The Trade Bill raises concerns about delegated powers that also apply to the EU (Withdrawal) Bill, and need to be tackled in a way that is consistent with it. The Trade Bill also highlights flaws in Parliament’s role in international agreements. In trade policy, Brexit means UK parliamentarians could have less control than now, whereas they should have more.
The Trade Bill, which has its second reading debate today, is one of the most important pieces of Brexit legislation.
It is a framework Bill enabling the UK to implement the non-tariff elements of future international trade agreements, where those agreements are with states with which the EU has signed a trade agreement by the date the UK leaves.
For non-tariff issues, the Bill is aimed at addressing the domestic legislative aspect of one of the most urgent Brexit questions: how to save, in less than 15 months, the preferential trade arrangements that the UK has through the EU with, according to the Bill’s impact assessment, at least 88 countries and territories, covered by perhaps 40+ agreements.
The Bill’s broad aim is the same as that of the EU (Withdrawal) Bill - which has its report stage consideration in the House of Commons on 16-17 January - and indeed of the government’s overall Brexit approach: to minimise the disruption to business and consumers at the moment when the UK leaves the EU on 29 March 2019.
But, as regards trade agreements, the EU (Withdrawal) Bill on its own cannot do the job, because capturing the provisions of trade agreements that the EU might sign right up to Brexit day may require domestic implementing powers that last beyond those in that Bill.
Trade policy: why it matters
Just as the vote for Brexit was, in part, a vote against some of the effects of the most far-reaching set of international economic liberalisation agreements ever, trade policy is going to be one of the key mediators of the UK’s post-Brexit economic model. Combined with domestic measures, trade policy is going to help determine which groups and sectors ‘win’, at least relatively, from Brexit.
Trade policy - apparently as represented primarily in the number and terms of the trade agreements that the UK signs around the world - is also going to be a key channel for potential delivery of prominent pro-Brexit campaign promises: ‘taking back control’, so that trade deals better reflect UK interests; and building a ‘global Britain’.
And trade policy is also going to be critical to the UK’s post-Brexit foreign policy and international identity. Will the UK make it its practice, for example, to include human rights and environmental standards in the trade agreements it pursues outside the EU – even if this makes it more difficult to get them concluded? Recent reports that President Trump might deny the UK a trade agreement unless he is invited to Prince Harry’s wedding would represent only an extreme example of the kind of hardball political linkage with which future UK trade policy might have to grapple. Arrangements concerning UK overseas territories; immigration policy; arms sales; cultural exchanges; extraditions; and votes in the UN Security Council or other UN bodies, and on the hosting of international sports events, are all easily imaginable as the kind of issue which might become linked to trade agreements.
Familiarity with the arguments over Commonwealth trade preferences at the time the UK joined the then-EEC, or further back over the Corn Laws, might underpin an idea that trade policy controversies are mainly about tariffs and quotas on goods.
But the most prominent public opposition to recent proposed trade deals such as TTIP and CETA has been about food standards (chlorinated chicken) and the openness of public services (the NHS) and public policy (investor-state dispute settlement) to foreign private interests. These examples demonstrate that non-tariff trade issues, about regulation and investment rules, can mobilise popular engagement. For policymakers, including parliamentarians, these issues are a potential ‘perfect storm’ – both highly technical and intensely political. Westminster is going to need the right procedures and resources to address them.
Trade Bill worries: Withdrawal Bill mark II?
In this context, the Trade Bill raises concerns partly because of its reliance on delegated powers, including Henry VIII powers to use statutory instruments to amend primary legislation that is retained EU law under the EU (Withdrawal) Bill.
The Bill provides that delegated powers will be used to implement the non-tariff aspects of relevant international trade agreements; and that these powers will be subject primarily to the negative scrutiny procedure.
As the Hansard Society has argued elsewhere, the visibility and political salience of the EU (Withdrawal) Bill has finally exposed the longstanding shortcomings of the delegated legislation scrutiny system. Unless there is thoroughgoing reform of this system, primarily in the House of Commons, Parliament cannot be said to have meaningful control over legislation made using delegated powers.
The government claims delegated powers in the Trade Bill for the same reasons as in the EU (Withdrawal) Bill – partly for speed, and partly because it says (as at paragraph 44 of the Bill’s explanatory notes) that the changes that the powers are required to make are often “technical”.
But the government also says in the same document that it may “be necessary to substantively amend the text of the previous EU agreements” (paragraph 53); and, in the Bill’s delegated powers memorandum, that the implementing power is “broad enough to allow implementation of substantial amendments, including new obligations”.
At the very least, there needs to be some consistency between the scrutiny arrangements applying to retained EU law under delegated powers in the EU (Withdrawal) Bill and to delegated legislation made under the Trade Bill to implement international agreements, since the government states (explanatory notes paragraph 41) that the latter would only be needed where UK legislation to implement EU agreements has not been made in time to become retained EU law on Brexit day.
The EU (Withdrawal) Bill was successfully amended at committee stage to incorporate a new sifting committee procedure so that MPs can sift all future EU (Withdrawal) Orders and recommend an upgrade in the level of scrutiny of those about which they have most concern. A key question is whether that mechanism will now be adopted for scrutiny of Orders arising from some very wide delegated powers in the Trade Bill.
Parliament’s role in international agreements
Compared to purely domestic legislation, there are added complications where domestic law is being made in order to implement international obligations.
This applies whether that domestic law is primary or delegated legislation.
Normally, for a parliament, one of the points of legislation – as opposed to other instruments – is that it allows the making of legally binding amendments (depending, of course, on the parliament’s powers over amendments to delegated as well as primary legislation).
But it is, at the least, not certain that such amendments could have the effect of obliging the UK and a foreign partner or partners to make specific changes to an international agreement that has already been signed.
The need, in the UK system, for Parliament to pass legislation to implement international agreements is conventionally seen not as a vehicle for influencing the content of such agreements, but as the primary point at which Parliament exercises control over whether there should be an agreement at all. This need to pass domestic implementing legislation is often seen as ‘compensation’ in the UK constitutional system for Parliament having only weak ‘up or down’ powers over ratification.
Under the 2010 Constitutional Reform and Governance Act (CRAGA), Parliament cannot vote definitively against UK ratification of an international agreement. In the shape of the House of Commons only, it can only indefinitely prevent ratification, by passing repeated negative resolutions to deny its consent.
But how, exactly, it would do so is not clear. As the House of Commons Library has set out, neither House has ever resolved against ratification under the CRAGA provisions. Because of the government’s control of the parliamentary timetable there, the House of Commons, in particular, could face similar procedural difficulties in expressing itself against ratification of an international agreement as it does in securing meaningful debates and votes on delegated legislation. And yet these weak powers over ratification apply even where the relevant implementing legislation is to be made using delegated powers, as with the trade agreements to be implemented through the Trade Bill.
On top of these uncertainties, the Brexit process itself is introducing new precedents and potential inconsistencies into UK practice concerning Parliament’s role in international agreements.
For one thing, the government has decided that the UK-EU Withdrawal Agreement will be one of those UK international agreements that is implemented through a dedicated piece of primary (not delegated) legislation, the Withdrawal Agreement and Implementation Bill 2018.
Potentially more significantly, the Supreme Court’s Miller judgement required Parliament to pass, at least for this case, primary legislation to authorise the government’s use of prerogative powers even to open negotiations on an international agreement.
This comes as parliamentarians are set to lose one of the few formal roles they have towards the start of the process for making at least some international agreements. As an element in the European scrutiny system, UK ministers in the EU Council are not supposed to agree to the EU opening negotiations on, or signing, an international agreement unless the scrutiny committees in both Houses have released the relevant documents from the scrutiny reserve.
In its Trade Bill impact assessment (paragraph 21), the government used the fact that existing EU trade agreements “have already been subject to UK parliamentary scrutiny processes at their point of conclusion by the EU” as part of its justification for claiming negative delegated powers to implement their UK successors. In a system for parliamentary involvement in international treaty-making which otherwise is heavily weighted towards the end of the process, this would seem to provide grounds at least to open discussions on a possible post-Brexit replacement for the scrutiny reserve, to apply to entirely new UK international trade agreements, and potentially giving Parliament some additional formal role more towards the - often most important - opening phases of the trade agreement process. Otherwise, just as the EU (Withdrawal) Bill originally threatened to give Parliament less control over wide delegated powers than some earlier pieces of legislation, post-Brexit trade policy could see UK parliamentarians with even less of a say over international trade agreements than they have within the EU.