New research finds that a deal with Brussels that allows exports of British goods to the EU without further testing or certificates will increase the UK’s exports to the group on average by one tenth, while for some sectors, the exports of British goods increased by more than a quarter on average.
The “Mutually Recognized Consistency Assessment” protocol will allow products certified in one jurisdiction to be certified in another without redundant testing or expensive duplication.
The UK government has worked to make such measures part of its “reset” of its economy and security with the EU, which will officially begin on Monday.
So far, Brussels has rejected its advice – arguing that it violates the UK’s own “red line”, which ruled out the re-joining of a single EU market or a customs union with the group – frustrating the industry on both sides of the channel.
New modeling Aston University of Birmingham estimates that the average growth rate of the consistency assessment protocol is as high as 27.9% in the UK sectors such as exports, industrial machinery and electronics.
Since the EU Trade and Cooperation Agreement, Aston Economics Economics Professor Jun Du has modeled the impact of Brexit, saying the study shows that “mutual recognition of integrated assessments,” or MRCA deals, will especially help smaller businesses visit the EU without “drowning in traditional videotapes.”
“Our research shows that MRCA can significantly reduce the burden, especially in areas such as food, textiles and machinery, where compliance is complex. It is a low-political, high-impact solution that can allow small exporters to reopen their business,” she said.
UK negotiators still hope that the consistency assessment agreement will be part of a deeper readjustment with the EU single market, including in industry standards and other regulations, to calm the trade relations with the group.
However, analysts warn that the challenge of achieving such a settlement would present a huge challenge given the Brexit politics, adding that the economic interests of the “reset” the trade components of the negotiations are likely to be limited.
The EU has rejected Britain’s demand for the deal throughout the Brexit process, with former EU chief negotiator Michel Barnier warned speech In 2020, the UK will not be a “regulatory and certification hub” in Europe.
The Labor government made a new push to be elected to the MRCA agreement after it was elected last July, but Brussels rejected the request in recent negotiations ahead of the summit on Monday, according to internal EU documents in the Financial Times.
Nearly 20 industry organizations on both sides of the channel, including the UK’s CBI and the UK Chamber of Commerce, as well as the European Union’s Smeunited and Swedish companies’ federal governments, have also lobbied the EU’s MRCA agreement, but have so far been unsuccessful.
In a joint statement last month, they called on London and Brussels to agree to an MRCA agreement, calling it a “real and achievable measure to reduce unnecessary trade barriers”.
William Bain, head of the BCC, said the University of Aston analysis showed that a deal “will bring much-needed lab and testing capabilities to the UK and improve our export capabilities.”
Trade experts added that the EU is reluctant to sign such a deal with the UK – although it has an MRCA with seven countries including Switzerland, the United States, Japan, Australia and New Zealand, reflecting ongoing determination to prove the cost of leaving Bloc.
John Springford of the European Reform Think Tank Center said the decision was a matter of “pure political” rather than a legal barrier, and the potential interests of both sides are important.
He added: “What’s strange is that the EU is willing to allow the United States to judge the compliance of goods in compliance with EU standards, but not the United Kingdom’s consistency, although it is consistent with EU rules in the cargo sector.”
Prime Minister Rachel Reeves will rely on the EU reset to give growth as she faces ongoing weakness in public finances and faces the prospect of budget responsibilities from government offices this fall.
