Six months after the end of the implementation period, the UK is adapting remarkably swiftly to life outside the European Union. For example, the Secretary of State for International Trade, Liz Truss, has just concluded the terms of a new free trade agreement with Australia – the first FTA to be negotiated “from the ground up” since Brexit.
The next FTA is likely to be a deal with New Zealand; but arguably the most exciting trade news of the last month was the announcement on 2nd June that the member nations of the Trans-Pacific Partnership (CPTPP) had agreed to the UK’s bid to begin the process to join. This is significantly important, not only because the CPTPP is the fastest-growing free trade area of the world, accounting for 13 percent of global GDP (growing to 16 percent after UK accession), but also because the new Biden administration is speculated to wish to pursue US membership. UK membership could thus provide a route to tariff-free trade with the world’s largest economy.
Another important moment last week was the publication of the report of the Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) by the former ministers Iain Duncan Smith, Theresa Villiers and George Freeman.
Since Brexit, the UK has continued to follow EU regulations; but the Government is determined to seize the opportunity to move away from the EU system to one that is better attuned to UK interests.
The TIGRR report points out that the EU’s regulatory regime is founded on the Napoleonic Code, an alien legal system in the UK, with its Common Law tradition. The consequence is a rigidity of regulatory approach, with excessive bureaucracy exemplified by the “hundreds of regulations… enforced by several different agencies and public bodies” inflicted on the agricultural sector.
The report recommends moving away from the continental system and its “precautionary principle” to a new “proportionality principle”, to encourage innovation, particularly in areas such as fintech, pharmaceuticals and agriculture. The Common Law would ensure a flexible legal framework founded upon developing precedent, wholly different from the Napoleonic system.
Parliament would have an important oversight function through expanded select committees, with no doubt similar roles for the devolved legislatures in areas in which they have competence.
The TIGRR report is an important piece of work, and I commend it. In particular, I welcome the recommendation to move away from the precautionary principle, which has a chilling effect on progress and entrepreneurship. The United Kingdom has always excelled in innovation, and areas such as fintech, blockchain and agricultural technology offer exciting new avenues for progress. The Common Law is notable for its adaptability, and we should make the most of it.
Part of the very rationale for Brexit were the opportunities that departure from the EU would present for regulating in a way that best suits British circumstances. We must seize those opportunities now, to ensure that we make the most of the new trading relationships we are building with other innovative economies around the world.