivoire and Cameroon, because
they will not appreciate his comments
either.
Mike
Gapes (Ilford South) (Lab/Co-op)
rose—
Mr
Davey:
The hon. Member for Great Grimsby did ask one
question that deserves an answer, and when I have answered it, I will
give way to the hon. Member for Ilford South. The hon. Member for Great
Grimsby asked what effects the treaty will have on us. There will be no
change. As I said in my opening remarks, Cameroon and Côte
d’Ivoire, because of the initial agreement, already benefit from
duty-free, quota-free access to EU and British markets, and it will be
British consumers who
benefit.
The
hon. Gentleman has been a long-standing campaigner against the common
agricultural policy, and he may be interested to learn that I share his
concerns about that aspect of the European Union. He will know that one
of the problems with the CAP is that it has negative effects for
consumers. Bringing down tariffs and establishing free trade brings
benefits for consumers, but there is something more important, and in
this regard the present Government have followed the example of the
previous Government. We have tried to ensure, and have succeeded in
ensuring, that these agreements are development friendly and are in the
interests of the people of Cameroon and the people of Côte
d’Ivoire.
Mike
Gapes:
I am grateful to the Minister for giving way and I
apologise for being one minute late into the Committee. I welcome the
fact that Cameroon, which is a Commonwealth country, having been a
former French, German and British colony in parts, is part of the
agreement, but concerns have been raised about the human rights
situation in both Cameroon and Côte d’Ivoire. What
consideration has been given to calling for improved human rights,
particularly in Côte d’Ivoire, while bringing in the
agreements? Also, there is a potential implication for Caribbean
producers of bananas. I would be grateful if the Minister could say
what consideration has been given to the impact that the measures might
have on those small monoculture economies in the
Caribbean.
Mr
Davey:
I am grateful to the hon. Gentleman for his
intervention. As a former Chair of the Select Committee on Foreign
Affairs, he brings a wealth of experience and knowledge to debates such
as this. I can reassure him on his last point, which was about bananas.
He will know that EPAs have either been signed or are under negotiation
with countries in the African, Caribbean and Pacific regions. A number
of nations that produce bananas, be they in the Caribbean or in Africa,
stand to benefit from some of these agreements, not least because they
are coupled with extra development assistance and support to ensure
that we can reduce poverty and help with economic prosperity in those
countries.
The
hon. Gentleman also referred to the concerns about human rights in
Côte d’Ivoire and Cameroon and asked what consideration
had been given to improving human rights. We believe that ensuring that
the tariffs go down and there is more prosperity in Cameroon and
Côte d’Ivoire will help the cause of economic and social
progress. If we got rid of the current duty-free, quota-free
arrangements, it would hurt some of the poorest people in Cameroon and
Côte d’Ivoire. I do not know whether the hon. Gentleman
wants to call them human rights,
but it would certainly undermine their chances of employment and
prosperity in the future. We certainly have no intention of doing
that.
9.4
am
Gordon
Banks (Ochil and South Perthshire) (Lab):
It is a great
privilege to serve under your stewardship, Mrs Brooke. I am
grateful to the Minister for his opening remarks. Despite what he may
have heard, the Opposition largely welcome the agreements and I
therefore do not intend to give him too much
grief.
The
trading agreements are designed to support parts of the African economy
and should benefit workers in training. In turn, businesses and
workplaces will be made safer and more efficient. As the Minister said,
economic partnership agreements are intended to be broad agreements
that help to build regional markets and to diversify economies in the
African, Caribbean and Pacific regions, before opening up the
international benefits of increased, balanced and sustainable trade
between the regions. They will change our relationship from one that
offers tariff preferences, to one that builds lasting and more
efficient regional and international markets for the ACP
regions.
The
ACP economies are too small to go it alone and regional integration has
the potential to boost local trade and to create larger markets, which
will attract trade and investment. Eliminating the barriers between
neighbouring countries and creating real integration favours trade
exchanges and boosts economic growth. It also creates bigger markets
that are more attractive to investors and facilitates trade with
landlocked
countries.
I
have no criticisms of these agreements, but I would appreciate
clarification from the Minister on a number of points. First, on the
central Africa agreement, hon. Members will note that Cameroon is the
only central African country to have signed the document.
Cameroon’s strong links with the EU are well documented. It is
estimated that 61% of its exports go to the EU and 56% of
its imports come from the EU. We have heard, after the intervention of
my hon. Friend the Member for Great Grimsby, that the impact on the UK
will be minimal. Will the Minister confirm that the agreement will
strengthen the quality of the Cameroon economy, which might benefit its
trade dealings outside the EU? Does he expect the agreement to be
superseded by one that includes the seven countries of the Economic and
Monetary Community of Central Africa, and if so, when? Are there plans
for the agreement, or any future agreement, to be extended to cover not
only goods, but services? The Minister has spoken of the specific
requests of Côte d’Ivoire and Cameroon that these be
goods-only arrangements, but are there plans for wider arrangements
that include
services?
Obviously
there are gains to be had when the less developed members of such
trading arrangements gain fairer access to larger markets such as the
EU. However, that is not the only prize. There is an opportunity to
improve access to the larger, more developed markets of fellow African
continental members. Does the Minister agree that that in itself is a
big prize in expanding the membership of the central Africa
group?
Finally
on this agreement, is the Minister satisfied that the gradual reduction
of tariffs on goods entering from the EU, such as vehicles, chemicals
and power generation
equipment that are not
manufactured in Cameroon, will reduce production costs and product
prices in the Cameroon economy quickly
enough?
I
have a similar line of questioning on the Côte d’Ivoire
agreement. Will it be a stepping stone to securing a larger agreement
that encompasses more of western Africa? Whereas the EPA covering
Cameroon has been established in preparation for a possible expansion
under the central Africa banner, I am concerned that the Côte
d’Ivoire EPA is restricted to just the one country. Will the
Minister update hon. Members on the progress of the discussions on
securing similar agreements with Côte d’Ivoire’s
neighbours, in particular Nigeria and Ghana, but also other members of
the Economic Community of West African States? When might we expect to
see further developments towards a regional-based agreement for west
Africa?
Countries
such as Côte d’Ivoire are using the agreements as a
gateway to larger markets among their African neighbours, which will
allow them to grow their national industries before looking to other
international markets in a significant way. Does the Minister see such
goals as significant in the domestic economy of Côte
d’Ivoire? Are those goals hampered by this being a single
agreement with Côte d’Ivoire, without any additional
African benefit? As with the Cameroon agreement, will the Minister
confirm whether he has ambitions for an ECOWAS agreement covering not
just goods, but services? Likewise, does the Minister feel that the
reduction in the tariffs over 15 years on certain manufactured products
that could drive the Côte d’Ivoire economy is being done
over an appropriate period? We have heard about the case of the central
African EPA, and the Côte d’Ivoire agreement will be
negligible in its impact on UK imports and investment.
On the
Caribbean issue, the Minister will be aware that my hon. Friend the
Member for Harrow West (Mr Thomas) was involved in discussions
on, and the implementation of, the Caribbean EPA. I believe that he got
a nice trip to Barbados out of it, and I am sure that the Minister is a
little jealous that he was not in government at the time. My hon.
Friend told me that, during his visit to Barbados, he managed to get a
lot of work done and was updated on how development aid was being spent
to help support the Caribbean nations. The money was offered to ensure
that Caribbean products met European safety standards and to support
the development of infrastructure, so that businesses in the Caribbean
could get their products to market. I note from the draft orders that
financial support will be offered to both countries under discussion
today. The Minister has already given a figure for Cameroon of
somewhere in the region of €97 million. Does he have a figure
for Côte d’Ivoire, how much support there will be and
information about what the money will be spent on? Will it be for
developing infrastructure to allow an expansion of trade, both within
Africa and externally?
It would also
be useful to know when the Minister last met the relevant trade
Ministers from each country to ascertain what assistance they need to
make best use of these agreements. It is vital that the interests of
Cameroon and Côte d’Ivoire are central to the
legislation. I am keen to find out whether the Minister’s
Department works closely with colleagues in DFID on such matters.
My right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown)
set up a joint trade policy unit between the Minister’s
Department and DFID. I would be grateful to hear what the current
function of this unit is in relation to the agreements.
The
agreements have to take European interests into account. Will the
Minister confirm whether the agreements were discussed at the previous
meeting of EU trade Ministers? Moving on to the Caribbean as a
comparison; we are now two years on from the implementation of the
agreement on the Caribbean, an issue that my hon. Friend the Member for
Ilford South has raised. Will the Minister update Members on how he and
his European counterparts feel that agreement is going and whether
there were any lessons that have assisted in drawing up the
agreements?
Finally, the
agreements are the result of years of hard work by officials, whom I
thank for their efforts. Will the Minister tell Members how we are
going to be progressing the development of EPAs for other regions in
Africa, and how they might impact on the agreements before us
today?
9.13
am
Mr
Davey:
I welcome the hon. Gentleman’s comments and
his support for the ratification process. He was right to mention the
hon. Member for Harrow West, who played a role in his time as trade
Minister. I would like to put on record my thanks to the right hon.
Member for Kirkcaldy and Cowdenbeath, who, as Chancellor and Prime
Minister, played an important role in ensuring greater trade
liberalisation for Africa as part of tackling poverty there. One good
development in recent years is that those issues have had cross-party
support, with all parties in the House working together and supporting
each other. That has ensured that our voice, as a country, at the EU
and in other forums has been stronger and therefore, we have had more
influence. Politics often has a bad name, but on this British politics
has given a global lead, and, without going over the top, we should pay
tribute to people from both sides of the House.
The hon.
Member for Ochil and South Perthshire asked a large number of
questions. I shall try to deal with them; I certainly have never had so
many small pieces of paper in front of me before, but I think I can
manage the questions. On Cameroon, he asked about regional progress on
the central African grouping. The problem for the grouping is that it
involves a large number of fragile states, such as the Democratic
Republic of the Congo, and, not surprisingly, signing an EPA is not a
priority for them when they have such pressing problems. The Cameroon
EPA is an interim EPA and is likely to remain in place for several
years, given the problems in the region, before there is a regional
EPA. I assure the hon. Gentleman, however, that the UK Government,
working with the European Commission, want to promote those
negotiations so that a regional EPA can be concluded when the region
indicates that it is ready. Let us be clear that it is the countries in
the region that have other priorities, not the
EU.
The
hon. Gentleman asked whether the liberalisation would help the Cameroon
economy outside the EU. The answer is yes. If it is able to grow its
exports to the EU, its companies and organisations will benefit and
greater experience of international trade and competition will make them
stronger and enable them to export to other
countries.
The
hon. Gentleman also asked whether the arrangement could be expanded to
services, investment and so on. That would be a good thing, but we may
have to wait for the full regional agreement. It is important to
emphasise that the pace is being set by Cameroon, not the EU.
Non-governmental organisations have, over the years, criticised EPAs,
because they felt that the EU was imposing a liberalisation on
developing countries, but the way in which the EU is going about things
shows that that is not the case. Indeed, we are allowing, supporting
and encouraging the ACP countries to decide the pace at which they wish
to
go.
The
hon. Gentleman talked about the issues in relation to Côte
d’Ivoire and I can confirm that it is the intention of both
Côte d’Ivoire and the EU that its EPA is a stepping stone
towards a regional EPA. The negotiations for a regional goods-only EPA
have been slow, but there has been some progress this year and they
could be concluded next year, which is extremely good news. He is right
to focus on the regional dimension, because the coalition
Government’s ambitions for a pan-African free trade area are
supported by regional EPAs. I am proud that the coalition has managed
to achieve reforms to promote the strengthening of the regional EPAs,
particularly in relation to the reform of the rules of origin, where a
country that produces a finished product for export to the EU can
import components for that product from neighbouring countries. We hope
to secure the reform of the rules of origin in the next few weeks. That
will enable and encourage more regional trade, because goods will be
able to be exported duty-free and quota-free to the EU. That is a real
step forward worth hundreds of millions of euros to those
countries.
The
hon. Gentleman asked about the amounts of development assistance. The
total pot set aside by the EU for the two regional areas—the
central area and the west African grouping—is, I
believe, more than €500 million. The eventual split between
Côte d’Ivoire, Cameroon and other countries in the
regional groupings has yet to be decided. We have announced the
€97 million, to which the hon. Gentleman referred,
but further decisions have yet to be
taken.
Gordon
Banks:
On that point, is the Minister saying that the
€500 million exists as a fund to cover the overarching, wider
agreements we hope to reach in the future? The €97 million has
been allocated as part of the Cameroon agreement, but how much will be
allocated as part of the Ivory Coast
agreement?
Mr
Davey:
I do not believe that the final decision has been
taken. I undertake to write to the hon. Gentleman so that as soon as we
have those figures he will have them. If there is anything else that I
have not been able to cover in my remarks, through my lack of knowledge
and expertise, I shall make sure, through my officials, that we will
get the information to him. What I have said is my understanding of the
current state of play on decisions about that money.
The hon.
Gentleman asked when I last met trade Ministers from Cameroon and
Côte d’Ivoire. I have not yet had that pleasure. I hope
that I shall do so in due
course. He mentioned the visit dutifully made to the Caribbean by the
hon. Member for Harrow West, and I am sure that he would be
the first to acknowledge that foreign trips are not all that they are
cracked up to be. I have not been making many as a trade
Minister, but I am very welcoming to trade Ministers and delegations
from other countries. So if the trade Ministers of Côte
d’Ivoire and Cameroon read this debate in due course, and want
to come to visit me, I shall be keen to meet
them.
On
the matter of working between the Department for International
Development and the Department for Business, Innovation and Skills, I
assure the hon. Gentleman that the relationship is very close, and is
building on some of the developments that he mentioned which happened
during the previous Government. We believe that development goals are
central to trade policy. Again, I think that that is a shared agenda,
because this country has a very open approach to globalisation and
believes that it is a win-win for all parties—assuming that we
can get the adjustment processes and transition arrangements
right.
The last
Trade Council that I attended in Brussels did not discuss these
specific EPAs, but discussed EPAs in general. In my short intervention
in that debate I stressed that it is important that EPAs should be
development-friendly. We are winning that debate, and I am delighted
that the EU has shown a lead in such trade agreements, making sure that
we take account of the needs and circumstances of some of the poorest
countries.
I think that
I have covered all the points. I have not had a chance to study all the
papers before me, but if the hon. Gentleman feels that there are points
I have not touched on and wants further advice I will be happy to give
it.
Gordon
Banks:
Before the Minister sits down: did the joint trade
policy unit play a role in the
discussions?
Mr
Davey:
I believe it did. The officials are working closely
together. Officials from the Foreign Office have also played a role. We
see trade as cross-Government, as I believe the previous Government
did. The Prime Minister has made it clear that trade is foremost in our
economic policy, in terms of generating growth. He has made it clear to
all Ministers that he expects them, whatever their Department, to
promote British exports and the cause of free trade. I assure the hon.
Gentleman that the agreements are seen very much in that light. They
build on some of the achievements of the previous Government and are
good for Britain, Cameroon and Côte d’Ivoire.
Question
put and agreed
to.
Draft European Communities (Definition of Treaties) (Côte D'ivoire Economic Partnership Agreement)
Order 2010
Resolved,
That
the Committee has considered the draft European Communities (Definition
of Treaties) (Côte d’Ivoire Economic Partnership
Agreement) Order 2010.—(Mr
Davey.)
9.24
am
Committee
rose.