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This publication is available at https://www.gov.uk/government/publications/trade-bill/trade-bill
The Trade Bill was introduced on 19 March 2020. The legislation is an important element of the UK’s independent trade policy now we have left the EU.
It contains key measures that will deliver for UK businesses and consumers across the UK, providing continuity and certainty as we take action to build a country that is more outward-looking than ever before.
- agreement on government procurement – ensuring the UK is able to implement its obligations as an independent member of the Agreement on Government Procurement (GPA). Opportunities covered by the GPA market are estimated to be worth £1.3 trillion per year across the 20 parties to the agreement
- implementation power – the implementation power is a measure intended to enable the UK to ensure that all elements in trade continuity agreements can be fully implemented in domestic law (via secondary legislation) over time and in all circumstances
- trade remedies – establishing a new independent UK body – the Trade Remedies Authority (TRA) – to protect UK businesses from injury caused by unfair trade practices or unforeseen surges in imports
- data collection and sharing – ensuring the UK government has the legal abilities for gathering and sharing trade information
Explaining the Trade Bill
Government procurement agreement
The GPA is an agreement between 20 parties, comprising 48 World Trade Organization (WTO) members.
The GPA aims to mutually open government procurement amongst its parties. This provides UK businesses with access to public procurement opportunities worth approximately £1.3 trillion per year, as well as facilitating access to UK public contracts covered by the GPA to bidders from GPA parties, ensuring taxpayers and consumers get the best value for money.
The UK will accede to the GPA as a member in our own right at the end of the transition period.
The Trade Bill provides delegated powers to implement the UK’s obligations as an independent member of the GPA into domestic procurement law. It also allows the UK to update the list of UK central entities covered by the UK’s market access offer, alongside parties joining and withdrawing from the GPA.
International trade agreements – maintaining trade arrangements with other countries
To ensure continuity for businesses and consumers, the government is transitioning existing EU-third country free trade agreements into UK agreements with those third countries. These free trade agreements are referred to as trade continuity agreements.
The implementation power in the Trade Bill is a measure intended to enable the UK to ensure that procurement and mutual recognition provisions in these agreements can be fully implemented in domestic law (via secondary legislation) over time and in all circumstances.
The powers can only be used to implement those trade continuity agreements where a third country had signed an equivalent trade agreement with the EU before 31 January 2020. Consequently, the Trade Bill cannot be used to implement a future free trade agreement with countries which do not have a free trade agreement with the EU, such as the USA.
Any secondary legislation required to implement a trade continuity agreement will be subject to the affirmative procedure, requiring a debate, in both Houses. In addition, the government has introduced a 5-year sunset provision that can only be extended for further periods with the agreement of both Houses.
Trade Remedies Authority
The government supports free trade, but this does not mean trade without rules. Under the WTO, members are able to protect domestic producers from injury caused by unfair trade practices or unforeseen surges in imports, through trade remedy measures.
These trade remedy measures can include applying additional duties or quotas to specific goods where:
- imported goods are ‘dumped’ – that is exported at prices lower than the prices of the same goods in the domestic market of the exporters, or less than the full cost of production plus a reasonable profit, and which materially injure the domestic industry of the importing country. These measures are known as anti-dumping duties
- imported goods have benefited from a financial contribution by a foreign government or public body. These measures are known as anti-subsidy, or countervailing, measures
- there has been an unforeseen surge of ‘fairly’ traded imports which seriously injure the domestic industry of the importing country. These measures are known as safeguards
When the UK was a member of the EU, trade remedy matters were handled by the EU Commission. Now the UK has left the EU, the UK will operate our own trade remedies system. The Trade Bill provides for the establishment of an independent Trade Remedies Authority to undertake this work.
Data sharing and collection
The data collection power within the Trade Bill will further assist the government in identifying those businesses who export. This information will assist the department to develop bespoke exporting promotion activities to help businesses of all sizes to take advantage of the opportunities available.
The data sharing measures in the Trade Bill will allow HMRC to share data with UK government departments and agencies that need to have access to the information in order to carry out a range of public functions relating to trade, allowing them to undertake functions formerly carried out by the European Commission.
The Trade Bill will not take any powers away from the devolved administrations. Every decision that a devolved administration could make before exit day, they can make afterwards.
The powers in the Trade Bill can only be used to implement non-tariff elements of transitionally adopted trade agreements.
The bill focusses on continuity of existing agreements the EU has signed with third countries before exit day and that we are party to due to our membership of the EU. These agreements have already been subjected to a scrutiny process at EU level, which involves scrutiny by member state legislatures, such as our own. This was overseen in the UK by Parliament’s EU select committees.
The powers in the Trade Bill cannot be used to implement future free trade agreements with countries such as USA and China.
Concurrent powers and legislative consent motions (LCM)
The concurrent powers contained in the Trade Bill allow for regulations to be made once for the whole of the UK, where it makes practical sense to do so.
An example is the case of the EU Enforcement Regulation which governs the exercise of EU rights for the application and enforcement of international trade rules, including the Agreement on Government Procurement Agreement (GPA). The GPA power will allow the UK to amend the EU regulation to ensure that it can implement the outcome of a GPA dispute.
The UK government will not normally use the concurrent powers in areas of devolved competence without the agreement of the relevant devolved administrations, and never without consulting them first.
The use of concurrent powers has been a feature since the devolution settlements of the late 1990’s. Concurrent powers were used to implement EU law via the European Communities Act 1972, before this legislation was repealed by the European Union (Withdrawal) Act 2018.
Because the implementing powers in the Trade Bill relating to transitionally adopted trade agreements and the GPA could be used in areas of devolved competence, legislative consent from the devolved legislatures will be sought for the clauses in the Bill providing for these powers.
The legislation increases the degree to which the devolved administrations can amend areas of retained EU law using the Trade Bill powers. The only limitation on the devolved administrations’ ability to use powers in the Trade Bill to amend retained EU law is in respect of those areas where a common UK wide approach is desirable and then only if a Section 12 SI (from the EU Withdrawal Act) has been laid.
The Scottish Parliament and the Welsh Assembly will each publish a memorandum setting out their views on whether the Parliament should provide an LCM for the Trade Bill.
Whilst international relations is a reserved matter for the UK government, paragraph D4.22 on page 59 of the Concordat on International Relations sets out that devolved executives and legislatures may be involved in the treaty-making process and implementation. The UK government has signed treaties on many policy areas, such as terrorism and extradition and human rights, and implemented them UK-wide to ensure a consistent approach.
Agreement on Government Procurement (GPA)
- the GPA provides procurement opportunities to a market worth an estimated £1.3 trillion a year to UK businesses
Trade continuity agreements
- by the time the Withdrawal Agreement was signed we had successfully concluded and signed continuity agreements with 48 countries
- the government continues work with trading partners to transition our remaining agreements and ensure continuity for UK businesses following the transition period
Find further information on existing UK trade agreements with non-EU countries.
Trade Remedies Authority
- the EU currently has over 100 trade remedies measures in place against around 25 countries which affect an estimated 0.5% of EU imports. The UK is transitioning over 40 of these measures.