Draft Conformity Assessment (Mutual Recognition Agreements) and Weights and Measures (Intoxicating Liquor) (Amendment) Regulations 2021

Seema Malhotra Excerpts

Thursday 10th June 2021 General Committees

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mrs Murray.

I am grateful to the Minister for his opening remarks on why we are using this measure to continue to support international trade while keeping in place measures to ensure product safety. I am particularly grateful for his remarks about some of the disclosure processes that have to be followed if there are concerns about products that may be entering the market.

Conformity assessment ensures that what is being supplied or placed on the market in Great Britain complies with regulations and meets the expectations specified or claimed. Conformity assessment includes activities such as testing, inspection and certification. As the Minister has laid out, those organisations that make these checks are called conformity assessment bodies, to which I shall refer from now on as CABs.

Mutual recognition agreements lay down conditions under which one party will accept conformity assessment results from testing, certification or inspection performed by the other party’s CABs or designated public authorities to show compliance with the first party’s requirements and vice versa. MRAs enable exporters to obtain conformity assessment certification from CABs in their home market, which is recognised then in the export market.

National rules on weights and measures can also form technical barriers to trade, as the Minister will know, and that is why the World Trade Organisation technical barriers to trade agreement aims to ensure that technical regulations, standards and conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles to trade. At the same time, it recognises WTO members’ rights to implement measures to achieve legitimate policy objectives such as the protection of human health and safety or of the environment. The agreement strongly encourages members to base their measures on the international standards as a means to facilitate trade. Through transparency provisions, it also aims to enable a predictable trading environment. Parties to a trade agreement can agree to eliminate such barriers beyond what is applicable under the WTO rules.

The draft regulations cover UK MRAs with the United States of America, Australia and New Zealand, and the incorporated MRA chapters of UK agreements with Canada, the Republic of Korea, and Japan. As discussed, these agreements have similar or sometimes identical terms to those of the EU MRAs with these countries immediately before exit day. The regulations therefore give effect to the MRAs between the UK and certain third countries which have been agreed to provide continuity for businesses and consumers following the UK’s exit from the EU and the end of the transition period. May I ask the Minister why the regulations are coming now now? Obviously, the powers under the Trade Act 2021 have just commenced, but there is a question whether the instrument should have been passed before the respective MRAs were ratified. Perhaps the Minister will come back on that point.

The regulations ensure that specific products assessed by bodies in the countries recognised under the MRAs can be placed on the market, largely in Great Britain—they might also apply to Northern Ireland—and enable the Secretary of State to designate and monitor UK CABs to assess products against the other parties’ requirements.

The Minister mentioned that the instrument also implements annex 2-D to the UK-Japan comprehensive economic partnership agreement by allowing single distilled shochu to be placed on the market in Great Britain in the new quantity of 900 ml, in addition to the existing quantities that are currently permitted.

The MRAs are signed with countries with which the European Union already has existing mutual recognition agreements and requires the UK to accept conformity assessment procedures performed and conformity assessment results issued by those bodies designated by the other country that is a signatory to the MRA.

I recognise that this is an important statutory instrument to provide both businesses and consumers with vital continuity and certainty—something even more important now as we look ahead to 21 June and our hopes for the beginning of the end of restrictions. In order to support businesses and provide that all-important continuity, Labour will be supporting this motion to implement rolled-over MRAs. However, there are several areas on which I would be grateful for some further clarity.

First, in relation to UK policy on conformity assessment and accreditation of the situation under EU law as it is still applied in Northern Ireland—as the Minister made reference to under certain regulations—a regulation sets out the requirements for the accreditation of market surveillance as it applies in EU law through the Northern Ireland protocol, and that continues to be the basis for accreditation policy. If in future there are any changes to UK policy, will that require an assessment of the implications of any trade barriers between Great Britain and Northern Ireland? How is that being considered?

Secondly, regulation 5 in respect of registers of MRA bodies states that the Secretary of State may

“compile and maintain a register of…MRA bodies…their MRA body identification numbers…the activities for which they have been designated; and…any restriction on those activities”.

Can the Minister confirm where he has outlined or whether he will outline the activities for which the MRA bodies have been designated, and what restrictions there will be on those activities?

Thirdly, under regulation 6, the Secretary of State will also be able to designate a conformity assessment body to assess products against other countries’ requirements. What criteria will the Minister use to consider whether that body is capable of fulfilling those functions and to ensure that it meets the requirements of a designated body? Following that, how will the Secretary of State monitor each body and guarantee that they continue to have the necessary designated capability?

We know that in the EU and Australia MRAs, it is the responsibility of other signatory countries to monitor their own designated bodies, with general discussion set at joint committee level and action that may include joint participation in audits. If that is the case for the MRAs being discussed today, do the Government have any plans to conduct any audit? If they do not, does the Minister envisage any risks associated with simply letting other parties regulate those conformity assessment bodies? Could he clarify if any issues will arise in relation to the standard or speed of operations of conformity assessment bodies, and if there is an impact for British businesses seeking to export goods or services? If there are any issues, how will those issues will be handled?

On divergence, the UK MRAs replicate the previous EU MRAs in substance, with the only substantive divergence from the EU in the permission to allow the additional bottle size of single-distilled shochu. That poses a broader question of whether the UK could take a different approach to conformity assessment in the future.

From 1 January 2021, the UK introduced its own product safety mark, which broadly mirrors the EU’s CE mark. According to law firm Bird & Bird, the UKCA—UK conformity assessment—regime follows essentially the same principles as the previous CE marking regime, but with the safety and compliance standards, authorised representative/responsible person and notified body requirements all now being valid for the UK only. Despite being a UK ask, the EU-UK deal did not include an agreement on mutual recognition of conformity assessment, a crucial factor for the sale of a heavily regulated product. That means that most goods produced in the UK but requiring certification for sale in the EU will, I understand, have to go through a second conformity assessment for the EU to be eligible for export. That will result in extra costs to trade with our main trading partner.

A lack of an MRA is unusual for comparable deals as Japan, Canada and Switzerland all have MRAs with the EU, while even countries such as Australia and the US, which do not have a trade deal with the EU, have MRAs. Does the Minister not think it is ironic that, in not having an MRA, the terms of the trade and co-operation agreement seem to be worse than those of the infamous Australia-style deal? Outside the EU, we know that there are new regulatory barriers to trade. The EU Commission’s “Blue Guide” on product standards has a comprehensive overview of the system of mutual recognition and the functions of conformity assessment and accredited bodies. There is a system of notification in the EU by which national authorities notify the Commission and each other that a conformity assessment body has been designated to carry out conformity assessment according to harmonised EU rules. Will the UK continue to share information on CABs with the EU, or will that go through the public database of CABs to which the Minister referred, which the UK will put together?

In the absence of an MRA, local regulatory bodies cannot certify goods for sale in other countries. However, MRAs can help reduce some of the burden by avoiding duplicate product safety testing, for example. Consequently, to help businesses thrive, to do what we can to make trade easier and relieve additional barriers, Labour will support the draft statutory instrument today. I will be grateful to the Minister for his response on the points I have made. If he cannot answer in Committee, perhaps he will write to me afterwards.