Why MPs should back the Djanogly amendments to the Trade Bill on parliamentary scrutiny of trade agreements
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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.
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 2019-20 Trade Bill: Report stage amendments
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.
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.
The Djanogly New Clause 4
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.
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.
Government arguments
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’.
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.
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’.
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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