The UK’s Chemical Business Association (CBA) has welcomed a commitment by Prime Minister Theresa May to ‘explore the terms on which the UK could remain part of EU agencies such as those that are critical for the chemicals, medicines and aerospace industries.’
In a major speech on 2 March, May said she would negotiate “associate membership” of a number of bodies with Brussels, including the European Chemicals Agency (ECHA).
“CBA and other industry associations have been calling for this type of approach since the referendum, so we welcome this commitment on the part of the UK Government,” said CBA’s chief executive, Peter Newport, in a 5 March statement.
However, he called for “further clarity” for the term ‘associate membership’ before the industry could begin to make commercial and investment decisions based on a settled regulatory framework.
The CBA has consistently called for continued regulatory equivalence or alignment with the EU – covering REACH, the biocides regulations, and classification, labelling and packaging regulations as well as their related technical support systems.
“The industry has already invested many millions of pounds in complying with these regulations which form a central contractual term in commercial agreements for the supply of chemicals to EU markets. Regulatory compliance is the key to market access. Without it there can be no trade,” said Peter Newport.
In her Mansion House speech, the prime minister accepted that this would mean abiding by the rules of ECHA and making an appropriate financial contribution.
The CBA statement added that uncertainty caused by Brexit had already had an impact on the chemical supply chain.
“Companies are planning and in a number of cases have already taken matters into their own hands to protect the future of their businesses,” the statement added.
According to CBA EU distributors and manufacturers are repatriating chemicals to a member state to avoid potential post-Brexit regulatory conflict with the UK.
“In some cases, this involves a substance manufactured in the UK; in others it involves a substance imported into the UK from a third country and exported to the EU. In either case, EU companies understandably wish to ensure continuity of supply,” the statement went on to say.
CBA also pointed to examples of member firms establishing new subsidiary companies in EU member states.
“These firms are not simply creating a ‘post box’ presence, but establishing substantive operations involving investment in premises and employees,” the trade body warned.