UK to have less protection from cheap imports, trade regulator warns

British manufacturers are likely to have less protection against cheap imports from the UK’s post-Brexit trade regulator than they had under the EU regime, those running the new body have said.

The Trade Remedies Authority (TRA) had already scrapped “safeguard” tariffs in more than 50 areas since the UK left the EU, Oliver Griffiths, its chief executive, told the Financial Times, 

“We have built into our business plan an expectation we will have about four cases a year,” he said. Brussels launched 16 cases in 2019, with measures imposed in 12 areas. 

The bloc has active defence measures in more than 100 areas. Some were against goods the UK does not produce. The UK has continued only 43 and is reviewing them all.

The TRA, an independent arms-length body, on Friday recommended dropping tariffs on nine out of 19 categories of Chinese steel, a decision the UK industry called a “hammer blow”. 

The EU imposed the antidumping tariffs of 25 per cent in 2018. But the TRA found there had not been a surge in imports into the UK, a necessary condition for it to maintain the levies. The EU — as well as the US — continue to impose the duties.

Simon Walker, TRA chair, said the legislation that established the body was “suited to a buccaneering, global Britain” that favoured free trade.

The law states that Liz Truss, the international trade secretary, cannot reverse a recommendation to cut some tariffs on a sector. If she does not accept it then all tariffs in the sector under review would be lifted.

Even if it found that subsidised imports did harm domestic producers, the tariffs would be set at lower levels than EU ones. They would be set at the level of the injury caused, or the subsidy given, whichever was lower.

“That is quite distinct from the US and Japan which impose swingeing tariffs to protect particular industries,” Walker said.

The next cases the TRA is considering include duties on frozen Turkish trout and US biodiesel.

The TRA, launched on June 1, will apply a purely economic interest test in determining whether tariffs are necessary.

Griffiths compared it to the Competition and Markets Authority, which regulates fair competition domestically.

It can take measures for three reasons under World Trade Organization rules. One is dumping goods in the UK at prices below the normal value in the country they are being exported from.

The second is to protect industry from state subsidised imports and the third is to protect against a sudden surge of imports.

Griffiths said it would soon be busy on two fronts. One is the role of governments such as China and Russia that support their exporters.

The other is the huge state subsidies going to companies to survive the global pandemic and reduce carbon emissions.

“A big live issue in world trade is the systemic risk from non-market economies. The other is the amount of subsidy likely to go into the global economy to get to net zero,” Griffiths said. “There is going to be a huge amount of focus on trade remedies in coming years.”

The TRA has 120 staff, 23 short of its full complement. Walker said some who had joined had left during the long Brexit process, with a deal delayed until December 2020.

He admitted that after 40 years of EU membership “there is a lack of expertise in this country” on trade policy. “We have drawn as much expertise as we can from other countries, particularly Australia.”

Source: Financial Times