Most Favoured Nation: The Trials and Tribulations of the TRA (£)
Ask the wrong questions ... get the wrong answers
Welcome to the 56th edition of Most Favoured Nation. This post is for paid subscribers only, but if you want to read the whole thing [which you should, it’s good] you can sign up for a free trial below.
You’re probably sick of me writing about the UK’s Trade Remedies Authority (TRA), But if not, you are in for a treat.
To re-cap: The TRA is an independent arms-length body set up after Brexit. It is tasked with advising the UK government on trade remedies (hence the name), and whether there is good cause to apply trade defence measures such as anti-dumping, countervailing or safeguard duties.
The TRA was stupidly put in Reading, because levelling-up or some nonsense, but otherwise was designed quite cleverly (or not, depending on your perspective).
It was mandated to look at trade defence on a factual basis. It would assess whether unfair foreign trade practices were harming UK upstream producers, and, importantly, also take into account the potential impact of any new trade restriction on downstream manufacturing.
Importantly, politicians were restricted in their ability to meddle with TRA recommendations. They could accept or reject them, but not tweak them.
This anti-trade restrictions/pro-liberalisation bias was entirely deliberate, and borne of then Trade Secretary Liam Fox’s vision of a free trading UK.
But of course, politics intervened. As I wrote at the time, a review of rolled-over EU steel safeguards led to the TRA recommending the UK revoke tariff safeguards for nine product categories.
Its process for making this decision went something like this:
Anyhow, the TRA recommendation led to some British steel producers having a tantrum, questions arising about how dropping protections for domestic industry aligned with the government’s levelling up agenda, and other politicians and cabinet ministers getting involved.
As a result, this minor furore resulted in the Government rushing through emergency legislation to give the trade secretary the power to tweak the TRA’s recommendation. Instead of revoking the safeguard for nine product categories, the UK instead revoked the safeguard for four, but temporarily extended the safeguard protection for the other five until the end of this month … despite the UK having no legitimate reason for doing so [as per the analysis of its own independent TRA].
Since then, the TRA has been conducting its own review of its original recommendation, and as of March 2022, when the decision was called in by current trade secretary Anne-Marie Trevelyan, conducting a different review based on slightly different criteria [… which is important for reasons that will be revealed below].
Then a couple of weeks back, oddly, the Prime Minister’s ethics advisor resigned, ostensibly over being asked to provide cover for the UK extending these safeguards once more, which some might argue constitutes an intentional breach of the UK’s international legal [WTO] obligations. [Lord Geidt later put out a statement saying it wasn’t just because of this].
In last week’s newsletter I concluded by saying:
Anyway, politics has now moved on, but I for one will be interested to see
What the TRA’s report at the end of the month finds;
What the UK government does in response; and
Whether China brings a trade dispute against the UK
And … drum roll … we now have an answer to 1.
The TRA published its new report on Friday … and it finds that the UK is actually well within its rights to keep applying safeguard duties to the Chinese steel imports. Which directly contradicts its original report.
Or does it …
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