The Chair of the International Trade Committee, , has called on the
new Secretary of State for International Trade to urgently address
gaps in the information provided to Parliament regarding the
‘roll-over’ of EU Free Trade Agreements (FTAs) after Brexit.
The Government needs to secure ‘roll-over’ of EU free trade
agreements so they apply to the UK after Brexit (for more
information see background, below). Each time it rolls over such
an agreement, it reports this to Parliament with detailed
information, including an assessment of the impact on UK
trade.
Committee analysis of the information laid before Parliament to
date has uncovered a notable gap in the Government’s impact
assessments – regarding the ‘no-deal’ tariffs that it would, in
the event of a no-deal Brexit, apply to imports from countries
with which the UK has no agreement.
A letter sent today (attached) by Mr MacNeil to the new Secretary
of State, , highlights that the
Government has only outlined the impact
of maximumtariffs (set out in undertakings that it
has given to the World Trade Organization). It has not detailed
the impact of the actual tariffs which it
intends to implement under its temporary tariff regime in
case of a no-deal Brexit (which was published in March).
The letter calls upon Ms Truss to explain why the Government has
chosen to omit this crucial information, to confirm if the full
information will be given in future, and asks whether the impact
assessments so far submitted to Parliament will be revised to
include reference to the no-deal tariff.
Commenting on the letter, Mr MacNeil said:
“The Government has stated that, in the case of a no-deal Brexit,
87% of all UK imports will be subject to zero tariffs. This could
adversely affect a number of UK industries, not least agriculture
and several manufacturing sectors.
“If Parliament is to effectively scrutinise roll-over agreements,
and the wider public is to be properly informed of the potential
economic impacts, the Government must lay before us all relevant
information – including a full analysis of the implications of
its post-Brexit tariff policy. Not providing such important
information is either a concerning oversight or, more
concerningly, an intentional omission.
“I look forward to receiving Ms Truss’s explanation of why her
Department is not setting out the full facts, and to hearing
whether she intends to rectify this information gap in the
future.”
Background
The UK is currently party to 40 or so FTAs that the EU has with
some 70 countries, which together account for over 14% of UK
trade. If these are not ‘rolled over’ (i.e. replicated as deals
with the UK) by the time Brexit occurs, and the UK departs on a
‘no deal’ basis, their benefits will cease to apply to UK
businesses. This means that UK companies trading with those
countries will face trade barriers that currently do not apply to
them under the EU agreements. So far, only 12 roll-over
agreements have been signed, with countries accounting for about
6% of UK trade.
On 13 March announced the
Government’s temporary tariff regime in
case of a no-deal Brexit, which would see 87% of imports
from countries with which the UK has no trade agreement subject
to zero tariffs.
The Committee has previously heard that the no-deal tariff regime
could give away the UK’s bargaining position for future
agreements with the countries concerned. The plan for zero
tariffs after Brexit has already adversely affected the
Government’s attempts to roll over EU trade agreements, with the
Canadians declining to replicate their EU agreement since they
know their exports to the UK will not face tariffs anyway. These
concerns were discussed in the Committee’s sessions with the
former Secretary of State, , on 6
March and 3 July 2019.
