This edition of Trade Talking Points provides updates on the: new UK government plus the UK King's Speech announcements; new Agreement on Climate Change, Trade and Sustainability (ACCTS); European Parliament elections; G7 Trade Ministers' Meeting; and World Trade Organization (WTO) General Council meeting.
UK Election and King's Speech announcements
The Labour Party has formed the next United Kingdom (UK) Government with a majority of more than 170 Members of Parliament. The Labour Party manifesto made a number of core commitments relating to international trade, including: establishing a closer relationship with the EU, creating an industrial strategy council, publishing a dedicated trade strategy, and committing to a UK Carbon Border Adjustment Mechanism.
The new government unveiled its legislative agenda in the King's Speech on 17 July 2024, which announced 40 pieces of legislation and the establishment of an Industrial Strategy Council. The Council will be responsible for monitoring and evaluating the progress of the new UK Industrial Strategy, which is forthcoming.
The King's Speech also reaffirmed the Government's intention to improve its trade and investment relationship with the European Union (EU) through "reset[ting] relations with European partners." As part of this aim, a new security pact will be developed to strengthen cooperation between the UK and EU.
Agreement on Climate Change, Trade and Sustainability
On 2 July 2024, New Zealand, Switzerland, Costa Rica and Iceland announced that they have concluded negotiations on the Agreement on Climate Change, Trade and Sustainability (pdf) (ACCTS). This is the first agreement of its kind dedicated to trade and climate issues.
The ACCTS includes a commitment to eliminate tariffs on 300 environmental products, lower barriers to trade for environmental services, and increase cooperation on ecolabeling, as well as a new framework to discipline and eliminate harmful fossil fuel subsidies. Once the ACCTS has entered into force, the tariff eliminations and lower barriers to trade will be available to traders from all countries into New Zealand, Switzerland, Costa Rica and Iceland as they are being implemented on a nonpreferential basis.
The four countries will be encouraging others to join the ACCTS in due course.
Updates from the European Parliament
The European Parliament reelected Ursula von der Leyen as the President of the European Commission (EC) on 18 July 2024. Von der Leyen's Political Guidelines (pdf) for the next EC were published on the same day, outlining proposals for her second Commission term.
Trade has been identified as one of three "central planks" of the new economic foreign policy, alongside economic security and investment. The EC has committed to the creation of new Clean Trade and Investment Partnerships to boost supply chains for raw materials and clean energy. The Political Guidelines also contain a commitment to improve rules-based trade, partly through reforming and strengthening the WTO. The EC aims to increase efforts to enforce its trade agreements and deploy trade defense instruments as necessary.
On 23 July 2024, the European Parliament's 20 standing committees and four subcommittees held meetings to elect their own Chairs and Vice-Chairs. Bernd Lange (Progressive Alliance of Socialists and Democrats (S&D), Germany) was reelected as Chair of the European Parliament's Committee on International Trade. The Vice Chairs included: Manon Aubry (The Left, France), Iuliu Winkler (European People's Party, Romania), Karin Karlsbro (Renew, Sweden) and Kathleen van Brempt (S&D, Belgium).
Following his reelection, Lange emphasized his commitment to expand the EU's network of trading partners, reform the WTO, and ensure that the EU's sustainable trade policies are implemented in partnership.
G7 Trade Ministers' Meeting
The G7 Trade Ministers' Meeting took place on 16-17 July 2024 in Southern Italy. Some of the key points discussed were:
- Addressing non-market practices and related market distortions with trade tools already at the disposal of G7 members, as well as developing new tools that may be required to respond to emerging non-market challenges
- Recognizing the importance of artificial intelligence (AI) in international trade, including its role as a trade facilitation measure, while mitigating its related risks
- Maintaining a fair and transparent multilateral trading system through WTO reform
- Continuing to support trade policies that contribute to sustainable development and address environmental crises, while ensuring supply chains are climate-friendly and do not involve forced or child labor
The next G7 Trade Ministers' Meeting will take place under the Canadian Presidency in 2025.
WTO General Council
The WTO General Council meeting took place on 22-23 July with a packed agenda ahead of the European summer break. A number of WTO Members have expressed frustration at the lack of progress across a number of key files that were blocked by a handful of WTO Members. These included:
- Failure to agree to incorporate into the WTO's rulebook the plurilateral agreement on new rules on Investment Facilitation for Development
- Failure to agree on adopting the next tranche of commitments to tackle harmful fisheries subsidies under the WTO Fisheries Agreement (or so-called Fish II)
- Failure to adopt Brazil's proposal on "Moving Agriculture Negotiations Forward — Draft Decision"
WTO Members also discussed whether to start the selection process early for the next WTO Director General. Current WTO Director General Okonjo-Iweala's term expires in August 2025 and she is eligible for a second term. The Chair of the General Council, Ambassador Petter Olberg (Norway) will start consultations with the WTO Membership on whether to amend the existing process.
For additional information concerning this Alert, please contact:Ernst & Young LLP (United Kingdom), London
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Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert. |
