Accreditation enabling UK-EU trade and supply chain stability

In UKAS’s Annual Report for 2024, Stephen Phipson CBE , Chief Executive at Make UK , provided this article that explores how accreditation brings stability to supply chains.

Trade policy is a critical enabling force in supporting economic growth, allowing countries to expand their markets and access goods and services that otherwise may not have been available domestically. As a result, the global market is more competitive, improving market dynamics and innovation and offering cheaper products to the consumer.

Global manufacturing trade flows are intricate with components and sub-assembly systems moving across multiple borders at separate phases of assembly before the final product reaches the customer. Nowhere is this more critical and long-serving than with the supply chains that support the UK and EU manufacturing industries.

Trade liberalisation in goods has previously been commonly associated with the objective of lowering tariffs. This has seen tariff levels for manufactured goods drop over many decades. A new focus is needed to address other barriers that have proliferated affecting global trade in goods and services; that is regulation.

Regulations play a vital role in meeting public policy objectives in areas such as consumer safety and environmental compliance. However, differing national regulations lead to varying compliance requirements on businesses, such as additional testing and certification. This creates non-tariff barriers to trade which add to the cost, time and administrative burden for businesses seeking to operate across borders.

The UK’s exit from the EU’s internal market has introduced such non-tariff barriers, including the loss of dynamic alignment to the EU’s market regulation rules and the utility of a single system of market access authorisation and compliance. These regulatory costs matter for exporters and customers. For instance, GB firms exporting products to the EU must use an EU Notified Body for testing, compliance, and certification purposes if demanded by regulation. This leads to additional administrative costs, sourcing of suitable testing and certification facilities and other legal obligations on a third country supplier into the EU.

Securing opportunities that reduce the regulatory burden on exporters of manufactured goods would play a significant role in reducing these costs without impairing the ability of regulatory authorities to carry out their public policy responsibilities.

Mutual recognition agreements (MRAs) are an important trade policy tool designed to support this dual objective of regulatory adherence and reducing exporting costs. The use of MRAs on conformity assessment in negotiating a Free Trade Agreement, or a stand-alone agreement between two negotiating parties reduces the need for duplicative product evaluations, positively impacting trade flows. This produces positive outcomes for the value of exports, which can increase the number of exporting firms and their product portfolio available in export destinations.

The lack of MRA provision in the current trading relationship between the UK and EU is affecting trade volumes. In the future, where the UK and EU look to boost cooperation in sectors of mutual benefit and interest, trade in goods will be an integral part of how that economic cooperation will be achieved. Allowing an MRA on conformity assessment would reduce and potentially eliminate the geographical, jurisdictional, and associated costs from procedural obstacles of goods complying with each other’s legal requirements and standards. This would restore enhanced connectivity and integration of the UK and EU supply chains for our mutual and collective benefit.