Recommendations & Conclusions
8 items
11
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
We asked the Department about the value of state-to-UK bilateral agreements, in terms of contributing to the 80% target. The Department could not tell us and thought this would be hard to calculate. The Department said that it had not set a target for increasing market access at a state …
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We asked the Department about the value of state-to-UK bilateral agreements, in terms of contributing to the 80% target. The Department could not tell us and thought this would be hard to calculate. The Department said that it had not set a target for increasing market access at a state level.24 We also emphasised that the lifting of the ban on beef and lamb is only an achievement if it actually has an impact on British exports to the US. Defra told us that the ban on lamb was lifted at the end of 2021 so there have been no impacts yet. However, it estimates that, over five years, the lifting of the ban could be worth more than £30 million to the sector. Defra told us that it is working closely with the sector and the devolved administrations to ensure that the benefits are realised.25 22 Q 6 23 Q 7 24 Qq 7–8 25 Qq 75, 76 12 Progress with trade negotiations 2 Outcomes of trade agreements Measuring the Department’s progress
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Government response AI summary
The department states that the ending of bans on UK beef and lamb exports to the US are estimated to be worth £66 million and £37 million of export opportunities respectively and will use trade data to understand export trends over time.
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HM Treasury
12
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
The Department set out four measures in its Outcome Delivery Plan (ODP) for 2021–22 to measure its progress on its programme of trade negotiations. One of these measures, described in the previous section, is the percentage of UK trade with partners with whom the UK has a trade agreement. The …
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The Department set out four measures in its Outcome Delivery Plan (ODP) for 2021–22 to measure its progress on its programme of trade negotiations. One of these measures, described in the previous section, is the percentage of UK trade with partners with whom the UK has a trade agreement. The NAO found that the other three outcome measures in the Department’s ODP are the projected, rather than secured, benefits and outcomes of each concluded trade agreement, and that the Department has not set any associated targets for these measures.26 We noted that it is really important that it is clear to Parliament where things have gone well and where they have not. We asked the Department if it would work with the NAO to develop a set of metrics that can be used to report to Parliament on its progress with its programme of trade negotiations.27 The Department agreed to this, stating that it had a good starting point with the existing measures in its ODP and other published material.28
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Government response AI summary
DIT’s Outcome Delivery Plan (ODP) includes metrics for trade negotiations, and DIT will report on progress against each of the ODPs and continue to keep its ODP metrics under review.
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HM Treasury
13
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
The Department has published an impact or scoping assessment for each new FTA it is pursuing to help businesses and the public understand the potential economic benefits of the agreement and to support Parliamentary scrutiny.29 For example, the impact assessment for the UK-Australia free trade agreement (FTA) projects that the …
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The Department has published an impact or scoping assessment for each new FTA it is pursuing to help businesses and the public understand the potential economic benefits of the agreement and to support Parliamentary scrutiny.29 For example, the impact assessment for the UK-Australia free trade agreement (FTA) projects that the agreement will lead to an increase in UK GDP of £2.3 billion in fifteen years.30 We questioned whether the Department was putting too many resources into trade negotiations given the relatively small impact the agreements are expected to have on the economy. In response, the Department told us that it expects any long-term increase to GDP to be a permanent, annual increase. It also said that it spends about £50 million to £70 million a year doing these trade negotiations, and that there are few government programmes that would deliver that rate of return.31 The Department also explained to us that its assessments do not cover all potential impacts and that they are just forecasts of the future. For example, they do not cover secondary impacts that agreements could have, such as changes in production as a result of innovation, or wider geopolitical impacts such as furthering the UK’s environmental, human rights, animal welfare and wider agendas.32
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Government response AI summary
The department publishes detailed impact assessments and will publish monitoring reports which will provide DIT’s analytical evidence base to inform Parliament, the public and other interested stakeholders on progress and actual benefits.
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HM Treasury
15
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
We asked the Department how it planned to support businesses, particularly small and medium-sized businesses (SMEs), to take advantage of the opportunities in trade agreements.36 The Department’s 2020 survey of UK registered businesses found that just 28% of surveyed businesses who exported to non-EU countries knew whether the goods they …
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We asked the Department how it planned to support businesses, particularly small and medium-sized businesses (SMEs), to take advantage of the opportunities in trade agreements.36 The Department’s 2020 survey of UK registered businesses found that just 28% of surveyed businesses who exported to non-EU countries knew whether the goods they most frequently exported were eligible for reduced customs duties.37 In our 2020 report on government support for exporters, we raised concerns that the Department was not doing enough to support small and innovative businesses to export.38
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Government response AI summary
The department will write within 12 months on this recommendation, setting out how it is helping businesses take advantage of trade agreements and market openings, and mentioning the Export Support Service and other initiatives.
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HM Treasury
20
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
We asked Defra for its assessment of the effect of the Australian FTA on British agriculture. Defra said that it was confident that the phasing in of the liberalisation and the safeguards provide a period of adjustment for the UK agriculture sector, particularly as it goes through major domestic challenges …
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We asked Defra for its assessment of the effect of the Australian FTA on British agriculture. Defra said that it was confident that the phasing in of the liberalisation and the safeguards provide a period of adjustment for the UK agriculture sector, particularly as it goes through major domestic challenges following EU exit.52 The Department for International Trade also suggested that Australian imports may displace European beef that is currently imported to the UK. Defra confirmed its modelling showed that new imports mainly, but not entirely, displace existing imports and would not necessarily 44 Q 53 45 Qq 55–57 46 PTN0002 47 PTN0002 48 C&AG’s report, para 3.25, Figure 11 49 Q 20 50 Qq 10–11; 18–19 51 Qq 11, 20 52 Q 12 Progress with trade negotiations 15 damage UK production.53 Defra told us that it is also doing a lot to help the sector to reorient itself towards exports, such as by setting up a food and drink export council and by working with overseas trade attaches to open up new markets in places like China and the Gulf.54
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Government response AI summary
DIT is committed to using monitoring and evaluation (M&E) findings to ensure benefits are maximised, publishing a biennial FTA monitoring report, and working with DEFRA to support agricultural, and food and drink exports.
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HM Treasury
21
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
We asked why the National Farmers Union is so pessimistic about the trade agreement. The Department admitted that there were risks and downsides to the deal and that a body which represents the interests of farmers would be concerned about the downside, although the Department considered the downside to be …
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We asked why the National Farmers Union is so pessimistic about the trade agreement. The Department admitted that there were risks and downsides to the deal and that a body which represents the interests of farmers would be concerned about the downside, although the Department considered the downside to be very unlikely.55 We acknowledged that a trade deal requires compromise on both sides. However, the National Farmers Union may have concerns that farmers have been disadvantaged by the agreement so that the UK can gain access to Australia’s financial services market.56
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Government response AI summary
DIT is committed to using monitoring and evaluation (M&E) findings to ensure that the benefits for businesses, workers and consumers are maximised and will publish a biennial FTA monitoring report. DIT will also work with DEFRA to support agricultural, and food and drink exports.
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HM Treasury
22
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
Defra told us that it has looked very carefully into the question of carbon emissions.57 Its analysis so far suggests that carbon emissions resulting from shipping goods from Australia to the UK are not the most significant factor when looking at the carbon footprint of different sorts of production. The …
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Defra told us that it has looked very carefully into the question of carbon emissions.57 Its analysis so far suggests that carbon emissions resulting from shipping goods from Australia to the UK are not the most significant factor when looking at the carbon footprint of different sorts of production. The Department for International Trade added that it has modelled the environmental impact of the UK’s agreement with Australia and it does not think the greenhouse gas emissions of UK production will change much although transport has to be looked at as a whole.58 We asked Defra whether emissions outside territorial waters are counted when measuring the UK’s carbon emissions. Defra did not know but said that the quantitative assessment of environmental impacts is a very live topic across the world.59 The Department for International Trade wrote to us after the evidence session to confirm that its transport emissions modelling uses the whole distance between two trading partners, and captures the emissions associated with travel in non-territorial waters. It applies sensitivity analysis using the shortest and longest typical maritime routes between two trading partners to estimate the distance travelled by shipping freight.60 The NAO noted that the UK’s target to achieve net zero emissions by 2050 is set on a territorial basis and does not include emissions from goods produced overseas and traded with the UK.61 53 Qq 21–22 54 Q 12 55 Q 13 56 Q 14 57 Q 23 58 Q 24 59 Q 26 60 Letter from Permanent Secretary, DIT, to the Chair of the Public Accounts, 4 February 2022 https://committees. parliament.uk/publications/8916/documents/152325/default/ 61 C&AG’s report, para 3.6 16 Progress with trade negotiations 3 Transparency and scrutiny Transparency of information
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Government response AI summary
The government agrees and will continue to ensure a high level of environmental protection in new trade agreements, working with DEFRA to monitor free trade agreements and publishing a comprehensive ex-post evaluation of the UK-Australia agreement within 5 years.
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HM Treasury
24
Conclusion
Forty-Fifth Report - Progress with trad…
Acknowledged
We asked the Department whether it thought that the general public knew about trade. The Department told us that based on its survey, the public was “highly supportive of the trade agenda”.65 However, the NAO noted that the Department has identified public concerns about the actual or feared impact of …
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We asked the Department whether it thought that the general public knew about trade. The Department told us that based on its survey, the public was “highly supportive of the trade agenda”.65 However, the NAO noted that the Department has identified public concerns about the actual or feared impact of its trade agenda, and a lack of belief in the potential benefits as a key strategic risk to achieving its objectives.66 Similarly, evidence submitted by Which? shows that consumers have limited awareness of the status and implications of the government’s trade negotiations. For example, two thirds of respondents to a Which? survey felt that the UK government currently provides ‘too little’ information about new trade deals it is negotiating.67 The Department acknowledged that there is a “big communication issue” for the Department at an official and ministerial level to set out what it is it does and why it does it.68
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Government response AI summary
The government agrees and says it publishes materials before negotiations, after they conclude, and is highly consultative, publishing explanatory information on the impact of agreements. It constantly reviews its economic analysis methodologies and seeks views of the public through tools including the Public Attitudes to …
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HM Treasury