The problem with CRAG: why Parliament’s processes for approving trade deals need reform

David Lawrence sets out how a genuinely democratic system for approving international trade agreements could look like in post-Brexit Britain.

If MPs feel like they aren’t getting much say over Brexit, they are in for a nasty shock when it comes to post-Brexit trade deals.

Liam Fox’s ambitions for ‘global Britain’ mean the UK will supposedly embark on a mission to sign as many new trade deals as possible – with places like the US – the day after Brexit. As things stand, these deals will go through the processes outlined in the Constitutional Reform and Governance Act (affectionately known as ‘CRAG’). 

Legislation from another era

MPs will undoubtedly feel shortchanged by the CRAG processes, which give them nowhere near the amount of regular updates, scrutiny and meaningful say that they have enjoyed throughout the Brexit withdrawal process. CRAG does little more than enshrine an archaic convention known as the Ponsonby Rule. The Ponsonby Rule was established in 1924 with the purpose of rendering impossible “secret Treaties and secret clauses of Treaties” which were, at the time, thought to have helped bring about the First World War. 

Ponsonby was designed to give some Parliamentary oversight while ensuring that the Executive has complete authority to begin negotiations, set the mandate, sign agreements and ratify them. The rule requires that signed deals must be laid before both Houses of Parliament for 21 sitting days between signature and ratification. During this period there can be a debate on a deal, but in practice this depends on cooperation from the Government or Opposition. There is no guaranteed vote, and any votes are of the Hobson’s Choice (‘take it or leave it’) variety – there is no way for MPs to amend a deal.

The treaties Ponsonby was designed for were not modern trade deals but primarily defence treaties. This means two things: (1) the treaties needed a high degree of secrecy; for the sake of national security it was important that Parliament and the public were not involved in their negotiation; (2) the treaties did not affect domestic legislation, and were therefore constitutionally not within Parliament’s remit, but came under the Royal Prerogative held by the Executive.

Furthermore, historic trade agreements primarily concerned tariffs, but today’s agreements  impact directly on a range of domestic policy. ‘New-generation’ deals like TTIP and CETA include chapters on regulatory cooperation to ensure harmonisation between the regulatory frameworks of signatories. Services agreements, such as GATS and TiSA, contain requirements on industrial policy and nationalised public services. Some agreements cover Mode 4 services, affecting visa rights and free movement. 

If Brexit goes ahead, the UK will regain competence for trade policy for the first time in over 40 years. A return to Ponsonby will mean that MPs get less say over trade deals than their counterparts in the European Parliament. Equally, in other countries such as Australia and Denmark, legislatures get special access to negotiation texts and the power to refer deals to debate. Even in the US both Houses in Congress get a guaranteed vote on agreements, and America’s process for public consultation prior to negotiating deals is impressively far-reaching.

Parliamentary trade policy oversight – how it can be done

The UK could learn from these models. A democratic system for approving trade agreements should contain a framework for each of the following: 

  1. Parliamentary involvement in setting the negotiating mandate. This means MPs have a role in setting the negotiating objectives, or at least get to see and approve them, before negotiations begin. In the US, it is customary to publish negotiation objectives.
  2. Transparency during negotiations. Trade negotiations are not defence agreements: the public has a legitimate interest in their provisions and at the very least MPs should be updated on the content of negotiations as they happen.
  3. A guaranteed debate and meaningful vote prior to ratification. Parliament should have the opportunity to reject bits of the deal they do not like and mandate different negotiating objectives.
  4. A process for withdrawing from trade agreements. As economic, technological and social situations change, trade deals may cease to be in the national interest. There should be a means for Parliament to initiate withdrawal from existing trade agreements. 

This matters because post-Brexit trade agreements are likely to be controversial. A US deal could mean accepting their lower food and health standards – an ambition recently made clear by the US meat and pharma lobbies. Deals are likely to affect British farmers, small businesses, the quality of products on supermarket shelves, as well as regulations and public services. This is not to say that none of these deals are desirable, but that meaningful democratic oversight of controversial deals is essential.

The debates around whether Parliament should have a say over triggering Article 50 (which led to the Miller case) and whether Parliament should have a meaningful vote on May’s deal (which led to the Grieve amendment in the Withdrawal Bill) are just the tip of the iceberg: Brexit has exposed a much more fundamental constitutional debate to be had about the balance of power between executive and legislature. Trade deals, as with Brexit, have implications which reach far beyond the traditional foreign affairs remit for which the Ponsonby Rule was designed. The process for negotiating and ratifying agreements therefore needs urgent reform.

David Lawrence is Senior Political Adviser at the Trade Justice Movement, a UK coalition of seventy civil society organisations, calling for trade rules that work for people and planet. He tweets at @dc_lawrence

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