Regulations, Standards and 'levelling the playing field'
in this section: Rules of Origin, trade regulations, technical regulations, conformity assessment, intellectual property, subsidies, procurement, competition policy, CE marks, 'level playing field', disputes
Under the terms of the treaty, a Joint Partnership Council will be formed to vote on amendments to the UKEU trade deal in the future and to handle any disputes. The council will be supported by various technical committees covering business critical issues covering matters such as rules of origin and services.
Under the terms of the agreement, a Trade Specialised Committee on Technical Barriers to Trade will be formed to facilitate cooperation between UK and EU on technical standards. If the UK or the EU decides to diverge from international standards, the other party can request an explanation for any amends as well as an obligation for an impact assessment to be made. National standards body including the British Standards Institution (BSI), are expected to remain involved in the development of international standards.
The agreement confirms that there will be no mutual recognition of conformity assessment processes. This means manufacturers will have to pay to certify their products twice (as well as additional paperwork), both in the UK and EU. However, the agreement also confirms that the UK and the EU have agreed to simplify conformity assessments on a number of different product areas, including chemical products, motor vehicles, organic products and wine.
The UKCA marking came into effect on 1 January 2021. However, to allow businesses time to adjust to the new requirements, you will still be able to use the CE marking until 1 January 2022 in most cases. The CE marking is only valid in Great Britain for areas where GB and EU rules remain the same.
The agreement confirms that Intellectual property rights (copyright, patents, trademarks etc) will be protected to at least the standards required by the international agreements that the UK and the EU are subject to. The agreement also includes mechanisms for co-operation and exchange of information on intellectual property issues where UK-EU interests are aligned.
The agreement introduces a rebalancing mechanism to address future divergences in technical standards (including on subsidies, workers’ rights and the environment) by the UK or the EU that negatively impact the level playing field. If the UK or EU raises its standards and the other party does not follow suit, an arbitration panel could be convened to establish whether ‘other party’ has infringed the level playing field. The panel would be required to issues its decision within 30 days of assembling and if a breach has been established tariffs could be temporarily imposed by the complainant.
Under the terms of the agreement, if after four years the UK or EU believe that the other side have consistently and significantly breached the level playing field, they will be able to activate a year review and renegotiation of the trade section of the EU-UK Trade and Cooperation Agreement. If any outstanding issues have not been resolved after a year of negotiations this could lead to a suspension of parts, or all of the trade deal. Postponement of the trade deal would likely see the UK and EU trading on WTO terms. The number of mechanisms included in the treaty to switch off zero tariffs is likely to limit the extent to which the UK can lower standards and increases the fragility of the agreement with the threshold to either side using trade remedies against the other relatively low.
EU and UK can apply safeguarding measures, including anti-dumping duties and anti-subsidy interventions. The agreement sets out definitions of a subsidy and common principles (see article 3.4 of the treaty) to be applied to any future subsidy regime. Both definitions and common principles are similar to the EU’s current system of state aid and under the terms of the agreement, any UK subsidy regime would therefore need to respect the key and binding principles outlined in the treaty. Exemptions to these principles, such as the need to waive rules in a national emergency, have also been outlined.
The agreement also contains mechanisms for tackling disputes with both sides committing to legal remedies for a breach, including through their respective court systems. An arbitration tribunal can also be contravened to rule if there has been a breach, with countermeasures such as suspending parts of the trade deal or tariffs outlined in the agreement.
The agreement confirms that the UK and EU have agreed to permit businesses to continue to tender for each other’s public sector procurement contracts. This has been achieved through the agreement of common rules for a transparent and non-discriminatory system to bid on contracts.
While the UK and EU have committed to key common principles on competition policy, have an independent competition agency and to continue to apply domestic competition law, these obligations won’t be subject to dispute resolution.