Agreements reported for information
Agreement No.2 in the form of an Exchange of Letters between the United Kingdom of Great Britain and Northern Ireland and Ukraine amending the Political, Free Trade and Strategic Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland and Ukraine
Agreement in the form of an Exchange of letters between the United Kingdom of Great Britain and Northern Ireland and the Republic of North Macedonia amending the Partnership, Trade and Cooperation Agreement between the United Kingdom of Great Britain and Northern Ireland and the Republic of North Macedonia
1.Amendment No.2 to the UK-Ukraine Partnership Agreement3 and UK-North Macedonia amendment to the Partnership, Trade and Cooperation Agreement4 were laid before Parliament in accordance with Section 20 of the Constitutional Reform and Governance Act on 23 May 2023. The scrutiny period will end on 5 July 2023. The Agreements were considered by the Committee at its meeting on 29 June 2023.
2.Because of the similarities between the amendments and their simultaneous notification to Parliament, we have considered these Agreements together.
Background to the Agreements
3.The parent Agreements subject to the amendments are respectively the UK-Ukraine Political, Free Trade and Strategic Partnership Agreement5 and the UK-North Macedonia Partnership, Trade and Cooperation Agreement.6 Both Agreements came into effect on 1 January 2021, following the end of the Brexit transition period.
4.The Health and Care Act 2022 (the Act)7 aimed to “free” the NHS from “overly rigid” procurement requirements.8 The Act created a separate procurement regime in England for clinical healthcare services, and thus removed these services from the scope of the UK’s domestic procurement regulations.9 This means that when NHS healthcare commissioners are procuring certain healthcare services, they are not obliged to undertake an open competitive tendering process.
5.The parent Agreements with both countries ensure that rules in relation to procurement are no less favourable than those enjoyed by UK suppliers. Following the changes to the domestic procurement regime made by the Act, both countries agreed to make changes to their respective trade agreements with the United Kingdom.
The Agreements
6.The new arrangements amend the UK’s trade agreements with Ukraine and North Macedonia by excluding four categories of clinical healthcare from the procurement rules in the current agreements. These are human health services, administrative healthcare services, supply services of nursing personnel, and supply services of medical personnel. This is to protect the Government’s capability to develop and deliver policy for domestic healthcare reform. The amendments do not mean there is any blanket exclusion of the procurement of clinical healthcare services from companies in these countries.
7.The Ukraine amendment will additionally align the procurement chapter of the UK-Ukraine Partnership Agreement more closely with the World Trade Organisation (WTO) Government Procurement Agreement10 (GPA) by amending the relevant financial thresholds so that they are denominated in Special Drawing Rights11 rather than Euros.12 Linking them directly to the GPA simplifies future updates, rather than, as before, matching the EU’s thresholds as they applied to the EU and Ukraine.13
Final Provisions
8.Each Agreement will enter into force on the date of the second notification that both parties have completed their internal requirements. No implementing legislation is required in the United Kingdom for the Agreements to enter into force.
9.The amendments apply only to the United Kingdom as the procurement chapters of the Ukraine and North Macedonia trade agreements do not apply to Gibraltar or the Crown Dependencies. The Devolved Administrations have been consulted on the amendments.
10.While welcoming these Agreements, we ask the Government to clarify whether any trade agreements with other countries will need similar amendments to ensure the alignment of international trade policy with the UK’s domestic healthcare procurement laws.
11.We report these Agreements to the House for information.
3 Foreign, Commonwealth and Development Office, UK/Ukraine: Agreement No.2 in the form of an Exchange of Letters amending the Political, Free Trade and Strategic Partnership Agreement [CS Ukraine No.3/2023] : https://www.gov.uk/government/publications/ukukraine-agreement-no2-in-the-form-of-an-exchange-of-letters-amending-the-political-free-trade-and-strategic-partnership-agreement-cs-ukraine-no [accessed 22 June 2023]
4 Foreign, Commonwealth and Development Office, UK/North Macedonia: Agreement in the form of an Exchange of Letters amending the Partnership, Trade and Cooperation Agreement [CS North Macedonia No.1/2023]: https://www.gov.uk/government/publications/uknorth-macedonia-agreement-in-the-form-of-an-exchange-of-letters-amending-the-partnership-trade-and-cooperation-agreement-cs-north-macedonia-no1 [accessed 22 June 2023]
5 Foreign, Commonwealth and Development Office, Political, Free Trade and Strategic Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland and Ukraine (publishing.service.gov.uk), CP 584 (October 2020): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1046491/TS_1.2022_UK_Ukraine_Political_Trade_Strategic_Partnership.pdf [accessed 22 June 2023]
6 Foreign, Commonwealth and Development Office, Partnership,Trade and Cooperation Agreement between the United Kingdom of Great Britain and Northern Ireland and the Republic of North Macedonia, CP 348 (December 2020): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/942963/CS_N_Macedonia_1.2020_Partnership_Trade_and_Cooperation.pdf [accessed 22 June 2023]
8 HM Government, Health and Care Bill: provider selection and patient choice, 10 March 2022: https://www.gov.uk/government/publications/health-and-care-bill-factsheets/health-and-care-bill-provider-selection-and-patient-choice [accessed 22 June 2022]
9 Foreign, Commonwealth and Development Office, ‘Explanatory Memorandum: UK/Ukraine: Agreement No.2 in the form of an Exchange of Letters amending the Policial, Free Trade and Strategic Partnership Agreement’, para 2.2: https://www.gov.uk/government/publications/ukukraine-agreement-no2-in-the-form-of-an-exchange-of-letters-amending-the-political-free-trade-and-strategic-partnership-agreement-cs-ukraine-no [accessed 22 June 2023]
10 Foreign, Commonwealth and Development Office, Revised Agreement on Government Procurement, CP 52 (February 2019): https://www.gov.uk/government/publications/ms-no112019-revised-agreement-on-government-procurement
11 The Special Drawing Right (SDR) is an international reserve asset created by the IMF to supplement the official reserves of its member countries. The SDR is not a currency but a claim on the freely usable currencies of IMF members. As such, SDRs can provide a country with liquidity. Its value is determined by a weighted basket of notable currencies including the pound, euro and US dollar. https://www.imf.org/en/Topics/special-drawing-right
12 Foreign, Commonwealth and Development Office, ‘Explanatory Memorandum: UK/Ukraine: Agreement No.2 in the form of an Exchange of Letters amending the Policial, Free Trade and Strategic Partnership Agreement’, para 2.1: https://www.gov.uk/government/publications/ukukraine-agreement-no2-in-the-form-of-an-exchange-of-letters-amending-the-political-free-trade-and-strategic-partnership-agreement-cs-ukraine-no [accessed 22 June 2023]
13 Foreign, Commonwealth and Development Office, ‘Explanatory Memorandum: UK/Ukraine: Agreement No.2 in the form of an Exchange of Letters amending the Policial, Free Trade and Strategic Partnership Agreement’, para 4.4: https://www.gov.uk/government/publications/ukukraine-agreement-no2-in-the-form-of-an-exchange-of-letters-amending-the-political-free-trade-and-strategic-partnership-agreement-cs-ukraine-no [accessed 22 June 2023] Full wording: The second amendment is necessary to ensure that the provisions in the Government Procurement Chapter of the Agreement align with the GPA. The first six procurement thresholds were drafted to match the EU’s GPA thresholds as they applied to the EU and Ukraine at the time, however it is simpler for the Agreement to reflect the GPA thresholds directly and for these thresholds to be updated in line with the GPA. The last two thresholds are calculated in the currency of Ukraine rather than that of the EU.