A new IPPR report estimates that the UK is forgoing between £3.7bn and £6.5bn in annual EU exports due to the absence of a mutual recognition agreement (MRA) on product standards. Since post-Brexit trading arrangements began in 2021, companies have either abandoned EU markets or established subsidiaries within the EU bloc to avoid costly duplicate product testing, representing a significant drag on the economy equivalent to roughly 0.18% of national income. The finding underscores a major missed opportunity for trade friction reduction and has prompted renewed calls for government action.

The losses are concentrated in three key sectors: motor vehicles and parts (£2.48–3.42bn annually), electronics (£1.17–1.67bn), and pharmaceuticals (£740–820m). The IPPR advocates for an MRA based on "dynamic alignment", whereby the UK maintains product rules in step with the EU, allowing mutual recognition of product assessments and reducing administrative costs. The Starmer government proposed a single market for goods earlier this year but was rebuffed by Brussels, whilst the Liberal Democrats have pledged to reopen negotiations on EU alignment should they come to power.