‘The task of unpicking 40 years of economic and regulatory integration is complex and colossal’, CBI Director-General Carolyn Fairbairn warns at the launch of a new CBI report on EU rules that matter for the UK economy.
Smooth Operations is based on thousands of conversations with UK businesses, as well as dozens of leading trade associations, and provides an A to Z of the rules that will matter after the transition period. From architects to zoos, it outlines the regulatory needs of 23 industry and service sectors, of which 18 prefer convergence or alignment for the majority of regulation that matters.
The CBI study, compiled over a six-month period, says Brexit presents opportunities for rule changes in sectors such as agriculture, shipping and tourism that could ultimately benefit the British economy and consumers.
However, the report adds that opportunities for divergence are vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU market.
Another important finding is that changes to rules in one sector have significant knock on effects for companies in other sectors and throughout supply chains. The main regulatory needs of the aerospace sector are:
To protect consumers and supply chains, UK negotiators should seek to agree full convergence between UK and EU rules on the aerospace sector. These rules are primarily under the safety regulatory framework of the European Aviation Safety Agency (EASA)
The UK should also continue to play a role in EASA’s regulatory-setting processes
Convergence with other important rules for manufacturing – such as REACH regulation on chemicals – will matter to the aerospace industry throughout the production process
These rules are equally important for the Defence industry which also undertakes a lot of advanced manufacturing that relies on specialised supply chains that criss-cross borders. Alignment with rules to ensure goods and services can move easily across borders is therefore vital.
George McFarlane, CBI Sector Development Director, said:
“This report comes from the heart of British business. It provides unparalleled evidence to inform good decisions that will protect jobs, investment and living standards across the UK.
“The experience-based evidence of companies across the country will be essential in the months ahead, as it is critical that negotiators understand the complexity of rules and the effects even small changes can have.
“The UK is a world leader in the aerospace industry. From design to technology, and apprenticeships to research and development investment, the sector contributes significantly to the UK’s economy, generating £32 billion a year.
“Convergence with EU regulation in this sector is vital for the UK to continue to be a world player in the aerospace industry, to preventing disruption to trade, and to the smooth running of Europe-wide supply chains.”
Paul Everitt, ADS Chief Executive, said:
“The UK’s aerospace industry made remaining within the European Aviation Safety Agency and the European Chemicals Agency its highest priorities for the Brexit negotiations.
“Remaining within these globally recognised regulatory regimes is essential for our national competitiveness and to access international markets. In the coming months, it is important UK and EU negotiators adopt a pragmatic approach and prioritise jobs and prosperity.”