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Friday, 10 February 2023

Lorand Bartels is Professor of International Law in the Faculty of Law and a fellow of Trinity Hall and the Lauterpacht Centre at the University of Cambridge. He is Chair of the Trade and Agriculture Commission (TAC) and was appointed an MBE in the 2022 Queen’s New Year Honours List for services to UK trade policy.




This article first appeared in Lauterpacht Centre News - January 2023

Scrutinising the UK’s post-Brexit Free Trade Agreements

One of the main advantages of Brexit, to its supporters, has been the regaining of the UK’s ability to conduct an independent trade policy. Along with the UK now acting as a fully independent WTO Member, at the bilateral level this has meant the conclusion of free trade agreements (FTAs) with likeminded countries. These are agreements providing for the complete – or almost complete – reduction of customs duties on goods, as well as ‘behind the border’ rules facilitating trade by reducing regulatory barriers to trade in services, government procurement, investment, among others.

Free trade agreements can be politically controversial for two main reasons. The first is economic: trade liberalisation comes with import competition, which puts pressure on domestic producers. The second is to do with values, but can also have an economic dimension. Reducing trade barriers for imports made in countries with lower production standards can be politically sensitive per se, but it can also lead to objections that higher domestic standards are being undermined. In some cases, domestic producers might even seek to avoid these standards by relocating to those countries, taking advantage of new trade opportunities. 

For several reasons, the UK was until very recently been relatively immune from these concerns. In part, this is because the UK has (not entirely accurately) traditionally seen itself as a bastion of free trade, especially compared to other countries. In part, this is because, since the UK joined the EU 50 years ago, the UK was able to shelter behind protectionist policies promoted by other EU Member States, especially in agriculture. In short, the trade-offs inherent in a policy of trade liberalisation are new to the UK public, and perhaps even to its policy making apparatus as well. 

It was therefore to be expected that, when the UK came to negotiate new free trade agreements, these trade-offs would gain prominence. This took time. The UK’s first post-Brexit FTAs, mainly signed in 2019 and 2020, were ‘continuity’ agreements which essentially replicated pre-existing EU FTAs with other countries, and did not change anything for domestic producers. In addition, politically, attention was mainly focused on EU-UK trade relations, which resulted in two agreements in 2020: first, in February, the Northern Ireland Protocol to the UK-EU Withdrawal Agreement, which provided for free trade in goods between Northern Ireland and the EU via a de facto customs union, and then, in December, the UK-EU Trade and Cooperation Agreement (TCA), which provides for free trade in goods (and some services) between the UK and the EU. These agreements were (and remain) controversial, but this is not because they provide for trade liberalisation. Rather, it is for the opposite reason, that they establish new administrative trade barriers within the UK (under the Protocol) and between the UK and the EU (under the TCA). 

But alongside these developments, there was a growing concern that when the UK did adopt a new trade policy, this could affect domestic producers (via new import competition) and both producers and consumers (via lower standards). The lead in this was taken by the National Farmers’ Union (NFU), which wrote to the Prime Minister four days before the UK formally left the EU, on 27 January 2020, urging legislation to protect high agricultural production standards in the UK, and recommending the establishment of a statutory body to engage with these issues. A petition was launched which, with support from Jamie Oliver, the celebrity chef, achieved one million signatures by June that year. And in November, the government agreed to establish a Trade and Agriculture Commission (TAC), with a mandate of advising the government on UK agricultural standards in its trade policy. 

This Commission issued its report in March 2021, at which point its mandate expired. The Government responded to this report in October 2021, and at the same time established a new Trade and Agricultural Commission, this time to be on a statutory footing, as originally requested by the NFU. 

This new TAC (of which I am the Chair) has a different mandate, which is to scrutinise new UK FTAs, and to advise the Government and Parliament on whether these FTAs risk undermining the UK’s statutory protections in the areas of environmental standards, agricultural health and safety standards, and animal welfare standards. There are 11 TAC members, drawn from the worlds of academia, farming, trade law and policy, and science, each working in a personal and independent capacity. (It is worth noting that this model is unique. Usually, FTAs are scrutinised prior to ratification by parliamentary committees, which often have limited time and resources to conduct their work, by professional interest groups, or by professional consultancies commissioned to write reports by the negotiating governments). 

The TAC’s first commission was to examine the UK’s new FTAs with Australia and New Zealand, both signed in early 2022. These FTAs provide for full liberalisation of agricultural imports into the UK, albeit over a period of 15 years, and the economic implications of the import competition that this might generate has caused some concern over the past year in various quarters (including the UK’s former agriculture minister). The TAC’s role is not to look at these economic issues, however, but rather at whether any such increased imports are likely to also undermine UK standards. In its advices on these two FTAs, after a public consultation process, the TAC came to the view that this would be unlikely. 

This was for various reasons. First, these FTAs contain exceptions which are at least as broad as those in the WTO agreements, permitting the UK to protect its domestic environment, health and safety and public morals, and in the case of New Zealand even going further, in respect of climate change. Second, both FTAs contain provisions requiring the parties to maintain high environmental standards. Third, while it is true that in some cases Australian agricultural production has lower standards than UK production, with rare exceptions this does not affect products that are likely to be imported into the UK at increased rates under the UK-Australia FTA. 

For example, the TAC found that wool from sheep that had been subject to ‘mulesing’ can already be imported duty free into the UK, and beef from cattle given hormone growth promoters would not be exported to the UK. Nor was there any evidence that agricultural imports under the FTA would promote climate-unfriendly agricultural production in Australia or New Zealand. Indeed, the TAC found that in most cases New Zealand meat imports were less carbon intensive, even accounting for transport, than home-grown UK meat. The TAC did however find that the UK-Australia FTA would be likely to result in increased imports of canola (rapeseed) produced from genetically modified crops, and increased imports of certain other agricultural products grown using pesticides banned in the UK, causing potential harm to Australia’s environment, and which to this extent could not be prohibited by the UK. 

The TAC’s advices on the Australia and New Zealand FTAs were welcomed by the Government and, significantly, the NFU, and there was probably a sense of relief that – whatever their economic effects – the TAC concluded that these agreements were unlikely to undermine the UK’s agricultural standards. The TAC is likely next to be tasked with scrutinising the UK’s upcoming FTA with India, and its accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a regional free trade agreement with 11 countries, including Canada, Japan, Chile, Australia, New Zealand and Malaysia. Scrutinising these agreements will be a significant challenge, given the number of countries involved and the range of their agricultural practices – but also no doubt a rewarding one. 

Further information: government/organisations/trade-and-agriculture-commission