Following the finalisation of a new Trade and Cooperation Agreement between the European Union and the United Kingdom, CHEM Trust’s initial assessment is that this agreement does not adequately protect human health and the environment in the UK from hazardous chemicals. This is because it doesn’t retain UK access to the EU’s chemicals regulation system REACH. The agreement includes an annex on chemicals, but this does not facilitate the type of close cooperation with the EU post-Brexit that civil society groups, such as CHEM Trust, and also the chemical and other industries, were seeking.
However, the deal avoids the potentially catastrophic deregulation that could have followed a no-deal outcome, commits the UK to not regress from current levels of protection (though only if it affects trade or investment), includes a rebalancing procedure which could increase protection on both sides, and offers a platform on which a closer partnership could be negotiated in the future.
Up until the end of 2020 the UK has been part of the world’s most advanced regulations on hazardous chemicals, EU REACH. As the UK leaves the EU single market on 1st January 2021 this protection slips away, to be replaced by an attempted copy, GB REACH or ‘BREACH’; which in our analysis is substantially weaker than EU REACH. Northern Ireland does, however, remain in EU REACH under the provisions of the Withdrawal Agreement.
CHEM Trust has been calling throughout the Brexit process for the UK to negotiate within the EU to stay within the REACH system; for example through associate membership of the European Chemicals Agency (ECHA). Our analysis is that any close relationship with REACH would require the UK to continue to align with EU laws controlling the use of hazardous chemicals. Unfortunately the current UK administration did not seek such membership, instead insisting on a desire for the UK to have control of its own chemical regulation.
The chemicals annex
The Trade and Cooperation agreement has an annex specifically covering chemicals. Our analysis of this annex is that it is pretty weak, focussing on consultation and exchange of non-confidential information and does not facilitate much closer cooperation than third countries (such as Canada and Japan) already have with ECHA.
Article 7.2 of the annex commits both parties to facilitating the exchange of “non-confidential information” and Article 7.4 commits both parties to cooperation on the dissemination of data related to chemicals safety and “upon request of either Party, the other Party shall provide available non- confidential information on chemicals safety”.
Sharing of only ‘non confidential information’ does not secure the UK Government’s original objective for ‘data-sharing’. This would have provided the UK with access to ECHA’s chemical safety database and avoided the costs to UK industry of re-registering substances in a UK safety database that had already been registered under EU REACH. The EU REACH system has already been designed to share non-confidential information widely, for example through the substance information available on ECHA’s web site.
The annex also includes the provision that the UK and EU can enter into consultations on chemical safety, but such consultations would not be mandatory if requested by one of the parties; as was originally proposed by the UK in the draft legal text it published in May. CHEM Trust was concerned that mandatory consultations could take up valuable time and resources in ECHA, that could potentially result in delays to, and disruption of, regulatory action.
The annex promotes cooperation around international standards, specifically the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The EU already works closely with international processes on chemicals, including GHS. However, these standards do not provide the same level of protection as REACH.
Non-regression, ‘level playing field’ and ‘rebalancing’
The agreement includes provisions on non-regression, level playing field and rebalancing, all of which cover environmental policy including chemicals.
Both sides have committed to non-regression, i.e. not weakening their environmental level of protection below the levels at the end of the transition period (31st December 2020), though only if the weakening affects trade or investment:
A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its environmental levels of protection or its climate level of protection below the levels that are in place at the end of the transition period, including by failing to effectively enforce its environmental law or climate level of protection.
If one party considers that these provisions are breached then the agreement lays out a process whereby counter-measures can be put in place, though they must be proportional to the impact on trade. The UK Institute for Government has provided a summary of these provisions. There will also be an arbitration panel to rule on such disputes.
Beyond the non-regression provisions, there is also a process which aims to consider the development of regulations after the end of the transition process, the ‘rebalancing‘ process. This process is designed to deal with divergences that occur if one party adopts significant new policies that lead to “material impacts on trade or investment between the Parties” and then “either Party may take appropriate rebalancing measures to address the situation. Such measures shall be restricted with respect to their scope and duration to what is strictly necessary and proportionate in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement. A Party’s assessment of these impacts shall be based on reliable evidence and not merely on conjecture or remote possibility.” The rebalancing measures are also subject to the arbitration panel.
The rebalancing process is potentially significant in the case, for example, of new EU policies like the Chemicals Strategy for Sustainability, where if it could be demonstrated that this created ‘material impacts on trade and investment’ then some sort of rebalancing measures could be taken by the EU against the UK. It’s worth noting though that industry often exaggerates the potential impacts of new regulations, including REACH.
The agreement also creates a process for a more general review of the balance of the agreement, which can occur after four years or if there has been frequent use of the rebalancing process. This review which “shall address whether the Agreement delivers an appropriate balance of rights and obligations between the Parties“, should be completed within 6 months and could result in an amendment to the trade agreement. A similar review can occur every four years.
The agreement creates more reasons why divergence is a bad idea for the UK
In an interview at the weekend, Boris Johnson said the UK would break free from EU rules and regulations in the new year and listed chemicals (as well as data and animal welfare regulations) as one of the areas where the UK could diverge from Brussels.
However, polling has shown that voters don’t want to see a reduction in standards, and UK industry has also been pushing for the UK to remain aligned with EU standards on chemicals. There is no justification for the UK to reduce protection of UK consumers and environment from hazardous chemicals.
Beyond the public and industry opinion, the trade agreement will also present problems for any attempt by the UK to become a new dirty man of Europe, e.g. by allowing the use of hazardous chemicals in order to stimulate the development of a deregulated production base in the UK. If such an approach was taken (i.e. it had a material impact on trade or investment) then it would immediately get into trouble with either the non-regression provisions (if there was an attempt to deregulate laws that were in place at the end of the Transition period) or the rebalancing provisions, that will address areas where the EU has moved ahead of the UK.
CHEM Trust’s Executive Director Michael Warhurst said:
“CHEM Trust is very disappointed that the UK Government has not tried to negotiate a close relationship with the EU’s world-leading chemicals regulation REACH. This decision will substantially increase costs and bureaucracy for UK companies, while also reducing protection of the public, workers and the environment from hazardous chemicals.
We are now calling on the UK to commit to follow the controls on chemicals that the EU puts in place, as they have the data and capacity that the UK doesn’t have in order to make these complex decisions. This will also ensure that the EU doesn’t need to use the rebalancing provisions of the agreement for any aspects of chemical regulation.
We also call on all parties in the UK to push for the negotiation of a stronger UK relationship with EU-REACH in the future”
It is very clear that detailed EU-UK trade negotiations will continue long into the future, as this agreement is implemented and the rebalancing processes come into use.
These ongoing negotiations, in particular the potential 4-yearly review of the balance of the agreement, will provide future opportunities for achieving a close relationship with REACH in the UK-EU trade agreement. This may become easier in the future if the UK political focus moves away from ‘sovereignty’ and towards a more pragmatic consideration of what businesses need in order to be able to trade effectively with the EU – and the level of protection that the people of the UK will expect.
- This blog has been covered by Politico Pro Sustainability and Euractiv.