Many other sectors are facing similar challenges and it is clear that industry needs to speak with a consolidated voice to help shape UK Government policy at this important stage in our discussions with the EU. It was a result of these challenges that the EURIS Taskforce was formed, of which BCAS is a key member.

The EURIS Taskforce is an advisory body which examines the potential impact of the changing relationship between the UK and EU for the UK Government, manufacturers and the media. It covers sectors responsible for more than 25% of total UK goods imports and exports with a turnover of over £110 billion.  

A key driver is to ensure that manufacturers and suppliers in the UK are able to realise new growth potential through the Brexit process.

There are some major issues that will need considerable focus and, working with EURIS, BCAS will be ensuring the voice of industry can be reflected in this process.  Some immediate areas for the taskforce focus are:

EU-UK regulatory alignment

Adopting or mirroring EU technical product regulations for the long-term is essential for product manufacturers to import and export from the EU post Brexit. Any deviation has the potential to cause considerable confusion, uncertainties and costs. This may result in companies leaving the European markets, at significant economic cost to the UK.

EURIS proposes a new industry-Government plan to develop the right policies and approaches to ensure no regulatory divergence for product regulations. This would facilitate access to European markets and the vast array of global markets that also look for compliance with European legislation and standards as the basis for trade.

Application of Rules of Origin 

A major issue that has been highlighted is the impact on UK products once they stop being classified as EU products. Rules of Origin determine when a product can be certified as being from a particular country or market to decide whether it qualifies for any preferential tariffs that apply in free trade agreements. 

Typically, 40 to 50% of the value of the product must be derived from the country in which it is manufactured to allow it to be certified as originating in that country. This is based usually on the material and components rather than the labour, intellectual property or know-how contributed.  

Without enforcement of these Rules, it would be possible for importers of products to route them through the country or market with the best tariff deals without any significant value being added. 

Post-Brexit, or at least after the transition/implementation period ends in December 2020, UK products and components will cease to count for assessing the EU origin of goods and systems. This means they will cease to benefit from current tariff-free trade with the EU and also any preferential tariff rates under FTAs the EU holds.  It is possible that a tariff-free agreement will be negotiated and that the EU FTAs will be rolled over to continue to benefit the UK, but this cannot be guaranteed.  There is also an ongoing risk that EU manufacturers who have UK content in their supply or value chain will switch that supply to within the EU27 to ensure the end products will continue to count as of EU origin.

In a bid to counter this issue, EURIS is now assisting the Department for Business, Energy & Industrial Strategy (BEIS) in assessing the impact and is seeking information from member companies on:

•  The current challenges in certifying origin of products

•  Typical supply and value chain positions and complexities

•  The extent of exports and imports to and from the EU27 and other markets subject to EU FTAs

It is extremely important for our industry to get the most detailed and complete picture possible. UK government will need to make decisions on which industries to prioritise in negotiation and unless we provide them with a thorough assessment, other industries will be likely to take priority.

Notified Bodies
UK manufacturers use Notified Bodies (NBs) to check that their products conform to the essential requirements of European Directives, which have also been transposed into UK law. NBs are also known as Conformity Assessment Bodies (CABs) which are accredited by a National Accreditation Body (NAB), appointed by the respective member state. 

For the UK it is UKAS that provides the list of UK accredited bodies to BEIS who then supplies the list of UK NB’s to the European Commission. With the UK potentially leaving the single market, there was significant concern that UK NBs would no longer be recognised by the European Commission, meaning that manufacturers would be forced to use NBs on the continent to CE mark their products – at considerable expense!

As a result of positive lobbying work carried out by EURIS, the UK Government has recognised the valuable work undertaken by NBs and has recently confirmed that these will be able to continue conducting third-party conformity assessments for both the UK and the EU markets as they do now.

CE Marking
CE marking was introduced as a visual indication that products met applicable EU requirements and has been vital for ensuring goods can move freely across the EU. It means manufacturers can offer good value and high specification goods, and consumers and market surveillance authorities can be assured that safety and quality has been verified. 

It has also delivered real value to manufacturers and industry; 44% of all UK trade is with the EU, so even following Brexit, every endeavour should be pursued to remove barriers to trade. CE marking forms a major part of making this free trade a reality and any British company wanting to send its products into the EU will need to achieve CE marking. Having one set of requirements is beneficial to UK manufacturers who seek harmonised rules to improve the efficiency of their manufacturing processes and reduce administrative burdens, avoiding a situation where the same product would have to be re-worked to meet specific country requirements.  

If the UK withdrew from CE marking, it could result in products not being available in the UK or at least, take longer to go to market while further compliance processes, such as double auditing are undertaken. Product prices could rise too as these additional processes generally incur substantial costs.

EURIS will form a working group, with one of the primary objectives to take responsibility responsible for establishing a position paper. It was suggested that the EURIS European Network could may call for CE marking to continue post December 2020 to further raise the profile of this important issue)

In conclusion, the challenges are clearly numerous, and it is therefore in interests of industry that organisations with common interests work together on those areas that impact their member network. BCAS is delighted to be able to work with 12 other trade association as part of EURIS to create a united voice for British industry.