Mediaboss Marketing

18 February 2021

Cooley LLP

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On 24 December 2020, the EU and the UK reached a deal on theterms of their future free trade and cooperation agreement("TCA"). Comprising 1,200+ pages, the TCA was asignificant achievement in such a short timescale and avoided theUK leaving the EU without a deal at the end of the transitionperiod on 31 December 2020.

Although the TCA changes little of the immediate impact ofBrexit for product stakeholders in terms of new obligations (suchas using the UKCA mark, updating Declarations of Conformity andtraceability information), it does contain important implicationsfor the longer term, including:

It remains to be seen how the EU and UK will implement thesecommitments successfully as the regulatory requirements in the UKbegin to diverge from those in the EU. In the meantime, below isour summary of some of the key effects of the TCA for productstakeholders.

By way of background, from 1 January 2021, the UK has left theEU Single Market and Customs Union. This means that the UK nolonger benefits from the free movement of goods between the EU andGreat Britain (England, Scotland and Wales). However, the NorthernIreland Protocol, which is designed to avoid a hard border on theisland of Ireland, still allows for the free movement of goodsbetween Northern Ireland and the EU (and vice versa).

The EU and UK have the "right to regulate" goodsindependently within their own territories, subject to certainprovisions in the TCA which incorporates provisions from the WTOTechnical Barriers to Trade Agreement. These provisions aim toensure technical regulations, standards, and conformity assessmentprocedures are non-discriminatory and do not create unnecessaryobstacles to trade. The TCA does not contain mutual recognitionmeasures (apart from a limited number of provisions for certainproducts such as medicines and motor vehicles - which are discussedbelow). However, in reality the UK's freedom to regulate iscurrently fettered in respect of Northern Ireland as a result ofthe Northern Ireland Protocol, which requires products placed onthe Northern Irish market to continue to comply with the EU regime.As a result, for most products companies will now have to complywith two separate regulatory regimes for the EU (and NorthernIreland), and for Great Britain.

The TCA contains important provisions to try to ensure commonapproaches to future technical requirements for EU and UK goods andto simplify access to each other's markets. These include:

The TCA contains a framework for cooperation between the EU andUK, and in particular exchanging information on non-food productmarket surveillance and enforcement activities, risk assessmentmethods and product testing, and coordinated product recalls orother corrective actions.

An arrangement is to be set-up "preferably within sixmonths" for the regular exchange of information between the EUrapid alert system for unsafe non-food products ("RAPEX")and the new UK Product Safety Database.

There are some simplified measures to facilitate cooperation andtrade for certain products including motor vehicles, medicinalproducts and chemicals.

The TCA includes agreement on tariffs and rules of origin. Wewill be blogging separately on the details of these provisions, andon practical considerations to help businesses navigate the newproduct compliance, trade and customs rules.

The TCA was ratified by the UK Parliament on 30 December 2020and has been provisionally applied since 1 January 2021, pendingratification by the EU Parliament (this needs to be completed bythe end of February 2021, unless the parties agree to extend thisdate). On 10 February, the European Commission adopted a proposalto request an extension of this period until the end of April 2021,to allow time for the legal-linguistic revision of the TCA into 24languages of the EU Member States for its scrutiny by the EuropeanParliament and the Council.

The commitments by the EU and UK to cooperate and take commonapproaches to technical requirements for products will be welcomesigns for many product stakeholders. However, these provisions maybe difficult to implement if the UK starts to diverge significantlyfrom the EU regulatory position. We've already seen some signsthat the UK is willing to adopt its own approach outside the EU(for example in the context of construction products and medicaldevices).

What's more, as the TCA does not include mutual recognitionprovisions for most products - or strong commitments in relation tofuture regulation - the real test will be how these provisions playout in practice, and especially the extent to which the UK willfollow the EU's lead when it comes to its ambitious program ofreforms of the existing EU product regulatory regime (such as therevision to the EU's General Product Safety Directive and newupcoming legislation on AI, among many other initiatives in thepipeline). At this stage, it remains to be seen to what extent theTCA simply pays lip service to the notion of a close relationshipbetween the EU and UK when it comes to product regulation, whetherthere will be continued future cooperation in these areas, orwhether we will see increasing divergence in Europe.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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