UK trade ship warning: Boris risks breaking niche WTO rule and infuriating trade allies

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Last month, the Prime Minister said he hoped a domestic shipbuilder would create the £200million successor to the Royal Yacht Britannia. The new vessel would promote British trade and industry around the world.

However, the intention to build the ship in the UK could breach the WTO agreement the Government signed only eight months ago.

Government ministers excluded the construction of civilian ships from the list of contracts that must be open to global competition.

The WTO “government procurement agreement” (GPA) covered 48 countries and was signed last October.

International Trade Secretary Liz Truss said the GPA would allow British companies to keep bidding for public sector contracts around the world.

She added how overseas groups would be able to bid for UK public sector contracts and claimed it would deliver “better value for UK taxpayers”.

However, this could frustrate the Government’s “Buy British” approach to building the new yacht, according to the Financial Times.

Part of the UK schedule of the GPA states the procurement of “ships, boats and floating structures, except warships” must be advertised internationally and without discrimination.

In comparison to the UK’s agreement, the US, Canada, Japan and Australia have all ensured their agreements exclude civil shipbuilding.

Emily Thornberry, Shadow Trade Secretary, said the Government failed to take “the most basic and simple steps” to ensure the ship could be built in Britain.

She said: “It is yet more copper-bottomed, ocean-going incompetence from Boris Johnson and Liz Truss, and they need to get themselves on solid legal ground before spending any more public funds on this project.”

Aline Doussin, head of the international trade team at law firm Hogan Lovells, added it would be difficult for the UK to avoid international competition to build the ship.

She said: “It is likely that the GPA will be engaged, which means that open, fair and transparent conditions of competition will have to be met, and GPA country suppliers would have to be treated in the same manner as domestic ones.”

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A Government spokesperson said it would be “compliant with our obligations under the WTO GPA”.

Dmitry Grozoubinski, a trade expert visiting professor at the University of Strathclyde, said the Government could structure the deal to avoid the letter of the GPA rules.

He said: “Ringfencing this procurement is demonstratively contrary to their spirit.

“The arguments cited for keeping the procurement local — jobs, upskilling, patriotism — apply equally to any purchase made by the government and are precisely what the GPA was negotiated to set aside.

“The government can’t simultaneously present itself as a champion of the rules-based trading system and retain the freedom to ignore those rules whenever politically expedient.”

Construction of the new ship is expected to begin as soon as 2022 and it will enter service within the next four years.

The tendering process for the design and construction of the vessel will launch shortly, with an emphasis on showcasing British design expertise and the latest innovations in green technology.

The ship will be crewed by the Royal Navy and is expected to be in service for around 30 years.

There have been calls for the currently unnamed ship to be named after the late Duke of Edinburgh.

The Duke, who had a long and distinguished naval career, was also involved in the design of Britannia, which was officially decommissioned in 1997.

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