Northern Ireland, UK Australia & NZ, UK trade remedies, Week in London column

Week in London: TRA and a Johnson ethics row, Australia FTA, USTR Northern Ireland warning

While the world was glued to their smartphone screens for updates on the 12th ministerial meeting of the World Trade Organization in Geneva, some might have missed that this has been once again a turbulent week in the United Kingdom’s trade policy. By Chris Horseman and a little extra input from Iana Dreyer.

UK steel safeguards ‘trigger’ resignation of Boris Johnson’s ethics advisor

The UK’s Trade Remedies Authority has this week unexpectedly found itself at the centre of a political storm involving prime minister Boris Johnson and the resignation of Johnson’s ethics advisor, Lord Geidt.

The details of the case remain unclear at present, but Geidt has appeared to implicate Johnson in either a decision to overrule the TRA last summer in a decision to retain additional safeguard tariffs on steel imports – or an as-yet unpublished decision to retain them, when these lapse on 30 June.

As Borderlex reported at the time, the then trade minister Liz Truss made a last-minute decision to retain tariffs on five of the nine steel product groups for which the TRA had recommended abolition, on grounds that there was no economic case for their retention.

This was despite the fact that the UK Trade Act, which created the TRA, included no provision at that time for ministers to ‘call in’ a recommendation of the TRA in this manner. The rules have since been amended to permit such governmental intervention.

Johnson mentions TRA in response to resignation letter

The connection between Geidt’s resignation as the prime minister’s ethics advisor and the TRA only came to light after Johnson published his response to Geidt’s resignation letter on Thursday (16 June).

Geidt said he had tendered his resignation because the prime minister had asked him to “consider measures which risk a deliberate and purposeful breach of the Ministerial Code”.

The letter itself made no reference to the TRA, but Johnson’s response made clear that Geidt had been referring obliquely to “my seeking your advice on potential future decisions related to the Trade Remedies Authority”.

Johnson went on: “My intention was to seek your advice on the national interest in protecting a crucial industry, which is protected in other European countries and would suffer material harm if we do not continue to apply such tariffs.”

“It would be in line with our domestic law but might be seen to conflict with our obligations under the WTO. In seeking your advice before any decision was taken, I was looking to ensure that we acted properly with due regard to the Ministerial code,” Johnson’s letter adds.

Confusion over what lies behind political row

In light of the controversies which have surrounded the UK prime minister over the past couple of years over breaches of COVIC-19 regulations and other misdemeanours, it seems odd that a proposal by Johnson to act in a way which was potentially non-WTO compliant in the area of safeguard tariffs should have been the trigger for such a high-profile resignation.

It is also not at all clear that the application of duly-justified safeguard duties on imports of a heavily-supported industrial product would, in itself, be in clear breach of WTO law.

Moreover, the decision in question was taken almost twelve months ago – although the rolled-over safeguard tariffs are due to lapse in just two weeks from now, i.e. on 1 July 2022.

This suggests that Geidt’s dissatisfaction may in fact have related to an as-yet unannounced plan of action to be announced in the coming weeks.

TRA issues cryptic statement

This speculation has been fuelled by a rather cryptic statement issued on Thursday by the TRA, which confirmed that it was the steel duties that were at the heart of the issue.

But it also added that the TRA had “carried out analysis under the Government’s direction and we provided a Report of Findings to the Secretary of State for International Trade on June 1”.

These findings have not been published on the TRA’s website.

Some critics have drawn attention to the fact that steel magnate Lakshmi Mittal made a £10,000 donation to Boris Johnson’s Conservative party leadership campaign in 2019.

MPs angry – again – as ratification process starts for UK-Australia FTA

The countdown towards ratification of the UK-Australia free trade agreement by the British parliament has been set in motion this week – amid claims by MPs that the government is still refusing to submit to due scrutiny over the issue.

Following the publication last week of the so-called Section 42 report – in which the government confirmed the compatibility of the agreement with UK regulations on food safety, animal welfare and the environment – the way was cleared to lay the FTA before parliament on Wednesday (15 June).

The UK-Australia FTA – and the others that will follow it – will be ratified in the UK under the Constitutional Reform and Governance Act – CraG –  which is the procedure used for international treaties.

This legislation provides that MPs must have at least 21 parliamentary sitting days to consider the agreement before the motion to ratify goes to a vote.

On this basis, the vote on ratification should be held in mid to late July, shortly before the parliament finishes work for the summer break.

But the announcement has triggered a fresh row between the government and the parliament’s international trade committee, which is chaired by Scottish Nationalist MP Angus MacNeil.

Trevelyan accused of hiding from Commons trade committee

In a letter to international trade secretary Anne-Marie Trevelyan, MacNeil lamented the fact that the trade secretary would not be appearing before the committee to give evidence “until nearly halfway through the CRaG period”.

This, the MP said, was in contravention of commitments that Trevelyan had made previously that the CRaG process would not be triggered until after the committee had had a chance to cross-examine the secretary of state over the details of the agreement.

The international trade committee has in fact been scrutinising the UK-Australia FTA since 17 December last year.

But MacNeil said that parliamentary “courtesy” dictated that Trevelyan should have made more of an effort to meet with the committee earlier on in the process.

A ‘dangerous and disrespectful precedent for future FTAs’

MacNeil also made the point that the committee could not finish its report on the agreement until after the evidence of the secretary of state had been heard. This meant that the committee would have to rush to get its final report to MPs before the ratification vote was held.

“You continue to show no real regard for the scrutiny role of my committee, or even that of Parliament, and there is no indication that this will change for the better,” MacNeil wrote in his letter.

“This pattern of behaviour sets a dangerous and deeply disrespectful precedent for future FTA scrutiny.”

On the Australian side the relevant parliamentary body – the Joint Standing Committee on Treaties – still remains currently inactive following the change of government in last month’s general election.

Trevelyan gets Northern Ireland warning from USTR Katherine Tai  in Geneva

Anne-Marie Trevelyan had a face-to-face meeting her United States counterpart Katherine Tai in Geneva on the sidelines of the still-ongoing WTO ministerial meeting in Geneva. That was one day after London tabled legislation that would allow ministers to override key provisions of the Northern Ireland protocol enshrined in the EU-UK Withdrawal Agreement.

In a USTR readout of the meeting, Washington said that the two trade chiefs “discussed the Northern Ireland Protocol, which the United States has welcomed as a way to manage the practical challenges of preserving distinct EU and UK markets while preventing the return of customs infrastructure on the land border”.

“Ambassador Tai underscored the importance of the UK and the EU continuing good faith negotiations to find practical solutions to its implementation. She reiterated strong US support for preserving the political and economic gains of the Belfast/Good Friday Agreement,” the statement continued.

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