Guidance

Trade Bill factsheet: UK trade legislation

Updated 7 December 2018

This was published under the 2016 to 2019 May Conservative government

This guidance was withdrawn on

This page has been withdrawn because it’s out of date.

You can read about the Trade Bill at https://www.gov.uk/government/publications/trade-bill.

The Trade Bill was introduced into the House of Commons on 7 November 2017 and is currently progressing through the House of Lords. This Bill will help ensure that the UK has the necessary tools in place to operate our own trade policy. Further tax-related elements of the UK’s trade policy are contained in the Taxation (Cross-border Trade) Act 2018 which received Royal Assent on 13 September 2018.

Introduction

Global trade has had, and continues to have, an overwhelmingly positive impact on prosperity in the UK and around the world. It can lead to higher wages and contribute to a growing economy by stimulating greater business efficiency and higher productivity, sharing knowledge and innovation across the globe, and it ensures more people can access a wider choice of goods at lower cost.

The Trade Bill

The Trade Bill focuses on providing continuity for business and consumers. It contains the following provisions:

Continuity Trade Agreements

The UK currently enters into commitments in international trade agreements as a member of the European Union (EU). This means that the EU has competence to negotiate and agree trade agreements on the UK’s behalf, and that much of the implementation of the obligations on the UK in the trade agreements that the UK is party to as an EU Member State is carried out at the EU level and takes effect in the UK through the European Communities Act 1972 (ECA). The ECA will be repealed by the EU (Withdrawal) Act and the UK will therefore need to build a new legislative framework to ensure that our existing trade agreements are fully implemented within UK law and remain operable over time.

Without action these trading arrangements will cease to have legal effect on day one of Brexit. Overall these agreements account for approximately 12% of the UK’s total trade.

The government has committed to providing continuity in our existing trade and investment relationships. This legislation will create the necessary powers to preserve the non-tariff elements of existing trade arrangements, preventing disruption to UK businesses and consumers and international trading partners. These powers will only be used to adopt trade agreements with countries with which we already have trade agreements, through our membership of the EU.

Agreement on Government Procurement

The Agreement on Government Procurement (GPA) is a plurilateral agreement within the World Trade Organization (WTO) system between 19 WTO Members, including many of the major economies such as the United States, Canada, the EU and Japan. It aims to deliver open government procurement markets among its parties, and seeks to address trade barriers, such as preferential treatment of domestic goods and services, in the government procurement sector. While a member of the EU, the UK participates in the GPA via our EU membership but intends to join as an independent member.

This legislation will enable the UK to make any changes required in domestic legislation before the UK accedes to the GPA, and to have the power to make changes in the future, for example, to reflect new countries joining the GPA. This will maintain UK businesses’ access to public contract opportunities worth £1.3 trillion, and ensure that we can continue to secure the best deal for the taxpayer.

Trade Remedies Authority

WTO rules enable members to protect domestic producers from unfair and injurious trading practices through trade remedy measures, such as applying duties or quotas to particular imports. While a member of the EU, the European Commission undertakes trade remedies investigations, and imposes any remedies, on behalf of member states, including the UK. To ensure that the UK can continue to provide a safety net to domestic industries against unfair and injurious trading practices this legislation will create a new, independent trade remedies body, the Trade Remedies Authority.

Data Collection and Sharing

This legislation will also allow HMRC to share data with bodies carrying out public functions in relation to trade so that, for example, Department for International Trade (DIT) and the Trade Remedies Authority are able to carry out the trade dispute and trade remedies functions that are currently fulfilled by the European Commission. This will also enable DIT to produce statistics, research and analysis that will inform the development of evidence-based trade policy and monitor and evaluate its effectiveness.

The Taxation (Cross-border Trade) Act 2018

The Taxation (Cross-border Trade) Act includes provisions to:

  • create a standalone customs regime and amend the VAT and excise regimes, including to establish a new UK tariff
  • create a new UK trade remedies framework
  • put in place a unilateral trade preferences scheme
  • vary import duties when a dispute or other issue has arisen between the UK government and the government of another country

When these powers come into effect

While we are members of the EU, we will continue to comply fully with our obligations and to engage constructively with our partners. The steps we are taking on trade legislation will not at this point affect our trade relationships with third countries, the operation of the Common Commercial Policy of the EU, or the international trading frameworks within which the UK operates as a member of the EU. We will remain committed to working collaboratively with the EU to take forward our shared free trade agenda.

We will then also have the opportunity to advance our interests, priorities and ambitions through a future UK trade policy.

Trade Statistics

Exports

The value of UK exports was £615.9 billion in 2017, up 10.6% on 2016. This reflects increases in goods and services exports of 13.3% and 7.4%, respectively. (Source: ONS UK Trade: May 2018.)

In 2016, there were 206,800 registered businesses in Great Britain (8.8%) exporting either goods or services or both. (Source: ONS ABS Exporters and Importers 2016, experimental statistics.)

In 2017, the UK’s largest export market for goods was the United States, accounting for 15.2% of total UK goods exports. (Source: ONS UK trade: May 2018.)

The UK’s fastest-growing markets for UK exports of goods and services between 2010 and 2017 were: Guernsey – up by 644% to £6.4 billion; Oman – up by 354% to £2.8 billion; FYR Macedonia – up by 318%% to £1.1 billion; Gibraltar – up by 272% to £3.2 billion; Kazakhstan – up by 210% to £2.3 billion. (Source: ONS Pink Book 2018.)

Imports

The relative importance of the EU as an import market has declined over the last decade. In 2017, the share of UK imports coming from the EU was 53.1%, down from 56.3% in 2005. (Source: ONS Balance of Payments: Quarter 1 (Jan to Mar) 2018.)

Between 2016 and 2017, imports from the non-EU increased by 10.3% to £300.8 billion while imports from the EU increased by 8.2% to £341.0 billion. (Source: ONS Balance of Payments: Quarter 1 (Jan – Mar) 2018.)

The fastest-growing markets for UK imports of goods and services between 2010 and 2017 were: Guernsey – up by 456% to £2.4 billion; Vietnam – up by 225% to £4.3 billion; Iceland – up by 128% to £1.2 billion; Saudi Arabia – up by 122% to 2.8 billion; Bangladesh – up by 122% to 2.8 billion. (Source: ONS Pink Book 2018.)

Inward investment

In 2017, the UK was the 3rd most attractive destination for investment in the world behind the United States, Hong Kong (Source: UNCTAD World Investment Report 2018.)

Inward investments into the UK are estimated to have created 75,968 new jobs in 2017/18. Combined with an estimated 15,063 safeguarded jobs, this amounts to over 91,000 new and safeguarded jobs associated with FDI projects recorded in 2017/18. (Source: DIT Inward Investment Results 2017/18.)

The UK is the number one destination for FDI in Europe for FDI projects according to Ernst and Young. In 2017, the UK attracted the highest number of FDI projects and the highest number of jobs in Europe (Source: Ernst & Young Attractiveness Survey – Europe 2018).

DIT recorded 2,072 investment projects coming into the UK in 2017/18; down 9% on 2016/17. DIT supported 1,682 projects in 2017/18. (Source: DIT Inward Investment Results 2017/18.)

Outward investment

In 2017, the UK was the 5th largest global investor, behind the United States, Hong Kong, Germany and the Netherlands. The UK was the 3rd largest European investor in 2017. (Source: UNCTAD World Investment Report 2018.)

Future trade

The EU itself estimates that 90% of future global economic growth is expected to be generated outside Europe - a third of it in China alone. (Source: April 2018 IMF World Economic Outlook.)

Department for International Trade (DIT)

The UK’s Department for International Trade (DIT) has overall responsibility for promoting UK trade across the world and attracting foreign investment to our economy.

We are a specialised government body with responsibility for negotiating international trade policy, supporting business, as well as delivering an outward-looking trade diplomacy strategy.


Any enquiries regarding this publication should be sent to us at enquiries@trade.gov.uk.