No one can predict when COVID-19 will finally come to end, but the legal, hard deadline of the UK’s period of transition out of the European Union has long been inked in the calendar. With Prime Minister Boris Johnson refusing to countenance any further delays, the UK will be outside the EU on 1 January 2021, 48 years to the day after it joined.
In that sense at least, the UK medtech industry has some element of certainty on Brexit, said Richard Phillips, chairing another of the Association of British HealthTech Industries’ Brexit forums this month. This series of ABHI events, which started even before the June 2016 referendum, has allowed UK manufacturers to monitor developments and prepare, as far as is possible, for a post-EU future next year.
Johnson has other battles to win before then, and even with an 80-seat majority in the House of Commons, his government is being scrutinized hard by a newly-energized Labour opposition party under Keir Starmer, Lexington Communications associate director Will Culliford said. The high number of U-turns the government has been forced into in Johnson’s first year should tell him that nothing can be take for granted, even with a 10-point opinion poll lead over Labour in mid-July.
To the question of deal or no deal with the EU, Culliford’s colleague Paul McGrade sees a deal this year as likely. Johnson is essentially a deal-maker by instinct, he opined, and the certainty that would bring would create a winning narrative with the UK public. And the government will not want to visibly fail in both its COVID-19 response and “getting Brexit done,” he said. Because of that, the precise content of the deal will probably be secondary to the fact of it having been secured.
McGrade, Lexington’s senior council, trade, foresees a potential timeline under which, for a political deal to be done in time, a proposed UK text would have to be ready by late September so it can be ratified by the European Parliament. The EU27’s heads of government will also need to have reviewed it, and there might be further debate at the October EU council meeting. Under this timetable, compromises will need to be discussed in August – ie from next week. (Also see "UK Health Care At The Crossroads As Medtechs Watch For Bill, Brexit And NHS Change" - Medtech Insight, 17 Jul, 2020.)
UK Medtechs Likely To Need More Bargaining And Lobbying
The EU will likely demand assurances from the UK on the maintenance of environmental and labor market rules, a role in dispute resolutions and access to UK fishing waters. That would be in exchange for a zero tariff deal. All other elements might be deferred until 2021, or even dropped entirely. The UK might have to do more bargaining to secure, say, mutual recognition with the EU of device testing and approvals done in the UK.
In 2021, EU rules for goods will apply in Northern Ireland, with customs checks. It is unclear to many whether this implies some sort EU standards and device regulations jurisdiction in the UK by the back door. Nevertheless, the UK will probably agree to recognize EU approvals and standards unilaterally, at least temporarily, if a deal is struck, said McGrade. But that bargaining gambit might be a late entry in the negotiations.
McGrade advised the UK medtech industry to remain ready to lobby for its interests, especially with backbench MPs, in order to keep awareness high of the economic importance of the devices industry to the UK. But the deal that he believes has a good chance of succeeding “is as close to no deal as makes no difference” for the UK medtech industry, he said. The zero tariff provisions would probably not apply for medtech.
The UK would become a “third country” overnight, with local medtech companies needing to secure EU approval to reach the EU 27 market, and to set up an EU27-based office. Customs controls at the border will be phased in over a long period for EU goods coming into the UK, but will be fully applied from day one for UK goods going into the EU, said McGrade. “It will be quite a big change” for UK medtech in January 2021, he said.
But the UK industry can possibly mitigate some of the effects by lobbying the UK government. Even if its efforts bear no fruit this year, they may next year, said the Lexington senior counsel, also suggesting that the UK-EU trade relationship negotiations may never actually end. Swiss-EU negotiations, for instance have been ongoing since the Swiss reject EEA membership by a slim margin in December 1992. (Also see "EU MDR: Swiss Medtechs Count The Cost Of Being Without An MRA " - Medtech Insight, 19 Mar, 2019.)
He added that, were a UK-EU deal to be done, Brexit would disappear from the headlines, which would very much suit the government. In the absence of hard detail of what that would mean for UK and EU medtech, its suitability for the devices industry will be very much an open question yet awhile.