Technical Barriers to Trade in the event of No Deal: ‘Notified Bodies’ (3/4): Readiness (3a)

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.

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Technical Barriers to Trade in the event of No Deal: Importers (2/4)

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.

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Would UK regulatory divergence hinder our exports to the EU? (1/4)

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: 1

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.

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Notes:

  1. As is customary, I use ‘WTO trading’ as a shorthand for trading under WTO rules without a GATT Article 24(8) customs union or free trade area.

Technical Barriers to Trade without an MRA: Chemicals

In my last post I began to examine the extent to which, in the event of Britain leaving the EU, and in the absence of an agreement on the mutual recognition of conformity assessment procedures, there would be technical barriers to trade in industrial goods. I outlined the Old and the New Approach to EU Product Safety legislation, and showed that under the New Approach with CE Marking, British manufacturers could continue much as before. In the worst case, it is possible that they might have to change the Notified testing laboratory they employed to one belonging to a company established in the European Union, but I argued that even this could well be made unnecessary in most cases by means of subsidiaries of British testing and certification companies, or through subcontracting.

In this post I want to begin to examine the situation that would pertain in the Old Approach sectors, which include foodstuffs, biocides, motor vehicles, chemicals, cosmetics, detergents and pharmaceutical products. Whereas, in the New Approach, a whole sector may be covered by a single Directive or Regulation setting out the broad safety objectives, and a multiplicity of harmonised standards set by the European Standard organisations (CEN, CENELEC and ETSI), in the Old Approach the detailed requirements are contained in the EU legislation itself. Today I look at chemicals, of which UK exports amounted to £24.7bn in the 12 months to November 2014, and of which exports to EU countries increased by £0.7bn in 3 months between January and April 2016.

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Technical Barriers to Trade in the absence of a Mutual Recognition Agreement

Before continuing to examine the possible outlines of a post-Brexit Mutual Recognition Agreement on conformity assessment for products traded with the European Union, it occurs to me that it would be appropriate, and indeed logically prior, to consider what the situation would be without any such agreement. I have seen very different estimations of the extent of the problem of Technical Barriers to Trade in the absence of any such agreement. On the one hand, in Flexcit, Richard North has warned (p. 69, referring also to barriers related to Sanitary measures for trade in animal products) that in the absence of such MRAs the UK would:

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Overcoming Technical Barriers to Trade: An introduction to the EU’s Mutual Recognition Agreements

In my last post, I explained how Switzerland, having rejected in a referendum in December 1992 the EEA Agreement which it had signed in May, and having thereupon suspended its membership application to the European Community which it had made in the same month of May 1992, then found an alternative means of participating in the EU/EEA single market. First, it further developed the practice, which it had begun in 1988, of the autonomous adoption of EU law into its own domestic legislation; and second, it successfully negotiated with the EU a series of bilateral agreements, building upon the already extant 1972 Free Trade Agreement, which have given Switzerland a degree of access to the single market almost certainly greater than that of any other state outside the EU/EEA, but without the peril of being obliged (I am discounting here the virtually unusable right of reservation contained in Article 102 of the EEA Agreement) to adopt new EU legislation as it issues forth from the Commission.

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