Policy paper

2010 to 2015 government policy: free trade

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/reducing-barriers-to-international-free-trade–3. Current policies can be found at the GOV.UK policies list.

Issue

Not all trade markets in the world are entirely open to UK business.

Some countries set import restrictions or impose conditions which make life difficult for UK firms.

Actions

We deal with trade barriers by either talking directly to the country which has put up a barrier, or by talking to them via the EU (in some cases we do both).

The UK is taking part in the negotiation of international trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) between the EU and US. The EU has signed a free trade agreement with South Korea, which will make it easier for British companies to do business there.

We’ve set up the UK Single Market Centre to deal with the occasional problems UK companies can have trading in some EU member states.

The government continues to make sure agreements about international trade help developing countries. For example, through the Aid for Trade fund and other trade and development projects, we’re contributing to projects that will make it easier for developing countries to do business with other nations.

Background

We set out our strategy on trade and investment in the white paper, ‘Trade and investment for growth’, published in February 2011.

The white paper sets 3 goals:

• to create opportunities for UK business to trade and invest overseas
• to attract investment to the UK
• to strengthen international trading links and help developing countries benefit from trade and investment

We believe aiming to achieve these goals should increase international opportunities for British trade.

Appendix 1: helping UK business overcome trade barriers

This was a supporting detail page of the main policy document.

What is a trade barrier?

British companies can sometimes have trouble operating outside the UK. This can be because of discriminatory rules and practices of other countries or misinterpretation of rules by administrative authorities.

It can also be because another country imposes an unfair increase in duty or import levy on UK business. Measures like this are known as trade barriers.

There are several different types of trade barrier. They include tariffs and non-tariff barriers.

A tariff is the amount of import duty charged on a particular type of goods. Non-tariff trade barriers are measures intended to favour local industry. They can include:

• trade regulations
• labelling rules
• unfair government subsidies

Telling us about trade barriers

We need to know about any trade barriers as soon as possible. You can tell the Trade Policy Unit.

We can negotiate about trade barriers directly with the country concerned, or we can deal with them through the EU. We may do both. See the case study on Helping scotch whisky sales in Colombia by overcoming a trade barrier.

The European Commission can deal with trade barriers in 3 ways:

1. The Market Access Database (MADB). This tool provides a wide range of information for exporters, including information on trade barriers and import duties. You can search by product, region or country. It allows businesses to report barriers they’ve come up against directly to the commission.

2. The Trade Barriers Regulation (TBR). This regulation allows the commission to investigate complaints about violations of international trade rules.

3. Negotiations for World Trade Organization (WTO) membership. The WTO has reached several agreements to reduce and end barriers to global trade. The commission uses individual countries’ negotiations for membership of the WTO to push for greater freedom in world trade.

Appendix 2: international trade agreements

This was a supporting detail page of the main policy document.

Trade agreements open up new opportunities for the UK’s exporters. They can also ensure access to competitively priced imports from other countries.

Using the EU to negotiate shared international trade agreements

The UK has a shared import/export policy with other European Union (EU) countries. This means EU countries work together to negotiate trade agreements with non-EU countries.

This arrangement is part of the Common Commercial Policy – an agreement where the EU represents all its member states in trade negotiations with non-EU countries.

Types of trade agreement

There are 2 main types of international trade agreement:

• multilateral agreements are negotiated between the 157 members of the World Trade Organisation (WTO) - any trade concession applies to all members but with special considerations for poor countries
• bilateral agreements are negotiated between the EU and other individual countries or trading blocs - they include the Free Trade Agreements (FTAs) the EU is negotiating with India, Singapore and Canada

Trade agreements with poorer countries

There are several types of trade agreement specially suited for poorer countries. They include:

• Economic Partnership Agreements (EPAs): these provide immediate duty and quota free access to EU markets for countries in Africa, the Caribbean and the Pacific (ACP)
• Generalised System of Preferences (GSP): this grants trade preferences and reductions in tariffs to 176 developing countries and territories
• Generalised System of Preferences Plus (GSP+) scheme: this grants extra concessions to countries that adopt 27 international conventions on human rights, labour rights and the environment
• Everything but Arms (EBA): this is for the poorest countries in the world - it grants them duty and quota free access to EU markets without asking for concessions in return

The Transatlantic Trade and Investment Partnership

In July 2013, negotiations started between the European Union and the United States on the Transatlantic Trade and Investment Partnership (TTIP).

Appendix 3: Transatlantic Trade and Investment Partnership (TTIP)

This was a supporting detail page of the main policy document.

What is TTIP?

The Transatlantic Trade and Investment Partnership (TTIP) is a free trade agreement being negotiated between the EU and the USA. The negotiations started in July 2013. EU and US negotiators will meet alternately in Brussels and Washington. The UK government is working with the European Commission on the negotiations.

The trade agreement has the potential to add up to £10 billion to the UK economy by:

• reducing tariffs on cross-border trade between the EU and the USA
• reducing other barriers to trade (for example, reducing unnecessary differences in technical and regulatory requirements, without lowering protection)

Lowering trade barriers and trading costs should make it easier for companies on both sides to access each other’s markets. For consumers, this will lead to a wider choice of goods at a lower cost.

Consumer benefits

We are aiming for an ambitious TTIP which will:

• lower prices for UK shoppers (by reducing trading costs and removing EU import tariffs, including on popular US goods)
• make buying from the US easier and more reliable
• gives shoppers more security when buying from US traders

Business benefits

There are benefits for businesses of all sizes. TTIP could make it easier and cheaper to export by:

• removing the remaining $1 billion UK businesses pay the US every year in trade tariffs
• reducing costs from duplication, where businesses having to meet both European and US standards when they aim at the same high levels of safety
• giving businesses in the EU access to a market of more than 300 million American consumers

Latest on the negotiations

Read the latest developments on the European Commission’s website. The European Commission publishes and updates documents on TTIP. This includes a ‘state of play’ document after every negotiating round.

The governments of the 28 EU countries released the negotiating directives (the mandate) for the EU-US Transatlantic Trade and Investment Partnership (TTIP) on 9 October 2014. Read about what the mandate includes.

The European Commission also announced plans for greater transparency, making more information available publicly.

How UK is working with the EU

The UK government works with the European Commission on the negotiations to make sure the interests of UK consumers and businesses are reflected.

On a regular basis we meet with:

• representatives from industry
• consumer groups
• trade unions
• non-governmental organisations (NGOs)
• other civil society groups

We update them and consult them on the ongoing negotiations.

Have your say

We welcome evidence from citizens, businesses and organisations about their priorities and aspirations for the TTIP negotiations. Contact the BIS team: ttip.team@bis.gsi.gov.uk.