Standards and Regulations: divergence or alignment?
Part of the Brexit prospectus was the ability for the UK to diverge from what were perceived as overly burdensome EU regulations that were holding business back. More recently, the Retained EU Law Bill was seen as a way to achieve this task by putting in place a clause by which time laws would be scrapped unless specifically retained, but this has now been abandoned.
Business has however largely demanded continued alignment, seeing instead a burden if UK rules were to diverge from what are often global norms. Investors have been concerned that changing regulations means uncertainty about future market access to the EU, making it less attractive. Consumer groups, trade unions, environmental campaigners and many others have been concerned about protections being lowered when compared to the EU, though the level playing field clause of the Trade and Cooperation Agreement is meant to limit this.
Disagreement between politicians and stakeholders about regulatory alignment means there has been little consensus on the issue. Ministers continue to see the opportunities from global trade deals resulting from an ability for the UK to change regulation, while equally denying the intention to lower food safety standards on products like chlorinated chicken. However, the extent to which alignment would reduce barriers to trade with the EU is also unclear.
Questions for discussion
What areas should the UK prioritise for alignment and divergence with the EU?
Are there areas where we would want UK law to provide further protections, and what impact could that have on business?
To what extent will regulatory alignment remove barriers to trade with the EU, and are there ways to maximise the benefits?
What opportunities exist for bilateral work reducing regulatory barriers globally, and are these consistent with a model of close alignment with the EU?
Policy Options
Trade Unlocked 2023’s policy partner, the UK Trade and Business Commission, has recently published a comprehensive report containing policy recommendations to the UK Government. Section 1 of the UK Trade and Business Commission report, ‘Alignment with EU Standards and Regulations’, envisages widespread alignment. This includes agricultural produce, manufactured goods, consumer protections, chemicals, carbon border adjustment, data protection, and labour rights.
The report also proposes a new ‘UK Board of Trade’ tasked with ‘advise[ing] the UK Government on how the UK can minimise the trade barriers arising from our regulatory choices’. Specific recommendations that would achieve this through some form of mutual recognition with the EU including on veterinary equivalence, on organic food, and on mutual recognition of conformity assessments.