Businesses Push for Regulatory Alignment as Brexit Trade Talks Loom

Businesses Push for Regulatory Alignment as Brexit Trade Talks Loom

A majority of British businesses would prefer to see the UK’s regulatory infrastructure align with that of the EU after the Brexit process has been undertaken.

Various trade bodies and organisations representing different industry sectors have put forward the view that there should be a high degree of regulatory alignment between the EU and the UK going forward.

An official government position on the matter is seemingly yet to be arrived at, with prime minister Theresa May poised to begin trade talks with the EU in the coming weeks.

According to the Financial Times, top government ministers are at odds over the issue, with some lobbying for broad-based regulatory alignment and others advocating a greater degree of divergence once the UK is operating outside the EU.

Foreign secretary Boris Johnson and Liam Fox, secretary of state for international trade, are reportedly among those convinced that more regulatory divergence after Brexit would be beneficial.

However, Nicole Sykes from the Confederation of British Industry has expressed the view that regulatory alignment would help make trading with EU countries a more “frictionless” process for businesses.

“There is no sector which has come to us, where a majority of companies wants regulatory divergence,” Ms Sykes told the FT. “Where alignment means frictionless trade, that is what business wants.”

Meanwhile, Allie Renison, head of Europe and trade policy at the Institute of Directors, is quoted as saying that a majority of more than two to one among her organisation’s members would prefer a trade deal to be geared towards regulatory alignment.

“The UK should seek a high level of alignment with the EU to protect current trading relationships after its transitional period following Brexit, with the UK continuing to offer its technical association with EU regulatory bodies,” said Stephen Phipson, chief executive of the manufacturers’ group EEF.

Elsewhere, representatives of the Federation of Small Businesses (FSB) are apparently open to a degree of regulatory divergence as long as stability can be maintained and overall regulatory burdens on businesses can be minimised.

Once the transition phase is completed “the UK has a real opportunity to forge its own path in creating a regulatory environment that can drive small business growth and productivity”, says Mike Cherry from the FSB.