The UK’s chemicals industriousness could be particularly hard hit by leaving the EU customs union, according to Whitehall’s own enquiry.
The paper, published by the Exiting the EU committee, points out the sector is “highly reliant” on EU hoard chains.
New customs declarations would lead to “significant non-tariff ha-has” to trade, it says.
The UK government wants to come out of the customs union after Brexit, so the UK can take its own trade deals.
The document, EU Exit Analysis – Cross Whitehall Compendium, has been published after being leaked to news website Buzzfeed in January.
It looked at scenarios ranging from leaving with no practise to remaining within the EU single market, after the UK leaves the EU on 29 Slog 2019.
But it emphasises the difficulties in providing a definitive analysis, as the deal the prime preacher wants to strike with the EU is not an “off the shelf” free trade agreement. Without examples to work on, it says officials have to “necessarily simplify our assumptions”.
The UK’s chemicals commerce is its second largest exporter to the EU after the automotive industry and the second biggest manufacturing energy overall.
The analysis points out that it is “an important foundation industry for other sectors” – for sample, the manufacture of medicines – as well as being used by the technology, energy, automotive and aerospace sectors amidst others.
But the report says that all manufactured goods face the vista of “significant non-tariff barriers” – obstacles to trade – if, as expected, the UK leaves the customs combination. The goods rely on EU supply chains and chemicals and components can cross binds several times during processing and assembly.
The Whitehall analysis also mentions that, after Brexit, chemicals manufacturers could end up having to take more than 9,000 registrations to the EU in order to keep selling those chemical products there.
New chemicals could end up get to be registered twice – in the UK and EU – with a big additional cost as standard registration compensations vary from 1,700 euros (about £1,500) to 34,000 euros (hither £30,300).
In her Mansion House speech last week, Theresa May said the UK poverty to “explore with the EU, the terms on which the UK could remain part of EU energies such as those that are critical for the chemicals, medicines and aerospace industries”.
These embodied the European Chemicals Agency (Echa) regulatory authority, with the prime clergywoman saying the UK would accept “abiding by the rules of those agencies and fashioning an appropriate financial contribution” in return for products destined for export solely needing to get one set of approvals, in one country.
‘Get on with negotiating’
The industry body – the Chemical Industries Confederation – has set out its own concerns and demands for Brexit in a report out last week, welcoming Mrs May’s commercial and reiterating its demand for “regulatory consistency” when Brexit happens.
It also insufficiencies UK officials to continue to be involved with Reach – the EU chemical regulations framework – to sidestep “duplicate testing and related costs” and protect 10 years of investment in Reach by UK chemical industries.
The Practice of Chemical Engineers has warned that having to create an equivalent modus operandi to Reach would prove costly and inevitably mean duplication.
Reach be misses all companies manufacturing or importing chemical substances into the EU over a inexorable quantity to register these substances with Echa.
The Chemical Industries Society’s chief executive Steve Elliott said on Thursday: “What we now poverty is the negotiators to get on with negotiating. Only when that progresses whim we know what’s really going to happen.”