Keir Starmer was in Brussels a few weeks ago to ‘reset’ the restive relationship. He received a warm reception. There is considerable goodwill across the EU for a government seen as honest – unlike the Tories – and less anti-European. But the EU was disappointed that the UK gave signals of still trying to please a rogue US administration, rather than work shoulder to shoulder with its biggest trading partner and security ally.
And Brussels got the impression that the Labour government is so scared of Reform UK Party Ltd and the right-wing media, that it dare not show its pro-European bias. Two days after the Starmer visit, the USA imposed high tariffs on UK and EU steel and aluminium exports. Special relationship anyone?
So not much progress was made on the avowed aim to improve the two-way trade and investment relationship.
EU Brexit fatigue
The EU’s patience is not unlimited. Brussels is suffering Brexit fatigue, is chary about taking commitments that might be reversed in five years’ time, and will not – in some cases legally cannot – offer sweetheart deals to what is now just another third country sitting between Ukraine and Uruguay.
And for Brussels, faced with the challenges of the Ukraine war, economic insecurity, immigration, the green transition and more, UK trade relations is a low priority. The trade and cooperation agreement (TCA) works reasonably well from the EU perspective, so no renegotiation is warranted.
The Commission is still asking the question: what do you want? Make a proposal! So the challenge for the UK is to define an agenda to improve two-way trade without renegotiating the TCA; an agenda attractive to both and that can be expanded over time. With, may we dare to hope, a potential long-term aim to rejoin the single market.
Rejoining the single market
If through a series of mini agreements over the next five years the UK can get halfway to the single market, those last steps may be less politically controversial and technically feasible. After all, how many British citizens know or care about the role of the European Court, or indeed of ‘dynamic alignment’? Isn’t that something the plumber does when he fixes your toilet? And the EU for its part is now open, as never before, to mini-deals and sectoral agreements.
Based on my own experience – as a former EU trade negotiator and head of the EU delegation to the World Trade Organization (WTO) and United Nations in Geneva – the UK should propose the following package of negotiations:
- Harmonisation of customs’ IT systems (they are incompatible today) and alignment of the UK’s carbon border adjustment mechanism with that of the EU;
- Negotiations on mutual recognition of product certification (quite easy, since most approved certification bodies are multinationals present in both jurisdictions) and electricity markets integration;
- Relaxation of restrictions on cabotage (the right to fly or sail or drive your goods to multiple points in the territory of the partner);
- UK joining the multi-party interim arrangement (the new temporary dispute settlement court in the WTO, which the Tories turned their back on under US pressure);
- Pharmaceutical and chemicals recognition arrangements;
- A dialogue leading to recognition of professional qualifications notably legal, engineers, architects, construction;
- A strategic dialogue on digital and artificial intelligence, building on the G7 consensus.
And above all, a volte face on the EU’s proposed youth mobility and education scheme, which has nothing to do with stopping the boats but which is of great EU interest and a money earner for the UK too. My contacts inside the UK Cabinet tell me there is a groundswell of Cabinet support for doing this. If Suella Braverman can benefit from the Erasmus exchange, why not today’s generation of bright students?
Control of our borders
A veterinary agreement will also give a big fillip to trade, but there is a humungous trust deficit to plug first. The Conservative government postponed four times checks on EU food imports. Labour has continued to postpone. Either the UK lacks the vets and infrastructure to check the safety of imports (it’s estimated that 50,000 staff would be needed to control the borders), in which case it can hardly verify the safety of UK exports. Or else, pre-election last year, the Tories sought to avoid any measure that might raise food prices. Either way, it’s not a good look.
The UK will have to demonstrate it has both the resources and will to operate a quality inspection system and build trust with EU regulators. That takes time. But it’s feasible by 2028.
Negotiating with the EU
This would have to be a package to be negotiated over the next three years, as the issues are not individually self-balancing. That would mean – in turn – firm, high-level political supervision to ensure all the elements of the package move ahead together.
It would be unwise for the UK to suggest that it join the EU’s nascent military capability in return for cherry-picking free trade deals. The EU runs shy of this kind of trade off, in part because of split competences between the Commission (in charge of trade), and member states (in charge of foreign affairs and defence). Perhaps over time Starmer can start to explore linkages, but not now. In Brussels last week the UK went as far as it could with Europe in coordinating the response to Ukraine and setting up better channels for defence cooperation.
Competent governments look ten years ahead. The jewel in the crown for the UK is surely rejoining the single market and enjoying the four freedoms (freedom of movement of goods, services, capital and people). Two electoral cycles is quite sufficient to prepare British public opinion for what is, frankly, an economic no-brainer. And any Royal Commission worth its salt will as a minimum say rejoin the single market. That will give Starmer his Keynesian alibi: “When the facts change, I change my views. What do you do Sir?”
The Stone Raft
But for now the UK is still giving mixed signals: seeking a reset, but ruling out joining the customs union or the single market, and rejecting the EU’s proposal on youth mobility and even the anodyne Pan-EuroMed agreement on rules of origin. Technical note: the Customs Union is not interesting to the UK, the single market is.
So, the UK remains unsure of what it wants. Paralysed by the opinion polls, scared of the mainstream media, and handicapped by the fact that at least some in the government feel they can ingratiate themselves with Trump – or at least avoid a trade war if they are cool towards the EU.
The UK will have to decide where it wants to put its efforts. It will have to propose a negotiating package of mutual interest, not just UK interest. And above all, it will have to regard the EU as its partner and ally and not a rival. You negotiate with your counterparts, not against them!
The Nobel Prize winning novelist José Saramago wrote a novel called The Stone Raft, about a country on the European continent that one day broke off and started floating across the Atlantic towards the USA. Let us hope that the UK does not turn fiction into reality.
