International rules and standards
There is also a series of international rules and standards that are relevant to the chemicals sector, such as those listed below.UN Globally Harmonised Systems (GHS) of classification and labelling of chemicals The UN Globally Harmonised System (GHS) of Classification and Labelling of Chemicals is an internationally agreed-upon system adopted across the EU by the Classification, Labelling and Packaging (CLP) Regulation.
There are also common areas of concern that are shared between GHS and the “UN Recommendations on the Transport of Dangerous Goods – Model Regulations” (TDG), such as hazard communication, labelling and packaging. GHS and TDG also share common texts such as the UN Manual of Tests and Criteria.
OECD guidelines for the testing of chemicals
These OECD guidelines are a tool for assessing the potential effects of chemicals on human health and the environment. These are usually adopted by the EU into the REACH Test Methods Regulation with no or little amendment.
The Stockholm Convention is a multilateral environmental agreement to which the UK is a Party in its own right. Effective from May 2004, it aims to eliminate or restrict the production and use of persistent organic pollutants (POPs). It is implemented by the EU regulation on POPs.
The Rotterdam Convention is a multilateral environmental agreement that promotes shared responsibilities in relation to importation of hazardous chemicals. The Parties to the agreement, of which the UK is one in its own right, can decide whether to allow or ban the importation of chemicals listed in the convention, and exporting countries are obliged to make sure that producers within their jurisdiction comply. The Prior Informed Consent Regulation (EU) 649/2012 implements the Rotterdam Convention in the EU.
The Basel Convention is a multilateral environmental agreement that aims to reduce the movements of hazardous waste – which includes discarded chemicals – between nations, and specifically to prevent transfer of hazardous waste from developed to less developed countries. This is implemented in the EU by Regulation (EC) No 1013/2006.
The Minamata Convention is a multilateral agreement that is designed to protect human health and the environment from anthropogenic emissions of mercury. This is implemented in the EU by Regulation 2017/852, coming into force on 1 January 2018, with additional UK implementing regulations being put in place to enable the UK to ratify the Convention in its own right in early 2018.
The Chemical Weapons Convention
The Chemical Weapons Act 1996 fulfils the UK’s obligations under the Chemical Weapons Convention. It requires sites manufacturing, using, or consuming those
chemicals covered by the Convention to record their usage, imports, exports etc. Sites exceeding set amounts are subject to international verification procedures carried out by the Organisation for the Prohibition of Chemical Weapons.
Existing frameworks for how trade is facilitated between countries in this sector
48. The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the EU.
There are a number of existing arrangements which govern the way in which non-EUMember States trade in chemicals with the EU. Around the world, other countries have also created arrangements for trading specific categories of manufactured goods.
Manufacturers from outside of the EU wishing to export manufactured goods to the EU need to meet the requirements set out in EU legislation. Companies in third countries wishing to export to the EU must seek an EU based importer or Only Representative to register the chemical with the European Chemicals Agency
(ECHA). These manufacturers would also need to comply with legislative requirements in their home country, and any other countries, where they intend to
The EU has established bilateral agreements with other countries to facilitate the development of trade in different aspects of chemicals and ensure a high level of protection of public health and environment. The EU has concluded a Mutual Recognition Agreement with Switzerland for biocidal products. The agreement enables the Swiss Competent Authority to grant the union authorisation procedure for biocidal products, which enables biocidal products to be placed on the EU market and vice versa. It also enables an applicant to appoint the Swiss Competent Authority to evaluate its application.
The EU-South Korea FTA contained an annex on chemicals which outlined the parties’ shared objectives in the context of chemicals including to foster mutually beneficial development in trade and ensuring a high level of protection of public health and the environment. The agreement also established a forum to meet at least once every two years to support cooperation and the delivery of the shared objectives.
In terms of cooperation agreements with regulatory agencies in third countries, the European Chemicals Agency has cooperation agreements (Memorandum of Understanding or Statement of Intent) with regulatory agencies in Australia, Canada, Japan and the USA. The agreements support sharing information, best practice and scientific knowledge.To reduce the burden on companies testing chemicals numerous times to provide data to different the regulators, the OECD adopted the Mutual Acceptance of Data (MAD) to avoid duplicative testing of chemicals to meet regulatory requirements.
MAD requires that test data generated in any member country in accordance with OECD Test Guidelines and Principles of Good Laboratory Practice (GLP) shall be accepted in other member countries for assessment purposes and other uses relating to the protection of human health and the environment. The EU has adopted the OECD GLP principles and the revised OECD Guides for Compliance Monitoring Procedures for GLP as annexes to two EU GLP Directives. The EU has subsequently concluded Mutual Recognition Agreements for GLP with Israel, Japan, and Switzerland.
Common principles for GLP also facilitate the exchange of information and prevents the emergence of non-tariff barriers to trade, while contributing to the protection of human health and the environment.Trade in manufactured goods can be facilitated through the use of international standards, which are voluntary agreements on best practice for a given process or product. The United Nations has developed a ‘Globally Harmonised System’ (GHS) on classification and labelling of chemicals, which is a voluntary system for classifying and communicating the hazardous properties of industrial and consumer chemicals.
The UN GHS aims to ensure that information on the hazardous properties of chemicals is available throughout the world in order to enhance the protection of human health and the environment during the handling, transport and use of chemicals. GHS also provides the basis for harmonising regulations on chemicals at national, regional and worldwide level, which can facilitate trade.
There are many customs facilitation arrangements in international agreements.These include the EU’s agreements with a number of third countries, such as Canada, Korea, and Switzerland. These agreements differ in the depth and scope of customs facilitation offered. Examples of customs facilitations include: simplifying customs procedures, advance electronic submission and processing of information before physical arrival of goods, and mutual recognition of inspections and documents certifying compliance with the other parties’ rules.
In the absence of a preferential trade agreement, goods imported into the EU from non-EU countries must pay a tariff. Tariffs are custom duties levied on imported goods. Under WTO Most Favoured Nation (MFN), a country’s tariff schedule must be consistent for all countries it trades with, except those where a preferential trade agreement exists. EU MFN tariff rates vary depending on the good. The EU’s simple average of MFN applied duties is 4.5 per cent for chemicals. The EU has agreements with a range of trading partners that amend the tariff rates applied to goods.
There are a number of EU free trade agreements with 3rd countries that the UK chemicals sector currently benefits from:
a. Switzerland – FTA (2.8 per cent of chemical exports in 2014, 1.4 per cent of chemical imports in 2014) – value to the sector from key exports in fine chemicals for pharmaceutical production & Perfumes/cosmetics;
b. South Korea – FTA (1.4 per cent of chemical exports, 0.8 per cent of chemical imports) – value to the sector from key exports in radioactive materials; and key imports of PTA for PET production;
c. Singapore – FTA negotiated but not adopted (1 per cent of chemical exports, 0.4 per cent of chemical imports) – value to the sector from key exports in fine chemicals for pharmaceutical production;
d. Canada – FTA negotiated but not adopted (0.9 per cent of chemical exports, 1.6 per cent of chemical imports) – value for some specialty organic chemicals; and
e. Norway – FTA (0.8 per cent of chemical exports, 1.4 per cent of chemical imports) – value to the sector from key exports in perfumes/cosmetics, and from key imports of Vinyl chloride.
Rules Of Origin
The EU includes rules of origin in all of its FTAs, which are restrictions on the originating content of products that exporters must comply with to gain tariff preferences. These rules typically reflect both the supply chains of both the EU and its FTA partner. Many of the EU’s rules of origin arrangements are based on the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin, which includes provisions that allow producers to treat content from some third countries as if it comes from their own country. Several arrangements aim to reduce the administrative requirements associated with origin certification, including the EU’s Registered Exporter (REX) system, which lets businesses register for self-certification of origin using an online system, avoiding paper certificates.