UK Australia & NZ, US UK, Week in London column

Week in London: No steel deal with US for now, Australia deal ratification

The UK is manifestly back of the queue in US trade policy but front of the queue in Australia…

Tai: US will review UK steel tariffs ‘when the time is right’

Hopes of rapid progress to lift US ‘Section 232’ tariffs on UK steel and aluminium exports were dealt a blow this week, after US Trade Secretary Katherine Tai said the Biden administration would consider the UK request for an easing of tariffs “when the time is right”.

Speaking at an online event hosted by the Institute of International and European Affairs on Wednesday (12 January), Tai made clear that the US was in no particular hurry to lift the tariffs on UK steel exports, even though these have now been lifted, and a system of tariff rate quotas created, for imports from the EU .

Moreover, Tai hinted that resolving steel market access issues with Japan may now be viewed as a higher priority in Washington than lifting the tariffs for the UK.

“It’s a matter of pragmatism,” Tai said at the IIEA event. “It took us six months to conclude our negotiations with the EU – and as of last month we have now formally started our discussions on Section 232 tariffs with Japan.”

Speaking of the need to have “a process that makes sense”, Tai offered reassurances that the UK was “very much on our minds” in terms of steel market access.

“I am confident that we will take this up [with the UK] when the time is right,” she concluded.

Tariffs on steel imports from the EU – which then included the UK – were imposed by the Trump administration in 2018 under Section 232 of the US Trade Act, which addresses issues of national security.

As from 1 January 2022 tariffs were lifted for the EU27 and replaced by a tariff rate quota system – but the UK was excluded from that determination. This means that UK exporters are now subject to US import tariffs from which their EU competitors are exempt.

Link with Northern Ireland protocol concerns?

In response to questions at the IIEA event, Tai offered broad hints that the US’s attitude to resolving the UK tariff issue was indeed being influenced by Washington’s unease over the UK’s approach to the ongoing negotiations over the implementation of the Northern Ireland protocol.

“We are encouraging the EU and the UK to find a solution [over the protocol question] that is durable, and that maintains peace in Northern Ireland,” she said.

“There are deep levels of interest in the US over the Northern Ireland – and what happens in these [EU-UK] engagements will always be on the radar here.

Timeline for ratification of UK-Australia FTA becoming clearer

Members of Parliament are to be asked to ratify the new UK-Australia free trade agreement at some point in late spring or early summer, once a series of statutory reports on the impact of the agreement have been finalised.

This has come clear following the publication of recent correspondence between international trade secretary Anne-Marie Trevelyan, and Angus MacNeil, chair of the House of Commons’ international trade committee.

The ratification procedures for the new FTA are being closely monitored by MPs and government alike, as they will inevitably set precedents for all future UK FTAs.

Trevelyan said this week that the Trade and Agriculture Committee – the new body which is charged with giving an assessment on whether the agreement is consistent with UK rules on food safety, animal welfare and the environment – would be required to submit its report on the new FTA by 31 March.

This report will form the basis of a report which the government itself must table, on the same subject, under section 42 of the UK Agriculture Act.

In a letter to MacNeil, Trevelyan said she expected the section 42 report to be published “some weeks after we receive the TAC’s advice”.

No specific date commitments

But Trevelyan warned that she could not put a specific date on the delivery of either report.

“This is important work and my priority is to ensure that these reports are robust, rather than to meet specific deadlines,” she wrote.

The international trade committee has already started work on drawing up a report on the UK-Australia FTA.

Under the UK’s Constitutional Reform and Governance Act, FTAs become law 21 days after being laid before parliament – unless MPs vote to block its adoption during that process.

This short time span has focused lawmakers’ attention on the period for scrutiny which the government will allow for scrutiny prior to the CRaG procedure being triggered.

Australia launches own ratification process

In Australia, meanwhile, a similar procedure is being followed.

The Joint Standing Committee on Treaties – a body on which both houses of the Australian parliament are represented – is to conduct an inquiry into the FTA and report back to the Canberra Parliament.

Australian lawmakers would then consider any new legislation, or amendments to existing legislation, that may be necessary in order to implement the agreement.

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