Continuing application of EU trade agreements after Brexit Contents

6The implementation of rolled-over agreements

Powers under the Trade Bill

83.Like all treaties, trade agreements need to be separately incorporated into UK law. The UK currently implements legislation to give effect to EU trade agreements through the European Communities Act 1972. The EU (Withdrawal) Bill repeals that Act and converts EU law into UK domestic law on “exit day” as “retained EU law”. While most of the legislation implementing rolled-over EU trade agreements will be covered in this way,106 the Trade Bill has been introduced to provide for implementation of non-tariff aspects of rolled-over trade agreements which do not fall within the scope of the Withdrawal Bill. The tariff-related aspects of the agreements will be covered by the Taxation (Cross-border Trade) Bill.

84.Clause 2(1) of the Trade Bill makes provision for delegated powers—meaning that Parliament, through legislation, gives the Government and devolved administrations the authority to make law, including amendments to primary legislation by means other than the passing of a new Act of Parliament. These powers are subject to a “sunset clause”, whereby they lapse five years after exit, unless Parliament agrees to extend their application.107 The Trade Bill covers the implementation of trade agreements and other trade-related agreements,108 which could encompass some 750 agreements.

Parliamentary scrutiny

85.The power in the Bill to make regulations uses the so-called “negative procedure”, meaning that any statutory instrument passed under this provision will automatically become law without debate, unless there is an objection raised in either House of Parliament (and then only if time is given to debate that objection),109and cannot be amended, only annulled in its entirety.110

86.The Government argues that use of the negative procedure is warranted because this is “uncharted territory” and it is seeking “flexibility, transparency and efficiency”.111 In addition, it notes that the number and complexity of the EU’s trade agreements requires the scope of the powers to be drawn widely.112

87.We heard from Professor Derrick Wyatt, QC from Brick Court Chambers how Clause 2(1) of the Trade Bill does not limit the extent to which any new UK-third country agreements can depart from existing EU trade agreements signed prior to exit day in the roll-over process.113 He therefore suggested limiting the powers contained in the Bill to “18 months from Brexit, and thereafter to require an affirmative resolution”.114

88.The Minister of State for Trade Policy, Mr Hands, told us that that the process contained in the Trade Bill “would not apply to a brand new trade deal or a deal that revises, in a substantive way, what we have at the moment”, for which there would be “ratification processes that we will be bringing forward in due course”.115

Role of devolved administrations

89.Schedule 1 of the Trade Bill places certain restrictions on the powers of devolved authorities to exercise the delegated powers granted in Clause 2 (1) outside of their devolved competences and in areas where they would normally seek UK Government consent or legislate jointly. It also restricts their “power to modify retained direct EU legislation” and requires them to seek consent from the UK Government where powers are executed before exit day and involve negotiations over “quota arrangements” (see Chapter 5 above on Tariff Rate Quotas).116

90.Mr Dearden told us that, under the Trade Bill, the devolved administrations would have “no power to stop” trade deals that dealt with issues falling within devolved competence.117 Prof Wyatt, meanwhile, argued that, when it came to UK trade policy-making, the “appropriate avenue for the devolved Administrations would be direct consultations with central Government”, including “close participation in the negotiation process”.118

91.Our evidence strongly suggests that substantive changes will be necessary when EU trade agreements are rolled over. The Government should set out provisions for both more extensive parliamentary scrutiny and enhanced involvement by the devolved administrations in situations where such changes do occur, particularly in the light of the fact that each of the four nations of the UK may differ in their priorities for trade deals. We look forward to reading the proposals for a new ratification process for trade agreements to which the Minister of State for Trade Policy referred in his evidence, and expect to be consulted formally on those proposals while they are in draft.

106 Explanatory Notes to the Trade Bill [Bill 122 (2017–19) – EN], para 41

107 The Trade Bill, Briefing Paper 8073, House of Commons Library, January 2018, pp 26–28, 37–38

108 Trade Bill Committee, 23 January 2018, col 43

109 Parliamentary Glossary, “Negative procedure”

110 This can be compared to the “affirmative procedure”, in which an instrument is subject to a yes/no vote in the House of Commons Chamber.

111 Delegated Powers Memorandum to the Trade Bill [Bill 122 (2017–19) – EN], para 53

112 Delegated Powers Memorandum to the Trade Bill [Bill 122 (2017–19) – EN], para 54

113 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603-i, Q 67

114 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603-i, Q 74

116 Explanatory Notes to the Trade Bill [Bill 122 (2017–19) – EN], paras 84–91

117 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603-i, Q 68

118 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603-i, Q 70

Published: 6 March 2018