Brexit: Potential impact on the EU and Global Agriculture

The morning of June 24, 2016, was overshadowed by the result of the outcome of the Brexit referendum in the UK. The British people voted by a narrow margin of 52% to 48% to leave the EU. A period of intense discussion and speculation followed; however, it is necessary to retain an objective view moving forward for the future of EU and global agrochemical registration.

First and important to all, this could result in the loss of an extremely competent, scientifically oriented and busy regulatory authority in the EU. The Chemicals Regulation Directorate (CRD), based in the UK, currently plays a very important role in the EU. It´s science baseddecisions and guidance are always welcomed by applicants and other regulatory bodies in the EU. The timescale for the potential retraction of the CRD is as yet unknown.

Article 50 of the Lisbon Treaty gives clear guidance and rules on this topic, which is important to bear in mind. First the UK will have to notify its intention to withdraw from the EU to the European Council. Following the necessary discussions, this might not happen until end 2016 or possibly later. This would be followed by a negotiation period of two years to conclude an agreement between the UK and the remaining Member States. This period may be prolonged, if the remaining Member States agree.

Based on this schedule, it is probable that the UK will remain a member of the EU until the end of 2018. During this time the UK remains a full member of the EU with all voting rights and all duties, except the right to vote as a Member State on the treaty to leave or on the prolongation period of the negotiation period.

For all applicants on any kind of registration, be it Annex I (renewal) as Rapporteur Member State (RMS) or zonal product registrations as zonal Rapporteur Member State (zRMS) in the Central Zone (AIII) or as Member State for technical equivalence evaluations etc., there will be no change during this period. All decisions made by or supported by CRD in this period of Brexit negotiations will remain in force even after the UK completely leave the EU.

On the other hand, there will mid- and long-term impacts, which need to be highlighted.

There are no short-term impacts anticipated for the next twelve to eighteen months. Existing projects with CRD as either AI RMS or zRMS for formulated products will remain ongoing. Also on technical equivalent checks, there will be no impact during this period, which means that technical equivalence dossiers may still be submitted to CRD for evaluation. Eurofins Agroscience Services advise clients for the next year to continue with CRD as rapporteur for this purpose. This is very important, especially for Asian companies, as all approved sources by CRD will stay approved in the EU after Brexit completes. As a consequence, approval in the UK will probably remain valid post-Brexit.

In the mid-term it could be that the CRD will exit also from the review process. Therefore new AI renewal applications for the EU and registrations of formulated products may lead to a situation where applicants should search for other RMS or zRMS for future projects that are not yet started. In addition, CRD should be kept informed for any potential upcoming national registrations in the UK. The procedures here are still unclear.

For the UK in the long-term, we anticipate two possible scenarios. First would be a complete national registration scheme which might be similar to the EU process, and maybe easier. Secondly, and possibly in addition, is that CRD stays in the EU process, similar to Norway and Switzerland in the biocide area, but with limited responsibilities. They might still perform RAs, but as the UK will not be part of the EU anymore, they would not be in the driver’s seat.

The first consequences could be felt following one of the next Standing Committee Meetings after the UK officially informs the European Council of its intention to leave the EU – it is likely then that the AIR4 will need to be discussed. CRD has responsibility of about 20 % of the AIR4 substances. An outcome of this could be that current AIR4 timelines maybe prolonged.

Conclusion

In toto, Brexit will impact the European, and therefore the global, agrochemical market. But there is no need for worry or alarmism given the timescales and the industry’s ability to predict likely outcomes. A careful analysis of single projects is required. For future projects, new strategies will need to be developed on the basis of the above mentioned points and the impending results of discussions between the UK and the EU.

If you need more advice, please do not hesitate to ask Dr Andreas Wais at andreaswais@eurofins.com