Leaving the EU: Future Trade Remedies

Julia Lopez Excerpts

Tuesday 17th April 2018 Westminster Hall

[Julia Lopez (Hornchurch and Upminster) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) for securing this debate on future trade remedies. He is ahead of the curve on this issue, because amid the wrangling over Brexit we have rather overlooked the profile that this issue will have. I believe that it will become ever more pressing as we chart a new path beyond the EU. It is therefore important at this stage, as we draw up our Trade Remedies Authority, that we get its basic structure right.

As I have said before in this House, we are lucky to be among the first generation of politicians in more than 40 years to be drawing up our own independent trade policy, but that means we are also very green as a nation in fully grasping trade legislation and its implications. None the less, these are issues of enormous relevance to consumers and to businesses of all sizes in our constituencies. It is all well and good for us to be free traders in principle, but in practice many of those principles can be sorely tested when producers in our own constituencies are challenged by international competition. Indeed, they can be tested to breaking point when that competition is able to undercut domestic businesses due to the state subsidy or economic structure of their own countries.

My hon. Friend spoke eloquently about the capacity of Chinese pottery firms to undercut domestic industries, with a speed that can pull the rug from under industries that have been carefully developed over many years. Equally, however, cheaper products from abroad can be a boon to other industries, for instance by providing cheap steel for car manufacture, helping to retain production on these shores and delivering cheaper prices for consumers. These are not simple issues and they must be carefully considered.

As a member of the International Trade Committee, which has been closely examining the Government’s plans to set up our own Trade Remedies Authority, I have been encouraging the Government to study the arrangements of respected trade authorities in other nations, particularly the US and Canada. Throughout the TRA process I have been concerned about the amount of power being vested in the hands of the Secretary of State, including over appointments to the TRA’s board. I am also concerned about whether the TRA will be sufficiently skilled and resourced for what can be extremely intensive investigations.

In the US, the body responsible for injury investigations alone, the United States International Trade Commission, has several hundred employees. Given the difficulty that the Select Committee has securing sufficiently knowledgeable domestic trade panellists, we have a considerable recruitment challenge on our hands. As we leave the EU, there is the chance to produce a more flexible and responsive trade remedies model. UK Steel sees the EU’s decision-making process as monolithic, with too much power in the hands of the Commission and a heavily politicised system. We have opted for an approach similar to Australia’s, but in a recent Committee session one of our panellists expressed concerns that producer interests are beginning to take a much stronger precedence in that system.

I still believe that we would do well to consider the bifurcated model of the US and Canada, with subsidy and injury investigated separately to avoid politicisation and bias. With our TRA’s chair and non-executive members all appointed by the Secretary of State, and with the Secretary of State retaining the ultimate say on the imposition of a trade remedy, I must confess that I am uneasy about the concentration of power in ministerial hands, given the prospect of a much more interventionist Opposition taking power.

Our new regime must be open and transparent, and have integrity and credibility. I therefore suggest that we try to take steps to ensure that the executive board of any TRA is open to independent scrutiny, perhaps through the Select Committee, rather than being only a matter for the Secretary of State to decide. I am sympathetic to my hon. Friend’s concerns about dumped and subsidised produce, and the issue of transparency on the economic interest and public interest tests. Trade remedies are currently a highly political issue, and it is vital that our own desire to secure trade deals does not prevent us from imposing trade remedies if we need to in the event of dumping.

It is also necessary to flesh out the appeals mechanism for trade remedies. There is much that remains up for grabs, with a lot being allocated to statutory instruments by the Secretary of State, and details remain patchy. I would be grateful if the Minister could use his contribution to the debate to assure us further of his Department’s progress in establishing a robust TRA in time for March 2019, if we are unable to secure the deal with the EU that we seek.

[Hannah Bardell (Livingston) (SNP)]

The hon. Lady makes a number of points that I find myself agreeing with. I am sure that I will get the opportunity to say this in my own contribution but, given what she has said about the Trade Remedies Authority being a transparent and fully representative body, does she agree that the amendments put forward by the Scottish National party and Labour, with the support of Plaid Cymru, to have representatives from all the devolved nations are vital?

[Julia Lopez]

I might be sympathetic to that, but there is a real concern that all those on the board of the Trade Remedies Authority should be able to rise above particular interests. Those particular interests could be strong industrial concerns in particular regions of the UK. Board members will need to be able to look at the UK as a whole and weigh up different arguments made to them. I would have concerns about being very prescriptive about exactly who should be on any board. None the less, there needs to be independent scrutiny of the Secretary of State’s decisions in making those appointments. On that note, my contribution has ended.