Unlock Brexit lead by abandoning rule that ‘boosts EU profits’, said Rishi Sunak

Flag of the European Union

Flag of the European Union

Rishi Sunak should abandon the EU’s protectionist trade mark rules to unlock a Brexit lead of cheaper clothes, toiletries and cars, senior Conservatives said.

Conservative MPs want the Prime Minister to scrap a decades-old Brussels regulation that allows brands to charge higher prices to British buyers.

They say repealing the costly law would be a quick win that would show voters a tangible benefit from cutting ties with the bloc.

Currently, companies can prevent UK shops from selling their products if they have already been placed on the market in another country outside the EU.

It means UK shops can’t buy stock from stockists in countries like the US and Canada, where prices are typically much lower.

“We all pay more than we should”

The rule is contained in the Trade Marks Directive, introduced in 1989, and has been supported by EU court rulings in favor of big brands.

In November 2001, European judges prevented Tesco from selling Levi jeans which it had imported at a lower price from the United States.

The ruling reversed previous decisions by British courts, which had held that brands had no right to block the sale of authentic products.

Other countries, including Canada, the United States and Singapore, allow the marketing of branded products that have already been sold elsewhere.

John Penrose, a Tory MP who was Sunak’s competition czar, said the PM should take advantage of Brexit to follow suit.

He said: ‘This was introduced by the EU a few decades ago and it suits big businesses because it increases their profits, but it means we are all paying more than we should.

“Scrapping would make things more accessible to everyone, at a time when money is tight and we’re all struggling with rising prices.”

Review of EU laws

A committee of MPs that has investigated the impact of the EU rule has recommended scrapping it to help bring down prices in shops.

Its report, released in 1999, said that the cost of clothes, shoes, perfume, toiletries, and automobiles in particular were rising.

He cited a Swedish government report from the previous year on the benefits of being open to “parallel exports” from around the world.

The country’s competition authority found that it had cut the cost of food, shoes and car parts by 30%, and by up to 50-70% on clothes.

British MPs said that in addition to the abolition of the law, further protections should be foreseen for some more vulnerable sectors, such as pharmaceuticals and music.

“Such a flexible approach would not only lead to cheaper goods for consumers, but would respond to the different needs of different sectors,” they said.

Mr Sunak has ordered a review of all EU laws remaining in the UK statute book, to be completed by the end of next year.

By then, all 2,400 rules inherited from Brussels will have been copied, modified and replaced, or scrapped altogether.

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