Professional Documents
Culture Documents
Regulatory issues
- Regulatory issues in context
- Regulatory issues in free trade agreements
- Automotive sector
- Chemicals - REACH
- Trade in agri-food products, sanitary & phytosanitary provisions
Union policies and actions, including the Internal market with its four
freedoms, form a unique ecosystem underpinned by instruments and
structures that cannot be separated from each other
The EU ecosystem:
Treaty rules
&
Secondary law
Judicial Supervision
Review, Enforcement &
& Interpretation Market surveillance
Administrative
Implementation
& Enforcement
3
European Council Guidelines – principles for
the future relationship
4
Future relationship and UK red lines
UK leaves
No deal
the EU
UK red lines:
- No ECJ jurisdiction
- No free
movement
UK red lines:
- No substantial
financial - No free
contribution movement
- Regulatory - No substantial UK red lines:
autonomy financial - No ECJ
contribution jurisdiction
- Regulatory UK red lines:
- Regulatory
autonomy autonomy - Independent
trade policy
5
Single Market vs Free Trade Agreements
Illustration - Goods
Single Market Free Trade Agreement
• Free movement • No general free movement;
• EU Customs Union customs controls and procedures
• No customs duties between MS • Market access
• No quantitative restrictions • Elimination of most duties over time
• Some quantitative restrictions
• Regulatory integration
• Harmonised areas: full EU-level • Access requires full compliance
harmonisation of product rules with host state rules
and compliance methods • No harmonisation
• Non-harmonised areas: mutual • No mutual recognition/equivalence of
recognition of national rules substantive rules; limited mutual
• No border controls in intra-EU recognition of conformity assessment
results with host rules
trade
• Regulatory cooperation always on
• Integrated regulatory,
a voluntary basis
supervisory, judiciary and
enforcement system • Each side retains right to regulate
• Some general rules framing regulation
("rules on rules") 7
EU Customs Union vs customs cooperation
Illustration – customs
EU Customs Union Third country/FTA
• Borderless internal market • Customs border: customs
through EU customs union controls and procedures apply
and internal market • Customs Cooperation to
• Mission of EU customs: mitigate burden of customs
supervision of international controls and procedures
trade and implementation of • Mutual recognition of authorised
external aspects of internal trader programmes (Japan, USA)
market • Mutually agreed customs security
measures (Switzerland, Norway)
• Union Customs Code • Mutual recognition of risk
• Common customs procedures management techniques (USA)
• Common Risk Management • Establish channels of
Framework communication for exchange of
• Trade facilitating measures, e.g. information (China) between
simplified procedures and customs authorities
authorised economic operators
• Union IT systems and
8
databases
Single market vs FTA
Illustration – Services
Single Market Free Trade Agreement
• Fundamental freedoms • Differentiated liberalisation:
(dismantling national barriers) • Open on establishment (but e.g. no
• Services direct branching financial services)
• Establishment • More limited for cross-border
• Capital provision of services and movement
of staff (only temporary)
• Persons
• Based on existing levels of openness
• Sectoral liberalisation • Sectoral exclusions to market
• Services Directive access; reservations; exceptions
• Sector-specific legislation
(harmonising conditions for the • Access requires full compliance
provision of services) with host state rules
• Country-of-origin • No harmonisation of rules
approach/mutual recognition
• No mutual recognition of rules
• Each side retains right to regulate
• Some general rules framing regulations
("rules on rules")
9
Regulation and access conditions under FTAs -
limited differences between goods & services
GOODS from 3rd countries SERVICES from 3rd countries
Tariffs Removal of (most) tariffs Tariff removal irrelevant (no tariffs)
Rules on
goods/ EU rules - Host State principle
services No mutual recognition with 3rd countries
12
European Council guidelines: implications for
regulatory issues (3/3)
13
UK views – regulatory issues in the future
relationship
14
Conclusions:
Preserving the role of the CJEU: if reliance on EU law concepts, CJEU must have
a role but even if CJEU role preserved, risk for EU in the absence of full EU
"ecosystem"; no same effectiveness in enforcement.
15
Internal preparatory discussions on
framework for future relationship
Regulatory issues
in free trade agreements
18
FTAs – Regulatory cooperation
• Objective:
• Create opportunities for cooperation between regulators to enhance
compatibility of measures
• Prevent and address unnecessary barriers to trade and investment
19
FTAs – Regulatory cooperation in
goods
• Voluntary information exchanges and cooperation on upcoming
regulatory measures
• e.g. EMA-U.S. FDA cooperation on pharmaceuticals
20
FTAs – Chapter on Technical Barriers
to Trade
22
FTAs – Sectoral annexes for certain
regulated sectors
Cars, Pharmaceutical Good Manufacturing Practices (GMP), Chemicals,
Wines and Spirits, Consumer Electronics
In no case do these Annexes deliver single market treatment
Generic Objectives:
24
Regulatory cooperation in industrial goods
with European and neighbourhood countries
Deep and Comprehensive FTA with Ukraine (2/2):
• EU autonomous decision whether full alignment is achieved
• Possibility to conclude Agreement on Confomity Assessment
and Acceptance of Industrial Products (ACAA) in aligned
sectors:
Products compliant with UA's aligned legislation covered by ACAA
accepted in the EU as compliant with corresponding EU legislation
(and vice-versa)
Full participation in EU regulatory ecosystem, including dynamic
alignment and preserving role of CJEU
No general free movement clause beyond specific ACAA scope
ACAA also available in pre-accession phase and relations with Southern
Neighbourhood countries
ACAA preparations started with Southern Neighbourhood countries more than
10 years ago based on Association Agreements with EU (but with no detailed
roadmap like Ukraine): limited progress, only example so far is ACAA with
Israel covering Good Manufacturing Practice for Pharmaceuticals 25
Regulatory cooperation in industrial goods
with European and neighbourhood countries
Trade with Switzerland in industrial goods (1/2):
• Specific historical context: convergence towards EU/EEA.
• Mutual Recognition Agreement in relation to conformity
assessment:
Where equivalence of substantive rules is granted, it is assessed
by the EU based on Swiss full alignment with relevant acquis
(horizontal [framework] legislation + vertical [sectoral] legislation)
20 sectorial chapters listing relevant EU and Swiss legislation:
15 New Approach sectors (CE marking legislation, e.g. electrical
equipment, machinery, toys, gas appliances, etc.)
5 additional sectors: Motor vehicles, agricultural and foresty tractors,
Good Laboratory Practice for the testing of chemicals, Good
Manufacturing Practice for pharmaceuticals, biocidal products
26
Regulatory cooperation in industrial goods
with European and neighbourhood countries
Trade with Switzerland in industrial products (2/2):
• Mutual Recognition Agreement in relation to conformity
assessment (continued):
Products compliant with Swiss aligned legislation covered by MRA
equivalence provisions accepted in the EU as compliant with
corresponding EU legislation (and vice-versa)
Unsatisfactory governance: no provisions on dynamic alignment
and preservation of role of CJEU
Heavy maintenance required: static agreement, each change in relevant EU
acquis requires new EU equivalence assessment of amended Swiss legislation
by EU side and decision by MRA governing body amending relevant sectorial
chapters
27
Internal preparatory discussions on
framework for future relationship
Automotive sector
32
Transition (2/2)
• EU acquis FTA:
• Motor vehicles – Dir • No mutual recognition of non-
2007/46/EC UNECE based type approvals
• Light category vehicles – • Joint-commitment to UNECE
Reg 168/2013
harmonisation work (domestic
• Agricultural and forestry
incorporation of UNECE
vehicles – Reg 167/2013
regulations, promotion of
• Non-Road Mobile
Machinery – Reg harmonisation work)
2016/1628 • Voluntary bilateral industrial and
regulatory cooperation in specific
• Enforcement/CJEU areas of interest
• EU/Mexico
primarily based on UNECE 1958 and 1998
• EU/Mercosur
• EU/Chile Agreements – (e.g. tables of equivalence in case of
• EU/Indonesia EU/Korea, EU/Japan and EU/Canada), coupled with
• EU/Malaysia
research, technical and regulatory cooperation
• EU/Philipines
• EU/India
• EU/ASEAN
• EU/Thailand Parties keep their own respective regulatory
frameworks and certification/type approval
requirements, including testing and enforcement 35
Future relationship (2/2)
• UK applies EU Future
acquis and is part of
Single Market
• UK out of EU type-approval
system • Stakeholders'
• UK bound by awareness and
obligations • No general mutual adjustment
stemming from recognition or equivalence
"automotive" acquis of regulatory frameworks,
• Adaptations of EU law
i.e. approval of
if needed
systems/components/parts
• UK out of EU or full vehicle type
Institutions and approvals.
bodies
• Mutual recognition of
component approvals and Preparedness
Transition tests under UNECE
arrangements provided
Contacting Parties apply
the same levels of
stringency (but falling short
of the full recognition
available in the Single 38
Market under EU law)
Internal preparatory discussions on
framework for future relationship
Chemicals - REACH
Supervision & - Commission, European Chemicals Agency (ECHA) and all its
enforcement bodies
- Member State inspectorates, network of Member State
inspectors in a FORUM coordinated by ECHA
- CJEU, Member State courts
No participation in:
• rule-making (REACH committee)
• risk and socio-economic assessments
• enforcement of EU chemicals legislation
No access to ECHA's database
41
Overview of withdrawal implications
TRANSITION
Market Access
FUTURE
Regulatory matters
Enforcement & Supervision
PREPAREDNESS
For the UK becoming a third country,
including in a no deal scenario
42
Transition (1/2)
43
Transition (2/2)
44
Future relationship
Third-country regime:
• Manufacturers and traders exporting chemicals
from the UK to the EU must comply with REACH
fully
FTA solutions?
but
45
Preparedness
46
Summary
• UK applies EU • Stakeholders'
acquis and is part of awareness and
Single Market adjustments
• UK bound by EU Future • European Chemicals
chemicals legislation Agency has provided
• UK out of EU comprehensive
Institutions and • UK out of the REACH guidance for business
bodies system; no mutual actors on all sides as
recognition / equivalence. well on general
• Operators exporting implications of the
chemicals from the UK to UK's withdrawal
the EU must comply with
Transition REACH fully. Preparedness
• Registration of substances
by an operator established
in EU-27 as pre-requisite
for access to EU market.
47
Internal preparatory discussions on
framework for future relationship
48
Internal Market for trade in agri-food:
an integrated regulatory area
49
Consequences of the UK becoming a third
country
Restrictive legal framework governing market access to the EU.
For live animals and animal products in particular:
Legal approval of the third country, the specific
commodities and the establishments authorised to export to
EU; approval of residue plans for veterinary drugs
Commission audits of the oversight of the third country
authorities (entire food production chain)
Formal certification by third country services of
compliance with the relevant EU import requirements
Mandatory documentary, physical and identity border
checks by Member State authorities (for plants and plant
products, risk based controls)
TRANSITION
51
Transition (1/2)
52
Transition (2/2)
53
Future Relationship (1/3)
• Models are
SPS chapters in Free Trade Agreements (Canada, Chile) or
Examples
56
Preparedness
57
Summary
• UK applies EU • Stakeholders'
acquis and is part awareness and
adjustments;
of Single Market;
• UK bound by
Future • Agri-food sector is
obligations heavily regulated and
divergent regulatory
stemming from
requirements entail
SPS requirements; • UK as a third country unavoidable trade
• UK out of EU with all the relevant disruption;
Institutions and rights and obligations, • Stakeholders need to
bodies. i.e. WTO/SPS; anticipate that third
• FTA with the UK and/or countries can only
Transition SPS chapter with market trade with the EU
under highly
access arrangements;
restrictive conditions.
• No escaping from
significant impact on
trading conditions under
either scenario.
Preparedness
58