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UK policy paper: Preparing for our future UK trade policy


UK policy paper: Preparing for our future UK trade policy

Newington's Caitlin Sweeney and Tiffany Burrows summarise a new policy paper from the Department for International Trade.

Overview

The Department for International Trade (DIT) published a paper setting out the Government’s plans for developing its independent trade policy following the UK’s withdrawal from the European Union. This was released on the same day as a Customs paper from HM Treasury, in what was seen as the Government putting preparations in place to ensure the UK is “ready for the first day after exit”.  Tellingly, the publication of this document from DIT, rather than the Department for Exiting the European Union demonstrates the Government’s separation of its overall future trading policy from its new partnership with the EU.

 Of particular importance is the emphasis that the UK will implement “a new mechanism to investigate cases and propose measures that offer proportionate protections for our producers”. This will allow the UK to conduct trade disputes following its EU departure, as the European Commission will no longer manage these disputes on the UK’s behalf.

Key provisions

The paper is divided into two main sections. The first outlines the world in which the UK currently trades and the role of trade in an economy that “works for everyone”, and the second outlines the basic principles that will shape its future trading framework and approach to trade policy.

  • The paper identifies trade as a key driver of growth and prosperity, linking international trade with creating jobs, higher wages, greater business efficiency and higher productivity. It recognises that although trade has many positive impacts, the benefits are not always felt equally. DIT outlines that it will work with all stakeholders towards ensuring these benefits are spread more widely, and aim for trade policy to be aligned with the Government’s Industrial Strategy.

The overarching aim of the UK’s new trade policy is enhanced economic prosperity for the UK. The Government outlines that the UK will build on its track record of championing free trade by playing a proactive role in the multilateral trading system, alongside expanding existing bilateral trading relationships and taking unilateral action where appropriate.

Principles of UK international trade

  • Trade that is transparent and inclusive;
    • “The devolved administrations will have a direct interest in our future trade agreements” - The UK Government has faced some opposition from the devolved administrations since the referendum result, and this acknowledgement of their role in future talks is an important recognition from central government. The paper also states views will be sought from English regions.
    • In the same vein, the paper states that the Government, in relation to future trade policy, will “continue to respect the role of Parliament and the importance of business and the wider stakeholder community”
       
  • Supporting a rules-based global trading environment
    • “The UK is preparing to take on an even greater role in the WTO outside the EU, but still firmly alongside our partners” - When the UK leaves the EU, it will regain its independent seat at the WTO which will allow it to intensify support for robust free and open international trade rules.
    • The Government “will maintain current levels of market access and keep changes to a technical nature” whilst working with the EU and other WTO Members to ensure a smooth transition.
       
  • Boosting UK trade relationships
    • “Boost our trade relationships with old friends and new allies” – The paper addresses trade with the EU first, examining trade with the rest of the world after. The Government is committed to ensuring that UK and EU businesses can continue to trade freely after the UK leaves the EU.
    • The UK will seek to agree a time-limited implementation period with the EU, during which access to one another’s markets should continue on current terms. The Government intends to pursue new trade negotiations with others during the implementation period.
    • As the UK prepares to leave the EU, the Government will seek to transition all existing EU trade agreements and other EU preferential arrangements to ensure certainty and stability in trade and investment relationships.
    • The UK will look to secure greater access to overseas markets for UK goods exports and will push for greater liberalisation of global services, investment and procurement markets.
       
  • Supporting developing countries to reduce poverty
    • “The UK remains committed to ensuring developing countries can reduce poverty through trading opportunities” - The UK will provide preferential access to developing countries.
       
  • Ensuring a level playing field – a UK approach to trade remedies and trade disputes
    • “Free trade does not mean trade without rules” - This statement relates to a number of assertions made by critics of the UK’s exit from the EU, that the decision will allow the Government will pursue an agenda of ‘trade at any cost’.
    • To operate an independent trade policy the UK will need to put in place a trade remedies framework which will be implemented by “a new mechanism to investigate cases and propose measures that offer proportionate protections for our producers”.
    • By the time the UK leaves the EU, it must be ready to act independently to protect UK interests should trading partners fail to meet their international obligations.

Analysis

Given the International Trade Secretary Rt. Hon Dr Liam Fox MP’s (Con, North Somerset) visibility during the referendum campaign and as the champion for free trade, it is not surprising that the policy paper relating to the Trade Bill is banging the drum for “Global Britain”. The paper sets out that the UK, setting its own independent international trade policy, will be able to branch out and broaden its trading horizons, in a way Brexiteers feel the UK has been restricted from doing so in the past as a member of the EU.

 In setting out how the UK will trade in the future, the paper addresses concerns that have been voiced since the UK voting to leave the EU about ‘free trade at any cost’ by reaffirming the UK’s commitment to “maintain a high level of protection for intellectual property, consumers, the environment, and employees”. The paper also consistently refers to the Prime Minister’s speech in Florence, with the suggestion that the UK Government has adopted an approach to negotiating with the EU that will provide certainty and stability to businesses.

Next steps

The government is welcoming views on all aspects of its position on international trade, particularly on the UK’s commitments to an inclusive and transparent trade policy; the UK’s approach to unilateral trade preferences, and its approach to trade remedies (deadline 6 November via [email protected] ). The Government will soon be issuing a call for evidence to identify which existing trade remedy measures have a UK interest, and will be holding a series of subject-specific roundtables, debates and Chatham House discussion groups.

 If you would like to speak to Newington about how your business could best outline its position to the Government please get in touch with our dedicated Brexit team at [email protected] or call Lizzy Roberts on 020 7234 3332.

The fifth round of negotiations concluded last week (12 October). Progress will be reviewed at the European Council summit taking place next week on the 19 and 20 October.

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