By Professor David Collins
Maintaining a smooth trading relationship with the European Union (EU) is rightly a top priority for the new Labour government. While there is strong growth in the UK’s trade with other countries around the world, especially in the Asia-Pacific, the EU is still one of the UK’s most important trading partners. Non-tariff barriers in the form of product safety regulations are among the most significant modern impediments to trade, particularly since the EU tends to employ dense and constantly evolving regulations on a wide range of goods and services.
The Product Regulation and Metrology (PRM) Bill reflects the UK government’s concern that it does not currently have sufficient powers to respond to EU regulatory initiatives fast enough that there will not be adverse trade consequences. The EU’s new General Product Safety (GPS) Regulation, which will come into force in mid-December of this year, should entail significant product standard regulatory changes. The GPS will introduce specific safety obligations for economic operators and online marketplaces, reinforced product traceability requirements, as well as specific rules on handling product recalls, including a mandatory recall notice template.
The PRM Bill is intended to allow UK domestic law to be updated to reflect new or revised EU product requirements with a view to minimizing trade frictions. Under clause 2(7) of the PRM, future UK product regulations can provide that a product requirement is to be treated as fulfilled if it meets specified provisions in relevant EU law. This captures the government’s view that any EU regulation is presumptively valid from the standpoint of safety – a reasonable perspective given the EU’s devotion to the precautionary principle of mitigating even the most miniscule of risks. It is odd, though, that only the EU’s standards are granted this status – the Bill does not make reference to any other international standard setting bodies. It says nothing about the costs of these measures as borne by businesses.
It is not quite right, moreover, to term this clause in the PRM Bill as indicative of ‘mutual recognition’ since there is no indication that the deference will work in the opposite direction (e.g. UK standards being presumptively accepted for products entering the EU). The EU remains concerned that the UK will apply product standards in such a way that it will make it more competitive, drawing economic activity away from the continent.
Paragraph 6 of the briefing notes to the PRM Bill explains that when the UK was a member of the EU there were various systems of mutual recognition and mandated conformity markings used across the EU. After the UK’s exit, there were also provisions under the UK’s EU Withdrawal Act (2018) designed to create a UK-only system using a UK Conformity Assessment (UKCA) marking. The explanatory notes add that: ‘However to ensure a continued flow of goods, provision was also made to allow certain goods that meet current EU requirements on the market across the UK.’
One of the problems with the PRM Bill is that it does not articulate how far the government intends to exercise these powers in favour of alignment with the EU. The background briefing notes merely state the legislation will ensure that the UK can terminate recognition of EU product regulations ‘where it is in the interests of UK businesses and consumers to do so.’ This is vague and arguably fails in the government’s duty to achieve transparency.
The PRM Bill would provide the Secretary of State with the ability to update relevant legislation to maintain high product standards in a flexible, timely way. In particular, Clause 1(2) states that in addition to the matters listed in clause 1(1) (i.e. requiring guarantees of safety, mitigation of risk, accurate readings, efficient and effective operation), the Secretary of State ‘may make provision for the purpose of reducing or mitigating the environmental impact of products where the EU makes provision in that area.’
There is a risk that this means, in addition to assimilated or inherited EU laws, producers may be required to follow EU product regulation on a wide range of issues, particularly when one considers the breadth of ‘environmental impact.’ In other words, there may be a re-introduction into the UK of the EU’s level playing field laws for goods: effectively dynamic alignment, meaning a situation where one party (in this case, the UK) would automatically adopt changes to regulations made by another party (the EU). The PRM Bill could therefore allow EU law to be used, or introduced via Statutory Instrument, without any UK law being introduced and debated in parliament.
The willingness to maintain dynamic regulatory alignment on safety and environmental matters will probably depend on the outcome of the now-regular negotiations with the EU as well as political context of the post-Brexit ‘reset’ sought by Prime Minister Starmer.
Although the discretion afforded to the Secretary of State under the draft legislation is broad, the PRM Bill does not specifically mention dynamic alignment with the EU as a requirement or even an objective. Given the UK’s timid aversion to straying from the EU post-Brexit in which it has often reflexively copied EU rules (e.g. data protection), permanent alignment is a distinct possibility. Hopefully duplicating EU product safety regulations would instead be voluntary or based on practical considerations rather than a formal arrangement with the EU, retaining the ability to diverge should the UK wish to do so. It would also be wise to include the proviso that any government measures under the Bill should not mitigate against the UK’s commitments under other FTAs, such as the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) and further that any new product regulations are subject to a sunset clause of a year during which time there must be an assessment on the economic implications which should be made available to the parliament.
This post was first published on Politeia and can be accessed here.
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