The British Coatings Federation has increasing concerns at how plans for post-Brexit trade with the EU will have a substantial negative impact on its membership in the future.

In a letter to the UK Prime Minister, BCF CEO Tom Bowtell cited lack of progress on UK-EU Free Trade Agreement talks, as well as how current plans for future regulation of chemicals in the UK – particularly a UK version of REACH – would create substantial extra financial and regulatory burdens for business.

These conditions could lead to global companies moving their manufacturing to sites in Europe threatening the UK’s status as a net exporter. The letter also highlighted fears of job losses across the UK if workable solutions for trade beyond the Brexit transition period were not found.

Examples of extra regulatory burdens on the coatings and printing inks industry included UK-based companies that want to continue to export to the EU having to set up legal entities in the EU and operate under dual-labeling regimes.

On top of those issues of red-tape are the much-talked-about concerns over the setting up of a separate UK REACH system, duplicating the requirements of the existing EU REACH.

In the letter to the PM, BCF explained how additional costs to chemical manufacturers re-registering chemicals in the new UK chemicals database within two years are conservatively estimated at £1 billion.

Moreover, EU companies may deem it uneconomic to register some substances in the new UK system at all. That would mean UK manufacturers would not have access to the same raw materials as their EU counterparts or, to make sure they can continue to have access, UK downstream manufacturers, like those in the coatings sector, would have to take on the re-registration costs themselves.

The letter goes on to urge the Prime Minister to secure a comprehensive FTA that maintains tariff-free trade, high standards and consistency in chemicals regulation, and does not create substantial extra cost and bureaucracy or animal testing. It also calls for the current duplications inherent in the planned UK REACH system to be rethought, to reduce the additional costs that it would currently mean for business.

Commenting on the letter, Bowtell said:

“The BCF has, along with many other organizations, worked closely with the Government to try and ensure a workable transition for industry post-Brexit. However, with the clock ticking, and FTA talks making very little progress, we feel that there remain significant – indeed growing – risks that what is currently planned will significantly and detrimentally impact on our members’ future business. Put simply, if a key point of Brexit was to reduce bureaucracy for business, this will not end up being the case in the coatings or wider chemicals sector as things stand.

We still believe the best way to prevent the issues outlined in our letter from damaging UK business would be for the UK to remain as an associate member of the European Chemicals Agency. However, if the UK Government has definitively ruled that option out, we support attempts to negotiate access to the EU chemicals database for the UK regulator through an FTA chemicals annex. However, even then, there would be extra obstacles and costs to trade between the UK and EU our members will have to deal with. We therefore also need the UK Government to minimize those added hurdles of new UK regulations in the future, especially where they introduce duplicate requirements for our industry, as will be the case with UK REACH.”