Brexit: UK released a white paper on the future trade policy

The Secretary of State for International Trade and President of the Board of Trade presented in October 2017 a white paper (“Preparing for our future UK trade policy”) to the UK Parliament, which outlines the main principles that will shape UK’s independent trade policy after Brexit.

The UK Government confirms its commitment to support fair and free trade, emphasising the positive role that free trade has on the global economy, while acknowledging that some sectors, regions and groups experience difficult adjustment effects.

The white paper acknowledges and builds on the following trends in global trade: (i) the growth in intra-industry trade, with over 80% of UK manufacturing trade being intra-industry, (ii) the development of cross-border supply chains, with over 70% of global trade now being in intermediate products or in capital goods; (iii) the significant increase of the share of developing economies in world trade, with approximately 90% of global economic growth in the next 10 to 15 years expected to be generated outside Europe; (iv) the growing importance of services in global trade, with services accounting for around 45% of the value of UK exports in 2016.

As the UK prepares to leave the EU, the UK Government is working on designing a fully functioning independent trade policy that aims at ensuring continuity and avoiding disruption for business and other stakeholders, taking into account all possible outcomes of the exit negotiations. The future trade policy is designed in accordance with the following underlying principles:

  1. Trade that is transparent and inclusive – the UK Government intends to design the future trade policy based on transparency and inclusivity, and for this purpose is undertaking a comprehensive stakeholder engagement programme.
  2. Supporting a rules-based global trading environment – the UK Government confirms its traditional strong support for an open, rules-based international trading system, with the WTO viewed as central to the liberalisation and governance of international trade. The UK intends to participate in ‘plurilateral’ arrangements, such as the Government Procurement Agreement (GPA), the Environmental Goods Agreement (EGA), and the Trade in Services Agreement (TiSA).
  3. Boosting UK’s trade relationships – the UK Government’s long-term goals for its global trade policy are: to secure greater market access for UK goods exports; to push for liberalisation of global services, investment and procurement markets; to negotiate ambitious digital trade packages, in particular on cross-border data flows; to maintain a high level of protection for intellectual property, consumers, the environment, and employees. Moreover, the UK Government is committed to securing a deep and special partnership with the EU.
  4. Supporting developing countries to reduce poverty – the UK Government expressed its commitment to maintain preferential access to the UK market for the world’s Least Developed Countries. To achieve this goal, the Government intends to establish a UK unilateral trade preference scheme to support economic and sustainable development, as well as to maintain many of the already existing EU arrangements.
  5. Ensuring a level playing field – the UK Government has outlined a trade remedies framework that aims to protect domestic industry against unfair and injurious trade practices. The proposed trade remedies framework is consistent with the UK’s WTO obligations and aims to achieve the following goals:
  • To develop an impartial and objective trade remedies framework by: (i) creating an independent trade remedies investigating authority; (ii) setting a transparent, objective and efficient investigation process; (iii) providing a route to appeal decisions.
  • To target the injury caused and the interests of all the parties involved through: (i) applying an economic interest test; (ii) applying a UK-specific threshold for initiating cases; (iii) applying remedies in proportion to the level of injury caused.
  • To set a swift and effective investigation process by: (i) applying provisional measures; (ii) developing a digital support service; (iii) introducing measures against attempts to circumvent or absorb trade remedies; (iv) legislating the use of Undertakings.
  • To balance the need of protecting commercially confidential data with the need to make relevant information accessible to the interested parties.

In designing the new independent trade remedies framework, the UK Government is considering to transfer some of the existing EU remedy measures, in particular for such industries as steel, ceramics and chemicals. As a first step of this process the UK Government will shortly issue a call for evidence to identify which existing EU trade remedy measures are relevant to UK companies.

With concern to conducting trade disputes, the UK Government is preparing to be able to act independently to protect the UK’s interests after Day One of exit by developing the capability to participate in every stage of a trade dispute.

Contact

If you have any questions on the above, please contact e.deangelis@quanteraglobal.com or your trusted Quantera Global advisor. We will be happy to assist you.