My Lords, the EU-Andean free trade agreement covers the trade and investment relationship between EU member states and Colombia and Peru. Although this deep and comprehensive agreement constitutes a small part of the EU’s ambitious programme of bilateral trade and investment negotiations, it is an important and valuable step in improving our trade relations with Latin America. Together with our important trade negotiations with such countries as the US, Japan and Korea, it demonstrates that the EU is looking to advance its trade with countries large and small, developed and emerging. Taken together, all the EU trade negotiations stand to boost the EU’s GDP by over 2% and bring over 2 million jobs to the EU. The Government are proud to be a major voice in support of the EU’s overall trade agenda.
Not only will this trade agreement bring significant benefits to the Andean economies of Peru and Colombia, but it sends an important message of the benefits of open markets and the importance of resisting protectionism to the rest of Latin America. The free trade agreement will aid UK firms in getting a foothold in those two emerging markets, which have enjoyed strong growth figures in recent years. The agreement will also help UK companies already trading in this part of the world. Analysis shows that the deal could benefit our economy by up to approximately £400 million a year over the long term.
In line with other recently concluded trade agreements, the deal is ambitious and comprehensive. It stands to substantially improve the market access for UK exporters
to the Andean region through the elimination of tariffs and technical and procedural barriers to trade, improve market access in procurement and service markets, and enforce common standards and rules that will level the playing field. It will also bring stability in areas including the protection of intellectual property. Furthermore, the deal stands to bring in greater transparency on subsidies and implement processes to settle disputes.
Not only have the economies of Peru and Colombia enjoyed strong recent growth, but they provide a combined market of almost 80 million people, and are increasingly becoming important commercial partners for UK firms looking to trade in Latin America. Between 2007 and 2012, overall UK exports to the combination of Colombia and Peru almost doubled. With this FTA in place, providing British firms with improved access to these rapidly growing markets, UK export levels should grow even further. We have already seen a variety of UK firms set up businesses in these countries, from fragrance house CPL Aromas, to retail firms such as Mothercare, Accessorize and Hackett. Those last three firms have all now opened shops in Bogotá, the second largest city for retail in Latin America. It is my hope that further UK firms will follow and take advantage of the new opportunities brought by this agreement.
Since the trade agreement entered into provisional force earlier this year, the UK Government have worked closely with UK firms and the respective Governments of Colombia and Peru to maximise opportunities presented by the deal. In particular, UKTI officials have identified significant opportunities for UK firms in infrastructure markets, financial services and energy. This FTA provides opportunities not only for larger companies but for SMEs. It also provides further opportunities for companies already established in these respective markets, those which are looking to establish themselves in these markets or those which are yet to consider trading with these two countries. A number of ministerial colleagues have also visited Colombia this year. The noble Lord, Lord Green, David Willetts, and the lord mayor of London visited Peru and Colombia this summer. I look forward to more official visits which will build on this momentum.
To assist SMEs looking to trade with Colombia, the Government launched a new business-to-business organisation called UK Colombia Trade, which hosted an event at the UK ambassador’s residence in Bogotá in November to showcase the varied commercial opportunities that arise from this trade agreement. I look forward to hearing about future such events as firms take advantage of the important opportunities that the deal provides.
I am a firm believer in free trade, and trade agreements bring competition in the marketplace. Ultimately, it is the consumers who stand to benefit from increased choice and companies from sourcing inputs and components from abroad. By improving our trade relations with new countries we are improving markets around the globe and not merely with our traditional commercial partners. Increasing trade and investment is at the heart of generating balanced, long lasting and strong economic growth. The United Kingdom continues to be the most influential voice in ensuring that trade
liberalisation is at the heart of the EU’s growth strategy. Rapidly ratifying this FTA in the UK will strengthen our relations with these two important Latin American countries, bring major benefits to UK firms and underline the UK’s position at the heart of global trade liberalisation. I commend the order to the Committee.