Non-tariff issues will be of great significance to the construction industry supply chain during the Brexit negotiations. UK construction product manufacturers have invested heavily in European standards to support the CPR so any significant divergence relating to the trade in goods and services may force global businesses to decide between complying with UK rules for access to a market of 65 million customers or to EU rules for access to a market over ten times this size.
It is imperative that the UK retains its influence in standards writing to reduce any divergence between the UK and the remaining 27 Member States.
To satisfy the UK’s policy to expand trade globally outside the EU, five areas allied to construction require our continued influence:
- Eurocodes
- European standardisation
- Quality Assurance
- Construction Products Regulation
- Procurement
Eurocodes
While these harmonise the methodology for the design of buildings and structures within the EU, they are also being successfully marketed around the world. They are supported by harmonised European standards covering the manufacture of construction products to which the UK industry is significantly engaged.
The adoption of Eurocodes outside of the EU has great potential and would have a positive effect on the export of construction products manufactured in the UK. Therefore, it would be advantageous for the UK to remain involved in their future development. If, however, the UK had to develop its own replacement design methodology this would be expensive and time consuming resulting in UK exports of construction products suffering.
Major construction companies operating in the UK are internationally owned so the continued use of a common EU design methodology with access to construction products manufactured in the UK to European standards supporting these Eurocodes would benefit UK exports.
The design criteria behind Eurocodes provide both principles that must be satisfied and application rules that offer ways to satisfy these principles. Thus Eurocodes encourage innovation. This approach to design offers greater flexibility than does the design method taken by our major competitor on the world market, the USA. It is this flexibility which is of interest to non-EU countries as it enables designers to deal with specific local and regional conditions, an aspect not so readily accomplished by rival design approaches.
European Standards
European standards play a vital role in supporting trade, economic growth and productivity of UK industry. The standards for construction products fall under the control of the European Committee for Standardisation (CEN) to which the British Standards Institution is an active member enabling it to exert influence in the development of new and existing standards.
Membership of CEN necessitates compliance with the single standards model i.e. European standards are adopted by the UK and conflicting national standards are withdrawn. Continued support for this model makes life easier for manufacturers and exporters of construction products by harmonising compliance and reducing unnecessary obstacles to trade as well as providing reciprocal market access for imports. This approach allows for the continued convergence of regulatory requirements. If the UK’s influence in EU standards writing was removed it would lead to a divergence from export market requirements. Ultimately, this may lead to the development of new UK standards which could result in the dual testing of products to prove they meet the requirements in both the domestic and European markets. Would industry wish to pay these extra costs?
Domestically, if any of the devolved governments, (Scotland in particular) chose to retain European standards while the rest of the UK initiated its own standards, this would add an unwelcome layer of complexity across the domestic industry. Thus it would be beneficial to maintain the current system with a close affiliation with European Regulators.
Quality Assurance
Under the CPR, it is necessary to police the factory production control procedures for the manufacture of construction products. Such work is undertaken by Notified Bodies accredited by their national competent authority, UKAS in the UK. Once the UK leaves the EU, UKAS will have to negotiate with the European Co-operation for Accreditation to maintain its membership. Alternatively they may be able to maintain their Notified Body status by operating under a Mutual Recognition Agreement, however, it would be less disruptive to maintain the current system.
For UK manufactures who use Notified Bodies located in the 27 remaining Member States they can continue to follow this path or work through a Mutual Recognition Agreement. Again continuation of the existing approach would maintain the status quo.
Construction Products Regulation (CPR)
Despite the European Union (Withdrawal) Bill consolidating the CPR into future UK legislation, there is a distinct possibility that some aspects of the Regulation will be subject to review. The question arises what such a review will change?
UK exporters to the EU will need to comply with the CPR as it is legislated in the remaining Member States. Failure to do this will prevent products from entering the EU market, a detrimental move for UK trade and economic growth.
Importers will have to recognise European standards as this is what EU imported products will be manufactured to.
Any divergence from the CPR as it currently exists will mean UK manufacturers having two sets of requirements to work to, adding additional expense and the likelihood of dual stock having to be held to match the respective markets.
It would make sense to maintain parity with the CPR as used by all EU member States so it would be beneficial if then UK were able to influence any future progression of the Regulation.
Procurement
For the UK to continue to bid for European public sector projects it needs to abide by the EU Procurement Directive. Failure to do so would negate the UK from bidding for lucrative EU contracts.
In the future, the UK could alter the procurement regime to reduce red tape and some of its administrative burden as well as abolishing the rules requiring competition to be open to EU parties. Such a move would likely be met with reciprocal moves by those denied the opportunity to bid for UK work and would, therefore, be counter-productive and act against the interests of UK businesses seeking to operate abroad.