By Jonathan Djanogly MP
Trade is absolutely essential for international development, and Britain’s primary relationship with many developing countries is not one of aid, but of trade. After 31 December this year, the UK will ‘take back control’ of trade policy for the first time in nearly 50 years.
This means we need to ask some serious questions about how our new trade policy will affect our international development obligations and our achievement of the Sustainable Development Goals. It also means we need to find a process by which Parliament can meaningfully scrutinise new trade agreements, to make sure that international development is front and centre of new deals.
That is why in the upcoming Trade Bill, I am joining with other Conservative colleagues to table an amendment to guarantee a debate and vote before and after new trade deals are negotiated (NC4). The amendment will also require a comprehensive Sustainability Impact Assessment for all new deals, to ensure that they take into account food safety, health and environmental factors.
There are a number of reasons why scrutiny of trade deals matters for international development. First, because many of these deals are with developing countries themselves. We are ‘rolling over’ 40 deals with about 70 countries, including the East African trading bloc, the Southern African trading bloc, and a number of other African and South American countries.
Some of these countries have used this as an opportunity to negotiate new trading terms, if their trading relationship with the UK is different from that with the wider EU. Others have sought to guarantee continuity, for fear of a cliff edge ‘no-deal’ Brexit at the end of the year. Either way, the deals are currently being ratified without any legislative Parliamentary oversight of terms prior to signature. This means that if there are changes to regulations, or if the government proposes provisions which damage sustainable development, there is very little opportunity for MPs to examine these deals or propose changes.
Second, our new trade deals with developed countries – such as the US, Japan and Australia – will have an indirect impact on our trade with developing countries through ‘preference erosion’. For instance, if a new deal with the US leads to a removal of tariffs on Californian wine, then this will indirectly disadvantage Chilean wine producers who now face more competition.
The UK has pledged to retain preferential tariff rates for many developing countries, but these benefits could be ‘eroded’ by new trade agreements. Scrutiny could help to ensure that new trade agreements do not indirectly harm developing countries, and provide an opportunity for ministers to explain to MPs how they hope to protect the interests of developing countries in our trade policy.
Third, trade deals are increasingly about regulations rather than just tariffs. Regulations can make or break an exporter’s ability to trade with another country. Our new trade policy will determine whether we are primarily aligned with the EU or the US – the two global leaders in regulation-setting. As things stand, we are fully aligned with the EU, and many developing countries trade with us on that basis. It means that goods exported to the UK can easily be sold on the European market, and vice versa. That is why a number of developing countries have expressed their preference for a close deal between the UK and the EU.
How closely aligned we are to the US or the EU after Brexit is of course a political decision for the executive, but it is not one which should be taken without any accountability from elected representatives. My amendment would mean that MPs are better able to scrutinise any new regulations, including any divergence in the new EU-UK relationship, and hold the government to account.
Brexit presents us with an opportunity to develop a new trade policy, one which is good for UK prosperity and international development. To achieve this, however, the government must reassure MPs that Parliament will not be left without a say. A more collaborative approach will ensure that trade policy has democratic support and is beneficial to our developing partners around the world.
New Clause 4 to the Trade Bill can be seen here, on page 4: https://publications.parliament.uk/pa/bills/cbill/58-01/0120/amend/trade_rm_rep_0625.pdf