The construction equipment sector is seriously affected by Britain’s leaving the EU. The trade between the EU and the UK has been increasing in recent years and economic and technical connections are tight. For this reason, it is imperative that cordial business relations are retained.
Regarding the results of the second round of negotiations between the UK and the EU in April, it seems that post-Brexit remains a complicated system to design. The time schedule is tight. The “political Brexit” took place at the beginning of this year. The “economic Brexit” is to follow on 31 December. During this transition period both sides have to come to a final agreement about their future relationship with Britain as a third country and its economic interdependence and geographic proximity to the Single Market.
The bonds are tight
The outcome of the agreement will also have an effect on the construction equipment sector. 46% of total UK exports of construction equipment went to EU countries. This includes exports from multinational OEM’s, who run significant manufacturing facilities in the UK. In 2019 exports reached € 1.8 billion, which is a 4% increase on 2018 levels. 2019 also saw a significant increase in UK imports of construction equipment. Imports from EU countries reached €1.2 billion in 2019, an increase of 12% on 2018 levels, and accounted for 64% of total UK imports of construction equipment. Therefore, CECE urges parties to achieve a free trade agreement, which should build on the closest alignment possible of regulations and standards. This would allow both parties to keep a similar pace with the respective industrial goods regulatory frameworks.
The future economic relationship should be as close as possible. The integrity of the Single Market and level playing field on product safety, environment, labour, taxation and competition rules need to be preserved. A quite delicate task with respect to the border of Ireland and Northern Ireland. Time is needed to reach a profitable deal. The outbreak of the virus has slowed the process of negotiations, so CECE keeps insisting that the transition period should be extended.
Keep it simple and keep it free
To ensure level playing field, CECE calls for a trade deal with zero industrial tariffs as well as zero quotas and no other quantitative restrictions. Trade negotiations with third countries should be able to prioritise diagonal cumulation of rules of origin. The same goes for non-tariff barriers: CECE recommends the UK regulatory alignment to the EU regulatory framework governing the marketing of products.
Mutual recognition of conformity assessment procedures and market surveillance provisions would avoid double testing, an increase in costs and loss of competitiveness for construction equipment manufacturers. Moreover, CECE champions the transposition of international standards in the UK national system to allow global market access based on the ‘one standard, one test, accepted everywhere’ principle. In addition, any future partnership should preserve the cooperation in the development of standards between the British Standards Institution (BSI) and the European Standards Organisations - the European Committee for Standardization (CEN), the European Committee for Electrotechnical Standardization (CENELEC) and the European Telecommunications Standards Institute (ETSI).
Shut and yet open
The Channel-crossing flow of goods must not be burdened by new complicated custom procedures with more documentation and information obligations. The achievements of recent years have to be preserved. The same applies to the deployment of service staff. Offering services for their machinery has become an essential part of the construction equipment manufacturers’ business in Europe. So, workers need to be able to travel easily without a visa or permit when service or maintenance is required for a machine or plant in another European country. A considerable share of the EU GDP and world trade is public procurement. CECE recommends mutual access to public procurement at all levels (central and local) as this would give mutual access in the EU and UK to public calls for construction works and infrastructure projects. Last but not least, the free flow of data plays a decisive role in the digitalisation of construction machinery. That is why CECE supports international data transfers, personal and non–personal, in the future EU-UK partnership while preserving the highest level of data protection.
This is a whole catalogue of measures required by the CECE for the construction equipment industry to save the future of many companies and employees that are interconnected with the UK and the European Single Market.
Riccardo Viaggi, CECE general secretary, said, “We are quite aware that changes are to come and that not all of our measures will be realised. But until a new agreement is signed, we will continue to raise our industry’s voice to achieve the best possible result.”
CECE is the Committee for European Construction Equipment. The organisation’s head office is in Brussels.
Tel: +32-2-706 82 26