UK paper sets out hopes to stay in single market in goods after Brexit

18 July 2018 3:21pm

12 July 2018. By Matthew Holehouse.

The UK has set out proposals to remain a de facto participant in the EU's single market for goods, including autos, chemicals, drugs and aerospace engineering.

It comes in defiance of repeated warnings by the EU not to attempt to “cherry-pick” market access on a sector-by-sector basis, and lays the ground for a major impasse over the coming months.

The EU has warned that such an approach ignores how the market works as a complex ecosystem of rules, and that financing and intellectual-property rules cannot be meaningfully separated from manufacturing standards.

The UK plans an end to free movement of labor, to be replaced with a labor-mobility regime covering short-term business travel and intra-company transfers.

It envisages falling back on limited arrangements in services, including the EU’s existing regime of equivalence for some services such as auditing.

The UK government says the paper amounts to a major shift in position and wants the EU to "look beyond" existing arrangements available to external states.

— Common rulebook —

The UK intends to keep fully aligned with current and future EU legislation covering trade in manufacturing sectors including autos, aerospace, chemicals, electronics and pharmaceuticals under what it terms a "common rule book." It will also adhere to EU's sanitary and phytosanitary rules in food and agriculture.

It argues that this would remove the need for checks at borders and preserve just-in-time supply chains, and ensure that companies do not need to produce separate supply chains for the UK and EU markets.

Under the model, the UK will seek participation without voting rights in EU technical committees that design regulatory regimes. It will also seek non-voting participation in the European Aviation Safety Agency, the European Medicines Agency and the European Chemicals Agency and access to their data.

“The UK believes that manufacturers should only need to undergo one series of tests in either market, in order to place products in both markets,” the paper says. “This would be supported by arrangements covering all relevant compliance activity, supplemented by continued UK participation in agencies for highly regulated sectors including for medicines, chemicals and aerospace.”

This compliance activity would include the UK conducting conformity assessments and other tests; accreditation of conformity assessment centers; and the ability of UK-based people and organizations to act as the legal owner of high-risk products such as drugs and chemicals after release onto the market.

This way, UK businesses will continue to be able to register chemical substances for EU-wide sale without appointing an agent inside the bloc.

The UK also wants “all current routes to market” for human and animal drugs to “remain available,” including the ability for UK regulators to assess medicines for sale.

The arrangements would be overseen by a governance mechanism including a joint committee, and an arbitration committee which could make preliminary reference on questions of EU law to the EU Court of Justice.

These arrangements, the UK says, should prevent the emergence of a so-called hard border with the Irish Republic. This will therefore obviate the need for any ‘backstop’ measure envisaged by the European Commission. The UK accepts the need for a legally binding backstop, but disputes the EU’s proposal for regulatory and customs checks to take place in the Irish Sea.

Today’s policy paper does not offer any rival UK vision for a backstop. Talks are ongoing, UK officials said.

The paper offers no hints of the UK’s next move if — as appears likely — EU negotiators reject the proposal.

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