Conformity Assessment (Mutual Recognition Agreements) and Weights and Measures (Intoxicating Liquor) (Amendment) Regulations 2021

I now move on to consider provisions for goods coming into the UK. Under the MRAs, the UK recognises the results of conformity assessment procedures carried out by recognised overseas CABs against domestic regulations. This SI makes it clear that assessments carried out by a recognised body based in one of our partner countries should be treated as equivalent to those carried out by a UK-approved body when relevant products are sold in Great Britain. These regulations do not change the detail of the requirements for third-party assessment, nor do they amend any requirements related to a product’s specifications. This means that the UK will maintain its robust product safety protections while continuing to reduce barriers to trade with our partners. The benefits are potentially significant here: trade with our MRA partners in radio equipment alone amounted to nearly £2 billion in 2019, although, of course, not all of these products will have required conformity assessment by a third party.

The regulations also provide for the Secretary of State to create a register of CABs that the UK recognises under the MRAs, defined as MRA bodies. This is communicated via the UK Market CAB database, a publicly available resource that can be used by businesses and regulators to verify quickly the status of CABs. These regulations also provide for Canadian accreditation bodies recognised by the UK under the UK-Canada Trade Continuity Agreement to be listed on the Government’s website.

This SI also provides that the Secretary of State, or a person authorised to act on their behalf, may disclose information to the other party to an MRA where required by an MRA. For example, we may communicate information regarding goods from the USA which have been suspended by UK enforcement authorities, as part of our co-operation commitments in the MRA with the USA. Disclosure will be made in accordance with data protection legislation.

This SI provides for a product known as single-distilled Shōchū, a spirit which is single distilled, produced by pot still and bottled in Japan, to be placed on the market in Great Britain in an additional bottle size, 900 millilitres. Prior to the UK-Japan Comprehensive Economic Partnership Agreement, single-distilled Shōchū bottled in Japan had been permitted in Great Britain, but only in quantities of 720 millilitres or 1,800 millilitres, in addition to the usual specified quantities for prepacked spirits. Providing for sale of this traditional bottle size was very important to Japan during negotiations of the UK-Japan Comprehensive Economic Partnership Agreement. This artisanal product is already on sale across the UK in other bottle sizes, so this change should not have a significant impact on consumers in Great Britain.

I shall now speak to the territorial scope of these regulations. For some provisions, the regulations will make amendments for Great Britain only, while others extend to the whole of the UK. Regulations 4 and 5, relating to recognition of conformity assessment by relevant overseas CABs, extend to Great Britain only. Northern Ireland will continue to recognise the results of conformity assessment procedures done under the mutual recognition agreements between the EU and the relevant third country. This is in accordance with the terms of the Northern Ireland protocol to the withdrawal agreement. Regulation 6, relating to the Secretary of State’s power to designate UK-based bodies under these agreements, will extend to the whole of the UK. CABs across the UK can therefore be designated under the MRAs.

Regulation 7, relating to information sharing, will also extend to the whole of the UK, to enable the Secretary of State to share relevant information required under the MRAs. Regulations 8 and 9, amending the permitted bottle sizes for single-distilled Shōchū, extends to Great Britain only. In accordance with the Northern Ireland protocol, single-distilled Shōchū will continue to be permitted on the Northern Ireland market in 720-millilitre and 1,800-millilitre bottle sizes, in addition to the usual specified quantities for prepacked spirits.

In conclusion, we are introducing these regulations to give effect to provisions which keep our barriers to trade low with some of our significant trading partners. As I have said, we do this while preserving our robust protections for product safety, as a responsible Government. This SI will provide certainty on the UK’s approach to recognising and designating CABs for certain products under the MRAs, as well as making necessary amendments to allow the 900-millilitre bottle size of single-distilled Shōchū to be placed on the market in Great Britain. I therefore commend these regulations to the House.

“The United Kingdom shall expeditiously take necessary steps to ensure the fulfilment of this obligation and shall notify Japan no later than 90 days after the date of entry into force of this Agreement of the completion of its domestic procedures necessary for the fulfilment of this obligation.”

The point at issue then was that the Trade Bill was going beyond 90 days. In the event, the 90 days were up on 30 March this year, the Trade Bill did not receive Royal Assent until 29 April, these regulations was laid on 12 May and we are approving them on 15 June. I think no harm is done, and our Japanese friends have been entirely understanding at each stage that we have trespassed beyond the 90 days and of why we have done so. For the benefit of those writing trade agreements in future, it would probably be best if they put timetables in and related them to the completion of the parliamentary procedures rather than the entry into force because the entry into force was done under a provisional application prior to parliamentary scrutiny.

The only other point I want to make is that, as my noble friend said, there is a different territorial aspect to this. By virtue of the Northern Ireland protocol, we cannot in this agreement, which is a continuity-plus agreement, vary the rules as they apply in the European Union single market, so the traditional five-gō bottle will be available in Great Britain but will not be available in Northern Ireland. As it happens, this is not strictly consistent with the text of the UK-Japan Comprehensive Economic Partnership Agreement, which states:

“Single distilled shochu … produced by pot still and bottled in Japan, shall be allowed to be placed on the market of the United Kingdom in traditional bottles of four go … five go … or one sho.”

One shō is 1,800 millilitres. There is a discontinuity between the text of the agreement, the treaty as such and what we are able to fulfil in our domestic procedures. That is a pity. Given that this is the first time we have had a continuity-plus agreement implemented into legislation, it has in a very modest way illustrated the complexity of the problems that we will have to encounter if the Northern Ireland protocol continues to impose these kinds of distinctions between the Great Britain market and the Northern Ireland market.

“The Secretary of State may … compile and maintain a register of … MRA bodies … their MRA body identification numbers … the activities for which they have been designated; and … any restriction on those activities”.

Can the Minister confirm where he has outlined, or whether he will outline, the activities for which MRA bodies have been designated and what restrictions there are on those activities? The Secretary of State will also be able to designate a conformity assessment body—CAB—to assess products against other countries’ requirements. What criteria will the Minister use to consider whether the body is capable of fulfilling those functions and to ensure that it meets the requirements of a designated body? What parliamentary oversight will that body have?

The statutory instrument states:

“To the extent that these Regulations contain provision in the areas of the protection of human or animal life or health or environmental protection, the provision is consistent with maintaining UK levels of statutory protection in that area.”

However, in Section 2(7) of the Trade Act, UK statutory protection also extends to

“plant life or health … animal welfare … employment and labour”.

Do these regulations not cover those areas?

The Explanatory Memorandum states:

“The main direct cost to business will be the familiarisation cost associated with these Regulations; these are a one-off cost, estimated at £205,000.”

Does this fall equally on large companies and SMEs?

On divergence, the UK MRAs replicate the previous EU MRAs in substance, with the only substantive divergence from the EU being in the permission to allow the additional bottle size for single-distilled Shōchū. This poses the broader question of whether the UK could take a different approach to conformity assessments in future.

On 1 January 2021, the UK introduced its own product safety mark, which broadly mirrors the EU’s CE mark. According to the law firm Bird & Bird, the UK conformity assessment regime

“follows essentially the same principles as the previous CE marking regime, but with the safety and compliance standards, authorised representative/responsible person and notified body requirements all now being valid for the UK only.”

Despite being a UK ask, the EU-UK deal did not include an agreement on the mutual recognition of conformity assessments. This means that most goods produced in the UK that require certification for sale in the EU will have to go through a secondary conformity assessment in the EU in order to be eligible for export, resulting in extra costs to trade with our main trading partner. A lack of MRAs is unusual for comparable deals such as those between the EU and Japan, Canada and Switzerland, which all have MRAs. Even countries such as Australia and the US, which do not have trade deals with the EU, have MRAs. Does the Minister regret not having an MRA in the TCA? Will the UK continue to share information on CABs with the EU? I look forward to the Minister’s response.

The noble Lord also asked whether the UK could take a different approach to conformity assessments in future. In relation to MRAs, this SI is all about providing continuity for businesses. The UK is able to make its own policy decisions on conformity assessment and accreditation now that we have left the EU. Any future changes would be based on the UK’s best interests, with due consideration, of course, of any impact on the UK’s internal market. The noble Lord asked about the trade and co-operation agreement with the EU. Despite the UK ask, the EU-UK deal did not include an MRA. This is regrettable and will result in an extra cost to trade. As he noted, the UK sought such an agreement, but we were unable to secure it there.

I hope that that answers all noble Lords’ questions on this legislation, and I therefore commend these draft regulations to the Committee.