Europe

completed within two years unless the 27 member states agree unanimously to extend the deadline.

Officially the UK is no longer an EU
member only when a withdrawal agree-
ment has been approved by the EU
Council and the European Parliament
The UK government has not yet de-
cided exactly what it wants out of the
Brexit negotiations. But it is likely to be a
deal enabling the country to have access
to the EU’s single market without tariff
and non-tariff barriers. Norway, Iceland
and Liechtenstein, and to a lesser extent
Switzerland – all non-EU countries – are
already part of the single market.

Much of the European coatings industry would like the UK to stay within the single market. The UK is one of the largest national coatings markets in the EU, after Germany, with annual total sales of £2.2 billion ( $3 billion), according to BCF figures. The EU provides 86 percent of its total coatings imports.

The benefits of the EU single market are that as one of the world’s most advanced free trade areas it is without tariffs and non-tariff barriers as a result of the harmonisation of national health, safety and environmental regulations and standards.

However, under the conditions of single market membership, non-EU states in the single market have to accept a basic EU principle of free movement of people across borders and comply with EU regulations over whose content they will have no influence. They will also have to contribute to the EU budget. These could all contradict key issues which persuaded voters to back Brexit, in particular control of immigration and national sovereignty.

The main alternative to a single market is a UK-EU free trade agreement. Since negotiations on it would be conducted separately from those on a Brexit deal, it could take years to finalise. Also it would include tariff and non-tariff barriers, so that it would curb levels of trade between the UK with a population of around 60 million and the 27 member states of the EU with a total of around 440 million.

“At the moment there is a massive
amount of uncertainty which is why
people in industry are so worried about
what Brexit will bring,” said Peter
Newport, director of Chemical Business
Association (CBA), Crewe, England,
whose members include distributors of
coatings and raw materials to UK and
EU customers. “ No one knows what
will happen, except that whatever it is
will be different,” he adds. “We’ll just
have to make the best of it.”
Some of the more immediate uncer-
tainties are about the implementation of
existing EU legislation both in the short
and long term.

Companies will have to comply with the last registration requirements of REACH – the EU’s nine-year-old regulation on the control of chemicals – which directly affects producers of certain coatings formulations and raw material suppliers.

The last phase of registrations under REACH is due to be completed in mid- 2018, when the UK seems certain still to be an EU member. By then safety dossiers on unregistered chemicals and their uses will have to be submitted to the European Chemicals Agency (ECHA), the EU body responsible for administering the legislation.

“As with other EU legislation we remain bound by REACH until a withdrawal agreement comes into place,” said Nishma Patel, chemicals management director at the UK Chemical Industries Association (CIA), London.

The legal position of REACH could
change radically once Brexit comes into
effect. Some UK-based lawyers are claim-
ing that UK producers and distributors of
chemicals exporting into the EU may have
to re-register their products under REACH
“If the UK negotiates something simi-
lar to the (single market ) option, existing
registrations will continue to be valid,”
said Patel. “For any other agreement it is
not yet clear what the outcome (for regis-
trations) would be.”
After Brexit, the UK could draw up its
own version of REACH. But this seems
improbable because it could create big
obstructions to the free flow of goods be-
tween the UK and the EU.

“It seems highly likely that any sub-
sequent UK (REACH) framework
would be based on the EU model,” said
Christopher Hayman, CBA chairman.
“Given the trend towards global harmo-
nization, this approach seems both logi-
cal and practical.”
With other EU legislation affecting
coatings, the BCF has already suggested
the UK introduce changes to rules on
emissions of volatile organic compounds

(VOCs) in sectors like auto refinishing.
A major concern among UK coatings
producers and importers is the effect of
Brexit on cross-border supply chains.
Many of the over 60 percent of coatings
producers exporting into Europe have
become well established in the region’s
supply chains. Now these companies,
especially SMEs which make up a large
proportion of them, fear they will lose
their position in these chains once the UK
is outside the EU.
Such is the depth of the ramifications
of Brexit that the UK coatings sector will
need plenty to time to adapt to it. But
first they need to be certain what the con-
sequences of leaving the EU are. CW
“Given the importance of Europe to our