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Amendment 31

Part of Trade Bill - Report (2nd Day) – in the House of Lords at 6:30 pm on 13th March 2019.

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Photo of Baroness Fairhead Baroness Fairhead The Minister of State, Department for International Trade 6:30 pm, 13th March 2019

My Lords, I thank the noble Baroness, Lady Brown of Cambridge, and the noble Earl, Lord Kinnoull, for tabling their amendments and clarifying in advance their concerns with me and the ministerial team.

Before I respond fully to the amendments, I will take the opportunity to draw your Lordships’ attention to the steps that the Government have taken to ensure that the UK is ready to deliver a fully operational trade remedies system by exit day. The Government have brought forward legislation under the Taxation (Cross-border Trade) Act 2018 to establish the UK’s trade remedies system in the event that we leave the EU without a withdrawal agreement. These regulations also temporarily confer trade remedy functions on the Secretary of State until the Trade Remedies Authority, the TRA, is legally established.

Staff already recruited to DIT with the intention of transferring to the TRA on Royal Assent of the Bill, including those trained as investigators—the key function of this body—will carry out their functions as the Trade Remedies Investigations Directorate within the department. The directorate started work on 6 March and will deliver trade remedies functions in house pending legal establishment of the TRA.

Let me repeat that this arrangement will only be temporary. As noble Lords will appreciate, this is a necessary and pragmatic operational contingency to ensure continuity of protection for UK businesses. This must remain the Government’s priority. It is right that we plan for all eventualities, including where, for whatever reason, the TRA is not legally established under the Bill by 29 March.

As the Secretary of State explained in his previous letter to the International Trade Committee on 14 February, these regulations ensure that we can deliver a fully operational trade remedies system for any eventuality, but we are clear that the TRA remains the long-term sustainable way of delivering an independent trade remedies function. Our commitment to establishing the TRA as a non-departmental public body at arm’s length from government has not changed. We must have an independent TRA in the near future.

To ensure consistency, the Trade Remedies Investigations Directorate will follow the same policy and procedures, as set out in the relevant legislation. Most importantly, the directorate will carry out objective investigations and make evidence-based decisions for consideration by the Secretary of State on whether measures should be put in place. Indeed, noble Lords will see that the relevant legislation laid before the other place last week sets out how the TRA will operate as an independent arm’s-length body. But if this preferred approach is not possible by exit day, the legislation also includes the necessary modifications to confer functions on the Secretary of State. These modifications will automatically expire when the TRA is legally established, with no need for further amendments. The message is clear. The UK will act decisively to address trade that causes unfair injury to our domestic industries. As soon as the TRA is established, subject to the will of Parliament, it will of course take on responsibility for delivering this function.

The Government are committed to tackling unfair trade and injurious practice in all sectors, including the ceramics sector, which the noble Baroness, Lady Brown, is interested in. It is one of the UK’s most iconic industries that exports world-class pottery around the world. The call for evidence concluded that existing EU trade remedies should be maintained for the UK’s ceramics industry. We will continue to operate a trade remedies regime that will provide a robust safety net for our industries and will enable the UK to be a leading proponent. I hope that this reassures the House that we are taking the right steps in the national interest, pressing ahead with the Trade Bill as planned while ensuring that necessary operational contingency preparations are in place if required.

I turn to Amendments 31 and 32. The policy framework that the TRA will be responsible for operating is already established in the Taxation (Cross-Border Trade) Act 2018. With regard to Amendment 31, let me be absolutely clear: that Act already sets out a presumption in favour of measures in all dumping and subsidies investigations. As I explained to the House in Committee, the Government amended the Act during its passage to emphasise this point and clarify that the TRA must consider,

“the injury caused by the dumping of the goods, or the importation of the subsidised goods, to a UK industry in the goods and the benefits to that UK industry in removing that injury”.

Furthermore, the Government will be publishing guidance on the economic interest test, which will reiterate this presumption and specify that the TRA must make a recommendation to impose measures unless it can show that anti-dumping or anti-subsidy measures would have disproportionate impacts on the wider UK economy.

I will repeat the reassurance I gave the noble Baroness, Lady Brown, in Committee: this presumption will apply when the TRA conducts the test. It has not been possible to mirror exactly the wording of EU regulations in our statute book. There was a very helpful intervention by my noble friend Lord Lansley. “Special consideration” has a specific meaning under EU law but does not have the same meaning under UK law. However, we are absolutely clear that we share the intent of giving that special consideration to the injury caused to UK industry by imports of dumped or subsidised goods. The language in the Act achieves the same outcome of an explicit presumption in favour of anti-dumping and anti-subsidy measures.

Amendment 32 also refers to the Taxation (Cross-Border Trade) Act 2018, which has already been considered and passed in the other place. This House will have seen that the provisions in the secondary legislation contain a great deal of technical detail. That is why it was accepted that the negative resolution procedure is the appropriate scrutiny mechanism. Indeed, the Delegated Powers and Regulatory Reform Committee of this House has considered the provisions of the Act and did not comment on the use of the negative procedure.

The noble Earl, Lord Kinnoull, asked about parliamentary scrutiny. We have considered the right balance between primary and secondary legislation. We want the UK to have a robust, responsive, WTO-compliant trade remedy system. The technical provisions set out in secondary legislation must be compliant with WTO law. That means that we need the flexibility for the UK to adapt to frequent developments in WTO case law. Anti-dumping and anti-subsidy measures are some of the most frequently litigated issues at the WTO. We laid secondary legislation before the other place on 5 March to have details of the framework ready to be operational as an example. The existing procedures will allow for parliamentary scrutiny of this secondary legislation.

My noble friend Lord Lansley asked whether all existing EU trade remedies would be moved over. Our commitment is to make sure that the UK will apply only those EU trade remedies that matter to UK industries. I hope that this will reassure my noble friend about the potential issue with WTO compliance that he highlighted.

I trust that my responses have provided reassurance to your Lordships and that the noble Baroness, Lady Brown, will withdraw her amendment.