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The Government presented the Trade (Australia and New Zealand) Bill to the House of Commons on 11 May 2022. The Bill’s second reading took place on 6 September. Its committee stage was completed on 18 October, and the report stage is scheduled on 12 December 2022.

The Bill would enable the implementation of the UK’s Free Trade Agreements with Australia and New Zealand – the first two trade agreements that the UK has negotiated independently, outside the EU.

The Bill’s objectives

The Bill would create powers to change UK domestic procurement law to implement the public procurement chapters of each agreement. UK procurement rules, set out in procurement regulations and guidance, regulate government and wider public sector purchases of goods and services.

The Bill would enable the UK Government and devolved authorities to make regulations for two purposes:

  • To implement the changes in domestic procurement law required to implement the UK Free Trade Agreements with Australia and New Zealand, and
  • To change domestic law to reflect some specific amendments required under the agreement with Australia, and apply those provisions to suppliers from the UK and other countries. This aims to ensure consistent regulation and treatment of all suppliers.

Temporary powers

The Procurement Bill 2022-23 [HL], currently under consideration in the House of Lords, proposes equivalent powers to update the UK procurement rules when required to implement new free trade agreements. The Procurement Bill is expected to repeal the Trade (Australia and New Zealand) Bill as enacted, although retaining the changes this Bill introduces.

Parliament’s role

The UK Government has prerogative powers to negotiate international agreements. However, some agreements may require changes to domestic law and these have to be agreed by Parliament. This Bill represents such legislation.

Besides passing implementing legislation, Parliament formally scrutinises the trade agreements under the Constitutional Reform and Governance Act 2010 (CRAG), and has power to delay the ratification of the agreements. On 20 July, the process was concluded for the UK Australia Free Trade Agreement. The agreement with New Zealand was laid before Parliament under CRAG on 27 October. The initial 21 day period for parliamentary scrutiny under CRAG ends on 1 December 2022.

The Government does not ratify and enter into force international agreements before both processes – passing domestic legislation and completing the scrutiny under the CRAG Act – have been completed.

The agreements will come into effect after also New Zealand and Australia have completed their domestic ratification procedures.

Procurement provisions

In the UK Australia and the UK New Zealand Free Trade Agreements, the parties have committed to ensuring fair, transparent and non-discriminatory selection processes of suppliers. They have agreed to open up their procurement markets allowing suppliers to bid for more contracts of wider public sector bodies. It is unclear how economically significant the improvements are compared to the current situation.

Some obligations of the procurement chapters go beyond the World Trade Organisation Government Procurement Agreement (GPA) – of which the UK, Australia and New Zealand are part. These include innovative provisions on advertising and conducting procurement electronically, and helping small companies bid for tenders.

The Government’s view is that where the text of the agreements deviates from the GPA and might seem to reduce commitments (PDF), this was unlikely to have negative effects on suppliers (PDF).

Commons stages

During the second reading debate MPs were for a significant part focussing on the issue of parliamentary scrutiny of the UK free trade agreements and the role of the devolved administrations in the negotiation process. MPs also debated the effects of both FTAs on the economy, especially agriculture.

In the Committee, the opposition parties sought to add impact assessments and consultations with stakeholders and the devolved administrations. Other amendments proposed more parliamentary scrutiny of regulations made under the Bill. The Committee passed the Bill unamended.

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