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) 1 and Deveraux (2006) 2, 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.
- G. Schaffer, ‘Reconciling Trade and Regulatory Goals: The prospects and limits of new approaches to transatlantic governance through Mutual Recognition and Safe Harbor Agreements’, Columbia Journal of International Law 29 (2002-3) ↩
- C. Deveraux ‘The Mutual Recognition Agreements’ in ‘Case Studies in US Trade Negotiation’ by C, Deveraux, R. Lawrence, M. Watkins (Washington DC: Institute for International Economics). Another version with references can be found here. ↩
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:
In my previous post, I introduced 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 am confining myself to products covered by the New Approach legislation, and have focussed on the form that legislation has taken since the introduction of the New Legislative Framework in 2008. The main points were:
As the government prepares for the Article 50 withdrawal negotiation, and (probably) a parallel negotiation on the UK’s future relationship with the EU, it becomes increasingly important to form an accurate assessment of the consequences of failing to reach a trade agreement before the two years are up (and of failing also to agree an extension to the talks). If, as some say, the results would be disastrous, then we would be in an extremely weak negotiating position. Better, it is sometimes said, to join EFTA and the EEA, despite the admitted drawbacks of such a course, than to risk the WTO option. In particular, it has been argued that an extra requirement to prove the conformity of their products to EU product safety legislation would greatly hinder UK exporters.
The Barnier Appointment
In a Press Release on 27 July 2016, the European Commission announced that Commission President Juncker had appointed Michel Barnier as ‘Chief Negotiator in charge of the Preparation and Conduct of the Negotiations with the United Kingdom under Article 50 of the TEU [Treaty of the European Union]’:
Introduction: a debate re-opened?
The Financial Times reported on 26 July that there is:
a ‘live debate’ in government about whether Britain should quit the customs union
The FT points out that staying inside the customs union:
could restrict Dr Fox’s ability to strike new trade deals[,] or prevent them altogether.
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.
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:
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.