Streamlining Standards: Sectoral Trade Gains from Mutual Recognition of Conformity Assessment (MRCA) in a Post-Brexit World
Show abstract
Mutual Recognition of Conformity Assessment (MRCA) is a targeted mechanism, distinct from broader Mutual Recognition Agreements, that lets product testing, inspection and certification carried out in one jurisdiction be accepted in another. Using a PPML gravity model on bilateral trade data for 2010–2023 across 98 two-digit HS sectors, we find that MRCA provisions are associated with an average 9.8% increase in exports, with positive effects in 25 sectors (notably electrical machinery, machinery and dairy) and negative effects in seven (e.g. nickel, rail equipment). We assess MRCA as a practical mechanism within a UK–EU reset: a pragmatic alternative to full harmonisation that preserves market access, reduces compliance burdens and mitigates post-Brexit frictions.
This paper investigates Mutual Recognition of Conformity Assessment (MRCA), a targeted mechanism distinct from broader Mutual Recognition Agreements (MRAs), which streamlines regulatory compliance by enabling acceptance of product evaluations (testing, inspection, certification) across jurisdictions. Using a Poisson Pseudo-Maximum Likelihood (PPML) gravity model applied to bilateral trade data (2010–2023) across 98 two-digit HS sectors, we find that MRCA provisions are associated with an average 9.8% increase in exports, with positive effects in 25 sectors (notably electrical machinery, machinery, and dairy) and negative effects in seven (e.g., nickel, rail equipment).
Key findings
- MRCA provisions raise exports by 9.8% on average, with statistically significant gains in roughly one-third of sectors.
- The largest absolute gains are in high-value, technology-intensive industries: electrical machinery (HS85) and mechanical appliances (HS84) gain around $25 million per country pair.
- Dairy (HS04) and apparel (HS61) see export growth of 41–51%.
- Resource-intensive sectors such as nickel, ores and railway locomotives see declines of 18–61%, reflecting adjustment costs and greater competitive exposure.
Policy implications
MRCA offers a practical, politically feasible route for UK–EU regulatory cooperation that enhances market access without the legal and institutional complexity of full alignment or treaty reform. Because gains are uneven, a sector-sensitive approach is needed: prioritise industries with high conformity costs and strong existing alignment — pharmaceuticals, electronics, machinery — and use transitional arrangements or adjustment support where competition bites. Beyond the EU, MRCA is a scalable template for UK cooperation with CPTPP and Gulf Cooperation Council partners.
For the policy argument in brief, see After SPS: the EU trade barrier that needs fixing next.
Working paper: Centre for Business Prosperity, Aston University / The Productivity Institute, August 2026. With Jun Du and Lin Zhang.