Existing frameworks for how trade is facilitated between countries in this sector
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 European Union.
Manufacturers from outside of the EU wishing to export consumer goods to the EU need to meet the requirements set out in any applicable EU legislation. Many consumer goods fall under the General Product Safety Directive14, described above.For some products, however, the EU has introduced specific product safety legislation, which places certain additional requirements on importers, such as the need for conformity assessment of products (from declaration by the importer supported by documentary evidence through to mandatory use of test laboratories appointed by a Member State), where there is a greater perceived safety risk. This includes toys and recreational watercraft.
Importers and distributors of consumer goods from manufacturers based in third countries must satisfy themselves that the products comply with all relevant EU legislation, including conformity assessment by an EU notified body. These manufacturers would also need to comply with legislative requirements in their home country, and any other countries where they intend to market products.
Countries can use bilateral Mutual Recognition Agreements (MRAs) which allow conformity assessment bodies in either market to carry out product testing and certification to each other’s legislative requirements. The authorities in both parties agree to accept conformity assessment decisions issued by bodies recognised in one another’s markets. Manufacturers still need to ensure that products meet the requirements set out in the legislation where they plan to market the product.
The EU has concluded MRAs with seven countries, covering a variety of sectors.Some of the EU’s bilateral MRAs have been integrated into FTAs, not all of which cover consumer goods. The EU-Canada Comprehensive Economic and Trade Agreement (CETA) is an example of an MRA which does cover some consumer goods, and offers mutual recognition of conformity assessment for eleven sectors including toys and recreational craft. CETA also contains provisions for voluntary cooperation on data exchange to support market surveillance activity and exchange of information about the development of technical regulations.
Other existing agreements, such as the EU-Swiss agreements and the EEA Agreement, provide for further mutual recognition. For example the EU-Swiss MRAs provide mutual recognition across around twenty product types, including those in CETA and are linked to an agreement that recognises Swiss legislation as equivalent. Where legislation is deemed equivalent, certificates of conformity with the product rules in the EU will be recognised as proving conformity with Swiss legislation, and vice versa.They also cover cooperation on market surveillance of products already on sale.
In the EEA agreement, where there is EU legislation for consumer goods,
EEA countries adopt EU product legislation into their domestic legislation, and goods that originate from these countries are treated as products from member states. The agreement also includes a system of surveillance and enforcement.
Trade in manufactured goods can be facilitated through the use of international standards, such as those developed by the International Standards Organisation (ISO) and the International Electrotechnical Commission (IEC). These are describedin more detail above.
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 World Trade Organisation (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 ratesvary depending on the good. The EU’s simple average of MFN applied duties is 6.5 per cent for textiles, 11.5 per cent for clothing and 4.1 per cent for Leather, footwear & other.
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. The approach to RoO administration in many US bilateral agreements involves no obligation to provide origin documentation unless specifically requested.