24 December 2020
Below is an interpretation of a current situation which could put the EU in violation of WTO law concerning Most Favoured Nation Status. This could work to the UK’s advantage on the possibility of the UK gaining a mutual recognition agreement.
Mutual Recognition Agreements (MRAs) & The Potential for EU Violation of WTO Law
There are two different types of Mutual Recognition Agreements:
This is an agreement for mutual recognition of conformity assessment. The signatories to such an agreement recognise that a designated testing body in one country can perform testing on the basis of technical requirements of the other country and vice versa. This allows a product produced and certified in one country can be exported to the other country without undergoing further testing to assess whether the product meets the other country’s technical requirements. Such agreements may cover a single sector or be multi-sectoral.
Critically, traditional MRAs do not require countries to create common technical standards and regulations, nor do they require the participating parties to recognise each other’s requirements as being equivalent. MRAs are limited to the recognition of the competence of the partner’s conformity assessment bodies to conduct conformity assessment.
Parties do not have to change their technical rules and this is why the UK government has proposed MRAs on conformity assessment as part of its new trade agreements.
These cover both testing and that the rules of the other country are automatically recognised e.g. the EU internal market.
The European Commission has concluded free trade agreements with Canada and Korea which provided for conformity assessment without requesting its partners to align their regulatory requirements with those of the EU. If the EU refuses to negotiate similar mutual recognition regimes with the UK it may well violate the most favoured nation (MFN) obligations under World Trade Organisation law.
MFN status provides for a non-discrimination rule which requires that any advantage in one country must be afforded to like products originating in other countries. Thus, by granting mutual recognition to products covered by the free trade agreement with Canada and Korea, but refusing the same treatment of products originating from the UK, would put the EU in violation of the WTO law.
We await any deal or no deal and whether UKAB should be able to continue to be recognised for the EU CPR and CE marking of construction products and will update BASA Members as soon as we have any information.
Written by: Lorna Williams / CPA