Peers warn of "acute" risk of trade disruption on Brexit

Peers have warned of an "imminent and acute" risk of disruption to UK trade with important partners following Brexit, in a report on trade agreements published today.

In its first such move the House of Lords EU Committee has drawn three Brexit "roll-over" trade agreements to the special attention of the House of Lords. It identifies all three agreements as politically important, and also raises concerns over the UK Government’s level of consultation, particularly with the devolved administrations.

The agreements concerned are:

the free trade agreement between the UK and Denmark in respect of the Faroe Islands, in respect of which insufficient information has been provided but which is politically and legally important particularly due to its significance for the Scottish fishing industry, because of which further consultation including with the devolved administrations would be appropriate;

the agreement establishing an Economic Partnership Agreement between Eastern and Southern African States and the UK – also politically and legally important, but in respect of which the Government has provided insufficient explanatory information; and

the agreement establishing an Association between the UK and the Republic of Chile – again politically and legally important, and further consultation may be appropriate; there is also no provision to establish a successor to the joint EU-Chile interparliamentary body that oversees the existing EU-Chile Association Agreement.​

The committee also raises concerns that the Government has not yet bought forward proposals to roll over major trade agreements with countries such as South Korea and Japan, from which the UK currently benefits as part of the EU. The report suggests this may indicate larger economies are "reluctant to replicate" the preferential terms of their EU trade deals in bilateral agreements with the UK.

Given the proximity to the date the UK is expected to leave the EU the committee concludes: "The risk of disruption to the terms of UK trade with many of its most important trading partners is now imminent and acute."

Committee chair Lord Boswell commented: "Today’s report is the first time we have drawn special attention to Brexit agreements. We are concerned that the Government is not consulting properly on the process of bringing over these treaties, particularly with the devolved Governments.

"International treaties are a reserved matter, but this isn’t the time for the UK Government to adopt a legalistic approach, especially on issues that directly affect other parts of the UK, such as the Scottish fishing industry’s interest in the trade deal with the Faroe Islands.

"We are also concerned that with the Brexit deadline looming, the trade agreements we’re reporting on today only represent 0.3% of the UK’s international trade. It looks increasingly as if major economies such as Japan and South Korea, with whom we have trade agreements through our membership of the EU, are not willing to give the UK the same preferential terms post-Brexit. That is a real worry for UK business and consumers as we get ever closer to 29 March."

Click here to view the committee's report.