However, recent free trade agreements indicate a change in approach and acceptance of “traditional” SARs. For example, Articles 4(6) and 7(21)(4) of the EU-Korea Free Trade Agreement provide for the negotiation of mutual recognition of conformity assessment for goods and services. Mutual recognition of the rules has been put at stake by the BRITISH government in the Brexit negotiations, notably in Theresa May`s Florence speech and as an option for future regulation of financial services, but has been rejected by the EU. The deal was welcomed by techUK, which represents more than 900 companies and around 700,000 employees in the UK tech sector. *Restrictions: Capacity rules apply to routine surveillance inspections. In the future, the following types of products and inspections may be included in the scope of the agreement, subject to further reflection: Washington, D.C. – On February 14, 2019, C.J. Mahoney, U.S. Deputy Trade Representative, and Ambassador Kim Darroch, Ambassador of the United Kingdom to the United States, signed two mutual recognition agreements (MUTUAL Recognition Agreements, MRA) on telecommunications equipment, Electromagnetic Compatibility (ELECTROMAGNETIC) for information and communication technology products, Good Pharmaceutical Manufacturing Practices (GMP) inspection and marine equipment.
These MRIs with the United Kingdom reproduce the essential provisions of existing MRIs between the United States and the European Union for these sectors and ensure that trade between the United States and the United Kingdom in these product sectors is not disrupted when the United Kingdom leaves the European Union. U.S. exports of products covered by these agreements to Britain exceeded US$5 billion in 2018. The first scenario examines assumptions that no agreement would be reached on time between the UK and the EU, so that WTO rules would enter into force from 1 January 2021. A simple free trade agreement would allow the elimination of all tariffs on trade in goods for all sectors in the second scenario, a hypothesis considered realistic in the report. The third provides that non-tariff measures (NTMs) will also be included in the free trade agreement, such as regulatory cooperation on MSGs, inspections and batch testing through a mutual recognition agreement. The UK and the US are the main trading partners and this agreement will allow UK and US businesses to continue to act as freely as they do today, without additional bureaucracy. The Johnson government has moved away from these approaches. In its proposal for a Comprehensive Free Trade Agreement with the EU, the UK proposes an agreement on the mutual recognition of conformity assessment, “compatible” with the provisions of the EU-Canada agreement. It also proposes a separate agreement on the certification of marine equipment, “similar” to the EU`s agreement with the US.
From a macroeconomic point of view, the mutual recognition agreement would be a better option for both sides, as it would have a slightly negative impact on GDP, exports and production and reduce pressure on costs. In addition, it would support competitiveness with regard to the United States, Japan, Switzerland and China. The inclusion of the MRA would also increase annual EU exports (+€1.1 billion per year) and the production of medicines (+€1.0 billion per year) compared to a simple free trade agreement. With a free trade agreement+MRA, European nominal GDP will increase by €1.3 billion per year compared to an unde concluded agreement, an event that also translates into a 1.2% drop in EU pharmaceutical exports (0.9% in the case of a free trade agreement with MRA). Ireland, Germany and Belgium would be the most affected countries. While little progress has been made in the accession negotiations, Turkey is gradually adapting its legislation to EU legislation in order to remove technical obstacles. . . .