A Letter from the Rt Hon Greg Hands MP, Minister of State for Trade Policy
DO YOU HAVE A SUCCESS STORY?
We’d like to hear from you.
Wed, 8 Nov. 2017
The Government is taking a significant step in preparing to leave the EU by making arrangements for our future independent trade policy.
Trade is a key driver of growth and prosperity and has always been an important part of both the UK and world economy. International trade is linked to many jobs; it leads to higher wages and contributes to a growing economy by stimulating greater business efficiency and higher productivity, sharing knowledge and innovation across the globe. It ensures more people can access a wider choice of goods and services at lower cost, making household incomes go further, especially for the poorest in society.
Legislation is being introduced to Parliament which will put in place the necessary legal powers and structures to enable us to operate a fully functioning trade policy. This will ensure the UK is ready for exit, providing continuity for individuals, businesses, and international trading partners.
The legislation being proposed includes the Trade Bill. This legislation will help to ensure that the tools we need are in place, to ensure the UK is ready from the first day after exit. This will avoid disruption for businesses, workers, consumers and our international trading partners.
The Trade Bill focuses on providing continuity for businesses and consumers. It will:
- Create powers to enable the UK to transition trade agreements that currently exist between the EU and other countries, and which we are party to through our EU membership;
- Create the powers needed for the UK to implement the Agreement on Government Procurement (GPA) as an independent member instead of as part of the EU, maintaining current guaranteed access for UK businesses to global procurement opportunities and offering value for money;
- Establish an independent body (the Trade Remedies Authority) to conduct trade remedies investigations, providing a safety net for domestic industries against unfair and injurious trade practices, or surges in imports, consistent with our legal obligations at the World Trade Organization (WTO); and
- Ensure the UK Government has the necessary powers in relation to the gathering and sharing of trade information.
The Taxation (Cross-border Trade) Bill will:
- Allow the government to create a standalone customs regime by ensuring that, among other things, the UK can charge customs duty on goods, set and vary the rates of customs duty, and suspend or relieve duty in certain circumstances;
- Allow the government to define how goods are classified to determine how much duty is due;
- Allow the UK to set preferential or additional duties in certain circumstances, for example, preferential rates for developing countries (unilateral preferences) and additional duties relating to trade remedies following an independent investigation by the Trade Remedies Authority, and when authorised following trade disputes; and
- Allow the VAT and excise regimes to continue to function whatever the outcome of the negotiations, for example, by enabling supplies of goods and services to continue to move as freely as possible.
The trade elements being taken forward in the Trade Bill and the Taxation (Cross-border Trade) Bill are outlined below. Those in the Taxation (Cross-border Trade) Bill relate to tax/tariff measures.
Transitioning Trade Agreements
The UK is part of many EU trade agreements which we intend to transition into UK law as we leave the EU. The Trade Bill will make sure the UK has the powers to implement these trade agreements.
This will help to ensure continuity of existing trade and investment arrangements across the UK, providing continuity to workers, consumers, businesses and international trading partners.
The Trade Bill will create the powers needed to implement, as an independent member, the GPA. This offers value for money to procurers and maintains guaranteed access for UK businesses to contract opportunities worth approximately £1.3 trillion per year.
The measures in the Trade Bill will allow data on trade to be provided by HMRC to various national and international bodies (such as Department for International Trade (DIT), the new Trade Remedies Authority and the WTO) and used to perform essential functions in international trade as well as to and inform the development of new policy and monitor its effectiveness.
The UK is an unequivocal champion of global free trade, but free trade does not mean trade without rules.
The Taxation (Cross-border Trade) Bill will introduce a new trade remedies framework, to replace the EU regime by the time we leave.
The framework will be governed by a new body established by the Trade Bill (the Trade Remedies Authority) which will have powers that will provide a safety net for domestic industry and protect against unfair and injurious trading practices such as dumping or subsidies, and from surges in imports.
Unilateral Trade Preferences
The Government is committed to helping the world’s poorest countries trade their way to prosperity.
The Taxation (Cross-border Trade) Bill will ensure less prosperous developing countries can continue to benefit from, as a minimum, the same level of tariff-free or reduced tariff access to UK markets as under the current EU trade preference scheme. This means over 70 countries across the globe, from Bangladesh to Sierra Leone, will be able to export their goods into the UK at preferential rates and grow their economies. This also benefits UK businesses and consumers who depend upon imports from the developing countries.
Preferential Trade Arrangements with Other Countries
Preferential tariffs are an important element of the existing trade arrangements we propose to transition, and this will be taken forward via the Taxation (Cross-border Trade) Bill.
Such tariffs will also feature in new arrangements that the UK will be free to negotiate in the future.
If you have any questions or feedback on either our recent White Paper or the Trade Bill, please do contact the Department for International Trade at email@example.com.