Cambridge leaders decode how new UK/EU trade deal will work in practice
With the new era of UK/EU trade relations start on January 1 021, Cambridge’s business and political leaders have been studying the trade deal announced on Christmas Eve and ratified by Parliament and the House of Lords yesterday (December 30).
The practicalities of implementing the terms of the agreement in time for the start of the new year are daunting.
“The fact is that presenting a 1,246-page document a week before it becomes law, with Christmas in between, is just unacceptable for the people who have to follow it and comply a week later,” said John Bridge, chief executive at the Cambridgeshire Chambers of Commerce.
The chamber has a team of people identifying potential issues.
“We’re still trying to identify the challenges,” Mr Bridge said. “For instance, with certification in manufacturing, it looks as if goods going from the UK into the EU will be certified in the UK, but some will have to be redone in the EU.
“For importers, it seems that we will be following the UK/Japan model where the importer takes on responsibility for the goods instead of the exporter – we don’t know that is the right answer, but that’s what the document is inferring.
“The key thing about the rules of origin is that supplier declarations on the origin don’t have to be implemented for 12 months – for both-way supplier declarations.
“We’ve always said that the key aspect of the deal is the tariff process and the paperwork that needs to be in place – but will the IT systems for hauliers work? It’s the practical application that we don’t know about yet.”
For the pharmaceutical sector, the challenges are the drug regulatory processes and the importance of being able to have easy access to global talent.
The continuation of the Horizon 2020 research funding programme makes life easier, but there are outstanding areas of concern, says Dr David Crome, managing director of compliance at technical and regulatory services company Diamond Pharma Services.
Dr Crome told the Cambridge Independent: “Basically the deal establishes a Mutual Recognition Agreement [MRA] between the EU EMA and the MHRA for the UK to accept GMP [Good Manufacturing Practice] inspections undertaken by each others’ regulatory agencies, thus ensuring continuity of supply from manufacturing sites anywhere in the world that currently have an EU GMP certificate currently issued by any of the current 28 EU agencies.
“When the UK leaves next month, any of the manufacturing site inspection MHRA GMP certificates will remain valid until re-inspection is due, and the same applies to any of the sites which were inspected and issued a EU GMP certificate by one of the remaining 27 EU regulatory agencies, and the MHRA will continue to accept them.”
There remain grey areas, however.
“Notable absences from the trade agreement include any mention of herbal medicinal products or medical devices,” noted Dr Crome. “This would imply that GB will set up separate arrangements for medical devices. This is likely to mean that conformity assessments conducted by GB Notified Bodies will not be recognised by the EU– and visa-versa? – but this still requires clarification.”
The aviation sector seems able to adapt without undue disruption – though again, this needs to be proven in practice. However Adam Durant, managing director of aerospace start-up SATAVIA, foresees problems with access to global talent.
“We are currently trying to figure out what we need to do with an active hiring process,” he said. “There is no official government clarification. The much-derided resident labour market test– RLMT – is being removed, to be replaced by another process, but we don’t know what that process is.”
Cambridge’s Labour MP, Daniel Zeichner, was unimpressed.
“This is no Christmas miracle and however the Prime Minister wraps it up, this is a terrible deal for Cambridge. Yes, it’s better than the nightmare of nothing but this is a rotten deal that reduces access to each other’s markets, destroys jobs, creates red tape, makes it harder for researchers, and removes our rights,” he said.
But South Cambridgeshire’s Tory MP Anthony Browne said the deal was “fantastic”.
“It gives certainty to British business, giving them tariff-free and quota-free access to the UK single market in the biggest trade deal for both sides. It delivers to the British public everything they were promised in the referendum campaign. And it means security for South Cambridgeshire’s thriving exporters – including our farmers who can continue to sell throughout the EU – as well as our cutting-edge entrepreneurs and our valuable life sciences sector.
“I particularly welcome the news that we will remain part of the Horizon 2020 programme, ensuring continued cooperation between our scientists, something which has been vital throughout the year.”
Around 30 new technical committees have been set up under the direction of the new partnership council (PC), a political body which consists of representatives of the European Commission and UK government ministers. Any areas not clear in the trade deal will be arbitrated by the council.
What’s for certain is that 2021 spells the end of one set of processes – and the start of a whole lot more.