Devolution and Post-Brexit Trade Agreements: Towards a Joint Trade Policy Committee?

In October 2017 when presenting the policy paper, Preparing for our Future UK Trade Policy, the Secretary of State for International Trade, Dr Liam Fox, recognised that for the first time since the 1970s, the United Kingdom (“UK”) would have its own independent trade policy.¹ Since the last time the UK had an independent trade policy, there have been notable constitutional changes within the UK, notably the creation of devolved administrations in Scotland, Wales and Northern Ireland. All parts of the UK will be affected differently by the decision to leave the European Union (“EU”) (i.e. Brexit) after 29 March 2019, particularly by the creation of an independent trade policy. As a member of the EU customs union and of the single market, the UK does not at present have an independent trade policy. Instead, trade policy is “largely determined by the EU”,² a position that will change with Brexit. While trade is a reserved matter, areas of devolved competence such as agriculture will need to be taken account of in any future UK trade policy. The devolved administrations will require to be involved in what Dr Fox identified as “a once in a lifetime opportunity to build a stronger, fairer and more prosperous United Kingdom that is more open and outward-looking than ever before”.³ Indeed, the policy paper further recognised that, “(t)he devolved administrations will have a direct interest in our future trade agreements”.⁴ This was accompanied by a commitment, “to seek the input of the devolved administrations to ensure they influence the UK's future trade policy, recognising the role they will have in developing and delivering it”.⁵

In this present paper, we critically review the UK Government's current approach to involving the devolved administrations in post-Brexit trade policy development. We demonstrate that there is a significant lack of clarity on the future role of the devolved administrations in the development of trade policy. The Scottish Government is particularly concerned in this respect given that its extensive devolution settlement includes areas with significant trade dimensions such as agriculture, fisheries and environmental policy. We argue that greater clarity on such involvement is very much needed and, in response, propose the creation of a Trade Policy Committee through an amendment to the Trade Bill.

The Trade Bill introduced into the House of Commons in November 2017 is designed to ensure that the UK has the necessary powers to conduct an independent trade policy on its departure from the EU. In addition to the creation of a Trade Remedies Authority and providing for regulations to be made to provide UK implementation of the World Trade Organisation's (“WTO”) Government Procurement Agreement, it also allows regulations to be made to ensure the continuity of existing trade agreements to which the UK is a party by virtue of its membership of the EU.⁶ It is important to note what the Trade Bill does not cover; the customs/tax-related elements of a future UK trade policy are to be found in the Taxation (Cross-border Trade) Act 2018, which received Royal Assent on 13 September 2018, and it does not provide for the implementation of new trade agreements.

The approach to be taken to new trade agreements was set out by the Secretary of State for International Trade in a statement to the House of Commons on 16 July 2018, which promised that the UK Government would engage with Parliament...