Trade Bill (Second sitting)

Matt Western Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 23rd January 2018 Public Bill Committees

[The Chair]

We are having trouble with time and scrutiny as well. We have only two minutes left for Matt Western.

[Matt Western (Warwick and Leamington) (Lab)]

Q Professor Winters, this Bill is supposed to be about the roll-over of pre-existing agreements. If that is the case, why is it necessary to include the Henry VIII powers?

Professor Winters: Because the roll-over is not straightforward. Maybe you can say that this is an implicit recognition that it is not entirely straightforward and that there will have to be changes. Some might be purely technical, but some are clearly going to be substantive.

It is precisely because it is difficult, contentious and requires negotiations, that the Henry VIII powers are so important, because it is the Minister, their designated authority or delegate who will make those decisions.

[Matt Western]

Q Can you give an example of a substantive?

Professor Winters: The division of tariff-rate quota on cheese into Canada, or which bit of law financial services access to Korea will refer to. There are, I have no doubt, plenty of others.

[Matt Western]

Q Can I ask that of the others?

George Peretz: I am not sure I have much to add to that very complete answer to the question.

Does it require Henry VIII powers? It probably does require them because you have to amend primary legislation. The questions about the degree of scrutiny and so on, are, I think, questions for you, but the need for a pretty fast procedure to amend our law to deal with what will quite often be technical points that involve changes seems fairly clear.

[Alan Brown]

Q We have heard that Wallonia has got a veto. The devolved nations do not have a veto in this. Indeed the UK Government can make provision in devolved competencies. If you were a Scottish or Welsh Minister, would you recommend withholding a legislative consent motion unless this Bill was amended?

Michael Clancy: When I get elected?

--- Later in debate ---

[Judith Cummins]

Q Unfortunately, my original question was to Mr Stace, but I will ask it to Mr Stevenson. Clause 6 of the Bill suggests that the TRA’s remit will extend to more than just trade remedies and to the analysis of trade disputes. Does that raise any concerns?

Cliff Stevenson: In principle, I think it is not necessarily a bad idea—that if you have an organisation full of trade expertise, you might use it for other purposes as well. I mentioned Canada earlier. The Canadian international trade tribunal, the independent entity that makes determinations on injury, can also be given other tasks and produce expert reports. So I do not think it is a bad idea in principle that the TRA may do other things. The concern would be about resourcing.

Trade remedy investigations are highly resource-intensive. They are incredibly detailed. Gareth mentioned earlier about the dumping calculation being easy. In a sense, what he was saying is that it is straightforward, the steps are very clear—but it is a massive calculation with thousands of data entries on a spreadsheet or in a model. To the extent that there would be a concern, it would be to ensure that there was sufficient capacity ring-fenced for the different functions. Principally, it seems to me that the Trade Remedies Authority’s purpose is the administration of the trade remedy regime. That would be the only issue I would raise.

[Matt Western]

Q We heard from Mr Stace a moment ago about an effective trade remedies system. In that one example, an effective system does not necessarily lead to higher consumer prices or significantly higher prices. Do you have other examples you can give, Mr Reynolds?

Tom Reynolds: One example I can give you is from MTRA partner sectors, the chemicals fertiliser sector, around the long-term implications for the consumer if adequate trade remedies are not installed. In Ireland, for instance, the domestic manufacturing industry for fertilisers sadly went by the wayside, because the anti-dumping measures were not introduced in time to provide a defence for their industry. As it became a less attractive market because of less competition, the prices started to rise for all the previously dumped exports, so the lack of competitive environment in Ireland ended up costing farmers more for their fertilisers.

Cliff Stevenson: Obviously, it depends on the product, because when you are talking about products used in another industry, such as in the case of steel, even a fairly substantial anti-dumping duty, if you work it through to the final price to the retailer of the downstream product, is going to have a much smaller effect. Obviously, in the case of a consumer product, where the product goes directly to the consumer, the impact of the duty would be exactly at the level of the duty, so that is certainly true.

It is important always to consider what the purpose of trade remedies is. They are about remedying a distortion, an anti-competitive situation or a subsidy. In that way, any time you increase a duty the users, the importers, or the consumers of that product are going to face the negative impact of the increase in duty. What is really important to remember about trade remedies is that they are not about protecting domestic industry, I do not believe. They are about restoring effective competition. That is a key point. Even if a consumer product does increase in price, in the long term the consumer is better off if effective competition is maintained.

[The Chair]

Are there any questions? No. May I thank you both very much for your very useful evidence? I am sorry that a Division disturbed the middle of your session—these things happen in Parliament. It was very kind of you to come, so thank you very much. If the next witnesses are here, perhaps they would like to take the stand.

Examination of Witnesses

Anastassia Beliakova, Stephen Jones, William Bain and Edward Bowles gave evidence.