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BREXIT - THE TRADE BILL

Introduction

The UK government introduced the Trade Bill to the House of Commons on 7 November 2017. The Bill is part of the set of Brexit Bills introduced  by the UK government to deal with the process and aftermath of giving effect to the UK referendum result to leave the European Union (EU). The Trade Bill will not cover every aspect of UK trade after Brexit: it will not cover whatever new trade agreements the UK may be able to sign after it has left the EU. Furthermore, tariff  provisions (i.e. tax and duties on exports and imports) will be addressed in a separate Bill, the Taxation (Cross-Border Trade) Bill.  Instead the Trade Bill takes wide-ranging powers to enable the UK government to continue with some key existing agreements where the UK currently participates through the EU; it will establish a new UK Trade Remedies Authority; and it will make some other changes.

 

Implementation of the Agreement on Government Procurement (GPA)

The Trade Bill includes powers for the UK to implement the Agreement on Government Procurement (GPA) in its own right after its membership through the EU ceases. The GPA in its original form was agreed in 1994, and a Revised GPA was agreed in 2012. It is a plurilateral WTO agreement, that is, it does not comprise the whole WTO membership but only a limited number of WTO members who opt to join, currently 19 including the EU. The GPA aims to ensure guaranteed open and fair access to competition in government procurement for certain specified procurement activities. It is said to cover UK businesses’ access to £1.3 trillion of public procurement opportunities. Currently UK access is achieved through the EU’s membership of the GPA. The Trade Bill’s provisions would allow regulations to be made , replacing 2015/2016 regulations and Scottish equivalents, and allowing for the necessary revisions to legislation for the UK’s membership of  the 1994 and 2012 GPA in its own right.

 

Implementation of international trade agreements

The Trade Bill will include powers (also using powers in the European Union (Withdrawal) Bill), to change domestic law and ‘retained EU law’ to meet the UK’s obligations under EU Free Trade Agreements (FTAs) and other mainly trade agreements in place before Brexit. Presently the UK participates in a large number of trade agreements or FTAs through the auspices of the EU. These are  in place with 50 countries, with others under negotiation. The UK wants to achieve “transitional adoption” by continuing the effect of these FTAs in its own right with each of the partner countries that has signed such an agreement with the EU, initially at least in terms as closely as possible aligned to the EU FTA. The provisions of the Bill would also apply to a number of ‘mainly trade related’ international agreements about issues such as technical standards.

 

New Trade Remedies Authority

The Bill will establish a new Trade Remedies Authority for the UK, and make provision for its funding and staffing. As the UK leaves the EU, complaints about dumping and subsidy and unfair trade practices by other countries will no longer be referred to the European Commission to investigate and challenge, so the UK will have to undertake that itself.

 

HMRC powers to collect export information and share it

Under the Bill, HMRC is to be given specific powers to collect data about exporters and exports, for trade promotion purposes, and specific provision is made allowing disclosure of such information to specified bodies such as other government departments or outside bodies including the WTO.

 

Points of controversy:

Territorial extent and devolution

The Bill applies to the whole of the UK, but in some areas it covers areas of devolved competence of the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly, and there are complex arrangements for either seeking the legislative consent of those bodies, or for specifically restraining them from passing legislation which would be incompatible with the Trade Bill powers. Whatever the practical needs for such coordination, its impacts on the devolution settlement are considerable, and the need for political agreement on a common approach between the UK government and the devolved administrations is very important.

 

Regulation making powers

As with other Brexit legislation, notably the European Union (Withdrawal) Bill, there is reliance in the Trade Bill on very far-reaching and wide regulation making powers, which for the specified purposes can amend primary legislation, or retained EU law. The debates on the pros and cons of such powers, and the measures needed to ensure their adequate scrutiny by Parliament, are amongst the main concerns in Parliament over the whole of the Brexit legislation.

 

Third parties to EU international trade agreements

It might have been thought that aiming to replicate or ‘mirror’ EU Free Trade Agreements in as close alignment as possible would be uncontroversial, but recent developments are a reminder that the views and interests of the third party signatories to these agreements should not be taken for granted. For example, when the UK and EU reached agreement on the allocation between them of some tariff quotas based on historical averages, i.e. where the goods or foodstuffs has been consumed, there were immediate protests from the US, Canada, Brazil, Argentina, New Zealand, Thailand and Uruguay. Australia has also raised similar objections.

 

For further information or to discuss our in-house Brexit Legislation Briefings, please contact William Wilson, Barrister – Director, Wyeside Consulting Ltd at info@wyesideconsulting.com tel. +44(0)1225-730-407