Policy background
- The UK-Australia FTA was signed virtually on 16 December 2021 and the UK-New Zealand FTA was signed on 28 February 2022. The government procurement Chapters of these Agreements (Chapter number 16 in each) contain the only obligations that require new primary legislation to provide for their implementation for the entry into force of the Agreements. This legislative implementation of the government procurement obligations in the Agreements is needed before formal entry into force of the Agreements to ensure that the UK is not in breach of them, when they enter into force, and the benefits of the Agreements can begin to accrue.
- Both government procurement Chapters consist of (a) the text of the Chapter setting out the government procurement obligations and (b) the Schedules in an Annex to the Chapter, which set out the procurement market access coverage of each of the parties. The text sets out rules for fair, transparent and non-discriminatory conditions of competition in government procurement. These rules do not automatically apply to all procurement activities of each party. Rather, the Schedules determine which entities and procurements are covered by the scope of the Chapter and must follow the rules. Only procurement activities by covered entities purchasing covered goods, services or construction services, of a value exceeding the specific thresholds, are within the scope of the respective Agreements.
- The Trade (Australia and New Zealand) Act 2023 provides the Government and the Scottish Ministers, Welsh Ministers or a Northern Ireland Department the power to make changes to domestic legislation which are necessary to ensure the UK’s government procurement obligations arising from the Agreements can be fully implemented.
- The Procurement Bill [HL] introduced into the House of Lords on 11th May 2022 would reform existing procurement legislation. That Bill is expected to provide a power to implement the UK’s government procurement market access obligations in trade agreements. Accordingly, the function of the power in this Act that allows the UK to implement any future updates to the government procurement obligations in the Agreements is only required until the relevant power in the Procurement Bill enters into force.
- The relevant provisions of the Procurement Bill are anticipated to enter into force after this Act and after the necessary changes to domestic law have been made for entry into force of the Agreements. To the extent that implementation of the Agreements for their entry into force is complete, the Procurement Bill is expected to repeal the Trade (Australia and New Zealand) Act 2023 and save relevant statutory instruments. Ongoing implementation of the market access aspects of the Agreements would be provided for by a power in the Procurement Bill.
