Time to give our industries the protection they deserve

Author
Published date
22 May 2018
A cross-party group of MPs have supported the TUC's call for a more robust trade defence regime post-Brexit
steel worker in a factory
UK industry workers deserve a post-Brexit trade defence regime that is robust

Earlier this month, MPs on the International Trade Committee delivered a withering verdict on the government’s plans for protecting UK manufacturing post-Brexit.

They echoed our warning that the proposed new ‘trade remedies’ system is too weak to protect our industries from the ‘dumping’ of cheap goods on the international market.

They also agreed that working people should be involved in developing protections against unfair trade practices by countries like China and the United States.

The Committee’s report will now be considered by the government, but we’re urging ministers to act now to ensure our trade defences are fit for a post-Brexit future.

Making the case

This month’s report by the International Trade Committee follows evidence we presented to MPs in a committee meeting earlier this year.

Back then, we warned that the proposed trade remedies system could leave industrial sectors such as steel, ceramics and glass more exposed to dumping.

We also cautioned that it could make these industries vulnerable to higher tariffs such as those that President Trump recently imposed on steel and aluminium exports to the United States.

Much room for improvement

This government already has a poor record of protecting our manufacturing workers from unfair trading by other countries.

For example, after a glut of cheap Chinese steel was dumped on the UK market in 2015, ministers refused to provide our steel industry with state aid or energy subsidies as other EU countries did.

As a result, the SSI Redcar steelworks was forced to close, 7000 steel industry workers lost their jobs, and local communities across the country suffered.

Now, just when the EU has introduced new rules that would increase protections from dumping and unfair trade practices (known as ‘trade remedies’), the government is vowing to leave the customs union and set up a UK-only system of trade defence.

The state of play

The new system outlined in the Trade Bill and Customs Bill would create a new body called the Trade Remedies Authority, which we believe will be much weaker than its EU equivalent.

Setting up our own trade remedies system outside the customs union will also make the UK much less powerful than the remaining 27 EU countries when it comes to standing up to countries like China or the USA over unfair trading practices.

In their report, MPs on the International Trade Committee agreed with our concerns and those of the Manufacturing Trade Remedies Alliance (which consists of manufacturing employers and trade unions) that the new post-Brexit trade remedies looked inadequate.

They also warned that the government seemed underprepared to defend our industries, particularly were the UK to leave the customs union in March 2019 without a deal.

Workers deserve a say

The fact that neither the Trade nor the Customs Bill mentions trade union involvement demonstrates the government’s lack of concern for workers who are at the sharp end of trade dumping.

This indifference stands in marked contrast to the EU, which recently reformed its trade remedies rules to give trade unions a legally guaranteed role in the process of filing complaints about unfair trade practices.

Thanks to intensive TUC lobbying, the Chair of the Trade Remedies Authority will at least be required to engage with trade unions and other stakeholders.

But we want the government to go further by giving trade unions seats on the new Trade Remedies Authority.

This will allow workers from sectors that have been negatively affected by dumping to push for the trade remedies necessary to protect jobs.

And the Committee agrees with us that ‘there is a strong case for requiring that some Trade Remedies Authority Board members be appointed to represent the interests of particular groups (for example, consumers and trade unions)’.

Democratic oversight

We also told the committee of our concerns that the UK parliament will not get a say in the new UK trade remedies system.

This means that the government cannot be forced to act to protect industries badly hit by waves of cheap goods from countries like China.

By contrast, the European Parliament and EU countries do get a say in the protections that are put in place for industry.

In their report, the International Trade Committee agreed that there was a worrying lack of independent, democratic scrutiny for trade remedies.

Further hurdles

We are also worried that there are too many hurdles in the post-Brexit system before anti-dumping measures can be put in place.

One of them is called the ‘economic interest test’, which sounds technical but is actually a very political tool.

This ‘test’ would essentially allow the International Trade Secretary Liam Fox or the Trade Remedies Authority to reject anti-dumping measures if they are not deemed to be in the economic interest of the county.

In our committee evidence, we argued that this would mean subjective judgements about what is in the ‘economic interest’ of the country would trump appeals by workers or employers for the government to act against dumping or other unfair trade practices.

It is therefore good to see MPs agree that there this economic interest test has no place in the Customs Bill.

Time for action

Now that the International Trade Committee has delivered this verdict, it’s time for the government to take action.

Our manufacturing industries employ thousands of workers across the country.

They deserve a post-Brexit trade defence regime that is robust enough to protect their jobs and the communities their industries support.