Trade Bill

Debate between Earl of Kinnoull and Baroness Brown of Cambridge

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[Baroness Brown of Cambridge (CB)]

My Lords, Amendments 31 and 32 are in my name and those of my noble friend Lord Kinnoull and the noble Baroness, Lady McIntosh of Pickering. Amendment 31 relates to the presumption in favour of adoption of trade measures and it will be familiar to noble Lords from Committee.

The Taxation (Cross-border Trade) Act sets the overarching rules under which the UK’s new Trade Remedies Authority will operate. The Act does not have a clear or explicit presumption in favour of adoption of trade measures akin to the EU equivalent, the Union interest test. Considering whether measures are in the interests of the UK involves taking into account five different sets of interests. In doing that, unlike the EU approach, the Act does not give priority or special consideration to the interests of the complainant industry. That special consideration gives the EU test a presumption in favour of adoption of measures, which is absent in the UK Act. While government amendments on Report of the Taxation (Cross-border Trade) Act improved the wording around the economic interest test, and Ministers have privately assured manufacturers that the intention is that there is a presumption in favour of adoption of the measures, the words contained in the Act fall short of such a presumption.

I thank the Minister for helpful meetings with me and my noble friend Lord Kinnoull on this issue, and I hope that, in her reply, she will be able to clarify the presumption that the TRA will apply when it conducts the test. An explicit reference to special consideration of the need to remove injurious dumping would be particularly helpful.

Amendment 32 relates to the way that the detailed rules for the operation of trade remedies will be scrutinised. These rules will have profound impacts on UK manufacturers’ ability to level the playing field when overseas competitors do not play by the rules. Many of those rules about the operation of trade remedies will come through secondary legislation as a result of provisions in the Taxation (Cross-border Trade) Act. Trade policy generally, including specific issues such as these, is of such importance that we should be discussing it frequently in your Lordships’ House—a sentiment that I believe the Minister might also support. Amendment 32 would require the statutory instruments to be affirmative instruments, to be discussed and approved by resolution of both Houses. I am interested to hear from the Minister about the opportunities that your Lordships’ House will have to debate important trade policy issues. I beg to move.

[The Earl of Kinnoull (CB)]

My Lords, I added my name to these two amendments and I will be brief. I agree with every word that my noble friend Lady Brown just said. I add my thanks to Ministers and the Bill team, who have been very gracious and given of their time generously to discuss these issues. I have nothing to add to what my noble friend Lady Brown said about Amendment 31, about which I wholly agree.

I also agree with what she said about Amendment 32, but I have one more point to add. It arises out of the report of the Constitution Committee into the Trade Bill. Talking about the formation of the Trade Remedies Authority, it states:

“While we recognise the pressing timescales and uncertainties concerning Brexit, in constitutional terms, creating and empowering an important public body in such a manner is inappropriate”.


I very much agree with that assertion. I therefore regard Amendment 32 not only as a mechanism for debate but as a partial cure for the problem that the Constitution Committee has unearthed in its report. I therefore see it as being an attempt to try to somewhat address that problem. Can the Minister comment on that and, if she feels the amendment should not be agreed, how we should address the itch that the Constitution Committee identified?

--- Later in debate ---

[Baroness Brown of Cambridge]

My Lords, Amendment 60 is in my name and those of my noble friend Lord Kinnoull and the noble Baroness, Lady McIntosh of Pickering. I also support Amendment 59.

The UK needs a strong and independent Trade Remedies Authority with a balanced membership to investigate alleged dumping and subsidy cases and to recommend remedies. Schedule 4 to the Trade Bill defines the membership of the TRA and its governance. As I have said before, and as the noble Lord, Lord Lansley, emphasised in moving Amendment 59, while both Clause 10 and Schedule 4 make the independence of the TRA a clear objective, this does not sit entirely comfortably with the chair and the non-executives being appointed entirely at the discretion of the Secretary of State.

The governance model of the Office for Students in the Higher Education and Research Act 2017 seems to offer a good model for delivering both independence and balance, and this is the model that has been used in drafting this updated amendment. It would require the Secretary of State to have regard to the desirability of members having between them experience in a number of relevant areas, including UK manufacturing, trade unions, consumers, regional economic growth, regulatory systems and international trade disputes.

The Government have suggested that the TRA should be managed by trade remedies experts rather than by stakeholders with vested interests, in order to be independent. However, the chief executive designate has already told a Commons Select Committee that she is not a trade remedies expert. A properly balanced group of non-executive stakeholders, supported by expert executives, could be effective, independent and balanced. I look forward to hearing from the Minister how the Government will ensure the combination of independence and balanced and relevant expertise that this important body requires.

[The Earl of Kinnoull]

My Lords, Amendment 60 is also in my name. I too have problems with the TRA as currently constituted, in that arguably it lacks independence and balance. It is in looking for independence and balance that the amendment has evolved. Amendment 59 very much deals with the independence point, and on that basis I strongly support it.

In Committee, I said that independence is important, because the TRA needs to be seen to be not a mere cipher for the British state but something which has its own life. There is a problem when one looks at Schedule 4 and sees that the chair is appointed by the Secretary of State, as are all the non-executive directors. The Secretary of State gets the chance to approve the CEO. The non-executive directors will always be in the majority and the Secretary of State has the power to remove them. On top of that, paragraph 34 of Schedule 4, entitled “Guidance”, says that the TRA must have regard to the Secretary of State’s guidance, which seems to me to mean instructions. It seems to be wrongly titled. Therefore, I worry that the independence bit of my beef is not coped with sufficiently. I look forward to hearing something from the Minister to assuage my concerns.

Balance is incredibly important. This cannot be an effective body if there is no balance—balance of experience and background. The point is obvious. Nowhere in Schedule 4 do I see anything that gives rise to a feeling that there would be balance, but I look forward to being corrected on that point.

Trade Bill

Debate between Earl of Kinnoull and Baroness Brown of Cambridge

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Baroness Brown of Cambridge]

My Lords, I will speak briefly to Amendments 90A and 90B in my name. Again, I thank my noble friend Lord Kinnoull for adding his name to both amendments.

As we have heard, the Taxation (Cross-border Trade) Act sets the overarching rules under which the UK’s new Trade Remedies Authority will operate. The Act states that trade remedy measures do not need to be adopted if the TRA or the Secretary of State decides that they do not meet the economic interest test, as we have heard. When applying the EU’s equivalent—the Union interest test—special consideration must be given to the need to remove the injurious practice, that is the dumping or subsidy by another country, and restore competition. It is this special consideration that gives the EU test a presumption in favour of the adoption of measures. The materials industry, in particular, is concerned that this consideration is absent in the UK Act.

I appreciate that government amendments at Report stage of the Taxation (Cross-border Trade) Act improved the wording around the economic interest test and Ministers have assured manufacturers that the intention is that there is a presumption in favour of adoption. However, the words contained in the Act fall short of such a presumption. Amendment 90A would give clearer direction to the TRA in exercising its duty to conduct an economic interest test. The intent is to establish firmly a presumption in favour of adoption of measures and hence to continue the protections that UK manufacturers currently benefit from while we are members of the EU. I recognise that the Government have indicated that the presumption in favour of adoption is their intent and that there may be other ways to strengthen this message to support and assure our manufacturers. I look forward to the Minister’s response as to how this might be addressed.

I think we have probably already discussed Amendment 90B. The noble Baroness, Lady McIntosh of Pickering, already highlighted the issue of rules about the operation of trade remedies coming through secondary legislation as a result of the provisions of the Taxation (Cross-border Trade) Act. I will not go on for much longer about it because we have already heard the Minister’s response. But I would like to take the chance to emphasise again that these are hugely important rules that will have a profound impact on UK manufacturers’ ability to get a level playing field when overseas competitors are not playing by the rules. I also emphasise my strong conviction that these statutory instruments should be affirmative ones, approved by resolution of both Houses.

[The Earl of Kinnoull]

My Lords, I do not want to comment on the two amendments I have signed. I want to urge some support for the noble Lord, Lord Stevenson of Balmacara. I have in front of me Article 13 of the 1994 agreement which supplements Article VI of GATT. Entitled “Judicial Review”, it says:

“Each Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews of determinations within the meaning of Article 11”.


It then goes on to say that the tribunal must be independent of the authorities that have made the determination. It is an international obligation for there to be exactly what the noble Lord, Lord Stevenson, proposes in his amendments. I think we need to pick that up and put it in the Bill.