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A new paper from the Institute of Economic Affairs, authored by Victoria Hewson, urges Britain to lift regulatory barriers regardless of reciprocity.

• From 2023, all EU goods destined for the UK market will need to be certified with a new regulatory customs mark, recognising the regulatory independence of the UK from the EU.
• This paper argues that Britain must act defiantly in the interest of consumers and free trade and prevent the imposition of costly regulatory barriers to trade.
• It must embrace a new radical free trade policy: unilateral recognition of EU rules should continue, even if the EU still declines reciprocity.
• Regulatory barriers or ‘non-tariff’ barriers place a significant cost on imports, with anti-competitive and distortive effects raising costs for consumers and stifling innovation.
• The cost of non-tariff barriers has been estimated as equivalent to a tariff of up to 20 per cent on some goods.
• Recognition of regulations should, therefore, be considered just as important as tariff elimination.
• The Rt Hon Jacob Rees-Mogg MP, Minister of State for Brexit Opportunities, said: “Anyone who believes in free trade will welcome this report. Non-tariff barriers are the delight of protectionists and should be removed wherever possible.”

After Brexit, the EU refused to continue mutual recognition of UK regulations under the Trade and Cooperation Agreement, but to help traders for a transitional period, the UK continued to recognise EU rules and the ‘CE’ mark that shows conformity to them.

This is due to come to an end in 2023 and all goods for the UK market will need to be certified with the new ‘UKCA’ mark, introducing duplication and cost for traders operating in both markets.

Changing the rules: A unilateral approach to non-tariff barriers argues that a new course is needed, and unilateral recognition of EU rules and the CE mark should continue. This policy should be adopted for all international trade where the rules of the exporting country meet the UK’s standards, bolstering the UK’s credentials as a free trading nation.

Non-tariff measures, like goods regulations and certification requirements, are as bad or, in some cases, worse barriers to international trade than tariffs are. The cost of non-tariff barriers has been estimated as equivalent to a tariff of up to 20 per cent on some goods.

Regulations should be considered just as important as tariff elimination – and we should not wait for mutual harmonisation, or try and use recognition as a bargaining chip towards other priorities.

It does not mean automatically accepting all of the regulations and standards of all other jurisdictions – only those that are considered to offer equivalent levels of safety. In the first instance, this would mean EU rules, which are currently still broadly the same as ours and widely trusted by consumers.

This policy would also help with Northern Ireland, whatever the outcome of current negotiations in respect of the Northern Ireland Protocol.

Victoria Hewson, report author and Head of Regulatory Affairs at the Institute of Economic Affairs, said:

“Regulatory barriers to trade inflict a significant cost on consumers and are as damaging to free trade as tariffs. 

“The UK has an opportunity to lead the world with a radical trade policy of recognising regulations, without requiring reciprocity, starting with the EU. This will transform the UK’s trade policy, ensuring goods which emulate our own standards are traded freely into the UK without unnecessary regulatory barriers.

“This will bolster the UK’s status as a free trading nation and help towards a solution to the Northern Ireland Protocol dispute”.

The Rt Hon Jacob Rees-Mogg MP, Minister of State for Brexit Opportunities, said:

“Anyone who believes in free trade will welcome this report. Non-tariff barriers are the delight of protectionists and should be removed wherever possible.”