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Analysis

Brexit Trade Bill is ill-defined power grab

by Luke Lythgoe | 09.11.2017

Trade secretary Liam Fox says his new Trade Bill merely provides “continuity” which will “guarantee stability” and give business “as much certainty as possible”. But this vaguely worded piece of Brexit legislation could give ministers much broader powers than that – and without Parliament getting a say.

“The ministerial power grab is fast becoming this government’s standard MO,” said Labour MP and Open Britain supporter Chris Bryant as the Bill was tabled on Tuesday.

Like the EU Withdrawal Bill before it, the Trade Bill grants ministers so-called “Henry VIII powers” allowing them to amend existing EU treaties with other countries, without further parliamentary scrutiny.

One huge problem with the Bill is it gives ministers powers to “implement” these existing treaties. But what exactly does “implement” mean? The term is undefined, giving the government potentially vast unchecked powers.

Another problem is that these powers could cover a very large number of treaties. Research by the FT revealed the UK will need to renegotiate as many as 759 EU deals after Brexit. That’s a huge task which needs to be done efficiently and effectively, but doing it via ministerial decree is not the way. Brexiters promised to take back control for Parliament. MPs must be involved in deciding which modifications of these treaties can be left to ministers and which require full parliamentary debate and new legislation.

What’s more, the Bill grants these powers for five years after Brexit, with the opportunity for ministers to extend them for another five. This is interesting in itself, suggesting Fox doesn’t really believe his own promises that this will be a speedy process.

Fox is wrong to suggest it’s a simple case of “rolling over” existing deals. For example, rules of origins would have to be changed in the EU’s free trade agreement (FTA) with South Korea. That’s a big deal for the UK’s automotive industry. And if the UK starts trying to renegotiate in its own interests, won’t other countries try to do the same? The government could start renegotiating significant chunks of FTAs without any parliamentary oversight.

And what about our World Trade Organisation membership or that of the European Economic Area (EEA)? It would be unacceptable for these massively important deals to be modified by decree.

The EEA case reveals another deficiency. The agreement allows us to do lots of free trade with Norway. But to keep this going outside the EEA would require a brand new FTA – something which can’t be done under this Bill. Fox is therefore not even providing the continuity he promises.

What about less conventional trade deals? The Bill covers any international agreement that “mainly relates to trade” of which the EU was a signatory before exit day. The government admits this definition would include mutual recognition of, for example, safety standards. But what about the rest of those 759 agreements – on everything from airlines operating in the US to nuclear safety? It could be argued that this Bill gives ministers power over all of this for many years to come.

The government has produced another pig’s ear of a bill, involving the same ill-defined power grab as its shambolic EU Withdrawal Bill. It is setting itself up for further time-consuming confrontations with MPs. Will it ever get a grip?

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Edited by Hugo Dixon

One Response to “Brexit Trade Bill is ill-defined power grab”

  • “For example, rules of origins would have to be changed in the EU’s free trade agreement (FTA) with South Korea. That’s a big deal for the UK’s automotive industry.”

    Luke, I’m actually a pragmatic remainer, but really you’re embarrassing yourself here.

    To clarify, I, a Brit, work at one of South Korea’s biggest conglomerates.

    But back to the article, the only thing that separates this assertion from any of the nonsense from Gove, Farage or BoJo is that, presumably, you were hoping that the relative obscurity of the ‘issue’ meant nobody would bother to question it.

    Giving you the benefit of the doubt, I’ll assume you don’t know that many of the ‘Korean’ cars, ie Kia or Hyundai, which are sold in the UK are actually manufactured in the EU (Czechia or Slovakia), and that many of the ‘British’ cars sold are actually made in Mexico, Range Rover, Land Rover, etc.

    This scenario isn’t just limited to the automotive industry either.

    LG and Samsung also manufacture or finish products in the EU to be sold in the UK.

    So clearly a deal on rules of origin, even before considering anything else, is in the economic interest of both parties and will be relatively straightforward.

    Most likely the problematic issues will be services and agricultural exports, imo.

    The South Korean economy is heavily dependent on exports.

    The UK economy is not.

    The UK is South Korea’s biggest export destination in the EU, even ahead of Germany. By contrast, South Korea isn’t even one of the UK’s top 5 export destinations in Asia.

    But more than that, the South Koreans see the UK as a key strategic ally and partner (its relationship with France has been tarnished by French hubris and diplomatic failures, whereas Germany is a direct competitor).

    The UK is one of the only Western countries to maintain diplomatic ties with North Korea (as does Germany). And it played a considerable part in the Korean War too, UK diplomatic clout elsewhere too also makes it an important ally, the AIIB, the P5, the G7, etc.