Chapter 5: Environmental implications of free trade with the EU
EEA membership
86.The Government’s white paper on Brexit stated that the UK would not remain a member of the Single Market after leaving the EU.128 Our inquiry, however, predated that publication, and much of our evidence focused on the implications of European Economic Area (EEA) membership for environment policy and law. The RSPB told us that “countries within the EEA that are not members of the EU … are required to apply large parts of EU environmental law”.129 The Wildlife Trusts agreed, but noted that, “critically, the Habitats and Birds Directives, the Bathing Water Directive and legislation on environmental impact assessments” would not apply.130
87.Thus were the UK to seek membership of the EEA as an alternative to EU membership, the change to current practices would be minimal, because the UK would continue to abide by all Single Market legislation facilitating the trade of goods within the EEA, and the majority of environmental protection legislation such as the Water Framework Directive, Air Framework Directive and REACH. However, given the clear objectives set out in the white paper, for the remainder of this chapter we focus on the environmental implications of the Government’s preferred option, namely a comprehensive free-trade agreement.131
Free trade agreement
88.Entering into a free trade agreement (FTA) with the EU would not oblige the UK to preserve or adopt the EU environment acquis. However, as we noted in our report Brexit: the options for trade: “Imports from countries outside the Single Market need to comply with relevant EU legislation (for example, product safety and environmental standards).”132 In other words, equivalence between UK and EU environmental standards would almost certainly be required, as part of any comprehensive FTA, in order to remove non-tariff barriers to trade, thereby ensuring UK access to the Single Market. The UK might therefore need not only to preserve many current standards, but to reflect some new standards as and when they were agreed by the EU, so as to continue to trade into the Single Market.
89.The UK would not necessarily be required to give direct effect to EU law in order to meet EU standards and regulations, “if it could demonstrate that its domestic law had an equivalent effect.”133 For instance, in our report Brexit: the options for trade, we cited the example of the EU ETS, where, instead of participating in the scheme, the UK could potentially adopt a carbon tax approach in which the price of carbon was similar and could be considered equivalent.134 As Prof Lee commented, countries could “decide, mutually, to recognise our different safety standards”.135 Prof Macrory agreed: “Depending on the terms of the agreement, there may be various forms of reciprocal recognition of authorisations”, which would have “implications for trading”.136
90.Key policy areas in respect of equivalence to allow trade include regulations such as the REACH Regulation (see Box 4), the Classification, Labelling and Packaging Regulation,137 and the Ecolabelling Regulation,138 which all set product standards for goods traded in the Single Market. It was widely assumed by witnesses that the UK would need to continue to adhere, for instance, to the REACH Regulation, in order to trade chemicals into the EU, because, as the Geological Society noted, that Regulation aims “to allow free movement of substances on the EU market”.139 Steve Elliott, CEO of the Chemical Industries Association, highlighted the importance of this free movement of goods: “Some 60% of all chemical exports go to the continent and 75% of chemical imports come from the continent.”140
Box 4: The REACH Regulation141
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REACH (EC 1907/2006) aims to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances. This is done by the four processes of REACH, namely the registration, evaluation, authorisation and restriction of chemicals. REACH also aims to enhance innovation and competitiveness of the EU chemicals industry. REACH is administered by the European Chemicals Agency (ECHA) in Helsinki. |
Source: European Commission, Policy Area: Environment, Chemicals, REACH, https://ec.europa.eu/info/strategy/environment_en [accessed 19 January 2017]
91.The Grantham Institute also argued that “It would be sensible for the UK to adopt European Union regulations relating to energy efficiency, including strong fuel standards for land vehicles and product standards for electrical appliances.”142 Finella Elliott, Policy Adviser at the EEF, told us that, for EEF members: “We cannot see a scenario where in order to maintain access to the Single Market we will not have to continue complying in some way with climate and environment policy.”143
Enforcement under a free trade arrangement
92.As we discussed in Chapter 4, outside the EU the UK will not be subject to the European Commission or the jurisdiction of the CJEU, and the enforcement of environmental legislation will be primarily a domestic matter.
93.Where disputes arise between the EU and the UK over the regulation of a substance or product, they will be addressed under the rules governing international trade. Prof Lee explained: “Basically, if they have banned it, we cannot export it to the European Union. If we have banned it, they cannot export it to us. There would be a disagreement; there would be a conflict. That is what the WTO is full of all the time.”144
Replacing current EU policies
94.Once the UK has left the EU, the Common Fisheries Policy and the Common Agricultural Policy will cease to apply.145 This means that, regardless of the shape of the future EU-UK relationship, the UK will need to replace all environment legislation that is currently embodied in EU fisheries and agriculture policy, respectively designed to manage European fishing fleets and conserve fish stocks, and to provide a stable, sustainably produced supply of safe food at affordable prices whilst ensuring a decent standard of living for farmers and agricultural workers through a system of subsidies and funding.
95.Witnesses were clear that the UK’s post-Brexit policies must continue to drive environmental improvements. We heard from the Society for the Environment that “As members of the European Union, we have made significant progress with the quality and quantity of our natural resources over the last 40 years. The Society wish to help protect that progress and maintain it going forward.”146 Prof Macrory stated that the current level of environmental protection “should not be diminished by future changes in legislation”.147 The Wildlife Trusts stated that “EU membership has led to a cleaner and healthier UK environment. Therefore, following exit from the EU, environmental (and climate policy) regulations should be preserved and not weakened.”148
96.Subject to the level of access to the Single Market attained, the UK will need to either comply with or align itself to EU environmental standards, such as chemicals regulations and energy efficiency standards. It is therefore vital that the Government should make clear what the free trade agreement with the EU will entail, in order to help to clarify the constraints on future environment policy in the UK.
97.Once the UK withdraws from the EU the Common Fisheries Policy and the Common Agricultural Policy will cease to apply to the UK. While equivalent policies could be carried over as a temporary measure by the Great Repeal Bill, alongside other EU environmental legislation, that Bill will not be the appropriate mechanism for evaluating and implementing options for taking forward these key areas of environmental policy. We recommend that the Government set out its plans for conducting such an evaluation, with a view to implementing new domestic policies that build on the progress in environmental protection that has been made in the last few decades in advance of the completion of withdrawal from the EU.
128 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017, p 35: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf [accessed 6 February 2017]
129 Written evidence from the RSPB (ECB0006); The Wildlife Trusts (ECB0007), CLA (ECB0001); Q 7 (Prof Andy Jordan)
131 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017, p 35: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf [accessed 6 February 2017]
132 European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72), para 39
133 European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72), para 140
134 European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72), para 197
137 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC, OJ L 396 (30 December 2006), pp 1–849
138 Regulation of the European Parliament and of the Council on the EU Ecolabel, OJ L 27 (30 January 2010) pp 1–19
141 The European Union takes a ‘precautionary approach’ to regulating chemicals which emphasises the hazard of a given substance to human and animal health. Chief scientific advisers in the UK have argued in favour of a risk based approach to regulating such substances instead, focusing on the risk of exposure to the hazard, rather than the hazard itself.