Transparency is key to future trade

Transparency is key to future trade

BLOG · BY TTF CEO David Hopkins · 12 June 2020

We are at an intersection in many ways. Just when we thought it was safe to go back into work from COVID-19, the lurking beast of Brexit has reared its head once more.

David_1

The issues around this are multiple and various. None are insurmountable, but all need to be discussed openly and transparently with sufficient time to consider all sides of the argument. But, time and scrutiny are the very things the Government is keen to avoid in its rush to the finish line.

Already we have seen the Government U-turn on a huge number of areas where previously we had been given concrete assurances and thought we had certainty. For example, payment of VAT on imports. Last year, the Government, in a signed letter from the Chancellor, assured TTF that importers could continue the same regime as before and defer payments over time to ease cash-flow.

In February, the Prime Minister broke this promise, telling all businesses that VAT would be payable upfront, in one sum, on all imports. This poses huge problems for smaller importers. Promises on frictionless trade, tariffs and other areas of business have gone the same way.

This week the TTF hosted a call on the proposed new tariffs for engineered timber and plywood- something we were previously told would never be imposed. We will be looking at how we can overcome this and other issues within the post-Brexit regime.

As negotiations continue, the threat of no-deal Brexit – something everyone said they wanted to avoid – now looks increasingly likely. Indeed, there often seems little difference between the deal the Government wants, and no-deal anyway. Many claim the broken promises are needed in order to achieve the future “Global Trading” role that has been highlighted as a key ambition by Government.

This is why the Trade Bill 2019-21 which is now entering its Committee stage before receiving assent, is so important. It is in the post-Brexit trade regime where we will see actual manifestation of our “British values”.

The government has kept the scope of the Trade Bill narrow, focusing on practical issues such as ensuring continuity agreements work effectively and establishing the Trade Remedies Authority (TRA). Worryingly, there are no provisions to increase Parliamentary scrutiny of trade deals, codify business consultation or link to wider trade strategy of the UK on matters such as climate or the environment.

This is a schoolboy error and will make most observers think the Government is aiming to lower standards in key areas such as climate ambition, environmental safeguards, labour laws and so on.

In the timber industry, there has been a huge amount of work done over the last couple of decades through our work to improve standards, to campaign for, and introduce tougher regulation such as the EUTR, in order to improve the image and the social and environmental impacts of our supply chain. And it has worked.

Wood is increasingly seen by the wider construction industry as a source of innovation, as well as an important material on the road to becoming net zero. Turning back the dial on either the UK’s product standards, manufacturing or environmental regulation risks undercutting our previous progress. If we did so, we would lose public support and with it, our income.

The same is true with future trade. If we do not enshrine the values of high product standards, high environmental and climate ambition, and strong regulatory codes with trading partners, the consuming (and voting) public will react against it. The COVID pandemic has caused quite an awakening in this country toward all manner of social and environmental injustice. We would be fools to ignore it.

This is why we will be calling for the Trade Bill to be widened to include proper Parliamentary scrutiny, and reaffirm the UK’s commitment to the Paris Climate Agreement Goals, Sustainable Development Goals, and our own Climate Change Bill 2008.

Free trade can do a lot of good, uplifting living standards and providing businesses with new opportunities. Linking the way we trade to our broader commitments is the best way to demonstrate our values and to ensure our future prosperity.

We also hope it allows us to uphold our central message of only trading “Timber You Can Trust”.