Inclusivity in UK trade policymaking? Process, Consultations and Devolved administrations

This roundtable was convened by the Centre for Inclusive Trade Policy. The event was held under the Chatham House Rule and took place on 3 October 2024.

Background

The aim of this roundtable was to provide a space to discuss inclusivity in UK trade policymaking formulation with a wide range of stakeholders. The term inclusivity, in this context, relates to the question of whether the processes that underpin the development, adoption and formulation of UK trade policy and law (e.g., unilateral trade measures and trade agreements) enable actors outside of the central government machinery to have a say in shaping trade policy. This includes public authorities, such as devolved and local/regional authorities, as well as stakeholders and civil society actors.

Inclusivity in trade policy formulation is particularly important in the post-Brexit context. The UK’s withdrawal from the European Union and the resulting repatriation of trade policy powers presented the UK with a unique opportunity to design a trade policy and law framework which would more accurately reflect the UK’s specific economic, social and value preferences. Putting in place systems that enable stakeholders from across the country to feed into the process of trade policy formulation would be one way of ensuring UK trade policy represents the views and interests of the UK as a whole.

Five years post-Brexit and with a new government, it is time to take stock of how inclusive the new UK trade policymaking apparatus is. While existing institutional machinery does offer routes for inclusivity through consultation, trade policy formulation remains a highly centralised decision-making process. Moreover, capacity issues, effective information sharing, and transparency issues often limit the channels through which the devolved administrations can actively engage with Whitehall. Finally, the existing mechanism for parliamentary scrutiny, which is governed by the Constitutional Reform and Governance Act, is also seen by many as being a blunt tool for democratic scrutiny of trade agreements. The roundtable discussed whether reform is needed and if so what types of reforms should be envisaged.

Information sharing

A key element of inclusivity in policymaking is ensuring transparency by allowing for the free flow of information across various levels of institutional structures. Some participants indicated that this was particularly problematic in the context of the negotiation of UK post-Brexit trade agreements. It was suggested that current mechanisms for communication between the UK central government, devolved governments and related stakeholders often falls short. Stakeholders do not have timely access to pertinent information relating to trade policy. This shortcoming makes it difficult for them to participate meaningfully in trade discussions. As a result, they frequently lack the background knowledge required to offer informed and meaningful feedback.

Participants also highlighted that transparency in the context of trade agreements is not limited to the negotiation and conclusion of such agreements. Territorial impact analyses, for example, are an essential element of efficient information exchange. These analyses provide important information on how particular industries and regions may be impacted differently by trade agreements. Some participants pointed out that these reports are often not distributed promptly to relevant stakeholders by the UK government. The upshot is that devolved governments and CSOs are less able to respond effectively since they are unable to analyse the possible effects of trade agreements on their communities.

Some participants pointed to the active participation of provincial governments in trade negotiations in Canada as a good illustration of efficient information exchange in this area. During the negotiations of the Canada- European Union Comprehensive Economic and Trade Agreement (CETA), provincial administrations had a direct role to play in the negotiations by “being at the table”. Provincial concerns were factored in while negotiating sensitive sectors such as services, labour mobility, investment and government procurement, which produced a model of trade policy that was representative. While several scholars note that the Canadian example has been a distinct case, given its particularly constitutional framework and the fact that its counterpart in these negotiations – the EU – pushed for the participation of provinces in negotiations, it has been portrayed by some as a “paragon of subnational involvement”. This case highlights the conditions that create a conducive environment to promote a bottom-up strategy that accounts for local viewpoints. When information dissemination across various levels of government is sufficient, opportunities where diverse voices remain undermined can be avoided.

A secondary problem relating to information sharing is the politicisation of “sensitive information”. Concerns about national security, potential leaks of confidentially shared information as well as the fear that the release of negotiating positions may lead to a public backlash can make the central government adopt very secretive stances in the context of trade negotiations. This approach may hinder stakeholders' capacity to participate positively by fostering an atmosphere of uncertainty. Furthermore, the flow of information between central government and stakeholders can often be heavily influenced by political relationships (e.g., to what extent is the central government politically aligned with a devolved government). These political considerations have important ramifications. Because a lack of transparency might raise questions about the government's commitment to inclusivity, they create an atmosphere of mistrust among stakeholders. Stakeholders lose faith in the trade policy process and may stop participating entirely if they believe that information is being hidden for political purposes.

Parliamentary scrutiny mechanism

It is paramount to ensure that the decision-making processes underpinning the negotiation of trade agreements are inclusive and representative. Currently, the decision-making processes governing the negotiation and conclusion of UK trade agreements are dominated by the executive. Some participants indicated that the UK parliament does not have a formally recognised role to debate, discuss, rework and then vote upon an agreement before ratification. Similarly, it was pointed out that devolved governments and legislatures have minimal involvement in treaty processes, despite being bound by these treaties and often responsible for their implementation. This indicates that the processes contributing to trade policymaking need to be more inclusive and representative than is currently the case.

Parliamentary scrutiny under the Constitutional Reform and Governance Act 2010 (CRAG) offers very limited time for the House of Commons to effectively recommend changes to the text of trade agreements. Under the CRAG, only the text of signed international treaties is subject to ratification. Other supporting documents that inform the negotiation process such as impact assessments, memoranda of understanding (MoUs), annexes and schedule documents are overlooked in the scrutiny process prior to ratification. Further, under CRAG, the UK parliament’s role is limited to a binary choice: ratify the agreement in full or delay ratification. Without the power to recommend amendments, the parliament’s role in trade policymaking is limited, both in breadth and depth. It is worth noting, however, that some participants were sceptical about the need for reforms. It was argued that, so far, there have not been significant complaints from members of parliament regarding the operation of the CRAG, nor had there been any clear attempts to use the CRAG safeguards to scrutinise trade agreements.

A secondary mode for parliamentary participation in treaty making is through the International Agreements Committees (IAC) approved by the House of Lords. These committees assess the implications of agreements and may hold hearings or request additional information to gather evidence by releasing calls for inquiry. The end of the specialised International Trade Select Committee presented a wider opportunity for increased parliamentary involvement in trade policymaking through the Business and Trade Committee in the House of Commons. Nevertheless, their recommendations are not always acted upon, leading to a disconnect between parliamentary intentions and government actions. This disconnect often results in a lack of accountability, with treaties being ratified without sufficient oversight or opportunity for amendment. The 21-day period for ratification for trade treaties in Parliament is grossly insufficient for launching calls for inquiry, leading to inadequate oversight.

Another concern participants discussed was the limited involvement of members of parliament in trade debates. This could either be due to the perception that their input will be ignored by the government or the government’s belief that trade issues are not priorities for MPs. Reduced parliamentary involvement on important trade issues has resulted from this pattern of low engagement, which has weakened the diversity of viewpoints in policy discussions. To address this, the central government needs to proactively emphasise the value of MPs' contributions to trade policy. By making consistent and transparent invitations for MPs to engage, the government can help build trust and signal a shift from the exclusionary approaches.

Capacity gap

Trade agreements today have evolved in complexity often requiring technical knowledge across several sectors. Expertise is required across multiple dimensions including economic, legal, environmental, cultural and political fronts to ensure trade policy outcomes are holistically delivered. Post-Brexit the UK is experiencing limited availability of resources dedicated to managing the UK’s trade affairs. It’s exit from the European Union meant limits on staff mobility, access to varied funding opportunities for NGOs, as well as access to policy advocacy networks. While recruitment in Whitehall has eased some of these gaps for the UK Government, capacity issues remain and are a critical barrier to inclusivity.

Several stakeholders, particularly the devolved governments and civil society organisations (CSOs), lack the required expertise, personnel and infrastructure to deal with issues pertaining to international trade policy and its domestic impacts. Although devolved governments are obligated by trade agreements and are responsible for implementing them, they frequently lack the resources or specialised knowledge required to thoroughly evaluate and respond to these intricate agreements.

Many CSOs—especially smaller ones, particularly so in the devolved administrations —lack the resources, personnel, and knowledge necessary to focus exclusively on trade policy. They frequently find it difficult to keep up with the pace of trade negotiations, which prevents them from actively participating in consultations or having an impact on choices that could have a big effect on the communities they represent. Their inability to perform in-depth research, attend meetings, and interact equally with government stakeholders is further hampered by their limited capacity. In addition, there are difficulties with the engagement process itself. Due dates for feedback submissions and consultation responses are frequently shortened, giving stakeholders minimal time to compile pertinent data, formulate well-informed opinions, and present them to the central government. The issue is worsened by the time constraints and resource scarcity, which results in lost chances to get feedback from CSOs and devolved governments.

Utilising existing mechanisms

The UK’s exit from the European Union prompted the creation or broader relevance of mechanisms intended to involve the devolved governments in policymaking. These channels include the new structure for Intergovernmental Relations, the Constitutional Reform and Governance Act (CRAG), the possibility for exemptions for devolved in the UK Internal Market Act and the Common Frameworks Approach. Participants expressed that these mechanisms have yet to be completely utilized, limiting the realisation of their full potential… as well as the evaluation of their limits and need for further reform.