Forty-Fifth Report - Progress with trade negotiations

Select Committee

Public Accounts Committee HC 993 18 March 2022

Report Status Government responded

Conclusions & Recommendations 29 items (8 recs)

Source View on Parliament website

Government Response (AI assessment · 20 of 29 classified)

Accepted 8

Deferred 1

Not Addressed 2

Rejected 1

Recommendations

8 results

2 Rejected

The Department has not set out how it will measure the benefits and outcomes of...

Recommendation

The Department has not set out how it will measure the benefits and outcomes of its programme of trade negotiations. The Department has published impact assessments, including projected economic benefits for each of the new FTAs it is pursuing, and … Read more

Government Response Summary

The government disagrees, but states it will publish detailed impact assessments and monitoring reports, and that the Outcome Delivery Plan includes metrics for trade negotiations.

HM Treasury

3 Accepted

The Department is not doing enough to help businesses, particularly SMEs, to take advantage of...

Recommendation

The Department is not doing enough to help businesses, particularly SMEs, to take advantage of opportunities offered by new trade agreements. Businesses need to understand and take advantage of the opportunities arising from trade agreements if agreements are to deliver … Read more

Government Response Summary

The government agrees to write to the Committee within 12 months to set out how it has supported businesses, particularly SMEs, to take full advantage of existing and newly negotiated trade agreements, including measuring preference utilisation rates, reducing burdens for SMEs, and detailing progress on its export strategy; target implementation date: April 2023.

HM Treasury

4 Not Addressed

The farming industry has concerns about the effect of significant competition from imported Australian meat,...

Recommendation

The farming industry has concerns about the effect of significant competition from imported Australian meat, and there is a lack of clarity on the potential environmental impacts from increased trade with Australia. The FTA with Australia signed in December 2021 … Read more The farming industry has concerns about the effect of significant competition from imported Australian meat, and there is a lack of clarity on the potential environmental impacts from increased trade with Australia. The FTA with Australia signed in December 2021 removed tariffs and quotas on many agricultural products imported from Australia. There are four safeguards to protect the agriculture sector, including a 15-year safeguard to protect UK beef and lamb from a rapid rise in Australian imports following implementation of the deal. The Department says that the safeguard is adequate given the length of the transition period and because the increase in imports is expected to be small relative to the size of the UK market. However, the National Farmers Union remains pessimistic about the impact of competition from Australia on farmers who may lose out in exchange for gains in other areas of the economy. Defra expects imports from Australia to largely displace existing imports, for example from the EU, and says that it is doing a lot to help the agriculture sector export, such as setting up a food and drink export council. The Department and also Defra tell us that they have modelled the environmental impact of the deal with Australia, and do not expect there to be Progress with trade negotiations 7 changes in greenhouse gas emissions of UK production, or that transporting goods from Australia will have a big impact on carbon emissions when compared to other parts of the production process. However, the departments acknowledge that more needs to be known about carbon emissions and the interaction between transport and trade. Recommendation: Defra should work with the Department for International Trade to monitor the impact of free trade agreements in its policy areas. In particular, it should: i) monitor imports closely to make an ongoing assessment of the impact of the Australia FTA on beef and sheep farmers, and set out what support could be provided to those farm Show less

Government Response Summary

Response refers to elective and cancer treatment waiting times, which is unrelated to the recommendation regarding monitoring the impact of free trade agreements.

HM Treasury

5 Accepted

Parliament and the public are not being provided with clear and transparent information to understand...

Recommendation

Parliament and the public are not being provided with clear and transparent information to understand the impact of trade agreements. Business associations and consumer groups are concerned that it is unclear how trade policy aligns with other policy objectives, and … Read more

Government Response Summary

The government agrees and says it publishes materials before negotiations, after they conclude, and is highly consultative, publishing explanatory information on the impact of agreements. It constantly reviews its economic analysis methodologies and seeks views of the public through tools including the Public Attitudes to Trade Tracker.

HM Treasury

6 Accepted

The Department has not done enough to support effective Parliamentary scrutiny of trade agreements.

Recommendation

The Department has not done enough to support effective Parliamentary scrutiny of trade agreements. Despite the Department making additional commitments beyond the statutory framework, the International Trade Committee has not been provided with information from the Department in sufficient time … Read more

Government Response Summary

The government agrees and states that it publishes and provides its strategic approach to each new FTA at the outset of negotiations to relevant select committees, including negotiation objectives, and offers oral updates to the relevant select committees.

HM Treasury

23 Accepted

When we asked the Department about its overarching trade strategy it told us that it...

Recommendation

When we asked the Department about its overarching trade strategy it told us that it aims to have “an open trade environment that promotes jobs and wages and reduces poverty”. The Department plans to achieve this through trade negotiations and … Read more

Government Response Summary

The government agrees and says it is committed to a high level of transparency, publishing materials before and after negotiations, consulting prior to and during, publishing explanatory information, reviewing economic analysis methodologies, and seeking public views through tools like the Public Attitudes to Trade Tracker.

HM Treasury

27 Accepted

The Department has made additional commitments beyond the statutory framework under the Constitutional Reform and...

Recommendation

The Department has made additional commitments beyond the statutory framework under the Constitutional Reform and Governance Act 2010 (CRAG) for Parliamentary scrutiny of trade agreements, but the Parliamentary committees responsible for trade agreements scrutiny have called for Parliament to have … Read more

Government Response Summary

The government publishes its strategic approach to each new FTA at the outset of negotiations, provides oral updates to the relevant select committees and will continue to review arrangements.

HM Treasury

28 Accepted

The opportunity for Parliament to view negotiating objectives at the outset would aid its scrutiny...

Recommendation

The opportunity for Parliament to view negotiating objectives at the outset would aid its scrutiny of trade agreements.78 There is a precedent in Parliament to share privileged information between government and select committees. For example, this Committee routinely sees privileged … Read more

Government Response Summary

The government agrees and states that it publishes and provides its strategic approach to each new FTA at the outset of negotiations to relevant select committees, including negotiation objectives, and offers oral updates to the relevant select committees.

HM Treasury

Conclusions (21) Observations and findings — click to expand

1 Conclusion

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for International Trade (the Department), the Cabinet Office and the Department for Environment, Food & Rural Affairs (Defra).2 We were also joined for this evidence session by Mark Garnier MP and Anthony …

7 Conclusion

In addition to the programme of negotiations, the Department also needs to implement and review existing agreements.14 The Department told us that it has set up governance committees to provide an overview of how FTAs are being implemented in practice and to discuss issues arising. However, these implementation processes are …

8 Conclusion

The Department aims to secure agreements with countries representing 80% of total UK trade by the end of 2022. This aim is stated in the Department’s 2020–21 annual report and accounts and is a government manifesto commitment. The National Audit Office (NAO) report stated that 64% of total UK trade …

9 Conclusion

We noted that the Department is quite a long way from reaching the 80% target and asked the Department when it expects to meet it. The Department told us that it thinks it will reach the 80% target but that the timescale will be challenging.19 The NAO found that joining …

10 Conclusion Accepted

A deal with the US would contribute 16.8% towards achieving the 80% target as the US is the UK’s largest trading partner.21 However, negotiations with the US are not currently progressing. The Department told us that in the meantime it is concentrating 10 Q 31 11 Q 36 12 Q …

Government Response Summary

The UK is ready to progress with a UK-US FTA when the US is ready and continues to work with the US on state level MOUs, securing the removal of Section 232 tariffs.

11 Conclusion Acknowledged

We asked the Department about the value of state-to-UK bilateral agreements, in terms of contributing to the 80% target. The Department could not tell us and thought this would be hard to calculate. The Department said that it had not set a target for increasing market access at a state …

Government Response Summary

The department states that the ending of bans on UK beef and lamb exports to the US are estimated to be worth £66 million and £37 million of export opportunities respectively and will use trade data to understand export trends over time.

12 Conclusion Acknowledged

The Department set out four measures in its Outcome Delivery Plan (ODP) for 2021–22 to measure its progress on its programme of trade negotiations. One of these measures, described in the previous section, is the percentage of UK trade with partners with whom the UK has a trade agreement. The …

Government Response Summary

DIT’s Outcome Delivery Plan (ODP) includes metrics for trade negotiations, and DIT will report on progress against each of the ODPs and continue to keep its ODP metrics under review.

13 Conclusion Acknowledged

The Department has published an impact or scoping assessment for each new FTA it is pursuing to help businesses and the public understand the potential economic benefits of the agreement and to support Parliamentary scrutiny.29 For example, the impact assessment for the UK-Australia free trade agreement (FTA) projects that the …

Government Response Summary

The department publishes detailed impact assessments and will publish monitoring reports which will provide DIT’s analytical evidence base to inform Parliament, the public and other interested stakeholders on progress and actual benefits.

14 Conclusion Accepted

We asked what the Department was doing to measure the actual benefits of trade agreements. The Department told us that it is committed to monitoring and evaluating the impacts of agreements.33 For example, it has committed to publishing monitoring reports for the Australia and Japan agreements two years after they …

Government Response Summary

The department publishes detailed impact assessments and will publish monitoring reports to inform on progress and actual benefits of FTAs.

15 Conclusion Acknowledged

We asked the Department how it planned to support businesses, particularly small and medium-sized businesses (SMEs), to take advantage of the opportunities in trade agreements.36 The Department’s 2020 survey of UK registered businesses found that just 28% of surveyed businesses who exported to non-EU countries knew whether the goods they …

Government Response Summary

The department will write within 12 months on this recommendation, setting out how it is helping businesses take advantage of trade agreements and market openings, and mentioning the Export Support Service and other initiatives.

16 Conclusion Deferred

The Department acknowledged that “agreements are only as good as the businesses that utilise them”.39 It told us that its new export strategy, published in November 2021, had been informed by our previous report on support for exporters, and that a particular focus of the new strategy was on supporting …

Government Response Summary

The department will write within 12 months on this recommendation and will set out how it is helping businesses take advantage of trade agreements and market openings.

17 Conclusion

We asked the Department how it would benchmark its trade promotion activities against those of countries such as Singapore and Hong Kong. The Department said that it 34 Q 30; C&AG’s report, para 4.19; Department for International Trade, Impact assessment of the Free Trade Agreement between the United Kingdom of …

18 Conclusion

We received written evidence from Logistics UK, asking for specific provisions to be included in future FTAs to make it easier for UK businesses to trade with the rest of the world. These include, for example, commitments to clear goods at the border within a pre-determined timeframe and cooperation between …

19 Conclusion Not Addressed

The FTA with Australia signed on 17 December 2021 removed almost all tariffs and quotas on agricultural products from Australia over 15 years. Tariff-free beef quotas, for example, would increase from a current 4,669 tonnes to 35,000 tonnes immediately after the agreement comes into force, a 7.5-fold increase in the …

Government Response Summary

Response discusses DIT's commitment to monitoring and evaluation findings, publishing a biennial FTA monitoring report, and working with DEFRA to support agricultural exports. It does not address the specific concerns raised in the conclusion.

20 Conclusion Acknowledged

We asked Defra for its assessment of the effect of the Australian FTA on British agriculture. Defra said that it was confident that the phasing in of the liberalisation and the safeguards provide a period of adjustment for the UK agriculture sector, particularly as it goes through major domestic challenges …

Government Response Summary

DIT is committed to using monitoring and evaluation (M&E) findings to ensure benefits are maximised, publishing a biennial FTA monitoring report, and working with DEFRA to support agricultural, and food and drink exports.

21 Conclusion Acknowledged

We asked why the National Farmers Union is so pessimistic about the trade agreement. The Department admitted that there were risks and downsides to the deal and that a body which represents the interests of farmers would be concerned about the downside, although the Department considered the downside to be …

Government Response Summary

DIT is committed to using monitoring and evaluation (M&E) findings to ensure that the benefits for businesses, workers and consumers are maximised and will publish a biennial FTA monitoring report. DIT will also work with DEFRA to support agricultural, and food and drink exports.

22 Conclusion Acknowledged

Defra told us that it has looked very carefully into the question of carbon emissions.57 Its analysis so far suggests that carbon emissions resulting from shipping goods from Australia to the UK are not the most significant factor when looking at the carbon footprint of different sorts of production. The …

Government Response Summary

The government agrees and will continue to ensure a high level of environmental protection in new trade agreements, working with DEFRA to monitor free trade agreements and publishing a comprehensive ex-post evaluation of the UK-Australia agreement within 5 years.

24 Conclusion Acknowledged

We asked the Department whether it thought that the general public knew about trade. The Department told us that based on its survey, the public was “highly supportive of the trade agenda”.65 However, the NAO noted that the Department has identified public concerns about the actual or feared impact of …

Government Response Summary

The government agrees and says it publishes materials before negotiations, after they conclude, and is highly consultative, publishing explanatory information on the impact of agreements. It constantly reviews its economic analysis methodologies and seeks views of the public through tools including the Public Attitudes to Trade Tracker.

25 Conclusion

Which? also highlighted the importance of reflecting consumer interests more generally and suggested that a consumer chapter should be included in each trade agreement.69 The Department confirmed that the UK-New Zealand trade agreement will include a “first ever” chapter on consumer protection and it said that it wants to test …

26 Conclusion

The Department said that it is its job to explain, engage and communicate and that when communicating information about trade agreements, it tries to set out what this might mean for consumers.72 We asked the Department why its forecast of the value of UK exports arising from the agreement with …

29 Conclusion

We also note that the House of Lords International Agreement Committee reported that the statutory framework under CRAG is insufficient to facilitate robust and effective scrutiny of international agreements. As stated in the NAO report, the International Agreement Committee has called for Parliament to strengthen its formal role earlier in …