I am responding to a claim made by Sam Lowe that new non-tariff barriers to trade would be ‘highly disruptive’ in the event of a No Deal Brexit. I am confining myself to those technical regulations which come under the WTO Technical Barriers to Trade (TBT) Agreement, rather than those covered by the WTO Agreement on Sanitary and Phytosanitary Measures. Like Lowe, I see three types of TBT barriers arising:
i) An EU ‘importer’ would be required (see part 2), who would have a responsibility to carry out checks that the manufacturer had carried out the necessary conformity procedures.
ii) UK ‘Notified Bodies’ will lose their notified status, and the certificates they have issued will lose their validity.
iii) UK exports to EU-27 would be subject to regulatory checks at the border.
In this post, I begin an examination of the difficulties that may arise in connection with UK Notified Bodies.
I am responding to a chapter by Sam Lowe on non-tariff barriers to trade in a report on the implications of trading on WTO terms in the event of a No Deal Brexit. I am confining myself to those technical regulations which come under the WTO Technical Barriers to Trade Agreement, rather than those covered by the WTO Agreement on Sanitary and Phytosanitary Measures. I began in Part 1 by addressing the question, raised in the chapter’s heading, as to whether regulatory divergence would give rise to technical barriers to trade. I argued that if the UK regulations diverged from the EU after Brexit, this could create challenges for manufacturers, wherever based, to overcome in producing goods that satisfied the new regulations. These differences in regulations could be considered to be barriers, or hurdles, to the UK market, but hardly to the EU-27 market.
On 6 December 2019, ‘The UK in a Changing Europe’, an ESRC-funded ‘Initiative‘ at King’s College London, published a report on the implications of trading under World Trade Organisation (WTO) rules (without a Free Trade Agreement or Customs Union with the EU) in the event of a no deal Brexit. Chapter 7, by Sam Lowe of the Centre for European Reform, concerns non-tariff barriers to trade under WTO trading:
My purpose here is to address Lowe’s first question:
I confine myself to those technical regulations which come under the WTO Technical Barriers to Trade Agreement, rather than those covered by the WTO Agreement on Sanitary and Phytosanitary Measures.
Introduction: why are Government ‘sources’ predicting failure?
On 4 November 2016, the day after the High Court had handed down its judgement that the Government ‘does not have power under the Crown’s prerogative to issue the Article 50 notification’, the Prime Minister’s spokesman said that ‘the focus of the government’ was on the Supreme Court appeal, and that they remained ‘confident of winning that case and proceeding with Article 50’.
On 7 November 2016, David Davis told Parliament that the Government disagreed with the High Court’s judgement, that their position remained that ‘triggering Article 50 is properly a matter for the Government using its prerogative powers’, and that they would therefore be appealing the judgement at the Supreme Court.
On 1 December 2016, John Finnis, Emeritus Professor in the Faculty of Law at Oxford University, in his Thomas More Lecture at Lincoln’s Inn Fields, four days before the Supreme Court hearings and therefore presumably on the basis of the Government’s written submission, said that ‘the principle of constitutional dualism at the intersection of international affairs with domestic law’ had ‘been presented much more clearly and fully’ than it had been to the High Court, intimating that he had not given up hope of a reversal of the decision.
I find it odd therefore that Government sources were reported by the Guardian on 11 January 2017 to be ‘convinced’ that ‘seven of the 11 judges will uphold the high court’s’ judgement. Why the defeatism?
In my penultimate post I recorded several instances when the Government, with support on occasion from the Opposition, undertook to make our EU membership a matter for decision by the British people in a referendum, calling that decision ‘the final say’, or ‘the final decision’. I pointed out that if the Supreme Court were to uphold the Judgement of the High Court, then the final decision would be made by Parliament, and the referendum would become, so to speak, the penultimate decision, and no longer the final one. Thus the Government would be obliged by the Courts to breach its commitment to the British people, which is a very serious matter.
I am pleased that Richard North has responded today to my series of posts on conformity assessment and the WTO option, which begin here. He claims, first of all, that I have made mistakes ‘relating to the activities of “notified bodies” and the continued recognition of UK bodies after a sudden withdrawal by the UK [from the EU].’
Status of UK Notified Bodies after Brexit
In part 2 of my series, in the section entitled ‘UK Notified Bodies after Brexit’, I explain why I think it ‘almost certain’ that, in the absence of an agreement on the mutual recognition of conformity assessment bodies, the UK Notified Bodies would lose their notified status. I conclude the section by stating that I will henceforth assume that to be the case for the sake of the analysis:
23 January 2013, Bloomberg: ‘this will be your decision’
David Cameron, in his Bloomberg speech of 23 January 2013 in which he announced a new Conservative Party policy to hold a referendum on the UK’s membership of the European Union, made it clear that the decision was to be made by the British people:
In my last post I traced the origins of the 1998 EU-US MRA on conformity assessment back to the Internal Market program of 1985-92 and its New Approach to product safety legislation. In accordance with the Community’s obligations under GATT, and the GATT Standards Code in particular, both the essential requirements that products had to meet, and the assessment procedures laid down to demonstrate their conformity with those requirements, were formally exactly the same for all products, whether imported or produced in Member States. The potential problem for third countries was that the third party conformity assessment bodies (CABs), whose involvement was necessary for some products, were designated by Member States and might naturally be expected to be established in the same Member State. Would it therefore be necessary for third country manufacturers to send their products to laboratories in the Community for type approval? And where the procedures required inspection of the manufacturing facilities and quality control systems, would inspectors have to come from Europe to carry them out, at considerable expense to the manufacturer?
In my last post, I examined a claim made by Nick Clegg that MRAs on conformity assessment are needed by exporters from third countries if consignments are not to be ‘impounded and checked at the EU border’:
I pointed out that China does not in fact have an MRA with the EU on conformity assessment, and explained how it is able to satisfy the EU’s product legislation requirements in the same basic way as an EU manufacturer does, either through a manufacturer’s Declaration of Conformity or, where third party certification is needed, through local test facilities, which are in either a subsidiary or subcontracting relationship with an EU-based Notified Body.
In this series of posts, to complete the picture as it were, I look at the second country named by Clegg as having an MRA with the EU and show that, while there are indeed two such EU-US MRAs in existence, they play only a marginal role in helping US manufacturers to export to the EU. The story of the first of these, the 1998 ‘Agreement on mutual recognition between the European Community and the United States of America’, is of considerable interest in its own right, as much effort was invested in attaining the agreement, and great hopes were attached to it, but in the end it is generally considered to have been a partial failure. There exist detailed accounts of the negotiations by Schaffer (2002) and Deveraux (2006) , which give valuable insights into the differences between US and EU regulatory structures, as well as into the conduct of trade negotiations. In this post, I try to explain the events that led in May 1989 to a joint US-EU commitment to open discussions on mutual recognition of conformity assessment.
In my previous two posts (here and here), I have been examining the concern that has been expressed, notably by Andrew Tyrie MP, about the obstacles UK manufacturers might face in exporting to the EU under the WTO option, because of the need to ensure that their products continue to conform to EU product legislation, and because of a need moreover to be able to prove that conformity. I have been confining myself to products covered by the New Approach legislation, and have focussed on the form which that legislation has taken since the introduction of the New Legislative Framework in 2008. My main conclusions so far have been that: