Much has been said and written about the concept of “regulatory alignment” as implied in the Joint Report of the EU/UK Brexit negotiators which broadcast and published on Monday, 11 December. Thus far, however, there has been little clarification as to the meaning and scope of this term. Let us first of all refer to what the text actually states:
“In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.”
This issue is important – and not only as regards the Irish question. It is precisely the internal market rules in question which have been said by those who entertain doubts about Brexit to constitute one of the barriers to trade which will inhibit British exports in the event of a “no-deal” Brexit. These, much more than EU customs tariffs, will make life difficult for EU/British trade – it is claimed.
But exactly what does this alleged regulatory framework of the Internal Market consist of? There was indeed a time when the EC/EU envisaged a market where virtually every industrial product was standardised. In 1969, two such harmonisation programmes were agreed and set in motion. They were to be implemented by means of EC directives, i.e. instruments which are not binding per se but need to be incorporated into the Member States’ legislations under the watchful eye of the Commission and Court of Justice.
The implementation process proved extremely laborious and slow, not only because of the elaborate implementation procedures, but also because technical advances were realised at the same time – including new products arriving on the market (e.g. video recorders, CD players) which did not even exist at the time when these programmes were being elaborated.
The major breakthrough came in 1979 and was affected by the Court of Justice in its Cassis de Dijon decision (Case 120/78). Here, the Court ruled that (a) any product lawfully made and sold in one member state was for that reason alone capable of circulating freely throughout the EC- this is known as the “mutual recognition” principle, and (b) certain barriers between the member states could be justified without resorting to the “safeguard clause” of Article 36.
This effectively meant the end of across-the-board harmonisation – as indeed the Council of Ministers acknowledged in a Resolution adopted in 1985, which determined that henceforth harmonisation would be severely curtailed and standardisation be left to such bodies as CEN (European Standards Committee) and CENELEC (European Electrotechnical Standards Committee) which are bodies entirely outside the EU and include non-EU members. The non-EU members of CEN and CENELEC are not obliged to adopt their standards, but they usually do – so there is no reason to suppose that the UK would not also continue to do so.
So the main thrust of Internal market legislation and case law is that differing national standards may continue to exist but should not be allowed to constitute non-tariff barriers between the EU Member States. In other words, the “regulatory internal market framework” as such is much less a block of uniform EU rules to which all imported products must conform than a system ensuring that goods can move freely across borders in spite of differing national technical standards. That would leave tariff barriers as the main obstacle to exports to the EU, and given that, for non-agricultural products these average at 2.3 per cent, this should not prove a major barrier – in fact currency fluctuations have a much greater impact on international trade than tariff barriers.
Let us take a practical example. As regards electrical goods, one would have thought that few issues are more important than safety – and as regards the latter, few components are more important than electrical plugs. Two observations are worthy of attention here. On the one hand, under current EU legislation, there is no ban on imports of electrical goods fitted with the British BS1363 three-pin plug. On the other hand, there has never been any challenge made under EU law to the UK Plugs and Sockets etc. (Safety) Regulations 1994, which make it a criminal offence to put on sale in this country a UK 3 pin plug, or ii) a non-UK plug permanently fitted with a UK safety approved conversion plug.
How is this possible in a highly-regulated market such as that of the EU, I hear you cry. Well, the answer must surely be that the BS1363 three-pin plug has a very high-quality set of safety features, which is why the UK has the lowest death rate from electrical injuries in Europe – because
1.The sockets are shuttered – the earth pin is longer, and pushes on a triangle which moves plastic plates out of the way on live and neutral… so if a child pushes a nail into a live socket, it doesn’t make connection.
2.[Not in the original standard] The bottom section of each pin on the plug (the bit nearest the plug body) has to be insulated rather than metal. So, if a child pulls out the plug a few millimeters and pokes behind with a paperclip, they don’t make connection.
3.There’s a fuse in each plug, so local appliance problems blow the fuse isolating the device immediately (there are still central trip fuses, and RCD devices in modern houses.)
4.The plug is polarised, so the fuse is on the live side (and the plug can’t be plugged in the wrong way round, unlike Europlugs.)
5.There are standards for retention force so it’s hard to pull out of a socket.
In other words, there is very little to suppose that this position would change post-Brexit.
I believe it is worthwhile reminding the outside world of these facts whenever we hear the mantra that we are “cutting ourselves off from Europe”. More particularly, the example set out above shows that the problems allegedly raised by EU non-tariff barriers to British exports post-Brexit are, like rumours of Mark Twain’s death, greatly exaggerated.