Last week the government published a customs bill which will give the UK power to set its own tariffs (taxes on imported goods) after Brexit. This follows the trade bill published two weeks ago which would give the government powers to negotiate trade deals independently of the EU.
The bills fuel the fears caused by trade secretary Liam Fox’s plans for post-Brexit trade. They show no commitment to protecting workers’ rights, public services, UK manufacturing or developing countries.
And they would set up a process for hundreds of trade deals to be agreed by the backdoor.
Customs union membership possible but not guaranteed
The customs bill would give the UK legal powers to be in a customs union with the EU (or any other country) after Brexit.
This is good news. It’s crucial that the UK does not rule out continued membership of the EU customs union after Brexit in order to avoid the customs checks, delays at the border and tariffs that could cost companies billions. These extra costs would hit jobs hard.
The bad news is that the government continues to drag its heels in negotiations and has ruled out single market or customs union membership for a future deal with the EU.
We think this was a major mistake by the government that puts jobs, rights and living standards at risk.
200+ trade deals rewritten by the back door
The trade bill would allow the 200+ deals involving trade that the UK currently is part of via EU membership to be renegotiated through secondary legislation.
This would mean that parliament would have no say and wouldn’t get a vote on what could potentially be 200+ new trade deals (if it was humanly possible for the government to negotiate that many.) And that would mean unions and others would not be able to influence the debate.
We’re concerned these renegotiated deals might allow lower employment rights or other standards, lead to unfair competition against UK businesses employing workers in Britain, or open our public services to further privatisation.
The trade bill would allow these changes to become law without parliamentary scrutiny.
No protections for workers’ rights or public services
There is no provision in the trade or customs bill for the protection of workers’ rights or public services in future trade deals or policy.
This reinforces our concern that Liam Fox’s agenda for trade will encourage a race to the bottom on standards through trade deals with countries like the USA and the Gulf States that have much lower protections for workers’ rights.
Similar risks would be run for consumer and environmental protection.
Uncertainty for developing countries
The customs bill would allow lower tariffs on goods imported into the UK from developing countries– what’s known as ‘trade preferences’.
But it’s not clear whether such imports will face zero tariff rates, as EU trade agreements provide for the majority of developing countries at the moment, or just lower rates than developed countries. It would do significant damage to the already fragile economies of developing countries if the UK imposed tariffs on their goods, even if they were low.
And there is also no provision in the customs bill for trade preferences to be conditional on respect for international standards on workers’ rights – as they are in the EU GSP+ trade preference scheme.
Weak anti-dumping measures
The customs and trade bills will set up a future UK system to deal with cases of trade dumping after Brexit – known as ‘trade remedies’.
Dumping of cheap steel, glass and tyres is already a serious problem in UK manufacturing, risking thousands of jobs.
The TUC and an alliance of manufacturers’ associations have been calling for stronger trade remedies post-Brexit. Unfortunately the government proposals in this bill don’t look like they will provide the strong protections workers in our industries need.
While the customs bill says the government could apply higher tariffs against countries dumping goods in our market, they wouldn’t be high enough to deter that dumping.
There’s also no indication of how the government will deal with non-market economies like China: one of the worst offenders when it comes to dumping cheap goods in UK markets.
Getting a better deal
The TUC will be lobbying for the trade and customs bill to contain stronger protections for workers’ rights and public services as well as stronger measures against dumping for our industries.
The trade bill must also guarantee all renegotiated and new trade deals involving the UK are subject to a parliamentary debate and vote.
And we will press for a future UK-EU relationship that preserves jobs, rights and livelihoods – probably through continued membership of the single market and customs union, as this is the best way to protect jobs and rights.
No trade deal with another country would provide the same economic benefit or protection for workers.