A fully functioning TRA is critical to ensuring a robust post-Brexit trade defence regime, but with the Government’s Trade and Customs Bills – which provide for the TRA’s creation and empower it to conduct trade defence investigation and recommend the imposition of trade defence measures (TDMs) – lacking sufficient detail and timescales becoming increasingly constrained, the magnitude of the task should not be underestimated.
Serious concerns about the Trade Remedies Authority being established
Launching the report, Committee Chair Angus Brendan MacNeil MP said:
"Developing an independent trade policy is an inherently complex exercise, whatever the circumstances.
The need to establish new trading relationships must be balanced against the requirement for a robust trade defence regime, capable of protecting domestic industries against unfair trading practices.
Establishing a world-class, independent Trade Remedies Authority should be high on the Government’s trade to-do list. However, the task has been made even more complex by the Department for International Trade’s familiar foe: time.
With March 2019 fast approaching, we have identified serious concerns about whether the TRA can be established, appropriately resourced, and fully operational by the Government’s self-imposed deadline.
The availability of qualified people to staff for the TRA, the appointments process and overall structure, insufficient safeguards of the TRA’s independence and the lack of a fully transparent appeals system are all areas where much more remains to be done.
Fortunately for the Government, many of changes required in order to address these concerns and ensure successful establishment of an independent TRA could still be included its Trade and Taxation (Cross-border Trade) Bills, and Parliament stands ready to play its part in developing this critical aspect of future trade policy."
Capacity and delivery
The Committee requires urgent assurance that the TRA will be fully operational by the Government’s March 2019 deadline.
At current levels of progress, witnesses rated the Government’s chance of meeting its deadline as “red” and “amber”.
The TRA’s establishment must be advanced as a matter of priority, particularly when it comes to appointing the TRA board, but this should not come at the expense of the appropriate parliamentary scrutiny of both the Trade and Customs Bills.
In addition, the inherently complex and resource-intensive nature of both trade defence investigations and uncertainty over whether the UK could legally ‘grandfather’ the EU’s existing TDMs without conducting new investigations raises further questions about the TRA’s capacity, and its likely opening workload.
TRA appointments and structure
Greater scrutiny of the appointments process for TRA Board members, including a right for the International Trade Committee to approve the proposed appointee to the positions of Chair, is required.
The Committee also expects to conduct a pre-appointment hearing for the proposed candidate of Chief Executive.
The Committee also notes the Secretary of State’s intention to appoint a Chair before having the statutory power to do so – in this case in particular, Parliament must be allowed to have its say.
The Government must give further consideration to the proposed size of the TRA (nine members), and the need for diversity amongst in membership, both in terms of experience and expertise.
At a minimum, clear guidelines are required on the independence of TRA Board members and their role in the decision-making process regarding TDMs.
Functions of the TRA
The Committee is concerned that the powers of the Secretary of State under the Trade Bill and overlaps in the proposed duties of the Secretary of State and TRA with regards to trade defence investigations could make it more difficult for the TRA to perform its functions independently.
Whilst trade defence is “a highly politicised area”, the TRA’s credibility “depends on its ability to perform its functions independently, free from political interference.” For the Committee, this principle is “inviolable”.
Of particular concern is the requirement that both the TRA and Secretary apply an economic interest test when deciding whether to recommend or impose TDMs.
It would be wrong in principle for the TRA reject a measure on this basis as doing so involves making an essentially political decision.
As such, the Government should bring forward amendments to the Customs Bill to remove this obligation as it pertains to the TRA.
Transparency and Review: Appeals
The integrity and credibility of the UK’s future trade defence regime depends on the openness and transparency with which decisions are made and reviewed.
Key concepts which will inform the transparency of the UK’s future regime are still missing from the Bills, such as how TRA decisions will be reported and how the TRA will calculate the existence of both dumping and injury.
Clear guidelines on these subjects are needed.
A further crucial troubling issue is that of an appeals mechanism.
Under WTO law, countries are required to have an appeals process against decisions to impose TDMs.
However, neither the Trade nor the Customs Bills contains provisions detailing the UK’s future appeals mechanism.
Whilst Minister of State for Trade Policy assured the Committee in writing that there will be some form of appeals mechanism, “it is constitutionally inappropriate for Ministers to determine such a mechanism in regulations without parliamentary scrutiny”. These are matters for Parliament to decide in primary legislation.
Accordingly, the Committee calls for the Government to bring forward amendments to the Trade and / or Customs Bills provide for an ‘on the merits’ appeals mechanism administered by a specialist tribunal.