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6. Jun 2018 | Raw materials

Halfway to Brexit

The October deadline for an agreement between the UK and the EU is looming. Many relevant issues are still in negotiations. The British Coatings Federation (BCF) addresses the need to have a good deal for the industry, which works both for the UK and European business community.

The October deadline for an agreement between the UK and the EU is looming. Image source: Delphotostock - Stock Adobe

On June 23, 2016, an historic vote in the United Kingdom forever changed the course of history. The UK voted to break away economically and to a lesser degree politically from the ‘constraints’ of Brussels, and the EU. The countdown has begun. It is less than a year until 29 March 2019, the Brexit day.

Negotiations ahead

The negotiating phase must be wrapped up by autumn 2018. The terms of transition have been completed. However, there are further items on the list which are in progress, such as the separation terms and the future status of Northern Ireland. And for instance, negotiations on the framework for future UK-EU relationship have not yet started.

The ratification phase, which has not started yet, has to be completed by 29 March 2019. It includes approval by 72% of member states, consent vote by European parliament, the UK parliament has to pass a bill implementing withdrawal treaty and both sides notify that UK remains part of 750 EU international agreements. The next important deadline is the transition phase, which has to end on 31 December 2020. This phase includes the beginning of formal trade talks. In addition, the UK seeks to replace 750 EU international agreements and both sides prepare new immigration, customs and regulatory systems. Political accord on partnership agreement and EU parliament approval is also part of this phase.

BCF highlights implications of brexit on the industry

In April 2018, the British Coatings Federation (BCF) and the British Adhesives and Sealants Association (BASA) joined forces to host a ‘Halfway to Brexit’ seminar in Nottingham to highlight the economic and political implications of Brexit on the global coatings and adhesives industries.

BB_Ellen Daniels_BCF_04_2018

Ellen Daniels

Head of Public Affairs & Policy BCF

Ellen Daniels, Head of Public Affairs and Policy at the BCF commented: "As time progresses with the Brexit negotiations, more will become known with regard to the impact of Brexit, but until then the talks and discussions held at the seminar left delegates with food for thought in preparation for businesses within our sector. Many of our European colleagues highlighted that the UK is seen as one of the most pragmatic voices in the EU relating to chemical regulations, and the loss of the UK from the bloc will be felt across the continent.”

Daniels spoke to the editorial staff of ECJ on the possible impacts for the paints and coatings industry due to Brexit.

The halfway mark regarding Brexit has been past. At this stage, what can you say about the impact of Brexit?

Ellen Daniels: The impact of Brexit in the coatings industry is yet to be truly seen. We have seen a drop in confidence from members. However, this has improved recently. The industry has a lot of foreign direct investment, so the long-term impacts are more worrying for our members.

What is the impact for the chemical and in particular the coatings industry?

Daniels: Half of BCF members are foreign owned, so if the UK does not secure a favourable deal, this will impact investment decisions. 98% of BCF members trade with the EU in some form, so staying within the chemical regulatory framework is necessary to ensure frictionless trade.

How can the industry prepare?

Daniels: The industry can prepare by communicating with its supply chains more, and understanding what it sources from the EU. Moreover, the industry can also engage with its trade association and elected officials, and feed in where possible to influence the upcoming negotiations.

How will Brexit affect companies in the UK and trade partners in the EU?

Daniels: This will depend on the deal that the UK negotiates with the EU. The implementation period means that companies in the UK will still be able to trade freely with their partners in the EU. What happens after that is still up for discussion. There is a high level of trade with the EU – 7 out of top 10 export markets are in Europe and 65% of paint exports go there. This shows the importance of proximity of markets for successful exporting. 80% of paint imports are from EU, so it’s important for both sides to have a good deal.

To what extent will Brexit affect the regulatory framework and standards?

Daniels: This is still up for negotiation. The Prime Minister has announced her intentions to keep the UK in the European Chemicals Agency (ECHA). This will ensure that the UK stays within the EU chemical regulatory framework but has not been agreed to by the EU. We hope for and have been lobbying for the UK to stay within REACH and to still have a say in standards.

Interview by Damir Gagro.

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