A deal with Brussels allowing British goods to be exported to the EU without further tests or certificates would increase UK exports to the bloc by an average of a tenth, and by more than a quarter for some sectors, new research has found.
A “mutual recognition of conformity assessment” agreement would allow products certified in one jurisdiction to be accepted in the other without redundant testing or costly duplication.
The UK government has pushed hard for such a measure to be included as part of its economic and security “reset” with the EU — which will formally begin at a London summit on Monday.
Its suggestion has so far been rebuffed by Brussels — which argues it breaches the UK’s own “red lines” that ruled out rejoining the EU single market or entering a customs union with the bloc — to the frustration of industry on both sides of the Channel.
New modelling by Aston University in Birmingham estimated that a conformity assessment deal could deliver an average boost of 9.8 per cent to UK exports, with sectors such as industrial machinery and electronics seeing increases of up to 27.9 per cent.
Jun Du, professor of economics at Aston who has modelled Brexit impacts since the EU-UK Trade and Cooperation Agreement, said the research showed that a “mutual recognition of conformity assessment”, or MRCA deal, would particularly help smaller firms access the EU without being “drowned in red tape”.
“Our research shows that MRCA could ease that burden significantly, especially in sectors like food, textiles, and machinery, where compliance is complex. It’s a low-politics, high-impact fix that would let small exporters get back to business,” she said.
UK negotiators still hope that a conformity assessment agreement will form part of a much deeper realignment with the EU single market, including on industrial standards and other regulations in a bid to smooth trade ties with the bloc.
However, analysts warned that achieving such a rapprochement would present formidable challenges given the politics of Brexit, adding that economic benefits from the trade components of the “reset” negotiations are likely to be limited.
Throughout the Brexit process the EU has consistently rejected UK requests for such a deal, with former EU chief negotiator Michel Barnier warning in a speech in 2020 that the UK could not become a “regulatory and certification hub” for Europe.
The Labour government has made a fresh push for an MRCA agreement after being elected last July, but the request was rejected by Brussels during recent negotiations ahead of Monday’s summit, citing “institutional and economic reasons”, according to internal EU documents seen by the Financial Times.
Nearly 20 industry bodies on both sides of the Channel, including the UK’s CBI and the British Chambers of Commerce, and Europe’s SMEUnited and the Confederation of Swedish Enterprise, have also lobbied for an EU-UK MRCA agreement, but so far without success.
In a joint statement last month they called on both London and Brussels to agree to an MRCA deal, calling it “a practical and achievable measure to reduce unnecessary barriers to trade”.
William Bain, head trade policy at the BCC, said the Aston University analysis showed that a deal “would bring much needed laboratory and testing capacity into the UK and boost our exporting capacity too.”
Trade experts added that the EU’s reluctance to sign such a deal with the UK — even though it has MRCA with seven countries, including Switzerland, the US, Japan, Australia and New Zealand — reflected ongoing determination to demonstrate that leaving the bloc carried costs.
John Springford, of the Centre for European Reform think-tank, said the decision was a question of “pure politics” rather than legal barriers, and that the potential benefits for both sides were significant.
“It’s strange that the EU is willing to allow the US to judge the conformity of goods to EU standards, but not the UK, despite its continued alignment with EU rules in the goods sector,” he added.
Rachel Reeves, the chancellor, will be counting on the EU reset to deliver a fillip to growth as she faces ongoing weakness in the public finances and the prospect of a harsh outlook from the government’s Office for Budget Responsibility at this autumn’s Budget.
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