This Government are committed to ensuring the UK has our own trade remedies function in place by the time we leave the EU.
The Trade Bill contains provisions establishing the Trade Remedies Authority (TRA), while the Taxation (Cross-border Trade) Act 2018 (TCBTA) confers trade remedy functions on it. The Trade Bill has completed Committee stage in the House of Lords, and it will begin Report stage on 6 March.
I am pleased to announce that we have today commenced the relevant provisions in the TCBTA and laid secondary legislation giving more detail to the measures set out in the TCBTA, with regards to the trade remedies system. Taken together, these provisions will ensure that the UK has the ability to protect UK industry against injury from unfair trade practices, and unforeseen surges in imports.
The regulations draw from both the relevant WTO agreements (i.e. the general agreement on tariffs and trade, anti-dumping agreement, the agreement on subsidies and countervailing measures and the agreement on safeguards) and are similar in many regards to the EU regulations which have applied throughout our membership of the EU. It therefore follows that the process provided for in these regulations will not be wholly unfamiliar to UK industry, and it will have the certainty of a full suite of legislation in place before we leave the EU; it has previously stressed the importance of having regulations in place sooner rather than later.
In the unlikely scenario that we leave the EU without a deal, it is in the national interest to ensure that the UK has the ability to protect UK industry against injury caused by unfair trade practices or unforeseen surges in imports. To provide this certainty, I have put in place contingency arrangements that will temporarily bring the power in-house, allowing the Department to operate trade remedy functions until the Trade Remedies Authority is legally established via the Trade Bill. The use of transitional powers in the Taxation (Cross-border Trade) Act 2018 will modify that Act to ensure the trade remedies investigations directorate (TRID) will temporarily deliver these functions. The modifications will expire automatically when the TRA is legally established.
The new function will follow the procedures set out in the legislation. In practical terms, the main difference between the operation of TRID and the TRA relates to the decision-making process. When the TRA is established, it will investigate applications to determine whether there is dumping and/or subsidies or unforeseen surges, and whether UK industry has suffered injury as a consequence. If so, it will apply the economic interest test to determine whether measures are in the wider economic interest of the UK. Where the test is met, the TRA will recommend that measures should be applied, and the Secretary of State will then consider whether to accept or reject that recommendation. In doing so, the Secretary of State can only reject the recommendation on public interest grounds, and this includes a limited assessment of the TRA’s consideration of the economic interest test. While the system is operated in-house, these distinct roles will not exist and legally the Secretary of State will take on responsibility for all of these decisions. However, the intention is to keep this two-stage process as far as possible and for the TRID to carry out objective and evidence-based investigations, while the Secretary of State will take the final decision on whether to apply measures. Where the Secretary of State decides not to apply measures on public interest grounds, a statement will be laid before the House of Commons explaining the reasons, to ensure transparency.
The contingency provisions rely on transitional powers in section 56 of the TCBTA. These provisions to modify section 13 and schedules 4 and 5 of the TCBTA, together with the secondary legislation (the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019 and the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019) made under those powers, bring trade remedy functions that would otherwise be carried out by the TRA in-house until the Trade Bill receives Royal Assent. This will legally establish the TRA, at which point the modifications will fall away and the TRA will assume responsibility for investigating cases and making recommendations to the Secretary of State as it considers appropriate.
To minimise disruption, the policies and procedures align to the future function of the TRA as much as possible. The main difference lies in the decision-making process.
When the TRA is established, it will carry out investigations to determine whether there is dumping, subsidy or an unforeseen surge in imports, and whether UK industry has suffered injury as a consequence. If it finds this is the case, it will then consider whether the economic interest test is met before making a recommendation to the Secretary of State to apply a trade remedy measure. The Secretary of State must then consider whether to accept or reject that recommendation. The Secretary of State may only reject the recommendation on public interest grounds, which includes a limited assessment of the TRA’s consideration of the economic interest test.
While the system is operated in-house, these distinct roles will not exist. However, in order to provide continuity for business, we have sought to keep this two-stage process as far as possible. Under the temporary modifications, those staff already recruited to the shadow TRA, including those who have been trained as investigators, will form the trade remedies investigations directorate within the Department and will carry investigations using the same guidelines, as far as possible, as those that would apply if the TRA were established. Measures will still only be imposed if they satisfy the economic interest test (where there is a starting presumption in favour of anti-dumping and anti-subsidy measures), and there are not wider public interest considerations as to why measures should not be imposed.