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State aid is a delicate issue in the current EU-UK trade negotiations. Whilst the EU is seeking dynamic alignment of any set of future UK State aid rules with the EU rules to maintain a ‘Level Playing Field’ (LPF) in areas relating to access to the Internal Market, the UK takes the stance that it would introduce its own regime of subsidy control. The UK prefers to adopt a more relaxed process for international trade based upon the rules in the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM) but relying on WTO rules would not create a robust domestic system of state aid control. To maintain a close trade relationship with the EU, the UK must manoeuvre into a position where it gives effect to a State aid regime equivalent to that maintained by the EU, with an effective and robust independent enforcement process, but the UK has taken a different view. The reaction of the UK Government to the COVID-19 crisis has revealed the need for transparency in the granting of subsidies as well as accountability in procurement and yet the current situation is very opaque. Read Briefing Paper 42: STATE AID: NOT ONLY ABOUT TRADE

This Briefing Paper sets out a new basis for reciprocity in what might be deemed essential goods, of which the medical kit and equipment associated with COVID-19 are examples. The authors propose a trade policy bargain that, although time-limited at first, could evolve into a multilateral or plurilateral deal. As governments of net exporting nations realise that export bans do little to end shortages of medical kit in a world of international supply chains, and do much to antagonise trading partners and to embolden economic nationalists at home and abroad, this proposal provides them with a rationale for embracing a more collaborative approach that generates a commercial edge for their exporters of medical supplies. For nations reliant on foreign deliveries of these goods, this proposal provides greater reassurance that supplies will be forthcoming when they are needed—thereby diminishing the case for devoting scarce resources to an import substitution drive on medical goods. The authors describe the underlying commercial logic of this bargain, its elements, and their WTO compatibility. The paper also discusses this proposal in relation to other recent joint trade policy initiatives in this critical area of world trade. Read Briefing Paper 40: PREPARING FOR A SECOND WAVE OF COVID-19: [...]

The UK’s draft text for the Free Trade Agreement with the EU indicates a vision of where the Government wishes to take the UK’s trade relationship with the EU. In some areas, the UK is unwilling to agree such deep integration as the Political Declaration foresaw and which the EU is seeking. However, in other areas, the UK is asking for more integration than the EU ordinarily offers partners in simple FTAs. This paper discusses four of these extensions in detail and provides further analysis of the implications for the negotiation process and future UK-EU trade. Read Briefing Paper 43: UK-EU FREE TRADE AGREEMENT: PLEASE, SIR, I WANT SOME MORE