The Trade (Australia and New Zealand) Act: a slippery slope for scrutiny 

By: Saba Shakil

The Trade (Australia and New Zealand) Act 2023 (TANZ Act) is the only piece of primary legislation implementing the UK’s Free Trade Agreements (FTAs) with Australia and New Zealand. It consists solely of a delegation of power to implement the Procurement Chapters of the FTAs by regulations, and sets a precedent for the future ratification and implementation of treaties affecting crucial individual interests.

The passage of the Act has exposed the dangers of two failing parliamentary procedures colliding. The scrutiny mechanisms for neither treaty scrutiny nor statutory instrument (SI) are fit for the purpose of giving Parliamentarians a meaningful say on the content of international agreements and the legislation that gives effect to them domestically. Many of these agreements have wide-ranging and significant effects on the lives and rights of individuals, affecting domestic legislation on labour rights, data transfers, food and agricultural standards, and environmental protection. The onus is now on MPs to prevent the negotiation and implementation of future trade agreements from continuing to transfer swathes of power to the executive at Parliament’s expense.

What the Act does – and doesn’t do

The Act delegates the power to make significant amendments to existing procurement legislation. Section 1(1)(a) of the Act provides for the power to implement the Procurement Chapters of the two FTAs by regulations. While this power could be used to make relatively minor changes like, for example, updating the names of government bodies if they change in the future, there is an even broader power in Section 1(1)(b) to make regulations for matters outside the scope of the procurement chapters. According to the Explanatory Notes to the Bill, the Government intends to use this power to extend the changes arising out of the FTAs to non-Australian suppliers to avoid imposing conflicting procurement procedures. But, on the face of the legislation, the power is to make regulations for matters only connected to (“arising out of, or related to”) the Chapters, and for those regulations to apply generally.

The TANZ Act also continues a concerning trend of ‘skeletal’ law-making, meaning that the Act does not list the changes to existing procurement legislation that the powers in the Act are needed to make. This trend was recently highlighted in a report by the United Kingdom Constitution Monitoring Group. Broad powers are sometimes constrained through a requirement that the Minister thinks it is ‘necessary’ to make the regulations; however, Section 1(1) of the TANZ Act only requires the Minister to think that making regulations is “appropriate”. Moreover, Schedule 2, Paragraph 2 of the Act states that regulations made under Section 1 are subject to the negative SI procedure. Any regulation made under the TANZ Act will become law immediately and remain in force unless there is a motion to annul within forty days, which is a very rare occurrence. This will be the case regardless of the content of the SI, how it impacts people’s lives, or the extent of the change it provides for. 

No Commons debate for the underlying treaty

The lack of scrutiny for the SIs implementing the FTAs follows the inability of MPs to debate the UK-Australia agreement. 

Section 20 of the Constitutional Reform and Governance Act 2010 (CRAG) provides that a treaty cannot be ratified unless a Minister has laid a copy before Parliament, the treaty has been appropriately published, and 21 sitting days pass without either House resolving that the treaty should not be ratified. However, similar to the ability to reject SIs, the power to delay ratification under CRAG has not yet been exercised by Parliament, likely due in part to the difficulty in finding Parliamentary time for debating a resolution during the short CRAG period. 

One day before the CRAG scrutiny period expired, the Government announced that there would neither be a Commons debate on the treaty, nor would the (then) Minister be using her powers under Section 21 of CRAG to extend the 21-day period. This was contrary to both the recommendations of the Commons’ International Trade Committee (ITC) and the Government’s assurances to that Committee. While the TANZ Bill was introduced in May before this scrutiny period commenced, the second reading of the Bill, which would also amount to the Commons’ first debate on the UK-Australia FTA, did not take place until after the summer recess, after the point at which ratification could be blocked.

Consequently, the second and third reading debates in the Commons for the minimalistic implementing legislation became proxies for debates on the substantive content of the FTA – but long after the terms of the agreement could be changed. By the end of the legislative process and after consideration of numerous proposed amendments that sought to mitigate the vast delegations of power in the Bill, the only amendment made to the Bill was a technical change: the inclusion of the word ‘different’ in Section 2(1)(a). The Minister’s regulations under Section 1 may now make “different provision for different purposes or areas”.  

Warnings for the future

If lessons are not learnt from the process of passing the TANZ Act, Parliament risks losing what little say it has in scrutinising trade agreements and any implementing legislation. Two recent developments in particular should be ringing alarm bells for MPs about the future of trade scrutiny. 

The first of these is the restructuring of Government departments that has created a new Department for Business and Trade and led to the disbanding of the ITC. It is notable that this is not the inevitable outcome of a departmental merger, as shown by the continued existence of the International Development Committee after the formation of the Foreign, Commonwealth and Development Office. Moving trade scrutiny to a new Business and Trade (BAT) committee has been criticised not least for the likely loss of the ongoing work and expertise of the ITC, a body that was highly critical of Government’s failures to facilitate scrutiny of the UK-Australia FTA. 

The second is the announcement that the Government has concluded negotiations on the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). There are already concerns that the agreement will undermine environmental commitments, UK farming standards, and gender equality. MPs need to engage with these compounded scrutiny issues by, for example, taking a keener interest in Committee work or using opposition day debates. If they do not, then the Australia FTA process will be seen to have set a precedent. Parliament risks, once again, having to debate the content and trade-offs inherent in an FTA in the course of a debate on a skeleton Bill. This is assuming that the entire agreement is not implemented through delegated legislation made under existing Acts of Parliament, including the Procurement Bill that is currently making its way through Parliament and will be repealing the TANZ Act once in force.

It is inappropriate for Parliament to be side-lined, in both treaty scrutiny and implementation and in the scrutiny of delegated legislation, particularly given the volume of post-Brexit treaties that are due to be negotiated. To exclude treaties from democratic oversight now that the UK is outside of the EU treaty scrutiny framework is to place individual rights and interests on the chopping block. Parliament must not let the Australia FTA process become the norm. 

Saba Shakil. 

Saba Shakil is a researcher at the Public Law Project.

The Constitution Society is committed to the promotion of informed debate and is politically impartial. Any views expressed in this article are the personal views of the author and not those of The Constitution Society.