Newington’s Rob Hamilton provides a summary of the UK’s Exiting the EU Position Paper: Continuity in the availability of goods for the EU and the UK.

Overview

The Department for Exiting the European Union (DExEU) published its paper, setting out the Government’s position and principles for negotiation to secure the least possible disruption to the availability of goods following the UK’s exit from the EU (21 August). Its ambition is to secure “a comprehensive future agreement with the EU, which includes securing the freest and most frictionless trade possible in goods and services, to the benefit of all.” The paper’s preamble noted that:

• The UK’s objective is to provide legal certainty and avoid disruption for businesses and consumers, aided by the recognition of the UK and EU’s common regulatory systems
• It will be important that business and consumers are confident that goods placed on the market and in use in the UK and EU comply with product legislation and that market surveillance and enforcement authorities have access to information about unsafe products
• The UK will seek to ensure that products are lawfully marketed in the UK and EU and that the provisions of services, tax and customs treatment of goods contribute to a smooth exit process. This would include goods placed on the market before the date of withdrawal, but cross the border after exit.

Key provisions

The paper proposes four principles intended to achieve the objective of providing certainty and avoiding disruption with respect to the continued availability of goods:

“Goods placed on the Single Market before exit should continue to circulate freely in the UK and the EU, without additional requirements or restrictions”

• This would seek to minimise disruption on the day of withdrawal, and should apply to both goods regulated under harmonised EU law, and those bound by the principle of mutual recognition.
• The agreement would seek to provide certainty that no changes will be needed to any product requirements for goods already on the UK and the EU markets, including no requirements to change labelling, and recognition of the validity of licences issued to these goods.
• Any requirement necessitating a person with responsibility for compliance should see that person, be they in the EU or UK, continue to carry out that responsibility for those goods already on the market before withdrawal.

“Where businesses have undertaken compliance activities prior to exit, they should not be required to duplicate these activities”

• The withdrawal agreement should recognise the validity of compliance procedures that were taken prior to the UK’s withdrawal in line with Union legislation and product requirements.  
• Where compliance is not a one-off activity, but instead an ongoing role conferred on authorities or businesses, those bodies should continue their work for any compliance activity recognised in the withdrawal agreement for the product’s lifetime.
• When compliance bodies have continuing obligations after the product’s assessment, the UK proposes that the bodies should continue to fulfil those obligations for the product’s lifetime, recognising the mutual confidence the UK and EU would have to display.
• Approvals, authorisations, certificates and registrations issued prior to exit, including those issues by a third party, should continue to be recognised as valid by both markets after the UK’s withdrawal.

“The agreement should facilitate the continued oversight of goods “

• The Government states it is essential that a product must be able to be traced on both the UK and EU markets, with a failure to support oversight by market surveillance and enforcement authorities potentially causing disruption and uncertainty for consumers.
• The agreement should provide clarity of how oversight activities can be conducted and should facilitate ongoing data exchange where currently provided.

“Where goods are supplied with services, there should be no restriction to the provision of these services that could undermine the agreement on goods”

• The Government believes that discussions between the UK and EU should recognise the connections between the availability of goods and those services attached to goods, arguing that services are essential for goods’ production, sale, distribution and delivery, and ongoing operation and repair.
• The UK wants to ensure that these connections are explored to avoid uncertainty and disruption to business and consumers.
• This discussion could for instance include ensuring mutual recognition of the qualifications of professionals involved in delivering goods-related services.

Analysis

The paper has been positively received by groups within the UK, such as the CBI, who have previously been critical of the Government’s lack of clarity on the issue of goods. However, the European Commission continues to maintain its position that discussions of an interim arrangement between the EU and UK, and any future deal beyond that, will only be discussed when the two parties have come to an agreement on citizens’ rights, the Northern Irish border and a ‘divorce settlement’. Nonetheless a European Commission spokesperson stated “we see [the position paper] as a positive step towards really starting the process of negotiations”.

The area likely to be most controversial with the EU is the UK’s intention to link a lack of restrictions on the trade in goods, to the services that come alongside them. There has also been scepticism in the media at the practicality of extending the current regulatory regime for products while rejecting ultimate ECJ oversight, although the Government has outlined its intention to provide clarity on such oversight issues.

Next steps

This time next week the UK will be conducting the next round of negotiations with EU officials but the EU has emphasised that the future trade arrangements in goods and services will not be discussed at this point. It is likely that these positions will not be open for negotiation until after the European Council summit in October and only then if the teams are considered to have come to agreement by EU Heads of State at the European Council. The UK Government has not fully outlined its position on the trade in non-goods related services, so further clarity on this position should be expected.

If you would like to speak to Newington about how your business could best outline its position to the Government please get in touch with our dedicated Brexit team at [email protected] or call Lizzy Roberts on 020 7234 3332.