U.K. Reveals Plan to Avoid Internal Trade Barriers Post-Brexit

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The U.K. government has set out its plan to avoid disruption to internal trade post-Brexit, seeking to avoid barriers between its constituent nations that would hamper commerce.

After Britain completes its split from the EU at year-end, the administrations in Scotland, Wales and Northern Ireland will inherit powers over at least 70 policy areas previously decided by the EU, including air quality and animal welfare.

Without further action by the British government, there would be a risk of goods being barred from moving from one part of the U.K. to another after Brexit, because different rules could exist in different parts of the country. Under a plan put out for consultation, the U.K. will adopt a “mutual recognition” principle, whereby each part of the U.K. must recognize the validity of regulations set elsewhere in the country.

“Ensuring businesses will be able to continue trading freely across all four corners of the U.K. without the burden of inconsistent regulation or additional costs will be essential,” said Business Secretary Alok Sharma in a statement. “Without these necessary reforms, the way we trade goods and services between the home nations could be seriously impacted.”

The plan has generated controversy among lawmakers in the U.K.’s devolved administrations, who fear they’ll be forced to accept goods made under inferior standards produced elsewhere in the U.K.

The legislation is also a key part of Britain’s negotiating leverage when conducting free-trade talks with countries such as the U.S. and Canada: the U.K. wants to be able to assure those parties that their goods will be able to circulate freely through the whole country.

©2020 Bloomberg L.P.

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