CPTPP, Latest news, Week in London column

Week in London: CPTPP accession ratified, sugar quota review

This week, the government re-opened the complex debate over access to the UK sugar market, while MPs accuse international trade secretary Kemi Badenoch of ‘dodging’ scrutiny of new trade deals. 

Government ratifies CPTPP accession amidst parliament criticism of scrutiny powers

Liam Byrne, chair of the United Kingdom business and trade committee, accused business and trade secretary Kemi Badenoch of ‘dodging full and proper scrutiny’ of trade agreements negotiated by the government.

Byrne’s comments came just days after Westminster formally ratified the UK’s accession to the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, without any parliamentary vote having been held.

In a formal government response to a recent committee report on CPTPP accession, published this week, Badenoch again refused to commit to a ‘substantive debate’ – i.e. one which allows for MPs to vote for or against – on any future trade agreements.

Largely echoing comments made in an exclusive interview with Borderlex earlier this month, Byrne claimed that Badenoch’s comments were “conclusive proof that the way Parliament scrutinise trade treaties is no longer fit for purpose in this new age.”

MP voting rights would ‘fundamentally alter’ UK scrutiny framework

In her response to the committee report, Badenoch said the existing scrutiny framework under the UK’s constitutional reform and governance act – or CraG – allowed plenty of scope for ‘robust and flexible scrutiny’ of relevant treaties, including new trade agreements.

But a government commitment to guaranteed substantive debates under CRaG “would fundamentally alter the nature of the scrutiny framework, undermine the Royal Prerogative, and remove flexibility”, Badenoch added.

The UK’s membership of CPTPP will take effect once at least six of the 11 existing CPTPP members have ratified the accession treaty. This is expected to happen in the second half of this year.

In the meantime, the UK is currently engaged in eight different negotiations for new FTAs, or upgrades of existing FTAs.

These are India, the Gulf Cooperation Council, Switzerland, Turkey, Israel, Korea, Mexico and Canada. In the latter case, talks are currently suspended.

All these agreements will need to be ratified by the UK parliament once concluded. This ensures that the ratification question will remain a live one for several years to come.

London to consult on future of post-Brexit sugar import quotas 

The government launched a consultation on the future of the UK’s sole post-Brexit autonomous tariff quota of 260,000 tonnes for raw cane sugar on Tuesday (26 March). 

Originally introduced on 1 January 2021 – the date on which the UK left the EU customs union – the autonomous quota has already been extended once following an initial term of two years.

But an important new consideration for this year’s review is the UK’s free trade agreement with Australia, which came into effect in May 2023.

Under that FTA, Australia enjous a duty-free sugar quota of 100,000 tonnes for the current 2023-24 marketing year, which runs from October to September. The quota will rise by 20,000 tonnes per year until 2031, when full duty-free access will be provided.

The department for business and trade said that preliminary data for January-October 2023 showed total UK sugar imports of 886,000 tonnes. This exceeded the total annual volume imported in each of the three previous years by more than 150,000 tonnes.

The autonomous tariff-rate quota has been almost fully utilised since its inception. 

Brazil has been the source of almost all of the sugar delivered under this quota.

The government has asked stakeholders to give their views on whether the quota should be maintained from the start of 2025, and if so, whether its volume should be adjusted.

British sugar beet producers are likely to make the argument that as Australia’s quota under the FTA rises year-on-year, the ATQ should be scaled back at least by a similar volume.

Review of MFN sugar tariff 

DBT also said that it would welcome “views on whether or not maintaining the UK global tariff rate [for sugar] would be appropriate”.

The UK applies MFN duties of £280 per tonne for raw cane for refining, and of £350 per tonne for white sugar for direct consumption.

These tariffs were inherited largely unchanged from the comparable EU MFN duties when the UK left the customs union.

Britain has ‘bound’ these tariff rates under the WTO agreement on agriculture. But it has the option of applying lower tariffs on an autonomous basis if it so chooses. 

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