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    A Canada-style deal is not enough, say American businesses

    150 150 ioana bere

    American Businesses active in the EU support a deal as comprehensive and ambitious as possible, reflecting the strong ties which currently underpin the EU-UK relationship. In their opinion, a Canada-style deal would not be enough. They also reject any third cliff-edge scenario at the end of 2020.

    According to a recent report published by the American Chamber of Commerce to the EU, American companies are heavily integrated in the EU and UK economies. They have built complex supply chains running across Member States, with a quarter of US foreign direct investment in the EU going to the UK. A significant change to the current economic and political relationship between the UK and the EU could seriously disrupt their business.

    In terms of regulatory alignment and cooperation, the report calls for divergence to be kept to a minimum and instead asks for continued regulatory convergence across industrial sectors. Significant divergence would result in substantial additional compliance costs and red tape, affecting companies, SMEs in particular, and citizens. It also states that the current EU rules are often de facto global standards to which they have already adapted.

    On chemicals, they suggest the UK should obtain associate membership of ECHA and continue having access to its database. It is suggested the UK should stay as close to REACH developments as possible, to avoid damaging divergences in standards and in product development. A lack of harmonisation would result in higher costs and longer lead times, and therefore fewer products would be available on the market.

    American Chamber of Commerce to the EU, recommendations on the future EU-UK partnership

    Environment Committee in the EU Parliament raises the bar for a level playing field with the UK

    150 150 ioana bere

    The Environment Committee wants a far-reaching environmental future agreement with the UK, according to an opinion approved by 64 votes to 15.

    It welcomes the non-regression clause proposed by the Commission in its draft treaty text, but considers that the proposed ratchet clause for future levels of protection is not enough. It wants instead at least equivalent future levels of protection, so that when one Party increases its ambition, the other should follow at least with an equivalent level – amounting to a form of dynamic alignment. The difference between this and the negotiating mandate adopted by the Council is that dynamic alignment is not modelled on the EU standards. The opinion also highlights the poor record of UK environmental infringement cases, especially on air and waste standards, which may raise the question of possible regression in this area.

    In terms of climate, the Environment Committee wants the UK to align itself with the Union’s targets, including the revised 2030 target, an eventual 2040 target as well as climate trajectories towards 2050 (provided by the Climate Law, right now under discussion at the EU level). It also stresses the importance of respecting the precautionary principle, dynamic alignment on chemicals safety legislation and cooperation between the European Chemicals Agency and the Health and Safety Executive (the UK chemicals authority).

    This opinion is addressed to the International Trade and Foreign Affairs committees, that will merge recommendations coming from all the European Parliament committees before putting it to a Plenary vote in June.

    Environment Committee, adopted opinion

    What options for EU-UK chemicals management cooperation post-Brexit

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    CHEM Trust published a briefing on EU-UK chemicals management cooperation scenarios post-Brexit. In addition to remaining part of REACH and as an associate member of ECHA, along the same lines as EEA countries, Articles 106 and 120 REACH, as well as the operating procedures of ECHA’s bodies, provide other mechanisms for partnership.

    ECHA can share confidential business information (i.e. ECHA’s database) with the UK, under Article 120 REACH. There is no precedent for the use of this article and ECHA has not adopted a general approach on how it can be applied. Sharing the database would save businesses considerable costs from duplicating data required by the UK-REACH registration system (estimated at around EUR 1 bn). The UK database is currently empty and will not have full information on substances until 31 December 2022 (the deadline for businesses to submit full information to the UK database), with some signs this deadline may be relaxed. The EU would in any case have to consider sooner or later how to share ECHA’s data with third countries. After the transition period ends, REACH will still be applicable to Northern Ireland and Northern Ireland (which will then be a third country) authorities will need to access ECHA’s data base to enforce the regulation.

    According to Article 106 REACH, the UK can also participate in the work of ECHA, more specifically in ECHA’s committees (e.g. risk assessment and socio-economic analysis committees). ECHA has previously granted such partnerships to Croatia (before accession) and to Switzerland (cooperation on biocides). The main criteria for allowing such participation is the third country’s chemicals management legislation close alignment with EU-REACH.

    Other forms of cooperation include participation in certain ECHA’s entities such as the HelpNet or peer chemicals agencies collaboration based on a memorandum of understanding (e.g. between ECHA and the US Environment Protection Agency).

    While the EU position on this is unclear at the moment, the UK wants a chemical annex in the future trade agreement that would provide for data and information-sharing. The UK is also interested in developing a memorandum of understanding with ECHA similar to those ECHA has with Australia and Canada. CHEM Trust and stakeholders across the industry are advocating for a partnership that is significantly closer than these agreements – that would ensure close alignment with REACH and active participation in ECHA. The briefing demonstrates the existing precedents for and legal mechanisms by which such a partnership could be secured.

    CHEM Trust, briefing on Models of Cooperation with ECHA, based on research provided by Ioana Bere from Stefan Scheuer Consulting

    UK has cut back on environmental enforcement

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    There is an enforcement gap in the UK according to Unchecked which is a new UK organisation studying the erosion of regulation in the UK and its enforcement. 

    Their research shows that years of cuts to the budgets of UK local and national regulators have resulted in huge declines in staffing. From 2009/10 to 2017/18, the budgets of major regulators fell by over 50% in real terms and the number of staff has plummeted by around 30%. For example, the UK Environment Agency experienced a real-terms reduction of over 60%.

    As a consequence, many watchdogs may no longer have the tools to carry out their responsibilities. Enforcement activities such as inspections, sampling and prosecutions have fallen sharply. From 2009-18, the number of water pollution samples taken by the Environment Agency fell by a third. Their workload has been further increased by preparing for Brexit. Unchecked thinks this situation, unless properly addressed, has the potential to undermine the vital protections in different areas, including environment.

    Unchecked website
    Unchecked, briefing on the UK’s enforcement gap

    Lack of clarity on how the Northern Ireland Protocol will apply in practice

    150 150 ioana bere

    Concerns are increasing about the lack of clarity with regard to the practical application of the Northern Ireland/Ireland Protocol.

    The House of Lords’ EU Committee sent a letter to Minister for the Cabinet Office, Rt Hon Michael Gove MP, conveying the worries of businesses in Northern Ireland. One of the biggest concerns is the uncertainty over the practical impacts of the Protocol – the processes that will apply, the level of checks and customs that will be required etc. Unclear language used by the government, such as “unfettered access”, arouse these fears further as neither the Northern Ireland authorities nor business know how this will translate in practice. The House of Lords’ Committee expects an answer from Minister Gove by 8th of April 2020.

    The EU Commission released this week a notice to stakeholders on the application of the Withdrawal Agreement in the fields of chemicals, which also talks about the situation of Northern Ireland. It clarifies that Northern Ireland will be considered part of the internal market in regard to REACH legislation. A substance manufactured in Northern Ireland and shipped to the EU will not be considered an imported substance. Substances put on the Northern Ireland market will have to register with ECHA, including those coming from Great Britain. However, there is still lack of clarity on how this will work in practice, how inspections will be done and whether the Northern Ireland authorities will be able to access ECHA’s data base.

    The EU wrote to the UK several months ago asking permission to open an office in Belfast. The EU wants a physical presence in Northern Ireland so it can ensure the Irish protocol is being properly implemented. Sources suggest the presence would be more technical than diplomatic. But UK negotiators believe this would be an infringement of UK sovereignty and would amount to EU “joint patrols” through the backdoor and could lead to an EU “permanent” footing.

    House of Lords EU Committee letter
    European Commission notice to stakeholders on the Withdrawal Agreement application in the field of chemicals
    RTE on the EU office in Belfast

    UK’s trade negotiation objectives: a shift towards US’ risk-based approach

    150 150 ioana bere

    The UK might pivot to a risk-based approach, according to a briefing by the Trade Justice Movement (a UK coalition of sixty civil society organisations). This is specific to US regulations and contrary to the EU’s precautionary principle. The briefing compares the UK’s negotiation objectives with the EU and US and points to important differences between the two. On environmental policy, it shows the UK is short on detail and enforceability in both of the negotiation mandates. None mentions the Paris Agreement, although the US one points to the net-zero target and the need for a dispute settlement to ensure enforceability (which is specifically excluded in the EU mandate). Including such reference can be considered encouraging according to Trade Justice Movement, as the US negotiators asked for climate change not to be included in the deal (revealed in leaked papers last year). 

    Trade Justice Movement’s report
    UK negotiation mandate with the EU
    UK negotiation mandate with the US

    The UK explores chemicals data sharing options in the negotiations with the EU

    150 150 ioana bere

    The Government is looking into ways of facilitating chemicals data sharing with the EU according to the Defra Minister, Lord Goldsmith, during a debate in the House of Lords. This is something the government is pursuing in the current negotiations with the EU. Article 120 of the EU’s REACH legislation allows for this possibility, but requires an international agreement between the EU and the beneficiary country.

    The Minister stated the UK will not seek regulatory alignment with the EU, “but will not diverge simply for the sake of it”. The UK might take different approaches on some chemical substances, but it is claimed not with the aim to reducing standards or level of protection, but to better respond to British circumstances. More rigorous rules minimising animal testing was mentioned as an example of an area the UK might want to diverge. However, there are concerns that avoiding animal testing has in practice meant that safety data of a substance has been missing, but the substance is still kept on the market.

    The House of Lords, debate on chemicals regulation

    The danger of a hollow UK REACH system

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    There is a danger the UK will end up with a hollow system, said Dr. Michael Warhurst (CHEM Trust) in his evidence to the Environment Bill Committee. Alongside Nishma Patel from the Chemical Industries Association and Bud Hudspith from the trade union – UNITE, Dr Warhurst expressed his concerns about the UK having to start building a chemicals’ safety database from scratch. Bud Hudspith and Nishma Patel felt it would take the UK years to catch up with ECHA. The lack of resources for and personnel of the Health and Safety Executive (ECHA’s equivalent in the UK) is an important issue. Restarting the process of registration and providing data behind the chemicals will put the UK behind the EU REACH. The amount of work to be done is considerable, especially because the chemicals market is constantly on the move, with industries usually going for a substance alternative once one substance is banned. There is also concern that the enforcement in the UK must be improved to cope with an even bigger task ahead.

    Evidence in the Environment Bill committee
    Chemical Watch article

    The EU struggles with making the level playing field work

    150 150 ioana bere

    The EU’s proposal for a treaty with the UK keeps the reference to level playing field commitments and a soft form of dynamic alignment. Compared to the negotiating directives adopted by the Council on 25 February, the wording on level playing field requirements is not that straightforward and it remains unclear how this will be implemented. Despite this, it remains the most ambitious treaty the EU has ever proposed on the level playing field and environmental protection.

    The level playing field section on environment and health includes a non-regression clause on environmental protection with a time-reference – the end of the transition period. The term “environmental protection” is defined through a list of environmental areas. There is also a ratchet clause and four environmental principles the Parties shall respect in their national legislation and practice (among them the precautionary principle). A soft form of dynamic alignment is foreseen as well, but this has to be mutually agreed by both Parties in the Partnership Council. This body can adopt binding decisions and set higher levels of protection or introduce new areas in the level playing field. This reflects the evolving nature of the agreement as explained on other occasions by the chief negotiator Barnier. Under the monitoring and enforcement part, public authorities and individuals of the two Parties should be able to bring actions against violations of the environmental law that are not in line with the treaty obligations. An “independent body” shall ensure the effective monitoring in regard to treaty provisions covering the non-regression, legislative improvements above the non-regression level and the ratchet clause.

    Before being published, the text was discussed with the Members States in the Council. The Commission’s text proposal underwent minor changes concerning dynamic alignment: Member States want the robust commitments for the level playing field to be “long-lasting”. Under the environment and health section, a new article was added; it says that the level playing field should also include targets that are agreed within the Union at the end of transition but will be achieved after the transition period ends. If the transition period is extended, this clause has the potential to cover new legislation under the European Green Deal.   

    First version of the draft text of the agreement (proposed by the EU Commission)
    Second version of the draft text of the agreement (after Member States changes)

    UK shows worries about US environmental dumping

    150 150 ioana bere

    The UK government asks for a level playing field in the ambitious and comprehensive free trade agreement it is aiming for with the US. It is less forceful than what the EU is asking from the UK, but it indicates that the government is worried about getting too close to the US and losing some environmental and labour protection.

    The adopted negotiation approach mentions the need to “secure appropriate provisions that promote open and fair competition”, which resembles the EU’s level playing field requirements. More specifically, on trade in services the UK asks for “ambitious commitments on market access and fair competition”. On competition law, the UK wants an ambitious chapter, with similar wording to the mandate with the EU.

    The UK government says the agreement will ensure high environmental and social standards and protections. The deal should also have appropriate mechanisms for the implementation, monitoring and dispute resolution of environmental and labour provisions. This is completely different from the UK negotiation mandate with the EU, where it specifically states that environmental and labour provisions should not be subject to the dispute resolution mechanism.

    An impact assessment backing the negotiation approach with the US finds that the UK outperforms the US in most environmental indicators, such as climate and energy, water resources, biodiversity protection and air pollution.

    The UK’s approach to trade negotiations with the US

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