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Press Release

Climate change to affect UK trade remedies decisions

Daniel Merlo
13/10/2021
The recently formed Trade Remedies Authority (TRA) has the remit to investigate allegations of unlawful trade practices and further, to recommend trade remedies to the Secretary of State for International Trade, who either accepts or rejects those measures. UK industry benefits from trade remedies as a protection from unforeseen surges in imports and unfair competition from overseas producers guilty of unlawful trade practices.

However, climate change is firmly on the international trade agenda and it has the potential to influence a decision on whether UK trade remedies measures are imposed or not according to Daniel Merlo, an international trade specialist at European law firm Fieldfisher.

"Unlike the World Trade Organisation (WTO) trade remedies framework, the new UK regime allows the TRA to take into account climate considerations as part of its economic interest consideration, and similarly for the Secretary of State for International Trade in the public interest assessment," said Mr Merlo.

"A unique feature of the new UK regime is that the TRA can only recommend a trade remedy measure when it is in the economic interest of the UK.

"Under the legislation, the TRA is required to take into consideration any climate related submissions that are framed as relevant to the economic interest of the UK, and anyone who has registered an interest in an investigation has the right to make such submissions."

Mr Merlo added that parties have the option of making environmental submissions to the Secretary of State for International Trade when considering whether the measures recommended by the TRA are in the public interest.

"The Secretary of State is required to give due consideration to such submissions, particularly where they can be linked to the Government's commitments under the Paris Agreement, otherwise decisions may be subject to legal challenge," he said.

Industry concerns collated in a recent World Economic Forum white paper included the impact of tariff barriers on climate-friendly goods and the need for greater alignment on carbon based trade policies. Exporters are particularly concerned about the negative impact that the increase in trade friction from the use of trade remedies and other unilateral trade actions is having on global supply chains.

"For example, analysis of 45 trade remedies cases involving clean air technologies – such as solar panels and wind turbines– by the International Centre of Trade and Sustainable Development, found that the indiscriminate use of trade remedies can raise costs for exporters," said Mr Merlo.

"Domestic producers on the other hand would benefit from the protection that trade remedy tariffs provide for environmental industries to grow, thereby diversifying the industry and reducing transport carbon emissions."

Mr Merlo added that business on both sides of the divide, and other organisations and interest groups, should therefore be aware that climate related submissions may factor in the UK's trade remedy investigations, and be prepared to make the case in their favour. 

"Businesses involved in trade remedies investigations, and climate interest groups, should be aware how these considerations may arise and plan accordingly," he concluded.

ENDS

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