Policy paper

Investigation and implementation processes for Bilateral Safeguards

Published 23 March 2023

Who is likely to be affected

International and domestic participants in bilateral safeguard investigations and reviews. This includes, but is not limited to, individual consumers, manufacturers, importers, downstream users, trade organisations, trade unions, public bodies and our Free Trade Agreement (FTA) partners.

General description of the measure

The measure will create new legislation setting out the role of the Trade Remedies Authority (TRA) and the government in investigating and implementing bilateral safeguard measures which the UK has agreed with partners in its FTAs.

The provisions will:

1. Enable Ministers to direct the TRA to open an investigation to determine whether the requirements to apply a bilateral safeguard measure are met and to recommend the form a potential measure should take;

2. Provide Ministers with the power to apply a measure;

3. Provide Ministers with the power to ask the TRA to reassess its determination and recommendation to Ministers where there is justification to do so; and

4. Enable Ministers to take a different decision on public interest grounds to that recommended by the TRA.

Policy objective

These provisions are needed to ensure that the process for investigating and implementing a bilateral safeguard measure is aligned to the UK’s wider Trade Remedies Framework and UK obligations under our FTAs. They are intended to allow Ministers to act swiftly and flexibly based on appropriate expert evidence and advice to protect UK producers if they are suffering serious injury, or threat thereof, from increased imports as a result of an FTA. This protection will come in the form of an additional import duty, the suspension of tariff preferences, or a new tariff rate quota.

Background to the measure

Since leaving the EU in January 2020, the UK has signed 19 FTAs that include provisions for bilateral safeguards. In that time, the UK has not opened a bilateral safeguard investigation or applied a measure. These provisions amend the Taxation (Cross-border Trade) Act 2018, which outlines the UK’s trade remedies framework, to ensure that Ministers can act swiftly and flexibly based on appropriate expert evidence and advice from the TRA to protect UK producers if needed under the terms of the UK’s FTAs.

Detailed proposal

Operative date

The measure will have effect on and after the date of Royal Assent to the Spring Finance Bill 2023. Secondary legislation made under these amended provisions will be made in due course.

Current law

There is no specific legislation that details how a bilateral safeguard investigation should be conducted, or how a measure should be applied.

Proposed revisions

This measure adds a new Schedule 5A to the Taxation (Cross Border Trade) Act 2018, which:

• expands the statutory functions of the TRA so that it can undertake bilateral safeguard investigations and reviews
• enables Ministers to request, receive and share information for the purpose of a possible or actual direction to the TRA to open a bilateral safeguard investigation or review
• enables Ministers to direct the TRA to initiate a bilateral safeguard investigation or review and report its determination and recommendation to Ministers
• ensures the TRA provides meaningful alternatives within its recommendation
• provides the power for Ministers to ask the TRA to reassess a determination and recommendation where there is justification to do so
• provides the power for Ministers to take a different decision to that recommended by the TRA, where there is a justification and evidence base to do so
• provides the power for Secretary of State to apply a bilateral safeguard measure by public notice
• ensures both Ministers and the TRA have due regard to the UK’s obligations under FTAs
• provides similar regulation-making powers to those in Schedule 5 to the Taxation (Cross-border Trade) Act 2018 to align bilateral safeguards with other trade remedies

Summary of impacts

Exchequer impact (£m)

2022 to 2023	2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028
Negligible	Negligible	Negligible	Negligible	Negligible	Negligible

The measure is expected to have no or negligible Exchequer impact.

Economic impact

This measure is not expected to have any significant macroeconomic impact.

Impact on individuals, households and families

It is expected that businesses that are participants in a bilateral safeguard investigation or review would be affected by the measure. The measure relates to the application or revocation of duties in specific circumstances and is therefore not expected to impact on family formation, stability or breakdown.

The impact on individuals or households will be considered on a case-by-case basis during the investigation on any specific measure.

Equalities impacts

It is not anticipated that there will be impacts for those in groups sharing protected characteristics.

Impact on business including civil society organisations

These provisions are expected to benefit UK producers by ensuring the government has the right tools to defend UK producers’ interests under the terms of the UK’s FTAs with its partners. Where businesses engage with a bilateral safeguard investigation or review, the administrative burden is expected to be small, and not exceed £100,000 per annum per affected business. In exercising the power to apply a bilateral safeguard, the impact of additional import duty on downstream users is considered during the process for investigating each measure.

Operational impact (£m) (HMRC or other)

Given the measures may require slightly increased resourcing, there is a limited potential operational impact on HMRC.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

This measure will be kept under review through communication with affected groups.

Further advice

If you have any questions about this change, please contact the Trade Remedies Policy Team at the Department for Business and Trade via email: [email protected]