Trade Watch 2022 Round Up

Dear RIA colleagues, Welcome to this RIA 2022 Trade Watch Round Up, a summary of all the relevant policy, political and technical developments around the UK trade this year. This includes negotiations with international partners, as well as RIA's work and activity in the international sphere.

Scroll down for a number of items which we hope will be useful, including: •

Progress on UK Free Trade Agreement negotiations, including updates on the UK's trade talks or agreements with Australia, New Zealand, India, Israel, CPTPP, Mexico, Switzerland, GCC, and South Korea.

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RIA's activity in Brussels: this year, RIA has maintained a strong level of engagement with EU counterparts - as part of this, we have continued engagement in Brussels, either by organising visits with RIA members or joining events to represent the UK rail supply chain.

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EU updates: key updates on Horizon Europe, the Northern Ireland Protocol, the Retained EU Law Bill, and more

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General trade updates, including the UK's International Transport Forum (ITF) presidency

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Useful resources, including a link to international tenders

You might be particularly interested in RIA's map of the UK's current existing and upcoming Free Trade Agreement negotiations – which you can access here.

With the input from members, RIA has also updated its Trade Asks – please find the new version here.

We hope you enjoy this round-up and that you find it useful! Please do feel free to forward this to colleagues.

Francesca Lentini RIA Senior Policy Executive

If you have any feedback or intelligence that we can share and/or suggestions for future editions please contact francesca.lentini@riagb.org.uk.

Please note that this Trade Watch is for RIA Members only and we ask that you do not share it beyond your organisation.

Progress on UK Free Trade Agreement negotiations

UK Trade negotiations – general progress On 8 December 2021, the National Audit Office published a press release on the Government's progress with trade negotiations following the UK’s exit from the EU. Notably, it found that “ahead of the EU transition period deadline of 31 December 2020, DIT worked with other departments to successfully transition 33 of the 39 existing EU trade agreements (98.6% by value) that the UK was previously party to, with three further deals agreed during 2021”. Furthermore, progress was also made with new trade partners, including: an AiP (Agreement in Principle) with Australia (June 2021, now FTA – Free Trade Agreement); an AiP with New Zealand (October 2021, now FTA); start of negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an FTA between 11 countries around the Pacific Rim; public consultations on planned negotiations with India, the Gulf Cooperation Council (GCC), Canada and Mexico.

Overall, 64% of total UK trade is with countries now covered by FTAs (including agreements in principle).

On 8 November 2022, a briefing was published on the House of Commons Library on the progress on UK FTA negotiations – you can access the briefing here.

UK-Australia Free Trade Agreement signed On 16 December 2021, the UK signed a trade agreement with Australia. The deal is expected to unlock £10.4 billion of additional trade, boosting the UK’s economy and increasing wages across the UK, while eliminating tariffs on 100% of UK

exports.

RIA produced a briefing on the Australian market ahead of the deal being signed – you can find it here.

In the DIT's Benefits for the UK briefing, on rail, it says: “This deal gives UK companies legally

guaranteed access to Australian government contracts on rail procured by bodies covered by this deal. It ensures UK rail businesses do not face any quantitative restrictions, such as quotas, or unfair treatment when investing and operating in Australia. It also removes all tariffs on rail-related goods, including rolling stock, track fixtures and fittings, and traffic signalling equipment. Australia is a priority market for UK rail companies, with the Australian rail industry valued at AUSD $29.8 billion according to the Australasian Railway Association. UK companies already have a strong presence in Australia, from design and engineering to the export of rolling stock and operation of railroads and this deal will help them to further expand. The Australian market is a huge opportunity for UK rail companies interested in the planned expansion of rail services across the continent. A further AUSD $3 billion in funding for rail related projects around the country was announced in Australia’s 2021-22 budget."

Former DIT Secretary of State, Anne-Marie Trevelyan, mentioned the Railway Industry Association during a debate on the Australia and New Zealand FTA bill in the House, at around 14:20:52 here.

UK-New Zealand Free Trade Agreement signed On 28 February 2022, the UK signed a Free Trade Agreement with New Zealand. The UK-New Zealand trade relationship was worth £2.3 billion in 2020 and is now expected to increase by almost 60%, boosting the UK’s economy by £800 million and increasing wages across the UK. Under the new deal, tariffs will be eliminated on all UK exports to New Zealand.

RIA responded to the call for input on this trade agreement – you can see our submission here.

Trade with India On 13 January 2022, the UK launched negotiations on an ambitious Free Trade Agreement at an event in New Delhi. The agreement would create great benefits for both countries and could boost our total trade by up to £28 billion a year by 2035 and increase wages by up to £3 billion across the UK. RIA responded to the call for input on the UK-India Free Trade Agreement, and welcomed the start of these trade negotiations.

Neil Walker, Exports Director at the Railway Industry Association (RIA), said: “Many UK

railway businesses will welcome negotiations starting on a new Free Trade Agreement with India. Both nations have a strong railway history and have Governments seeking to expand their networks through rail investment in the future. India is one of the top priority markets for UK rail suppliers, where they believe railway goods and services can be exported with further assistance, showing that with the right conditions there is a real opportunity to increase rail trade between the two nations. We look forward to working with the UK Government to support the negotiations and to ensure rail plays a central role in any agreed trade deal, supporting more exports growth, jobs and investment across the UK.”

Trade with Israel On 2 February 2022, the International Trade Secretary AnneMarie Trevelyan launched a consultation for a new UK-Israel trade deal. The UK is Israel’s third largest trading partner, with £2.7 billion worth of British exports going there in 2020 and an overall trade relationship worth £4.8 billion. While services account for 70% of both economies, they currently only represent 35% of the UK-Israel’s bilateral trade. An updated trade agreement could address this imbalance by cutting red tape and overhauling the very limited provisions on services and innovation in the current agreement. The Call for Input was open for eight weeks and RIA submitted a response to the questionnaire. Negotiations started in July 2022.

Furthermore, on 24 August, the UK Transport Secretary signed a new partnership with Israel, securing new business opportunities for rail. This new UK-Israel Memorandum of Understanding extends the benefits of Crossrail expertise overseas, promoting global Britain and enabling British engineers to team up with companies abroad.

Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) This is a trade agreement between 11 countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

On 18 February 2022, the UK moved into the second and final phase of the accession to join the £8.4 trillion CPTPP free trade area, known as the “market access” phase of negotiations.

Trade with Mexico On 20 May, the International Trade Secretary at the time launched negotiations on a new UK-Mexico Free Trade Agreement (FTA) alongside her Mexican counterpart, Tatiana Clouthier, in London. A ‘Mexico 2.0’ deal would transform the UK’s relationship with the world’s 16th biggest economy and secure a brand new, enhanced FTA for a digital age, which supports hi-tech jobs, industries of the future and grows our economy. This was the third major FTA negotiation launched by Trade Secretary Anne-Marie Trevelyan in 2022 – following visits to kick off talks in India in January and Canada in March.

Trade with Switzerland On 28 April 2022, the UK kick-started negotiations with Switzerland for a new, enhanced trade deal. An eight-week consultation was launched in the form of a questionnaire, which RIA filled out. The new deal aims to boost two-way trade between two of the world’s biggest services superpowers through measures including breaking down barriers and opening up access for UK firms to the Swiss market.

Trade with the Gulf Co-operation Council (GCC) On 22 June 2022, Trade Secretary Anne-Marie Trevelyan launched free trade negotiations between the UK and the Gulf Cooperation Council (GCC), made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The deal would add at least £1.6 billion a year to the UK economy and support new jobs in key industries. RIA responded to the consultation on this FTA in January 2022 – read it here.

Trade with South Korea On 9 December 2022, the UK kicked off the process to negotiate a new trade deal with South Korea. The new deal will upgrade our trading agreement with South Korea, ensuring a more modern and fit-for-purpose deal that builds on our existing £14.3 billion trading relationship and meets the specific needs of the UK. This will include important areas such as digital trade, enhanced climate provisions and further support for small and medium sized businesses.

A call for input was also launched. It will be live until 2 February 2023. RIA will be responding to this consultation – if you'd like to provide us with your perspective and feedback, please email francesca.lentini@riagb.org.uk.

Brussels

This year, RIA has maintained a high level of engagement with EU counterparts. As part of this, we have continued RIA’s presence in Brussels, either by organising visits with RIA members or joining events to represent the UK rail supply chain.

March 2022 – Brussels visit with UKTiE Back in March, together with UKTiE (UK Transport in Europe), RIA organised a two-day visit to Brussels with a delegation of UK members joining as well. During the two days, we heard from stakeholders such as DfT, UKMis, the Swiss, Canadian, and Norwegian Missions to the EU, the International Association of Public Transport, the Devolved Nations’ Government representatives in Brussels, and the European Commission (DG MOVE). We have produced a short note highlighting the main themes of discussion for the visit – you can access it here. You can also see two presentations that were shared during the visit, one from UKMis on the basics of the EU structure, and the second one is the update from DG MOVE. RIA is planning another similar visit on 2023 and we will keep you posted on any updates.

September 2022 – DfT/UKMis event in Brussels More recently, we also joined a couple of events held in Brussels, with the aim of raising the profile of UK rail in Brussels, forge and cultivate relationships in the EU, and conduct some intelligence gathering for our members. The first event was organised by DfT and UKMis at the end of September, and RIA was invited to the Ambassador’s residence in Brussels for an informal discussion on transport decarbonisation with the Department for Transport, Transport & Environment, and BP. The aim of the event was to measure the UK’s progress against its Transport Decarbonisation Plan

and the EU’s progress with its Fit for 55 legislation. The evening was also intended to bring together government and industry to discuss efforts to deliver on our commitments to decarbonise transport. For more details on what was discussed during the event, please see here.

November 2022 – The Enterprise Forum's Business Delegation to Brussels Finally, in early November we were invited to take part in The Enterprise Forum’s Business Delegation to Brussels. During the event, which included a working lunch with the UK Deputy Ambassador to the EU, delegates had the chance to hear an update on the UK-EU relationship from Mr Stefan Fuehring, Head of Unit at the European Commission for the EU-UK Trade and Cooperation Agreement. More details here.

European Union

Horizon Europe – update The UK is expected to become an associated country to the EU’s R&I Framework Programme Horizon Europe. Currently, UK organisations are already fully eligible to apply for funding in the programme, but cannot receive the money yet.

A safety net has been put in place by the UK government for those UK organisations who have reached the stage of needing to start their projects. You can see all of the open and forthcoming calls for proposals here.

More recently, UK Research and Innovation (UKRI) also announced they will deliver £280 million in new funding to help address the impacts of the ongoing delay in UK association to the EU’s Horizon Europe programme, with £150m being distributed via existing UKRI programmes boosting infrastructure investment across the UK.

We will continue to keep you posted with any updates as and when we receive them – visit the Horizon Europe website here.

EC publishes Horizon Europe work programmes The European Commission has published the final Horizon Europe Work Programmes for 2023-2024 on the Reference Documents section of the EC Funding and tender opportunities portal. Here is a direct link to the Cluster 5: Climate, Energy and Mobility Work Programme. It's a big document (over 500 pages), but it has a very informative contents page.

Northern Ireland Protocol Bill In mid-June, the Northern Ireland Protocol Bill was introduced into Parliament. The UK Government, having identified a series of issues with the NI Protocol, have outlined what they see as the solution in this explainer. The Bill is currently going through Parliament – see here to check at what stage of the passage it currently is.

Retained EU Law Bill RIA is following the progress of the Retained EU Law Bill – the bill intended to sunset EU legislation that was left over from the Trade and Cooperation Agreement agreed between the UK and the EU in December 2020. This bill will either sunset (revoke) retained EU Law, or change the way that what remains is to be interpreted – all by December 2023. RIA is working with the Department for Transport and other industry stakeholders, such as RSSB, to understand the extent of the impact on the railway industry and what pieces of legislation will need to be looked at out of the 2400+ laws included in the Bill. We will keep RIA members posted on any progress.

UNIFE updates – WRMS and General Assembly UNIFE, the Association of the European Rail Supply Industry, which RIA is member of, recently published the ninth edition of their World Rail Market Study, conducted by Roland Berger.

The report provides a comprehensive overview of the global rail market, and lays out a forecast of projected future development across 65 countries. Notably, this iteration has found that the global rail market will experience an average annual growth rate of 3.0% through to 2027 reaching a global market volume of EUR 211 billion between 2025 and 2027. If you would like to know more, you can access the study’s abstract here, and you can purchase the report here.

Earlier this year, in mid-June, RIA also attended UNIFE’s General Assembly in Paris. During the two-day conference, delegates had the opportunity to hear discussions and updates and ask questions on topics such as: EU funding and investments in rail; public procurement; digitalisation and innovation; cybersecurity; interoperability; the TSIs revision; competitiveness and the global leadership of EU rail supply industry. A summary of the assembly can be found here.

Extending recognition of EU conformity assessment for interoperable rail products and ending recognition of EU certification for entities in charge of maintenance On 7 December 2022, the government has today (7 December 2022) announced that EU conformity assessment for rail interoperability constituents and subsystems will continue to be recognised in Great Britain until 31 December 2024.

This follows the announcement by the Department for Business, Energy and Industrial Strategy (BEIS) on 14 November 2022 that CE product marking will continue to be recognised in Great Britain for an additional two years, which will allow businesses to use either UK Conformity Assessed (UKCA) or CE markings until that date.

General trade updates

UK takes presidency of the International Transport Forum On 18 May, the UK assumed the ITF presidency in Germany.

The ITF is a world-leading intergovernmental organisation for transport policy bringing together 63 countries from around the world, hosted by the Organisation for Economic Co-operation and Development (OECD). Grant Shapps, Transport Secretary at the time, delivered a keynote speech, laying out five priorities for the UK’s tenure: leading global transport transformation by making transport more connected, greener, inclusive, safe and resilient, and innovative.

UK Export Finance – UK and Turkey’s £1.7bn clean transport deal On 17 March 2022, a £1.7 billion UKEF-funded deal for the construction of a 503km high speed electric railway in Turkey was announced. This is the government’s biggest ever sustainable, civil infrastructure deal, which will help finance a new high speed electric railway line in Turkey to decarbonise travel, with major contracts awarded to British and Turkish businesses. Huge nine-figure contracts are set to be awarded to UK rail suppliers as a condition of UK support.

RIA supported the deal by working closely with ERG International UK – the engineering, construction and project management contractor for major infrastructure assets – over a period of time, providing overviews of both the railway industry and RIA member capability, and connecting them with supplier companies, whom they had identified as meeting their initial requirements.

Scotland's Vision for Trade: annual report On 31 March 2022, the Scottish Government published its first annual report on Scotland's Vision for Trade, outlining the range of specific actions that they have taken over the past year and their continued ambition to make trade-related decisions based on the principles of inclusive growth, wellbeing, sustainability, net zero and good governance.

Useful Resources

Help and support for UK transition

For regular exports updates, we'd encourage you to sign up to our RIA Exports mail via your RIA account – this mailing is sent out weekly every Wednesday.

For information on international tender opportunities, on portals such as the DIT GREAT tenders website and our weekly Official Journal of the EU (OJEU), including a catalogue of rail opportunities, please click here.

Please note you will need to sign into your RIA account to access this information.

Since this is the first Trade Watch roundup, we would particularly welcome any feedback you would have on this mail: