Trade Bill

Written evidence submitted by Professor Alan Winters, Professor of Economics and Director of the UK Trade Policy Observatory (UKTPO) in the University of Sussex (TB14)

The Trade Bill addresses three important issues, but does not deal with the critical issue of how the UK will handle the initiation and oversight of new trade agreements when they come to be made. On the three issues, I note:

Accession to the Government Procurement Agreement will require negotiation with existing members and so may raise issues of market access and coordination with the devolved administrations; it should, therefore, be subject to meaningful oversight from Parliament.

The text for the Implementation of Trade Agreements is predicated on the assumption that rolling over existing trade agreements is a technical tidying up process, whereas in fact it will require negotiation with the trade partners concerned and the European Union, and potentially with members of the World Trade Organisation. These negotiations will require concessions and thus more meaningful oversight from Parliament than currently is envisaged. Negotiations should be guided by mandates from parliament and the devolved administrations and these parties should be kept informed and actively consulted over the progress of negotiations to ensure that the resulting agreement has a good chance of being accepted and ratified by Parliament. Parliament cannot have the right to change agreements when they are concluded because, if that were the UK procedure, partners would be discouraged from negotiating seriously in the first place.

Among the areas in which ‘inherited’ trade agreements will require negotiation include: rules of origin, the basis of mutual recognition agreements and the division of tariff rate quotas between the UK and the remaining members of the EU (EU27). They will be complicated by the fact that several of the EU’s current agreements contain most favoured nation clauses, which mean that any improvement on the current terms that is offered to the UK will have automatically and ‘for free’ to be extended to the EU27.

The EU’s Economic Partnership Agreements with groups developing countries have not been a success and while, for reasons of expediency, the UK might seek to roll them over in the short run, within a few years the UK and its developing partners should develop a different trading relationship.

On the Trade Remedies Authority, I would make three observations. First, the adoption of the ‘lesser duty rule’ is highly desirable. Second, widespread experience elsewhere shows that trade remedy actions typically get captured by producer interests. The TRA should be mandated to consider consumer interests, and the government should commit to supporting financially and otherwise an organization which will develop and present the consumer interest in each case considered by the Authority. Third, the TRA should be required to have a high level of openness and transparency in its dealings.

January 2018