Agreement on Mutual Recognition in Relation to Conformity Assessment, Certificates and Markings between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland
3.1
This Chapter reviews the Agreement on Mutual Recognition in Relation to Conformity Assessment, Certificates and Markings between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland (the Australia–UK MRA). The Australia–UK MRA was signed in London on 18 January 2019 and is intended, in a post-Brexit environment, to secure existing arrangements for conformity assessment between Australia and the United Kingdom (UK).
3.2
The proposed treaty action was tabled in the Parliament on 12 February 2019. A public hearing was held on 1 April 2019. The Committee’s inquiry into the treaty action lapsed at the dissolution of the 45th Parliament on 11 April 2019. The treaty was re-referred to the Committee by the Minister for Foreign Affairs on 29 July 2019, following the re-establishment of the Committee in the 46th Parliament.
3.3
Timing for the entry into force of the Agreement was expected to depend on the terms of Brexit, which remain uncertain. When the Committee considered the Agreement in April 2019, the UK was set to leave the European Union (EU) on 29 March 2019 (UK time). The National Interest Analysis (NIA) stated that, during an expected transition period, the UK would remain bound by obligations stemming from EU–third country agreements as if it remained an EU Member State. Australia’s treaties with the EU would continue to apply to the UK for the duration of the transition period, and the Australia–UK MRA would not enter into force until the transition period ends.
3.4
However, the NIA explained that there was still considerable uncertainty regarding the withdrawal of the UK from the EU and a ‘no-deal’ scenario remained a possibility. In the event of a ‘no-deal’ Brexit, the Agreement would need to enter into force on the date the UK formally leaves the EU to avoid any legal gaps for Australia.
3.5
The UK is Australia’s equal seventh largest two way trading partner for goods and services, worth nearly $28 billion in 2017–18. The Department of Industry, Innovation and Science (DIIS) emphasised the need to protect this relationship and ‘minimise disruptions to trade flows and provide as much certainty to Australian industry as possible.’ Consequently, on 7 February 2019, Senator the Hon Simon Birmingham, acting Minister for Foreign Affairs, wrote to the Committee to advise that, in the event of a ‘hard’ Brexit, it may be necessary to ratify the Agreement before the Committee had completed its inquiry and reported on the treaty.
Conformity assessment
3.6
Conformity assessment ensures that a product or service meets a set standard. Conformity Assessment Agreements, usually referred to as Mutual Recognition Agreements (MRAs), allow Parties to an MRA to recognise each other’s conformity assessments. In practical terms, this reduces the regulatory burden on exporters by enabling them to rely on a single conformity assessment when exporting products and services.
3.7
Conformity assessments with the UK are currently covered by the Australia–European Union (EU) MRA. Post-Brexit, the Australia–UK MRA will provide continuity and certainty for Australian businesses.
3.8
The UK and Australia will continue to recognise the technical competence of each other’s conformity assessment bodies to test, inspect and certify products for compliance with each other’s respective regulatory requirements. This means that Australian exporters can ensure their goods comply with UK technical regulations before they depart Australia.
3.9
The DIIS explained that the laboratories, inspection bodies and certification bodies or conformity assessment bodies (CABs) play an important role curtailing costs for Australian businesses:
… what this means is that a test report or certificate issued by an accredited CAB in the EU is accepted within Australia, and vice versa, without the need for duplicative retesting or recertification of a product on arrival. This saves businesses time, resources and money.
Obligations
3.10
The following summary of Australia’s obligations under the proposed Agreement is taken from the NIA.
3.11
The Australia–UK MRA incorporates the rights and obligations provided for in the Australia–EU MRA subject to some ‘technical modifications’ provided for in the Agreement.
3.12
The Agreement covers conformity assessments in the following areas:
manufactured medical products;
telecommunications terminal equipment;
electromagnetic compatibility;
3.13
Article 6 of the Agreement confirms that conformity assessment bodies designated under the Australia–EU MRA will continue to be recognised by the Parties where those conformity assessment bodies are located in Australia and the UK. A safeguard mechanism will allow both Parties to withdraw designation from any conformity assessment body. Both Parties will have the right to contest the competence of any conformity assessment body designated by the other Party if this process is justified.
3.14
Conformity assessments issued under the Australia–EU MRA prior to the entry into force of the Agreement will continue to be recognised by the Parties under the Agreement for the life of their validity provided they are issued by conformity assessment bodies located in the UK or Australia.
3.15
Article 4 of the Agreement provides that all references to EU laws and regulations in the Agreement will be read as references to the substance of those laws as transposed into the UK when Brexit occurs.
3.16
Transitional periods contained in the Australia–EU MRA that have not yet ended will be recognised, along with any ongoing rights or obligations relating to transition periods that end before the Agreement comes into force.
3.17
The implementation of the Agreement will be undertaken using a Joint Committee. Any decisions made by the Joint Committee of the Australia–EU MRA will be deemed to have been adopted where the decision relates to the matters covered in the Agreement.
3.18
The Agreement contains a number of administrative arrangements as Sectoral Annexes that have less than treaty status. These Sectoral Annexes detail:
the scope of the products covered by the Agreement;
the applicable legislative, administrative and regulatory requirements of each Party;
the designated authorities of each Party; and
their respective procedures for designation.
3.19
These Sectoral Annexes have not been included in the material provided to the Committee.
Implementation
3.20
The NIA states that the Agreement will not require any legislative changes in Australia. However, it cautions that some future legislative or regulatory changes may be required, including if, post-Brexit, the UK adopts technical standards that substantially diverge from those it currently conforms to under EU laws and regulations.
Costs
3.21
According to the NIA, there will be minimal financial and regulatory costs as it replaces existing arrangements. The Committee notes that:
There are no additional costs imposed on businesses or our conformity assessment bodies. We’re essentially mirroring the agreement that we currently have with the EU with a new agreement which is solely for Australia and the UK … It’s more around providing certainty and ensuring that we don’t impose unnecessary additional costs, which would be the situation if there were no agreement in place.
3.22
The NIA advises that the Australia–UK Joint Committee established under the Agreement will be covered by the normal appropriations of DIIS.
Conclusion
3.23
The Committee understands that, further to Minister Birmingham’s advice of 7 February 2019 and given the ongoing uncertainty about the exact date of the UK’s formal departure from the EU, the Government has exercised the National Interest Exemption (NIE) provisions to ensure that if needed, the agreement could enter into force ahead of the UK’s possible departure date. At the time of the inquiry that date was 12 April 2019.
3.24
Therefore, Australia has provided the UK with advice confirming it completed the domestic processes necessary for entry into force of the treaty action and no further recommendation of the Committee is required.