22 January, 2018

The Trade & Customs Bills - the story so far

Fairtrade Coffee - trade customs bills
by Helen Dennis Fairtrade Policy Manager

MPs weren’t given much time to get their feet back under the table after the Christmas break. Both of the Bills that relate to post-Brexit trade policy were up for debate in the House of Commons on their first day back with a vote on the Customs Bill finally taking place at 10.30pm.

We always knew that it was going to be tough for development issues to get a look-in. These Bills are dealing with a wide range of issues, including the future protection of UK industries, and of course they hinge on a government decision to leave the Customs Union, which remains contested. Yet thanks to the efforts of Fairtrade campaigners, we’ve been able to get a number of key issues raised, and as a result of your engagement so far, we’ve been able to reach 98% of MPs – a great outcome.

Fairtrade was mentioned in both second reading debates, with MPs arguing that there is an opportunity with these Bills, to put poverty reduction and achievement of the Sustainable Development Goals (SDGs) at the heart of UK trade policy. The government has already indicated in its Trade White Paper that it wants trade to support development. The Trade Secretary Liam Fox also said during the debates that he wants to see developing countries increasing their export of value-added goods to the UK. Enshrining a commitment to the SDGs in trade legislation would be the perfect way for the government to show that it means business on this. 

For the moment however, continuity is the name of the game. Improvements for developing countries may come further down the line but the government’s main aim in the short-term is to replicate the status quo, both good and bad. Positively, the Customs Bill includes a commitment to offer duty-free and quota-free access to the Least-Developed Countries, currently delivered through the EU’s ‘Everything But Arms’ (EBA) scheme. Less encouraging, is the government’s intention through the Trade Bill, to ‘roll-over’ the Economic Partnership Agreements (EPAs), when these are being challenged by a number of governments in Africa because they undermine their own domestic industries. We still think that they could explore other options – which would protect market access and prevent a ‘cliff-edge’ for these countries, but move away from these flawed deals. You can read about these in more detail in our briefing paper

Perhaps the most contentious issue, and where we need your continued support, is the debate around future trade deals and how these will be agreed. There is a very real threat that the UK could start negotiating new deals in 2019 (subject to the Brexit negotiations of course!), without any formal role for parliament in the process and without any legal commitment to conduct impact assessments. This would mean UK MPs having less say over trade post-Brexit, than our UK MEPs currently have. It would also cut out the devolved administrations – granting power solely to the UK Secretary of State to strike these deals – and could mean that the impact on producers in poorer countries gets overlooked. 

The Trade Secretary has repeatedly emphasised that the Trade Bill is about transitioning existing EU deals and not about future ones – but if the government doesn’t amend this Bill or doesn’t bring forward a new Bill within the year – then trade deals will essentially be done in the dark.  Trade Justice Movement have a produced a very informative briefing about this issue which you can read here

Now that the Bills have had their second reading, they are going into a committee for further consideration, where we will continue to share with MPs our ideas on how they should be improved. We are delighted to have been invited to give oral evidence on the Customs Bill! The Bills will then return to the House of Commons for additional debate, probably towards the end of February. This will be our best opportunity to try and secure some crucial amendments before the Bills go to the House of Lords to be debated. 

So if you haven’t already, please email your MP and keep an eye out for our emails – we’ll be in touch as soon as the next debate is scheduled.

Brexit and trade glossary – a handy guide to all the jargon! 

Trade Bill – a bill that puts in place the necessary legal powers so the government can operate a fully functioning trade policy. It lays down the legislation for the UK to become an independent global trading nation. You can read about it in more detail here

Customs Bill – complementary to the Trade Bill, and technically known as the Taxation (Cross-Border Trade) Bill, this will give the government the ability to establish a standalone customs regime. You can read about it in more detail here.

Customs Union – this is a type of trade agreement between countries where they agree not to tax each other’s goods and agree on a common tax for goods imported from countries who are not part of their agreement. Setting these common taxes or tariffs for these countries is what makes a customs union different from a free trade area. Customs Unions make it easier for countries to trade with each other and promote economic co-operation. The EU Customs Union is made up of the 28 EU member states and Monaco. Find out more in this useful article.

Value-added goods – a product which has been enhanced so the producer can sell it for a higher price. For example, Fairtrade coffee farmers who also roast the coffee beans they grow, or Fairtrade tea farmers who process and package their tea. 

Everything But Arms agreement (EBA) - gives Least Developed Countries (LDCs – as determined by the UN) duty and quota free access to the EU single market for all products except arms and armaments. Globally, it is the most generous trade arrangement extended to LDCs. Read more here. 

Economic Partnership Agreements (EPA) – are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) countries. Each agreement is different and negotiated to suit the country’s regional circumstances. They give ACP countries immediate access to the EU market but also open up parts of their markets to EU imports. Read more here.

Sustainable Development Goals (SDGs) – created by the United Nations, and also known as the Global Goals, these are a set of 17 targets that aim to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. They follow on from the Millennium Development Goals. Read more here. 

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