UK–India free trade agreement: Scrutiny of the Government’s Negotiating Objectives Contents

Chapter 3: Government engagement and consultation

101.The Negotiating Objectives state that the Government is “committed to ensuring that our trade policy is transparent and subject to appropriate parliamentary scrutiny” and that after negotiations are launched, it will “continue to work closely with all our stakeholders, including the DAs, to ensure that negotiations with India further the UK’s key interests and brings benefits for the whole of the UK.”116

Negotiating Objectives: too vague and need to be framed within a published trade policy

102.We found the Negotiating Objectives to be very high level and often very vague (as well as overly ambitious at times).

103.For example, the Government says it is seeking “simple rules of origin that reflect UK industry requirements”,117 but does not provide any indication of what these would be. Its approach to mobility schemes and the temporary movement of business people between the UK and India is also unclear. On consumer rights, the Government says it is pursuing “commitments on the protection of core consumer rights”,118 but does not define what it means by “core” rights, nor provide an indication of how this may be achieved. Similarly, the Objectives refer to protections and non-discriminatory treatment for UK investors,119 but do not provide any information on how to meet these aims given the investment difficulties in India. These examples illustrate that the Objectives do not provide sufficiently detailed information, nor acknowledge the challenging context in which they have been set.

104.The Government has yet to publish a comprehensive and overarching trade policy. Although it has articulated its aims and objectives for individual negotiations, these are not embedded within a wider framework, setting out the Government’s priorities for all trade negotiations and how trade complements and supports the Government’s external and domestic policy objectives.

105.In particular, the absence of a published trade policy raises the question as to the impact India’s stance on Russia’s invasion of Ukraine, its refusal to support international sanctions, and indeed increased trade with Russia, may have and should have on the UK-India trade relationship.

Conclusions and recommendations

106.The published Negotiating Objectives are very general, at times overly ambitious and even unrealistic. We call on the Government to provide more detailed and concrete Objectives for future negotiations.

107.We reiterate our recommendation that the Government should publish a trade policy, showing how it links into broader foreign policy, security, defence and other domestic objectives, as well as labour, women’s and human rights, and the environment. This will enable trade policy to be understood in relation to other priorities and enable us to assess the impacts and trade-offs.

Round updates

108.While the Committee has received updates after each of the four negotiating rounds to date, these have been lacking in detail. We have previously raised the issue of the paucity of information in the written updates,120 but there has been a noticeable deterioration in the information for these particular negotiations. The third round update, for example, merely noted that talks had taken place in a hybrid fashion, referring to the Joint Outcome Statement issued by the UK and Indian chief negotiators and public Prime Ministerial announcements.121 The fourth update similarly noted that technical talks had taken place in a hybrid fashion, that the aim was to conclude talks by the end of October, and cross-referred to the Joint Outcome Statement (which did not include information of substance).122 Comments recently provided by the Indian Minister of Commerce to the Financial Times, noting that 11 out of 26 chapters had been agreed between the Parties, are more revealing than what the UK Government has told us.123

109.Other Parliaments receive more detailed information from their executives on the progress of trade negotiations, including those with similar constitutional arrangements, such as New Zealand. Appendix 5 includes a sample update on the India negotiations issued by our Government, which compares unfavourably against a round update provided by the New Zealand Government on FTA negotiations with the UK.

110.We note that, as part of the updates, the then Minister for Investment Lord Grimstone of Boscobel had offered to meet the Committee in private to discuss the negotiations. Timing constraints meant that we were unable to schedule a session with him.

Recommendation

111.While we do not expect the Government to share sensitive negotiating information in a public letter, round updates should at least give an indication of what has been discussed, where progress has been made, and provide a flavour of the obstacles encountered and choices faced by negotiators. The Committee should not have to rely on press reports for this information.

Consultation with the devolved administrations

112.Where matters under negotiation related to devolved competence, as with previous agreements, the devolved administrations were broadly positive about the UK Government’s engagement. They expressed concerns, however, regarding the sharing of information pertaining to areas of reserved competence—particularly where they could have a significant impact on devolved areas and their competences. The Scottish Government told us:

“The broad and increasing scope of modern trade agreements means that they deal with and merge a range of reserved and devolved policy areas and touch on many areas of life. The decisions the UK Government makes on tariffs and tariff rate quotas could have significant impacts on our economy, yet devolved administrations do not see the full UK negotiating mandates or have any role in the decision-making process.”124

113.On tariffs, the Welsh Government specifically suggests that the Government “put in place tools, such as staging or safeguards” to protect sensitive Welsh products,125 while the Scottish Government highlights the projected declines in output for the agriculture, processed food and textile and apparel sectors as a result of competition from India, and raises concerns “about the impact of any agreement on these sectors and the communities they support”.126

114.The Welsh Government raised concerns about pressure to conclude negotiations quickly, noting that the pace of the negotiations has had a detrimental impact on the quality of engagement with the UK Government:

“The pace of delivery for concluding the negotiations has also impacted on the engagement between ourselves and UK government. Although we still remain predominately positive about the engagement we have had to date, the timeframes we have been given to comment during the negotiations has been reduced, and on occasion, we have not been given a meaningful opportunity to discuss elements of the negotiations. It should be noted that this differs to other FTA negotiations where engagement is largely positive and information has been shared in a more timely manner.”127

115.The Scottish Government also raised concerns about the speed of the negotiations and cautioned that these should not be rushed.128

116.The Government’s position is that while they “recognise the importance that the DAs attach to this”, market access negotiations are highly sensitive and that sharing information on tariff liberalisation, particularly in the early stages, could “jeopardise the overall negotiations”.129 Lord Grimstone acknowledged, “I suspect it may never be possible to satisfy them for as long as trade negotiations are a reserved matter”.130

117.We recognise the UK Government’s challenge in balancing the need for confidentiality with keeping the devolved administrations involved, but it is clear that more needs to be done to keep the devolved administrations apprised of progress of those sensitive aspects of trade negotiations (if necessary, in confidence) which will have a direct impact on their devolved responsibilities.

118.We had previously raised with the Department for International Trade the need for both scoping and impact assessments to include more granular detail, particularly on the impacts of an FTA on the devolved nations.131 At his last evidence session with the Committee, Lord Grimstone told us:

“We do think that we have to do more work in the public impact assessments to give a more detailed picture of the potential impacts of trade agreements on the devolved nations. We did a review of our modelling techniques, and our analysts are now considering how they can improve the analysis of impacts of FTAs on the nations and regions of the UK.”132

119.We look forward to receiving improved scoping and impact assessments for future FTAs.

120.We thank the devolved administrations for the evidence they submitted. In the absence of detailed information provided by the UK Government on the discussions it has had with the devolved administrations, it is vital that we hear from them directly. We reiterate our open invitation to the devolved administrations and legislatures to raise with us any issues they consider to be significant.

121.While we accept that the negotiation of trade agreements is a reserved competence, trade agreements will have a significant impact not just on devolved policy areas, but also on devolved economies more generally (even in reserved areas) and interests.

122.We remain concerned about the adequacy of the information shared with the devolved administrations regarding matters that are reserved, such as tariff liberalisation for sensitive goods.

123.We call on the Government to ensure that consultation with the devolved administrations is comprehensive, transparent, detailed and timely, and that their views are represented throughout the negotiations, including on reserved matters that may have an impact on them. The quality of engagement with the devolved administrations must not be compromised by the pace of the negotiations.

124.We welcome that the Government has conducted a modelling review to provide a more detailed sub-national assessment of the impact of FTAs. We look forward to receiving assessments with more detailed information on the impact of FTAs on the nations and regions of the UK.


116 Strategic Approach, p 35

117 Ibid., p 11

118 Ibid., p 15

119 Ibid., pp 13–14

120 See, for example, International Agreements Committee, Scrutiny of international agreements: UK-Australia free trade agreement (4th Report, Session 2022–23, HL Paper 26), para 156

121 Letter from Lord Grimstone to International Agreements Committee Chair, ‘Third round of the UK-India Free Trade Agreement’, 12 May 2022: https://committees.parliament.uk/publications/22467/documents/165584/default/

122 Letter from Lord Grimstone to International Agreements Committee Chair, ‘India FTA Negotiations R4’, 28 June 2022: https://committees.parliament.uk/publications/23105/documents/169213/default/

123 ‘India and UK to seal trade deal in ‘next few months’, minister says’, Financial Times (7 July 2022): https://www.ft.com/content/ba1c2233-8e1d-4c35-bbe3-0a703fcbdc1d [accessed 20 July 2022]

124 Written evidence from the Scottish Government (IND0039)

125 Written evidence from the Welsh Government (IND0038)

126 Written evidence from the Scottish Government (IND0039)

127 Written evidence from the Welsh Government (IND0038)

128 Written evidence from the Scottish Government (IND0039)

129 Oral evidence taken before the International Agreements Committee on 27 April 2022 (Session 2021-22), Q 27 (Lord Grimstone of Boscobel)

130 Ibid.

132 Oral evidence taken before the International Agreements Committee on 27 April 2022 (Session 2021-22), Q 27 (Lord Grimstone of Boscobel)




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