Why MPs should back the Djanogly amendments to the Trade Bill on parliamentary scrutiny of trade agreements

20 Jul 2020
Trade shows Brexit legislation linkages and complexity

MPs should take the opportunity to show the government and their constituents that they want to have more say on free trade agreements than they did when the UK was inside the EU.

Dr Brigid Fowler, Senior Researcher, Hansard Society
Senior Researcher, Hansard Society

Dr Brigid Fowler

Dr Brigid Fowler
Senior Researcher, Hansard Society

Brigid joined the Hansard Society in December 2016 to lead its work on Parliament and Brexit, as well as contribute to its ongoing research on the legislative process, parliamentary procedure and scrutiny, and public political engagement. From 2007 to 2014 she was a Committee Specialist for the House of Commons Foreign Affairs Committee, where she led on the Committee’s EU-related work. In the first six months of 2016 she was on the research team of Britain Stronger in Europe. She has also worked as assistant to an MEP in Brussels and as an analyst and researcher on EU and European affairs in the private sector and at the University of Birmingham and King’s College London.

After completing BA and MPhil degrees at the University of Oxford in PPE and European Politics, respectively, she spent the first part of her career focusing on the politics of post-communist transition and EU accession in Central Europe, and completed her PhD at the University of Birmingham on the case of Hungary. She has given media comment, appeared before select committees and published several journal articles and book contributions.

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On 20 July, the House of Commons is due to hold the Report stage and Third Reading of the Trade Bill.

The Trade Bill is one of the flagship Brexit bills that the government failed to pass through the 2017-19 Parliament and has re-introduced following the general election.

The Committee stage of the Bill was held in a Public Bill Committee, not on the floor of the House, so its Report stage will be the first opportunity for all MPs to amend the Bill.

The Trade Bill passed through its Committee stage unamended, with the government majority on the Public Bill Committee defeating all the opposition amendments that were put to a decision.

For Report stage, opposition parties have to a considerable extent re-tabled amendments that they tabled in Committee.

The most significant – and potentially politically viable – non-government amendments tabled for Report stage are those led by the Conservative backbencher Jonathan Djanogly. Mr Djanogly has been among the most active MPs pushing for improved parliamentary scrutiny of trade agreements during both the previous and current Trade Bill processes, but he was not on the Public Bill Committee for either Bill.

In the current Trade Bill, the government has retained some but not others of the amendments that it conceded during proceedings on the 2017-19 Bill. Some of the amendments that Mr Djanogly is putting forward now would restore changes made during proceedings on the 2017-19 Bill that are not retained in the current version. These include, notably, a reduction in the lifespan of the delegated powers that are granted to ministers to implement ‘successor’ (or 'continuity') trade agreements; and a statutory requirement on the government to publish ‘parliamentary reports’ on UK successor trade agreements to identify where they differ from their EU predecessors. To its credit, the government has been publishing such reports anyway, on the basis of the aborted 2017-19 Bill, and it says that it will continue to do so without the requirement being in law. However, putting the practice on a statutory footing would create greater clarity and certainty.

With respect to parliamentary scrutiny, the most critical amendment tabled for Report stage is Mr Djanogly’s New Clause 4.

New Clause 4 would require the government to lay UK free trade agreement (FTA) negotiating objectives before Parliament, and secure the passage of approval motions for them in both Houses, before starting FTA negotiations; and repeat this process with draft FTAs before signing them. This would be a step-change in Parliament’s role in the UK trade agreement-making process.

At present, Parliament’s role in the trade agreement process – as in the treaty-making process in general – is defined by Part 2 of the Constitutional Reform and Governance Act 2010 (CRAG Act). The CRAG Act process is inadequate even in its own terms, as a pre-ratification process, not least because it subjects treaties only to a negative procedure in the House of Commons (that is, consent to ratification is given by default), and with no guarantee of a debate. By contrast, New Clause 4 would provide for an affirmative procedure (that is, approval is required), with a statutory debate.

Even more importantly, New Clause 4 would insert Parliament earlier into the FTA process, at two stages:

  • the opening of negotiations, when it is most important to exercise influence; and

  • before signature, which is the last chance to change text before the international commitments that come with signature kick in.

By contrast, the CRAG Act process gives Parliament a role only at the final, pre-ratification stage of the treaty-making process, when it is too late to influence the content of the treaties being concluded.

Moreover, New Clause 4 would apply this new process to all UK FTAs: both ‘successor’ (or ‘continuity’) FTAs (with partners which had signed an FTA with the EU before the UK left), and FTAs with new partners.

The FTAs covered by the New Clause 4 process could include any FTA that the UK negotiates with the EU.

With respect to the opening of negotiations, the proposed New Clause 4 process would come too late for the FTA talks with the EU, as well as with the US, Australia and New Zealand, all of which have been launched with at most an oral ministerial statement to the House of Commons, not a debate. (This has been a step back from the May government’s promise – in its March 2019 response to the International Trade Committee's report on trade policy scrutiny – of a debate at this stage of the process, for FTAs with new partners.) However, the proposed New Clause 4 process would catch the signature stage of these FTAs, as well as the entirety of the process for any FTA negotiation launched after the new process reached the statute book.

The proposed new process would also be too late for the signature stage of the 20 successor trade agreements that the UK has already signed, but it would catch those that remain to be completed.

Amendments proposing the kind of ambitious role for Parliament envisaged by New Clause 4 were tabled during proceedings on the 2017-19 Bill, and in Committee on the current version, but by opposition parties. The fact that New Clause 4 is led by a Conservative backbencher is new.

Moreover, Labour has not re-tabled its own amendments proposing parliamentary approval for negotiating objectives and draft FTAs, but refers to New Clause 4 in one of its remaining amendments, which suggests that it is supportive of Mr Djanogly’s version. Overall, New Clause 4 has the signatures of 33 MPs from 6 parties, which means that it may well be selected by the Speaker for debate and decision.

On the basis of its previous contributions to Trade Bill proceedings, the government would be likely to argue against New Clause 4 in several ways:

i) ‘The proposed new process interferes with prerogative powers’ – in this case, to negotiate and sign treaties.

This is correct. However, on its own, it is not a clinching argument. Limits can be, and have been, placed on the prerogative, including by legislation. For example, the CRAG Act constrains the executive’s ability to ratify treaties, and the Fixed-term Parliaments Act 2011 replaced the executive’s right to dissolve Parliament. Arguably, there is now an expectation that the House of Commons must give approval via resolution before the UK takes military action.

ii) ‘The CRAG Act process was only put in place 10 years ago and is working fine’.

The first part of this claim is correct. And, as a general principle, it can be problematic to change constitutional processes on the basis only of a changed House of Commons majority (although it is worth noting that the share of the current House of Commons who were not MPs when the CRAG Act was passed is 74%).

However, if there is a good case for reform of a process as a result of Brexit, treaty scrutiny would seem to be it – certainly with respect to free trade agreements.

When the CRAG Act was passed, the UK did not make trade agreements by and for itself, and scrutiny of such agreements fell within the scope of EU matters – both within the EU system, and at Westminster. The CRAG Act placed on a statutory footing a convention developed a century ago primarily to prevent the making of ‘high politics’ treaties in secret, not to address the making of international law affecting industrial policy and food and animal welfare standards. Since the referendum vote to leave the EU in 2016, the CRAG Act process has been declared unfit for purpose by the House of Commons International Trade Committee, as well as the House of Lords Constitution Committee and House of Lords EU Committee. An inquiry into treaty scrutiny by the House of Commons Public Administration and Constitutional Affairs Committee was cut short by the general election.

iii) ‘Parliament gets its say on treaties because it has to pass legislation to implement them, so it doesn’t need additional scrutiny processes’.

The first part of this claim is correct (provided that any treaty in question requires implementing legislation). Where legislation is needed, and assuming that it is either primary legislation or delegated legislation which is subject to the affirmative procedure, Parliament could in theory wield a veto over ratification by declining to pass the legislation. The Johnson government maintains its predecessor’s promise that, where UK FTAs with new partners necessitate legislation, this will take the form of primary legislation.

However, passing domestic implementing legislation is not the same as scrutinising or influencing treaties. The scope of debate and decision is limited to the domestic law that needs to be changed, and in normal UK practice the process in any case takes places only after a treaty has been signed.

iv) ‘The UK’s successor trade agreements have already been subject to scrutiny when they were EU trade agreements; further scrutiny of such agreements would not be a good use of parliamentary time’.

This argument has some merit. However, given that the Trade Bill has yet to go to the House of Lords, there would be scope to refine the application of the new process proposed by New Clause 4. (For example, the parliamentary report on each successor trade agreement could be laid when the treaty text is ready for signature, rather than only afterwards, with select committees thus able to take a view on whether the agreement merits pre-signature debate and decision, and the government able to make a case if it wished for moving straight to implementing legislation and ratification.)

Moreover, the government’s argument implies that scrutiny of trade agreements might be a good use of parliamentary time where such agreements would otherwise not be subject to the kind of pre-negotiation and pre-signature parliamentary engagement that applied to EU agreements. As things stand, this applies to the UK's prospective FTAs with new partners.

v) ‘The Trade Bill only concerns successor trade agreements, not trade agreements with new partners’.

With respect to the current provisions of the Bill, this is correct. However, the fact that amendments encompassing trade agreements with new partners have been allowed to be tabled suggests that there is no procedural bar to including such provisions in the eventual Act.

Moreover, the government’s argument draws attention to the continuing debate about the best process for 'new' UK FTAs, and, as things stand, the lack of a vehicle for the House of Commons to express a view on the matter if it is not to do so in the Trade Bill.

vi) ‘The kind of role for Parliament envisaged by New Clause 4 would limit the UK’s flexibility and effectiveness in trade negotiations’.

This claim needs evidence.

One test case would be whether the UK was able to negotiate more effectively with the EU on the Withdrawal Agreement before or after the House of Commons finally had an opportunity to express its opposition to the original Northern Ireland Protocol, when it agreed the 'Brady amendment' to a motion in January 2019. In terms of UK treaty practice as it stands at present, it was highly unusual for the Commons to be able to express a view on a treaty before the UK signed it.

Making trade agreements is making a form of law. MPs must know from their inboxes that it can be a politically-charged form of law that matters to businesses and their constituents. And for the UK, the power to make such agreements for itself is one of the most high-profile and far-reaching consequences of Brexit, which demands that MPs step up their scrutiny accordingly.

But as things stand, MPs may have less say over free trade agreements before they are signed than they did when the UK was in the EU.

Given that the Trade Bill has yet to go to the House of Lords (which will almost certainly insert parliamentary scrutiny requirements even if the Commons declines to do so on 20 July), there is still scope to refine any new processes for trade agreement scrutiny that are put in place by the eventual Trade Act. However, if New Clause 4 is put to a vote on 20 July, it will be seen as a vote on the principle of whether MPs want a greater say on the UK's free trade agreements than they had prior to Brexit. MPs should take the opportunity to indicate that they do.

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