A new analysis by the Institute for Public Policy Research (IPPR) finds that the UK may be missing out on as much as £6.5 billion of exports to the EU each year due to divergent product testing and conformity rules introduced after Brexit. The thinktank says the cost of duplicate testing and the extra administrative burden has led some companies to stop exporting to the EU or to relocate parts of their operations inside the bloc.
The IPPR attributes the losses to the failure of successive UK governments to secure a mutual recognition agreement (MRA) with the EU that would allow manufacturers to avoid repeating tests to demonstrate compliance with regulatory standards. Without such an agreement, firms face higher compliance costs and longer market entry times, which the report says has reduced trade flows.
Key sectors identified in the report include motor vehicles and parts, electronics and pharmaceuticals. The thinktank estimates motor vehicle and parts exports would have been between £2.48 billion and £3.42 billion higher annually, electronic exports between £1.17 billion and £1.67 billion higher, and pharmaceutical exports between £740 million and £820 million higher.
The IPPR frames the total estimated loss as equivalent to about 0.18% of national income, underlining the wider economic consequence of regulatory misalignment for UK exporters. The report represents one of several efforts to quantify the ongoing trade effects of Brexit and the practical barriers created by separate UK and EU product regimes.
The findings underscore a continuing policy debate over regulatory alignment and market access, with advocates of an MRA arguing it could cut costs for exporters and boost trade, while critics point to sovereignty and regulatory autonomy concerns. The report does not prescribe a single solution but highlights the scale of potential foregone trade tied to current testing and certification arrangements.
Officials in London and Brussels have previously discussed various mechanisms to smooth trade in goods, but the IPPR says that, to date, the absence of a comprehensive agreement on mutual recognition has left many firms bearing additional costs or changing their business models to maintain access to EU markets.