As the UK prepares for Brexit, there is a need to develop a trade policy that fits with a wider industrial strategy, to defend industries facing unfair competition from countries such as China — a country seeking market economy status, but still controlling its industries and prices via the state — which enable them to undercut and damage manufacturing by producing goods at prices lower than its costs to make them.
To date the EU has the responsibility to respond to unfair trade, but when we leave the EU the UK will need to develop our own a system of trade remedies — the instruments that are used to combat market distortions (such as dumping of cheap steel, ceramics, truck tyres, paper, fertilizers and chemicals and subsidising exports) which disrupt genuine free and fair trade and that can be economically devastating, causing potential job loss and collapse of those industries effected.
A group of manufacturing trade associations — Agricultural Industries Confederation, British Ceramic Confederation, British Glass, Chemical Industries Association, Confederation of Paper Industries, Mineral Products Association, UK Steel — and trade unions including Unite the Union, Community and GMB have come together to ensure that we shape the UK’s new trade remedies system.
We have set out our viewpoint in a position statement for political parties at the recent General Election — The Future of Trade Remedies. The Labour Party referred to the issue directly in its manifesto.
After years of contraction partly because of dumped imports from China, EU measures helped some sectors such as steel and ceramics to stabilise, invest and create decent skilled jobs.
While the Government is responsible for determining the UK’s post-Brexit ‘trade philosophy’, it is Parliament which must legislate to provide a legal framework for the UK’s future trade remedies.
Our organisations called on government to:
Include in the first Queen’s Speech a bill to adopt all of the trade remedies allowed by the World Trade Organisation: anti-dumping measures, anti-subsidy measures and safeguarding industries.
Ensure that new UK trade remedies are adequate to fully alleviate market injury to UK manufacturing, are available from day one after Brexit and are supported by the appropriate government infrastructure.
Promote genuine global free trade by ensuring that UK manufacturing can easily access the full range of remedies to harmful trade distortions.
A number of factors, which are listed in our statement, around how the new trade remedies system is structured and administered will determine its adequacy in defending good UK manufacturing jobs and businesses and ensure investment against unfair and disrupting distortions including those in non-market economies.
Unite and the unions have campaigned to stop the dumping of cheap imports from China, in steel, in the tyres sector, in papermaking, chemicals and other sectors.
The trade associations and unions are clear that we must have a easy to use and swift structure to deal with unfair trade and there must be no cliff-edge when the UK leaves the EU..
The trade bodies and unions note that in the section of the Queen’s speech pertaining to the Trade Bill it says the government plans:
“To establish the tools we need to deliver the best international trading framework for the UK outside of the European Union, including an effective trade remedies regime.”
So the trade associations and unions look forward to working with government to ensure these tools are comprehensive and adequate.
Tony Burke is the assistant general secretary of Unite the Union.