Since I have no text, it will not be the same speech, so if you will forgive me, I will not do that. It will appear in Hansard, and I encourage Members to read it there. In any case, I am now talking about the amendments in this group, as opposed to responding to the noble Baroness, Lady Chakrabarti, which noble Lords can read in Hansard.
On these amendments, I have great sympathy with what the noble Lord, Lord Hendy, was saying. When Philip Morris was frustrated on an investor-state dispute settlement, it effectively used Honduras and the Dominican Republic to use WTO procedures. So the absence of ISDS is not enough in itself—we have to ensure that we are proof against that. In fact, where Australia was concerned, as it happens, the public health exemptions in the WTO were sufficient in the last decision of the appellate body that the noble Baroness, Lady Kramer, regrets the absence of: the last decision it made in June was to uphold Australia’s position. We have to be very mindful of that.
Before I get to my own amendment, I will speak to the others. There is a very legitimate question. Are the Government planning simply to roll over existing EU agreements as they are, including where there are ISDS provisions and including with CETA in due course, where there is an investment court system? I am very interested to know what the Government’s intentions are. Certainly, my expectation is that it will be very difficult to have a continuity agreement while departing substantially from continuity.
As regards Japan, I do not have the text of the UK-Japan Comprehensive Economic Partnership Agreement, but while the EU-Japan agreement encourages mutual investment, Article 8.9.4 of it makes clear that, while market access, national treatment without discrimination and most-favoured-nation status are offered, it says that for “greater certainty”, most-favoured-nation treatment
“does not include investor-to-state dispute settlement procedures provided for in other international agreements.”
I will be very interested to know in due course whether the UK-Japan agreement says the same thing. I know that my friends in Japan take the view that we will not
be able to accede to the CPTPP without accepting an investor-state dispute settlement. So this is a very interesting moment in understanding whether we are joining with the European Union in moving away from investor-state dispute settlement, or whether we subscribe to the Japanese view that it remains a legitimate vehicle in international trade agreements.
Amendment 43 proposes a multilateral investment tribunal. I wish that we could use such a process. The Doha round did not accept a multilateral investment provision—the proposal failed. We have bilateral agreements, but while they might be desirable they are not sufficiently widespread to allow us to get to a multilateral tribunal. Putting in legislation a requirement for such a tribunal when people have not yet signed up to one seems heroic.
Amendment 91 is not about investor-state dispute settlement; it is about disputes between states. The best example to have in mind is the dispute between the European Union and the United States. As a result of US action, the dispute reached the point where it was lawful under WTO rules for the EU to apply specific import duties against US exports into the European Union.
The Taxation (Cross-border Trade) Act 2018 relates to this, but why I am talking about a different piece of legislation? The original Trade Bill and the Taxation (Cross-border Trade) Bill were introduced at the same time, at the end of 2017. They were intended to be considered side by side and they cross-refer considerably. In this instance, it is entirely right for us to look at the Taxation (Cross-border Trade) Act and ask whether the parliamentary scrutiny arrangements relating to it are correct. Section 15 of the Act gives the Secretary of State the power to impose through regulations additional import duties as a result of an international dispute—for example, regulations to impose import duties on US exports. That power is exercisable through the negative resolution procedure, but in my view it should be an affirmative resolution procedure—this should be added to the list of affirmative resolution procedures in Section 32 of the Taxation (Cross-border Trade) Act.
The argument in the Government’s Explanatory Notes for using the negative procedure in the great majority of cases where customs duties are imposed is that there are so many such regulations that they have to be made in that way, otherwise they become impractical. That is patently not the case here. In this instance, I encourage my noble friend the Minister to agree that there will be relatively few international disputes that give rise to the imposition of such duties and that, when that happens, it will by its nature be of considerable significance and therefore should be in the form of regulations subject to the affirmative procedure.