Policy paper

Goods market access: exclusions

Updated 17 November 2020

This was published under the 2019 to 2022 Johnson Conservative government

What are we going to do?

The Bill allows for a small number of exclusions in defined areas of legislation, in which the market access principles will not apply in their entirety.

Exclusions for goods from the market access principles will remove the effects of either mutual recognition or non-discrimination from the good in question. Exclusions from the market access principles have been granted for specific types of goods where it has been shown that the market access principles would be in contradiction to the current four nation system. Exclusions have been granted where additional safeguards need to be added for certain categories of goods. Each exclusion is unique to each category of goods, and in response to the particular risks around trade in such goods. Such risks include those related to local environmental protection and human safety, as well as unforeseen emergencies or pest and disease threats.

How are we going to do it?

The power granted to the government within Clause 10 of the UK Internal Market Bill enables the government to vary the list of exclusions. The changes to the list of exclusions will be made via secondary legislation through the affirmative procedure, allowing all parliamentarians to debate, scrutinise, and ultimately vote on amendments to Schedule 1. The affirmative procedure is considered appropriate given the effect such amendments may have on the scope and application of the market access principles.

The areas set out within Schedule 1 of the Bill will be excluded from the market access principles, as set out in the Bill, on the day the bill reaches Royal Assent.

Background: excluded areas

Sanitary and phytosanitary legislation

Certain sanitary and phytosanitary (SPS) legislation will be excluded from the scope of the market access principles where specific conditions are met. SPS legislation relates to the health of animals and plants and the prevention of the movement of diseases and pests. This exclusion will allow the nations of the UK to preserve and protect the health of their animals and plants, in line with existing international and national practice.

This legislation will be removed from the scope of mutual recognition and non-discrimination only where it is necessary and justifiable to achieve the policy objectives mentioned above.

Each part of the UK will be obliged to follow a rigorous process to justify an exclusion. This will include suitable evidence and a risk assessment shared between UK administrations, to confirm the nature of the threat posed and the effectiveness and proportionality of any proposed measure in response. The arrangements are in line with the current World Trade Organization’s (WTO) requirements on SPS measures, but modified to better suit the requirements of the UK, principally to be more stringent in ensuring that legislation being introduced is demonstrated to be necessary, technically justified and proportionate.

Food and feed emergency legislation

Legislation relating to food and feed emergencies will be excluded from mutual recognition. This will give each nation of the UK the ability to prevent goods moving into their markets in the case of an emergency. There are clear conditions that need to be met in order for the exclusion to apply.

These conditions are:

• the provision being excluded from mutual recognition must be aimed at preventing or reducing movement of unsafe food or feed from one part of the UK to another
• it must be reasonable to believe that the affected food or feed is unsafe
• the movement of the affected food or feed must pose a serious threat to human or animal health
• the part of the UK which seeks to enforce the provision must supply the other parts of the UK with an assessment of the evidence demonstrating these things, and how the provision is reasonable and justifiable as a means of reducing the threat

In the case of a public health emergency, legislation will be excluded from direct discrimination. This will allow a nation of the UK to discriminate in order to prevent or stop a public health emergency. Should a nation need to use this exclusion they will have to conduct an appropriate risk assessment in order to show that this is justified and necessary in order to address the emergency.

Health Ministers across the UK need to be able to act quickly and comprehensively during emergencies relating to food and feed safety.

Authorisations and restrictions under REACH (chemicals)

This provides an exclusion from mutual recognition for chemicals in relation to authorisations and restrictions under the REACH (Regulation, Evaluation, Authorisation and Restriction of Chemicals) regime. This enables the regulatory authorities to take account of local environmental and workplace factors when considering the authorisation of the use of particularly hazardous chemicals in their territories, and which chemicals should be restricted or banned because they pose an unacceptable human health or environmental risk.

Authorisations for dangerous chemicals reflect the circumstances of individual chemical plants and specific manufacturing conditions and local environmental circumstances. They are granted to individual applicants for specific uses, including for sale down their supply chain. The exclusion will ensure that manufacturers outside of this supply chain will have to obtain their own authorisation on the basis of their own specific circumstances and local environmental or workplace conditions.

For restrictions, the levels and effects of exposure to chemicals are not uniform, which means the need to take action to remove unacceptable risks may be particularly urgent, or only exist, in some areas. For example, there are lower river flows in England, and therefore a toxic chemical could build up more quickly and have a worse environmental impact than it would have in Scotland. The exclusion will ensure that restrictions can be focused on the areas where they are needed. It will also ensure that an administration can take urgent action to ban a particular chemical within its territory, and prevent the chemical entering its market from elsewhere.

Pesticides

This is an exclusion from the mutual recognition principle and is limited to the authorisation for sale of products, and approval of active substances in relation to pesticides. It ensures that each part of the UK remains responsible for deciding which pesticide products can be authorised for sale and use in its respective territory. This will retain the ability of each devolved administration to take account of local environmental conditions, such as wildlife, soil types, water environment, climatic conditions or cultivation methods, when considering which pesticides should be authorised for sale and use in its respective territory. For example, different decisions could be taken on the risks posed to upland crops and forestry in Scotland, where we see cooler temperatures and higher rainfall, than in warmer southern England.

Fertilisers

This excludes from mutual recognition the safeguarding decisions of each devolved administration in relation to the sale of fertilisers. The safeguarding measures allow devolved administrations to quickly ban the sale of, or place further restrictions on, unsafe fertilisers where these present a risk to the safety or health of humans, animals or plants, or the environment.

For example, if devolved administrations considered that because of either the geography or farming approach in their region a fertiliser needed further safeguarding measures and protections, this exclusion from mutual recognition would allow them to act quickly and effectively.

Tax

All tax and tax-related legislation is removed from goods, services, and professional qualifications market access principles. The exclusion is intended to avoid unforeseen consequences since the market access guarantee is targeted at regulatory requirements on goods, services and professional qualifications. As such it is not appropriate for tax measures to fall into scope.

Why is an exclusion on SPS animal and plant health measures needed?

This will enable the devolved administrations and the UK government to properly take account of differences in pest and disease prevalence across the UK which justify different protective measures. The ability to do so is necessary to ensure that UK biosecurity is maintained.

This will exclude measures which aim to prevent the spread of pests/diseases concerned to other parts of the UK, and to contain these where possible. Any measure falling under this exclusion would need to be supported by a risk assessment demonstrating the measure as reasonable and justified.

How will this affect the UK’s SPS regime?

Effective SPS control systems depend on managing and controlling the risk of introducing and spreading pests and disease, and regional controls are an integral part of achieving these objectives. Regional controls are a well-established international principle, widely applied and understood by other countries and underpinned by internationally agreed standards. Indeed, internal controls already exist in the UK. If these were removed, our trading partners would see UK commodities as presenting a significantly increased risk. There is also a significant risk that some existing market access arrangements would be rescinded or reviewed.

Internal SPS controls demonstrate that the UK is a safe trading partner. Pest free areas and the concept of zoning, compartmentalisation and regionalisation, for example, are key tools that are used internationally to facilitate trade where a pest or disease is present only in part of a country and are a key feature of the SPS chapters of our FTA texts.

Regional measures are provided for through legislation and information on regional plant health restrictions relevant to international trade are shared internationally. For example they are shared on the UKs country profile page on the International Plant Protection Convention’s (IPPC) International Phytosanitary Portal (IPP) and communicated when required, to the European and Mediterranean plant protection Organisation.

Does the SPS exclusion apply to Qualifying Northern Ireland Goods?

SPS legislation and actions to protect against plant and animal health risks associated with qualifying Northern Ireland goods are provided for through a specific exception in the Bill. This will help to ensure that we are not creating a backdoor for goods which may be infected entering GB via qualifying Northern Ireland goods. The exception upholds the principle of unfettered market access for qualifying Northern Ireland goods but ensures that biosecurity threats can be addressed in appropriate and specific circumstances.

Why are pesticides excluded from mutual recognition?

Decisions on which pesticides can be authorised to be marketed and sold in each part of the UK are already within devolved competence.

All 4 administrations work closely together, all supported by the Health and Safety Executive, and most decisions can be taken jointly by consensus. However, retaining the ability of each administration to take its own decision where necessary is important. For example, this may need to consider specific local factors such as environmental or farming conditions, as these can differ across the UK.

This has worked well for many years. Where there has been occasional divergence between different parts of the UK it has not caused problems. The Bill maintains the responsibility of each part of the UK for pesticide authorisation and the exclusion includes mandatory pre-requirements so that ministerial decisions are not constrained by the principle of mutual recognition.

Why is part of the REACH chemicals regime excluded from mutual recognition?

The risks to human health and the environment posed by chemicals can be particularly acute in one part of the country due to local circumstances. It is important that the UK government or a devolved administration can take local factors into account in deciding how to protect human health or the environment from risks posed by chemicals. For example, chemicals can have a greater impact on the environment where there are low river flows.

This is why we need to exclude those measures that can be area-specific from the mutual recognition principle.

Why do some, but not all, exercise of powers require consultation?

We will consult with the devolved administrations before amendments are made to the list of relevant requirements that goods need to meet to be able to benefit from mutual recognition and non-discrimination within the United Kingdom.

The government may need to make a swifter decision on exclusions in the interests of all parts of the UK should there be an emergency or unforeseen issue in the future.

Why are food and feed emergencies excluded from mutual recognition?

A food or feed safety emergency is when unsafe food poses a serious risk to human health. If a food or feed-related threat to public health occurs, the four nations would work together closely and, in most instances, would expect to take consistent action.

An exclusion from mutual recognition in food and feed safety emergencies is needed to ensure devolved administrations can take swift action. In particular, the exclusion will ensure that ministerial powers are not undermined or constrained by the application of mutual recognition if action is not taken or delayed in other parts of the UK or if it is insufficient to address the emergency.

Why was there an amendment on safeguarding of fertilisers?

The amendment excludes, from the principle of mutual recognition as proposed by the Bill, the safeguarding decisions of administrations in relation to the placing on the market of fertilisers. The amendment allows each administration to ban the sale of a fertiliser, or impose conditions on that fertiliser, in their jurisdiction in response to a risk to the health and safety of humans, animals, plants and the environment.

The amendment was needed to retain the current ability for the individual nations to take local circumstances into account and to immediately take a fertiliser deemed to be unsafe off of the market in their territory without the risk of this product then finding its way back into that territory via another nation. Without this amendment, it can take some time to formally ban a product through legislation (this can take up to two years), which is a long time for an unsafe product to be freely available for use.

This is limited to circumstances where a fertiliser may present a reasonably justified risk to the health and safety of humans, animals, plants or the environment in any administration within the UK.

How will NI authorities be able to take safeguarding actions and comply with the Northern Ireland Protocol?

NI authorities will be able to take safeguarding actions as set out in article 15 of EU Regulation 2003/2003 in relation to EC fertilisers in accordance with the Protocol. Because fertiliser policy is partially harmonised, the EU Regulation allows Member States to have domestic regimes for the regulation of fertilisers in addition to the EU rules. Thus, NI authorities will still be able to take safeguarding action in relation to fertilisers sold under The Fertiliser Regulations 1992 (NI) by using powers in the Agriculture Act 1970 in S74A, complying with the protocol, while also preventing the presence of an unsafe fertiliser on the domestic market.

Why are fertilisers excluded from mutual recognition?

The latest scientific evidence will always be taken into account to justify that a fertiliser constitutes a risk to the health and safety of humans, animals, plants or the environment. As such it may take time to gather and review this evidence. Imposing a permanent prohibition on a fertiliser, under either retained EU law, or the regulatory regime provided for under the Agriculture Act 1970 requires secondary legislation which will be subject to parliamentary processes which can affect the timescale of the action taking effect. By excluding fertilisers from mutual recognition principles in the UKIM Bill in relation to safeguarding, individual nations can take local circumstances into account and take action in respect of fertilisers deemed to be unsafe in their territories. The geography of the UK is varied, as are the types of farming that take place across it, which means the short and long-term impacts of products also vary considerably. This means the impacts of a potentially harmful product may be greater in one part of the UK than others.

Why is there mutual recognition of maximum residue levels of pesticides?

Whilst it is appropriate for each administration to remain responsible for deciding what pesticides can be sold and used, we do not want to establish unnecessary trade barriers to the sale of food. The overarching EU framework currently provides consistency but after the end of the transition period, there would be potential for divergence to arise.

The mutual recognition provisions in the UKIM Bill will therefore apply to pesticide maximum residue levels, thereby allowing food produced lawfully in one part of the country to continue to be sold in another. It is not appropriate for the exclusion to be extended to cover maximum residue levels.