Recommendation 13

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