Switzer, Stephanie

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Switzer, Stephanie (2018) Brexit and the Trade Bill : The Civil Society Brexit Project. [Report] , This version is available at https://strathprints.strath.ac.uk/66152/Strathprints is  designed  to  allow  users  to  access  the  research  output  of  the  University  of Strathclyde. Unless otherwise explicitly stated on the manuscript, Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Please check the manuscript for details of any other licences that may have been applied. You may  not  engage  in  further  distribution  of  the  material  for  any  profitmaking  activities  or  any commercial gain. You may freely distribute both the url (https://strathprints.strath.ac.uk/) and the content of this paper for research or private study, educational, or not-for-profit purposes without prior permission or charge. Any correspondence concerning this service should be sent to the Strathprints administrator: strathprints@strath.ac.ukThe Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archive of University of Strathclyde research outputs. It has been developed to disseminate open access research outputs, expose data about those outputs, and enable the management and persistent access to Strathclyde's intellectual output.The Trade BillAs a Member of the EU customs union and of thesingle market, the UK does not have an independenttrade policy. Instead, this is “largely determined bythe EU.” By dint of its membership of the EU, the UKis party to a large number of trade agreements and isrepresented at the World Trade Organisation (WTO)by the EU. Upon the exit of the UK from the EU,responsibility for trade agreements and policy willreturn to the UK. As part of the process of preparing for exit from theEU and in respect of matters relating to trade, thegovernment introduced a Trade Bill in November2017. The Bill aims to ensure continuity of itsexisting trade relationships with countries withwhich the EU has an existing trade agreement. TheTrade Bill does not, however, deal with new tradeagreements or with future UK-EU relations. TheTrade Bill has cleared the House of Commons andwill be debated by the House of Lords in September2018. What are the aims and functions of the Trade Bill?e ‘roll over’ of provisions of existing tradeagreements of which the UK is already a partythrough its membership of the EU.• The EU is currently party to around 65 tradeagreements. The UK will cease to be a party tothese agreements when it leaves the EU (though seeArticle 124 (1) of the draft Withdrawal Agreementbetween the UK and the EU).• e UK Government’s aim is to ensure continuityin its existing trade agreements. This will requirereplication, as far as possible, of the existing termsof trade agreements to which the UK is currently aparty through its membership of the EU. Whilethese agreements will be similar to the current EU-third country agreements, “they will, nevertheless,be legally distinct.” • Clause 2 (1) of the Trade Bill enables secondarylegislation to be used to secure the implementationof trade agreements, provided they were signedbefore exit day. According to the Delegated PowersMemorandum, “The power is broad enough toallow implementation of substantial amendments,including new obligations.” The Civil Society Brexit Project: InformationBREXIT AND THE TRADE BILLAbout the Civil Society Brexit ProjectThe Civil Society Brexit Project is a collaboration between the Scottish Universities Legal Networkon Europe (SULNE) and the Human Rights Consortium Scotland, funded by the LegalEducation Foundation. We give information, insight and independent advice to makesure that organisations in Scotland are able to influence Brexit as much aspossible. The Project will also help organisations to prepare for Brexitconsequences for themselves or their beneficiaries.www.hrcscotland.org/brexitWho is this Civil Society Brexit Project: Information for?This briefing is written for civil society organisations working in Scotland. For more information, contact hrcscotland@gmail.comThe Civil Society Brexit Project: InformationBREXIT AND THE TRADE BILL2• The Clause 2 power will be used where changes areneeded to a trade agreement or it has not been fullyimplemented prior to exit day. It is anticipated thatcertain existing trade partners may ask for changesto be made to existing agreements. In any case, inrespect of free trade agreements, rules of origin willneed amended. Clearly, a simple ‘copy and paste’of existing agreements is unlikely. • The type of trade agreement covered by the TradeBill includes not only free trade agreements (asdefined under WTO law) but also “an internationalagreement that mainly relates to trade, other than afree trade agreement” (Clause 8 (1)). Thisdefinition is undoubtedly vague, and indeedsomewhat broad, but it is clear from theExplanatory Notes that it includes ancillaryagreements such as mutual recognitionagreements. e expansiveness of this deinitionis potentially problematic as a large number ofagreements could potentially fall within itsscope.• Parliament needs to be informed where theseClause 2 (1) powers are exercised to implement theprovisions of a free trade agreement. A reportdetailing any significant differences – as well as thereasons for such differences – between the trade-related provisions of the existing free tradeagreement and the trade-related provisions of theagreement to be implemented must be laid beforeParliament at least 10 Commons sitting days beforethe draft of the statutory instrument is introduced(Clause 5 though see Clause 3 (3)). This reportingobligation is quite narrow; it applies only in respectof the “trade-related provisions” of the proposedagreement (Clause 5 (2)). A similar reportingobligation exists under Clause 3 where a proposedfree trade agreement with an existing pre-exit daypartner needs to be ratified. This reportingrequirement does not apply in exceptional cases(Clause 4).• The reporting obligation outlined above does not,however, require the sort of ‘explanatorystatements’ on appropriateness and equalitiesapplicable to certain delegated legislation enactedunder the European Union (Withdrawal) Act (Schedule 7, para 28). Accordingly, as it currentlystands, delegated legislation enacted under theTrade Bill would potentially be subject to adiﬀerent and less rigorous procedure than thatapplicable under the European Union(Withdrawal) Act 2018.• Of note is that the powers set out under Clause 2(1) of the Trade Bill only apply to non-tariffmeasures (Clause 2 (4). Tariffs and relatedmeasures will be dealt with by the Taxation (Cross-Border Trade) Bill (the so-called Customs Bill). • While it was initially expected that the UK wouldaim to transition existing trade agreements to takeeffect on exit day, the draft Withdrawal Agreementbetween the UK and the EU anticipates that theUK will be treated as if it were an EU Member Statefor the purposes of trade agreements during thetransition period (Article 124 (1)). Such anarrangement is, however, reliant upon the finalterms of the Withdrawal Agreement being agreedbetween the UK and the EU. In any case, the timelimit for regulations to be enacted under Clause 2(1) is three years from exit day though this periodmay be extended for periods of up to three years(see Clause 2 (7) and (8)).Membership of the WTO Government ProcurementAgreement • Clause 1 of the Trade Bill provides powers for theUK to make the legislative changes necessary toenable it to become a member of the WTOGovernment Procurement Agreement (GPA) in itsown right. The GPA is a WTO agreement betweenthe EU and 18 other countries which aims to,‘mutually open government procurement marketsamong its parties.’ The UK is currently a memberof the GPA through its membership of the EU andso requires to, in effect ‘re-join’ as an independentmember.• This aspect of the Trade Bill is only subject tonegative procedure -that is, it is not given fullparliamentary scrutiny and debate. Establishment of the Trade Remedies Authority • The Bill seeks to establish a Trade RemediesAuthority (TRA). Trade remedies may be employedby countries to counteract unfair trade practicesThe Civil Society Brexit Project: InformationBREXIT AND THE TRADE BILL3such as dumped or subsidised imports. After Brexit,the UK will require to conduct its own investigationsso as to implement trade remedies such ascountervailing duties and anti-dumping duties. • The Trade Bill, which should be read inconjunction with the Customs Bill, provides detailon the composition and function of the TRA. A system for the collection and disclosure of tradeinformation by HMRC • The Trade Bill would also permit the HMRC tocollect and share trade information in certaincircumstances (Clause 11 and Clause 12). What concerns, if any, have been raisedregarding the Trade Bill? Numerous concerns have been expressed regardingthe Trade Bill. These concerns very much echo thewider debate regarding the UK’s trade policy post-Brexit. Question marks remain, for example,surrounding the use of delegated powers, theinvolvement of Parliament in the development oftrade policy, as well as the role of devolvedadministrations and civil society more generally inshaping such policy. Extent of powers• There is considerable concern about the extent towhich secondary legislation could be used tomodify retained direct EU law as well as primarylegislation that is retained EU law (see Clause 2 (5)(a)). This could include key areas of social policy.As noted by the Equality and Human RightsCommission, primary legislation could beamended that, “contain(s) many fundamentalrights, among which are likely to be: worker’srights, rights concerning information privacy anddata protection, equality and non-discrimination,rights and responsibilities to act in the bestinterests of children, rights of older people, theinclusion of disabled people, access to health,education and social protection, consumer rights,environmental protection and rights to protectionagainst trafficking, slavery and forced labour.” Parliamentary scrutiny• The Trade Bill has been the subject of extensivecriticism regarding the proposed lack ofparliamentary scrutiny. For example, it was initiallyproposed that secondary legislation on changes totrade agreements would only be subject to negativeprocedure. Under the negative procedure, astatutory instrument will become law withoutdebate and will only cease to be law if there is anobjection from a House within a specified time.Use of this scrutiny-light procedure was justifiedon the basis that existing trade agreements hadalready been subject to extensive scrutiny. However,this flew in the face of the acknowledgement thatthe Clause 2 (1) powers were “broad enough toallow implementation of substantial amendments,including new obligations.” An amendment wastherefore introduced and accepted at theCommons to ensure regulations are subject togreater scrutiny through use of the affirmativeprocedure, whereby both Houses have to activelyagree to the regulations. • e introduction of the aﬃrmative proceduredoes not, however, remedy the fact thatparliamentary scrutiny comes at the end – ratherthan the beginning – of the negotiating process.There is nothing within the Trade Bill onParliament’s role in respect of setting negotiatingmandates. The Trade Bill is also silent on scrutinythroughout the negotiating process of relevantagreements. As a response to such concerns, a newClause 3 to the Bill was proposed by Caroline LucasMP. This would have required a sustainabilityimpact assessment to be conducted in respect of allfree trade agreements. The significance of thisproposal stems from the fact that modern tradeagreements cut across areas such as labour law andenvironmental law. Accordingly, existingprotections in these areas may potentially be at riskto the extent that concessions are sought fromexisting trade partners. The proposed amendmentwould also have provided a much more substantialrole for Parliament in the scrutiny of negotiationsof agreements and in giving consent to suchagreements. This amendment was, however,defeated in the Commons. The Civil Society Brexit Project: InformationBREXIT AND THE TRADE BILL4Devolution aspects• Similar to above, there is also nothing in the TradeBill about the Scottish Parliament’s role orcontribution in respect of setting negotiatingmandates or scrutinising throughout thenegotiating process. Treaty making and trade are byand large reserved areas, though many aspectsimpact upon devolved competencies.• As with the European Union (Withdrawal) Act, theTrade Bill also raises complex and sensitive issuesof devolved competence. In that regard, therestrictions to legislative competence introduced bythe European Union (Withdrawal) Act are largelymirrored in the Trade Bill – you can read more inthe Civil Society Brexit Project briefing on this Acthere. The legislative competence of the devolvedauthorities under the Trade Bill is also significantlynarrower than that of UK Government Ministers.The Scottish Government has recommended thatParliament withhold legislative consent in respectof the Bill (as it was originally introduced). What happens next?The Trade Bill has cleared the House of Commonsand will be debated by the House of Lords inSeptember 2018. A number of amendments whichwere not considered during the Commons stage willlikely be considered by the Lords. Devolution issuesand parliamentary scrutiny are likely to be to the foreof debate in the Lords. The Scottish Parliament Finance and ConstitutionCommittee has also taken evidence on a legislativeconsent motion for the Trade Bill and is expected topublish their conclusions in Autumn 2018. Stephanie SwitzerWHERE CAN I GET MORE INFORMATION?If there is any aspect of the briefing or a particular issue around Brexit where you would like moredetailed advice or information, we are happy to help! Please get in touch with us athrcscotland@gmail.comThere is also information available online at www.hrcscotland.org/brexit

Brexit and the Trade Bill : The Civil Society Brexit Project

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Brexit and the Trade Bill : The Civil Society Brexit Project

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