Perspectives, UK trade politics

Perspectives: UK government’s snub of parliament over trade risks backfiring

There was an outcry in both Houses of Parliament in their last week before the summer recess over the absence of debate for the UK-Australia FTA and the prospect of a low-ambition trade agreement with India. The government’s approach to parliamentary scrutiny could turn into a risk factor for the overall UK trade policy agenda.

Despite ongoing pressure from business, pressure groups, and opposition MPs, the British government’s approach to parliamentary scrutiny of its trade policy agenda has since 2016 been to seek minimal engagement.

This is consistent with a general political system in which parliament has fewer formal powers over the executive than in many other European countries

There is no requirement in law for parliament to vote to ratify free trade agreements, no minimum level of information to be given during negotiations, and no need for an independent impact assessment of the outcome.

Parliamentary pressure during the passage of the Trade Bill yielded the sole concession of establishing a Trade and Agriculture Commission whose role is to consider whether FTAs are consistent with existing UK legislation.

The only other substantive scrutiny of the UK’s government trade policy and agreement negotiations comes from two Select Committees, the House of Commons’ International Trade Committee, and the House of Lords’ International Agreements Committee.

With an autonomous trade policy widely considered as a key Brexit dividend, these committees were initially relatively supportive of government – at the very least they offered it the benefit of the doubt.

Relief was the key emotion when EU FTAs were replicated: MPs did not conduct detailed examination of these rollover agreements.

But political concerns have been growing with regard to new FTA negotiations with Australia, New Zealand and India. At issue: the potential negative impact on UK farmers for the first two, whether speed will deliver on key UK interests for the latter.

Last week, as parliament rose for the summer, MPs criticised the lack of debate before the Australia deal was ratified, and the House of Lords issued a highly critical report on the planned agreement with India.

It is early to tell what will happen once the new prime minister is in place. But these moves were a warning signal worth taking seriously. In failing to give parliament a meaningful role in trade policy, the government runs the serious risk of some unpredictable revolt in the coming years.

House of Commons Australia trade pact concerns ignored

Scottish National Party MP Angus Brendan MacNeil has been the Chair of the International Trade Committee since it was founded to shadow the Department of the same name in 2016. A spiky presence in UK trade discussions, his frequent open letters to the government, seeking further information, suggest there is a belief that insufficient information is shared with his committee.

A reasonable assessment of these parliamentary efforts, as well as the more normal business of taking evidence from a varied set of witnesses to compile reports, is that they have helped cast some light on government activities. But they have not resulted in sufficient political pressure to drive change.

Government powers in the UK include being able to ratify FTAs without a parliamentary vote under the 2010 Constitutional Reform and Governance Act, with only a short period of formal notice.

However, members of the committee, including Conservative MPs, were angered that in the case of the Australia agreement ratification happened after the repeated failure of Secretary of State Trevelyan to appear before them and give evidence, or after a full debate in Commons.

In response, trade minister Ranil Jayawardena said that those raising scrutiny issues were more concerned with process than delivering ‘Global Britain’. This hardly suggests any future change of approach.

House of Lords issues warnings over India

Reflecting the typically less confrontational nature of the second chamber, the House of Lords International Agreements Committee* seeks a more cooperative relationship with government. That might have been the reason why Anne-Marie Trevelyan did recently appear to give evidence, although her answers tended to be more verbose than informative.

The committee’s opinion on the Australia FTA was broadly supportive, welcoming progress while suggesting that the concerns of farmers might be exaggerated.

In a report issued in June it said of agriculture that “import volumes may be tempered by geographical distance and geopolitical issues, and the fact that Asia is likely to remain Australia’s main export market”.

The report was published following a debate of the whole House, although with no vote.

With such a track record, government might therefore have been surprised and perhaps worried by the negative tone of the committee’s report on FTA negotiations with India.

The key criticism came in the summary: “The negotiating objectives set for this deal are presented out of context and at times appear overly ambitious and unrealistic. It is hard to judge them given how vague and high-level they are, but some seem particularly unattainable.”

Considerable doubts were also expressed that compressed timescales to reach a deal would mean there could be a limited deal. The Lords will debate this report in early September, where further criticism will surely follow.

Parliamentary concerns may impact more difficult FTAs

A UK government with a healthy majority, like the current one, does not normally have to worry about parliament, whether the subject under consideration is trade deals or farming policy. Sufficient MPs are always likely to provide their support, even if they privately have concerns.

History however suggests that too obviously ignoring such concerns, or more widely showing contempt for parliament, can at times lead to the need for governments to retreat. This is particularly the case when, as with scrutiny of trade deals, the government has been seen to be dragging its feet for several years.

A sudden rebellion including previously loyal MPs can never be ruled out.

Accession to the CPTPP and ratification of the New Zealand FTA – despite the unhappiness of farming communities over these steps – seem unlikely to trigger one. Future agreements could however be rockier, with the deals with India, the Gulf Cooperation Council, and Israel all presenting political risks.

If an increasing number of MPs feel government isn’t quite meeting the Global Britain rhetoric in either in content or process, the chances of rebellion grow.

With the government showing no sign of increasing openness or significantly changing content, those odds may now be rising towards a 50:50 chance. This is in itself a sign that government should be thinking again.

* Disclosure: David Henig currently acts as adviser to the House of Lords on trade policy issues.

 

 David Henig runs the column ‘Perspectives’ on the politics of global trade for Borderlex. He is also a UK director at the think tank ECIPE.

 

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