This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
UK trade negotiations: Agreement with Australia
Date Published: 29 June 2022
This is the full report, read the report summary.
3. The statutory basis on which Parliament scrutinises treaties, including Free Trade Agreements (FTAs), is the Constitutional Reform and Governance Act 2010 (CRaG). Under section 20 of that Act, before the Government can use the prerogative power to ratify a treaty, the agreement concerned must be laid before both Houses of Parliament for 21 sitting days (days on which both Houses are sitting). If, during that time (referred to as “Period A” in CRaG), either House resolves that it objects to ratification, the Government must lay a statement explaining why the treaty should be ratified. If, during a further period of 21 sitting days, the House of Commons resolves that it objects to ratification, the Government must repeat the process before the treaty can be ratified—and ratification cannot occur if the House again objects. In theory, this could be repeated indefinitely.1
4. In respect of FTAs, further statutory provisions also apply. Under the Agriculture Act 2020, section 42, before the Government can lay an FTA under CRaG, it must lay a report setting out the extent to which the agreement is:
consistent with the maintenance of UK levels of statutory protection in relation to—
a) human, animal or plant life or health
b) animal welfare, and
c) the environment.2
5. The Trade Act 2021 (which amends the Agriculture Act) further requires the Government, in preparing its “section 42 report”, to request advice from the statutory Trade and Agriculture Commission (TAC) on all these matters (“except insofar as they relate to human life or health”), and to lay the TAC’s advice before Parliament.3 Pending commencement of the relevant provisions in the Trade Act, the functions of the statutory TAC are currently being replicated by an interim non-statutory body of the same name.4
6. In addition to the above statutory provisions, the Government has given voluntary undertakings regarding scrutiny of FTAs by our committee and the House of Lords International Agreements Committee (IAC), whereby it:
7. All the while that we have been scrutinising the UK-Australia FTA (“the Agreement”), we have been in communication with the Government regarding the management of the scrutiny process. As set out in para 6 above, the Government has committed that a debate may be held in the House of Commons prior to each FTA’s ratification, subject to a “timely” request from this committee and parliamentary time being available.6
8. It has been clear to us from the start that, in order for us to make such a “timely” request, we would first have to consult on and analyse the lengthy, technical, complex, sensitive and potentially precedent-setting text of the draft Australia FTA. As this is the first wholly new FTA negotiated by the Government since the UK left the EU, it was important our inquiry be a thorough overview of the Agreement and its implications. Our analysis would also need to take full account of the Agreement’s associated documents.
9. We were therefore concerned when the Secretary of State told us in January 2022 that she did not envisage there being “a significant period of time” between the publication of the ‘section 42’ report and the triggering of the CRaG period.7 We informed her that this would be at odds with the previous commitment that the Government had given to allow us sufficient time to produce our report ahead of the CRaG scrutiny period being triggered. We requested that there be at least 15 sitting days between the publication of the section 42 report and the commencement of the CRaG period, to allow us a minimal period in which to take account of that new advice as necessary and take Ministerial evidence on the Agreement before finalising and publishing our report for the information of the House.8 However, throughout months of correspondence, the Government consistently failed to give us any such commitment or to meet our requests for information concerning when we might expect the section 42 report to be published.
10. The section 42 report was sent to us on 27 May, after the House had risen for the Whitsun recess and Jubilee bank holidays, before it was published on the next sitting day, 6 June. We had been sufficiently concerned that we had also written to the Leader of the House, in late April, seeking his assurances about safeguarding the scrutiny process; on 13 June he wrote to us agreeing that it was important these first new free trade agreements receive “an appropriate level of scrutiny” and that he would “give careful consideration” to our request for a guaranteed minimum period between the publication of the section 42 report and the triggering of the CRaG process.9 The Secretary of State wrote to us the very next day to advise that commencement of the CRaG process was imminent,10 and it was triggered less than 48 hours after we had received the Leader of the House’s letter, on 15 June.11
11. The persistent lack of clarity on the timetable in the run-up to triggering the 21-sitting-day period of parliamentary scrutiny under CRaG has made it very difficult for us to plan our work. Our concerns on this point have been exacerbated by the requirement upon us simultaneously to scrutinise another FTA, with New Zealand,12 that was signed soon after the Agreement with Australia and for which the Government’s intended timetable for ratification remains similarly opaque.
12. We have been greatly disappointed that the Government has repeatedly failed to accede to our request that we be guaranteed a period of at least 15 sitting days between the publication of the section 42 report and the laying of the Agreement under the Act, to allow us to finalise and publish our report. Our request for this guaranteed period was not unreasonable. It would have ensured that we were able to identify and make recommendations on matters of interest to the House, thereby giving the Government due notice of any potential concerns, before the brief window of statutory parliamentary scrutiny commenced.
13. Ms Trevelyan indicated that she thought the Government had been generous in allowing us more than the minimum of three months that we had been promised for scrutiny of the Agreement text and associated documents. She acknowledged however that, four months after the Agreement had been published, we still lacked the section 42 report. The Secretary of State also said that a “prolonged period of parliamentary scrutiny” could impact the ratification process, thereby delaying the opportunity for businesses, producers and consumers to enjoy the benefits of the Agreement.13
14. We were struck by the contrasting view of Gerald Mason, Senior Vice President of Tate & Lyle Sugars, which is strongly in support of the Agreement. He wrote to us that he saw “no reason to rush” the completion of our scrutiny process: “If it takes a few weeks or a month or two extra to allow everybody the time they need to look at these issues properly, then so be it”. Mr Mason added that “The last thing we would want is for the FTA to have some sort of controversy hanging over it as people felt they hadn’t had proper time to consider it”, noting that, “we, as an advocate of the agreement, don’t want to see these things introduced with bad feeling”.14
15. Overhasty ratification, without the chance to complete full scrutiny, runs the risk that any significant disbenefits of the Agreement may be overlooked or disregarded. We note that steps to implement the Agreement in domestic law can still be taken ahead of ratification.
16. The undertakings that the Government has given on the process for scrutinising free trade agreements mean that our reports have a key role in triggering a debate on an agreement during the statutory scrutiny period. In addition, our reports have a further vital function in informing any such debate.
17. We were particularly disappointed that our efforts to conduct timely scrutiny of the Agreement were hampered by the failure of the Secretary of State to make herself available to give evidence despite eight requests and correspondence extending over a four-month period.15
18. By failing to keep its commitment to allow us enough time to conclude our scrutiny in full, including reflecting its own position in our report, before triggering the statutory scrutiny period the Government has undermined that statutory process and shown great discourtesy to Parliament.
19. It is in the Government’s own interests that for future free trade agreements the Secretary of State for International Trade gives evidence to us in a timely manner. Our requests for her attendance should be dealt with promptly and cooperatively.
20. We must have a reasonable opportunity to take oral evidence from the Secretary of State and then to publish our report on an agreement before the statutory scrutiny process begins. For future trade agreements, the Government must give an undertaking that there will be at least 15 sitting days between the laying of the “section 42 report” and the commencement of the statutory period of parliamentary scrutiny. It must also undertake that the Secretary of State will attend the Committee to give oral evidence on the free trade agreement before the statutory period is initiated by the Government.
21. We acknowledge that this has been the first wholly new FTA for the Government as well as for ourselves, but it has not acted in good faith or in keeping with the spirit or letter of its commitments to us and to Parliament more widely. The Government’s high-handed attitude in this matter has been unhelpful and has risked hindering the continuation of a positive and constructive working relationship between us and the department that we scrutinise.
22. On 14 June, the Secretary of State told us that she would be triggering the CRaG process,16 despite having previously said that the Government wished “to ensure that there is sufficient time for the relevant Select Committees to produce reports, should they wish, ahead of CRaG”.17 The CRaG period has now commenced and will conclude shortly before the House rises for the summer recess. As the Secretary of State has not made herself available to give oral evidence until 29 June—nearly halfway through the CRaG period—we are unable to publish our full report until we have taken her evidence into account. We will do this as quickly as possible taking account of the uncertainties and constraints under which we have been obliged to work. We are publishing this early report on our experience of the scrutiny process to highlight key areas for future improvement but also—crucially—to formally ask the Government to make time available for a debate on the FTA.
23. We acknowledge the hard work of the Government in negotiating the free trade agreement with Australia but also note that various areas of concern have been raised for this Agreement and future FTAs, which we are looking to discuss with the Secretary of State and will subsequently set out in our next Report. We believe that the House will also wish to have an opportunity to explore these issues before the ratification process is completed. We recommend that the House should be given the opportunity to debate the UK-Australia Free Trade Agreement before the expiry of the period of 21 sitting days provided for under Section 20 of the Constitutional Reform and Governance Act 2010 (CRaG).
24. While we are making every effort to conclude our scrutiny rapidly the pre-emptive commencement of the statutory period by the Government means that there will be very limited time available, before the statutory period is due to expire in the third week of July, for Members to consider our full report and the many areas of the Agreement in preparation for such a debate. We note that the statutory period may be extended for up to a further 21 sitting days by decision of the Government, or by 21 sitting days by agreement of the House to a motion that the treaty should not be ratified, within the statutory period. Such an extension would give Members more time to consider the Agreement, the associated documentation, the Secretary of State’s evidence and our report before a debate on the details of the Agreement after the summer recess.
25. Following the Leader of the House’s agreement that free trade agreements should receive appropriate scrutiny, we recommend that the Government should exercise its powers under section 21 of CRaG to extend the statutory period, providing more time for the House to examine and to debate the Australia agreement within that period, but after the summer recess. Failing this step, the Government must guarantee that the debate we have requested should be scheduled between 13 and 19 July and should be on a substantive motion to resolve that the treaty should not be ratified, in accordance with section 20 of CRaG.
26. We reiterate that such a motion, if passed, would not be fatal to the treaty but would extend the statutory period and enable further debate.
27. The Government’s own guidance on giving evidence to select committees provides that departments should aim to provide the considered Government response to committee reports within two months of publication. It nonetheless enables Ministers to respond immediately where necessary, in respect of “fast-moving events”.18 The timetable forced by the Government’s commencement of the statutory 21-day period, and our subsequent recommendation to extend that period, qualify for that description. We expect an urgent response from the Secretary of State to this recommendation during her scheduled appearance to give evidence to us on the FTA on 29 June or by the end of that week.
28. We hope that this short Report will be helpful to Members in understanding the context of the scrutiny process for the Agreement and the rationale for delaying ratification. We commend in advance our main Report on the Agreement to Members and hope that its analysis of the FTA, along with the evidence we have taken in our inquiry, will prove helpful to the House in its deliberations. We also welcome the recent Report by the Environment, Food and Rural Affairs Committee on food and agricultural elements of the Agreement,19 which we will also discuss in our main Report.
29. We note that we expect to make further recommendations on how the Government should support future scrutiny following the conclusion of our inquiry into the FTA with New Zealand.
1. We have been greatly disappointed that the Government has repeatedly failed to accede to our request that we be guaranteed a period of at least 15 sitting days between the publication of the section 42 report and the laying of the Agreement under the Act, to allow us to finalise and publish our report. Our request for this guaranteed period was not unreasonable. It would have ensured that we were able to identify and make recommendations on matters of interest to the House, thereby giving the Government due notice of any potential concerns, before the brief window of statutory parliamentary scrutiny commenced. (Paragraph 12)
2. The undertakings that the Government has given on the process for scrutinising free trade agreements mean that our reports have a key role in triggering a debate on an agreement during the statutory scrutiny period. In addition, our reports have a further vital function in informing any such debate. (Paragraph 16)
3. By failing to keep its commitment to allow us enough time to conclude our scrutiny in full, including reflecting its own position in our report, before triggering the statutory scrutiny period the Government has undermined that statutory process and shown great discourtesy to Parliament. (Paragraph 18)
4. It is in the Government’s own interests that for future free trade agreements the Secretary of State for International Trade gives evidence to us in a timely manner. Our requests for her attendance should be dealt with promptly and cooperatively. (Paragraph 19)
5. We must have a reasonable opportunity to take oral evidence from the Secretary of State and then to publish our report on an agreement before the statutory scrutiny process begins. For future trade agreements, the Government must give an undertaking that there will be at least 15 sitting days between the laying of the “section 42 report” and the commencement of the statutory period of parliamentary scrutiny. It must also undertake that the Secretary of State will attend the Committee to give oral evidence on the free trade agreement before the statutory period is initiated by the Government. (Paragraph 20)
6. We acknowledge the hard work of the Government in negotiating the free trade agreement with Australia but also note that various areas of concern have been raised for this Agreement and future FTAs, which we are looking to discuss with the Secretary of State and will subsequently set out in our next Report. We believe that the House will also wish to have an opportunity to explore these issues before the ratification process is completed. We recommend that the House should be given the opportunity to debate the UK-Australia Free Trade Agreement before the expiry of the period of 21 sitting days provided for under Section 20 of the Constitutional Reform and Governance Act 2010 (CRaG). (Paragraph 23)
7. While we are making every effort to conclude our scrutiny rapidly the pre-emptive commencement of the statutory period by the Government means that there will be very limited time available, before the statutory period is due to expire in the third week of July, for Members to consider our full report and the many areas of the Agreement in preparation for such a debate. We note that the statutory period may be extended for up to a further 21 sitting days by decision of the Government, or by 21 sitting days by agreement of the House to a motion that the treaty should not be ratified, within the statutory period. Such an extension would give Members more time to consider the Agreement, the associated documentation, the Secretary of State’s evidence and our report before a debate on the details of the Agreement after the summer recess. (Paragraph 24)
8. Following the Leader of the House’s agreement that free trade agreements should receive appropriate scrutiny, we recommend that the Government should exercise its powers under section 21 of CRaG to extend the statutory period, providing more time for the House to examine and to debate the Australia agreement within that period, but after the summer recess. Failing this step, the Government must guarantee that the debate we have requested should be scheduled between 13 and 19 July and should be on a substantive motion to resolve that the treaty should not be ratified, in accordance with section 20 of CRaG. (Paragraph 25)
9. We expect an urgent response from the Secretary of State to this recommendation during her scheduled appearance to give evidence to us on the FTA on 29 June or by the end of that week. (Paragraph 27)
Angus Brendan MacNeil, in the Chair
Mark Garnier
Anthony Mangnall
Mark Menzies
Martin Vickers
Mike Wood
Draft Report (UK trade negotiations: Scrutiny of Agreement with Australia) proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 29 read and agreed to.
Summary agreed to.
Resolved, That the Report be the First Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
Adjourned till Wednesday 29 June 2022 at 9.30 a.m.
The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website.
Richard Rumbelow, Director, International Trade and Member Relations, Make UK; Alessandro Marongiu, Senior Trade Policy Manager, Society of Motor Manufacturers and Traders; Sam Lowe, Director, Trade, Flint Global; Mr Shanker Singham, Chief Executive Officer, Competere LtdQ1–28
Alan Vallance, Chief Executive Officer, Royal Institute of British Architects; Mr John Cooke, Chairman, Liberalisation of Trade in Services Committee, TheCityUK; Prof Daniel Hodson, Chairman, CityUnited Project; Dr Minako Morita-Jaeger, Policy Research Fellow, UK Trade Policy ObservatoryQ29–55
Sarah Williams, Head of Greener UK unit, Green Alliance; Ruth Bergan, Senior Adviser, Trade Justice Movement; Sir Lockwood Smith, Former New Zealand trade minister and Former High Commissioner to the UKQ56–86
Rosa Crawford, Policy Officer, Trades Union Congress (TUC); Dr Silke Trommer, Senior Lecturer in Comparative Public Policy, The University of Manchester; Professor Emily Reid, Professor of International Economic Law and Sustainable Development, The University of Southampton; Victoria Hewson, Head of Regulatory Affairs and Research Associate, Institute of Economic AffairsQ87–105
Sabina Ciofu, Head of EU and Trade Policy, techUK; Eunice Lim, Senior Manager, Policy - APAC, Global Data Alliance; Swee Leng Harris, Director, Strategy & Litigation, LuminateQ106–138
William Kovacic, Non-Executive Director, Competition and Markets Authority; Eduardo Pérez Motta, Partner, SAI Law & Economics, Former President, International Competition Network; Professor Albert Sanchez-Graells, Professor of Economic Law, University of Bristol Law School; Anne L. Petterd, Author of Australia Chapter in Government Procurement Review, Partner, Baker McKenzieQ139–161
Richard Price, Chief Economist, Department for International Trade; Stephen Gibson, Chair, Regulatory Policy Committee; Dr Jonathan Cave, Member, Regulatory Policy Committee; Tammy Holmes, Deputy Director Trade Agreements Analysis, Department for International TradeQ350–390
Professor Tony Venables, Senior Research Fellow, Oxford University; Professor Joe Francois, Professor of International Economics, University of BernQ391–403
Professor Lorand Bartels MBE, Chair of Trade and Agriculture Commission (TAC)Q162–195
Nick von Westenholz, Director of Trade and Business Strategy, National Farmers’ Union; Robert Hodgkins, Shepherd; James Russell, Senior Vice President, British Veterinary Association (BVA); Miles Beale, Chief Executive, The Wine and Spirit Trade Association; Gerald Mason, Senior Vice President, Tate & Lyle SugarsQ196–249
The following written evidence was received and can be viewed on the inquiry publications page of the Committee’s website.
AUS numbers are generated by the evidence processing system and so may not be complete.
1 Accolade Wines (AUS0016)
2 Agriculture and Horticulture Development Board (AHDB) (AUS0033)
3 Australian High Commission (AUS0041)
4 British Veterinary Association (AUS0026)
5 Chartered Institute of Patent Attorneys (AUS0005)
6 City of London Corporation (AUS0027)
7 Collins, Professor David (Professor of International Economic Law, City, University of London) (AUS0002)
8 Compassion in World Farming (AUS0024)
9 Department for Economy (Northern Ireland) (AUS0030)
10 Direct Wines Holdings Ltd (AUS0013)
11 Farmers’ Union of Wales (AUS0017)
12 Federation of Small Businesses (FSB) (AUS0031)
13 Friends of the Earth (AUS0009)
14 Greener UK (AUS0021)
15 Harris, Swee Leng (AUS0038)
16 Hybu Cig Cymru - Meat Promotion Wales (HCC) (AUS0006)
17 Irish Whiskey Association (AUS0003)
18 Jones, Dr. Emily (Associate Professor of Public Policy, Blavatnik School of Government, University of Oxford) (AUS0035)
19 Lang, Professor Tim, Millstone, Professor Erik and Marsden, Professor Terry (AUS0022)
20 Lim, Eunice (Senior Manager, Policy – APAC, BSA | The Software Alliance) (AUS0039)
21 National Farmers’ Union (NFU) (AUS0034)
22 Paine, Dr Joshua (Senior Lecturer in Law, University of Bristol) (AUS0014)
23 Pernod Ricard (AUS0018)
24 Professional and Business Services Council (AUS0007)
25 Royal Society for the Prevention of Cruelty to Animals (RSPCA) (AUS0004)
26 Sanchez-Graells, Professor Albert (Professor, University of Bristol Law School) (AUS0043)
27 Sanchez-Graells, Professor Albert (Professor, University of Bristol Law School) (AUS0036)
28 Sustain: the alliance for better food and farming (AUS0023)
29 Tate and Lyle Sugars (AUS0042)
30 The Law Society of England and Wales (AUS0011)
31 The Scottish Government (AUS0025)
32 The Wine and Spirit Trade Association (AUS0008)
33 Trade & Animal Welfare Coalition (AUS0015)
34 Trades Union Congress (TUC) (AUS0037)
35 Traidcraft Exchange (AUS0020)
36 Trommer, Dr Silke (Senior Lecturer, The University of Manchester) (AUS0040)
37 UK Centre for Animal Law (AUS0019)
38 UK Trade Policy Observatory (University of Sussex) (AUS0028)
39 WWF-UK (AUS0010)
40 Which? (AUS0012)
41 techUK (AUS0029)
All publications from the Committee are available on the publications page of the Committee’s website.
|
Number |
Title |
Reference |
|
1st Report |
Digital trade and data |
HC 123 |
|
2nd Report |
UK Export Finance |
HC 126 |
|
3rd Report |
Inward Foreign Direct Investment |
HC 124 |
|
1st Special Report |
UK trade remedies policy: Government Response to the Committee’s Third Report of Session 2019–21 |
HC 269 |
|
2nd Special Report |
UK Freeports: Government Response to the Committee’s Fourth Report of Session 2019–21 |
HC 453 |
|
3rd Special Report |
UK trade remedies policy: Trade Remedies Authority’s Response to the Committee’s Third Report of Session 2019– 21 |
HC 707 |
|
4th Special Report |
Digital trade and data: Government Response to the Committee’s First Report |
HC 831 |
|
5th Special Report |
Inward Foreign Direct Investment: Government Response to the Committee’s Third Report |
HC 921 |
|
6th Special Report |
UK Export Finance: Government Response to the Committee’s Second Report |
HC 965 |
|
Number |
Title |
Reference |
|
1st Report |
The COVID-19 pandemic and international trade |
HC 286 |
|
2nd Report |
UK-Japan Comprehensive Economic Partnership Agreement |
HC 914 |
|
3rd Report |
UK trade remedies policy |
HC 701 |
|
4th Report |
UK freeports |
HC 258 |
|
1st Special Report |
The COVID-19 pandemic and international trade: Government Response to the Committee’s First Report of Session 2019–21 |
HC 815 |
|
2nd Special Report |
UK-Japan Comprehensive Economic Partnership Agreement: Government Response to the Committee’s Second Report of Session 2019–21 |
HC 1163 |
1 Constitutional Reform and Governance Act 2010, section 20. This provision is subject to the right of a Minister to ratify a treaty without meeting the requirements of section 20 in exceptional circumstances (under section 22), and limitations on the treaties to which section 20 applies (under section 23).
2 Agriculture Act 2020, section 42(2)
4 Rt Hon Elizabeth Truss MP to Angus Brendan MacNeil MP, 30 July 2021
5 Exchange of letters between Lord Grimstone and Baroness Hayter, 19 May 2022
6 Exchange of letters between Lord Grimstone and Baroness Hayter, 19 May 2022
7 Rt Hon Anne-Marie Trevelyan MP to Angus Brendan MacNeil MP, 11 January 2022
8 Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 21 January 2022
9 Rt Hon Mark Spencer MP to Angus Brendan MacNeil MP, 13 June 2022
10 Rt Hon Anne-Marie Trevelyan MP to Angus Brendan MacNeil MP, 14 June 2022
11 Votes and Proceedings, 15 June 2022, p 11
12 Free Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and New Zealand, February 2022
13 Rt Hon Anne-Marie Trevelyan MP to Angus Brendan MacNeil MP, 22 April 2022
14 Tate & Lyle Sugars (AUS0042) covering letter
15 Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 31 March 2022; Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 14 April 2022; Oral evidence taken on 27 April 2022, HC (2021–22) 128, Q119; Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 5 May 2022; Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 12 May 2022; Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 31 May 2022; Rt Hon Anne-Marie Trevelyan MP to Angus Brendan MacNeil MP, 14 June 2022; Angus Brendan MacNeil MP to Rt Hon Anne-Marie Trevelyan MP, 15 June 2022
16 Rt Hon Anne-Marie Trevelyan MP to Angus Brendan MacNeil MP, 14 June 2022
17 Rt Hon Anne-Marie Trevelyan MP to Rt Hon Sir Lindsay Hoyle MP, 3 December 2021
18 Giving evidence to select committees: guidance for civil servants (‘The Osmotherly Rules’) October 2014, para 65
19 Environment, Food and Rural Affairs Committee, First Report of Session 2022–23, Australia FTA: Food and Agriculture, HC 23