British merchant ship plan to break WTO deal, experts warn
Boris Johnson’s plan to build a new yacht in the UK is on the verge of falling under a World Trade Organization deal his own government struck last year, experts have warned.
The Prime Minister announced last month that he hoped a national shipbuilder would create the £ 200million ship, the successor to the Royal Yacht Britannia, to promote British trade and industry to the world.
But while Number 10 has announced its “intention” to build the still unnamed ship in the UK, it would violate an agreement Britain signed just eight months ago.
The ministers did not exclude the construction of civilian ships from the list of contracts that must be opened to global competition when signing the WTO “Agreement on Government Procurement” (GPA) covering 48 countries in last october.
The government has set up a national flagship task force, housed at the Department of Defense, to oversee the creation of the merchant yacht, which will be staffed with Royal Navy personnel. However, its focus is entirely commercial rather than security.
Liz Truss, trade secretary, boasted in October that the AMP would allow UK companies to continue bidding on public sector contracts around the world worth £ 1.3 billion a year. Likewise, she said, foreign groups could continue to bid on UK public sector contracts, “offering better value to UK taxpayers”.
But that could thwart government attempts to use a ‘Buy British’ approach to build the new yacht. Point 47 of Annex 4 of the UK AMP List explicitly states that the purchase of “ships, boats and floating structures, except warships” must be internationally advertised and awarded without discrimination. .
Other countries, including the United States, Canada, Japan and Australia, on the other hand, have ensured that their GPA agreements exclude civilian shipbuilding.
Of the 50 largest motor superyachts currently at sea, only one (el Mahrousa) was built in the UK – in 1865.
However, Cammell Laird, who owns a shipyard in Merseyside in North West England, says he is ready and willing to build the new commercial yacht.
Aline Doussin, head of the international trade team at Hogan Lovells law firm, said it would be difficult for the UK to avoid allowing international competition to build the ship unless it it is a real military ship.
“It is likely that the MPA will be engaged, which means that open, fair and transparent conditions of competition will have to be met, and suppliers from MPA countries will have to be treated in the same way as domestic suppliers”, she declared.
Emily Thornberry, shadow trade secretary, said the government had failed to take “the most basic and simple steps” to ensure the ship could be built in Britain.
“This is yet another copper-bottomed ocean incompetence on the part of Boris Johnson and Liz Truss, and they need to have a solid legal foundation before they spend more public money on this project,” a- she declared.
A government spokesperson said the ship would definitely be built in UK shipyards. She said the program would “be in line with our obligations under the WTO GPA”, but did not explain how this might be the case given point 47 of Annex 4.
A figure in Whitehall said the government is planning to pretend the new commercial yacht is essential to national security in an attempt to circumvent those rules.
But the government’s announcement of the launch said it would be used “to host high-profile trade talks and trade shows and would sail around the world to promote British interests.”
As a result, the UK faces potential legal challenges from foreign governments or shipbuilders against the government’s protectionist stance.
Dmitry Grozoubinski, a trade expert who is a visiting professor at the University of Strathclyde, said the government could try to structure the deal to avoid the letter of GPA rules.
“Securing that supply is clearly against their minds. The arguments for keeping local sourcing – jobs, skills development, patriotism – also apply to any government purchases and are precisely what AMP was. negotiated to set aside, ”he said.
“The government cannot simultaneously present itself as a champion of the rules-based trading system and retain the freedom to ignore those rules whenever it is politically expedient,” he added.