Joël Reland / May 2025
Photo: Shutterstock
As the 19 May UK-EU summit approaches, there are signs that the UK government may be about to under-promise and over-deliver on its ambitions for deepening UK-EU trade.
Labour’s election manifesto promised to ‘improve the UK’s trade and investment relationship with the EU, by tearing down unnecessary barriers to trade’ but, somewhat ironically, it offered only three concrete proposals which – at best – could be characterised as giving those trade barriers a gentle nudge.
But, now that the local elections are out of the way in the UK, there are signs that the UK government may be willing to go quite a bit further than previously indicated.
Two proposals which seem very likely to appear in the 19 May communiqué are agreements to negotiate an ‘SPS’ deal on plant and animal health standards and to link ‘emissions trading schemes’ (ETS) on carbon pricing.
Only the former of these was in the manifesto and, even then, the government did not specify what kind of deal it wanted, with the early indications being it wanted a ‘New Zealand’ style deal that avoided alignment with EU rules. It is now clear that, on SPS and ETS, the UK is willing to accept ‘dynamic alignment’ with EU regulations in exchange for the removal of the majority of relevant barriers to trade.
This breaks a significant taboo in post-Brexit British politics. No Conservative government was ever willing to cede sovereignty over rule-making in exchange for closer trading links. The SPS and ETS deals will likely lead to attacks from Kemi Badenoch and Nigel Farage about Labour ‘undoing’ Brexit or becoming a ‘vassal state’, and the fact that Labour appears willing to endure those charges is a sign of its seriousness about improving EU trade.
Another shift has been on the issue of youth mobility, which Labour initially ruled out as a ‘return to free movement’. Yet this week the UK’s Minister for EU Relations, Nick Thomas-Symonds, for the first time gave his explicit support for such a deal – while directly hosing down claims it would amount to free movement. This appears to indicate UK recognition that it will have to accept key EU negotiating asks (see also: fisheries) if it is to gain anything in return.
Reading between the lines, there are indications that negotiations may go further still. Thomas-Symonds notably did not rule out UK rejoining Erasmus+, which might be a compromise solution instead of EU students being allowed to pay the much cheaper ‘home’ UK tuition fee rates under any youth mobility scheme.
There are also reports that the EU may be willing to consider ways to make it easier for UK professionals to have their qualifications recognised in the EU (which could be of benefit for services trade) and that the UK is pushing for an agreement on mutual recognition of conformity assessments, which would help trade in manufactured goods – one of the sectors which has suffered most from post-Brexit trade barriers.
Energy is another issue where both sides have an interest in deepening cooperation. The two sides have for some time been trying and failing to deliver on a commitment in the TCA to improve the efficiency of energy trading, which would bring down energy costs for consumers. The problem is the technical complexity of the process, and the summit might serve as a moment for politicians to find another way to break the impasse.
This, clearly, goes a lot further than the proposals in Labour’s manifesto, while still respecting its red lines of no return to the single market, customs union or freedom of movement. The question, then, is what is the reason for this sudden, greater ambition?
To an extent, this may have always been the plan. Labour clearly did not want to come into government sending strong signals about its ambitions to deepen EU trade, for the fear of alienating Brexit-supporting voters. Instead, it has opted for the strategy of death by acronym: making its EU policy as boring as possible, quietly dripping out a sequence of technical, jargon-filled proposals on ‘SPS’, ‘ETS’ and ‘MRPQs’ in the hope that most voters will simply tune out.
But the focus on EU trade may have been sharpened by the government’s wider struggle to deliver on its much-vaunted plan for economic growth. It is notable that Chancellor Rachel Reeves has recently started to highlight economic benefits of closer UK-EU cooperation in areas like youth mobility, amid analysis that the EU ‘reset’ could increase UK GDP by around half a percent. EU trade has gone from being a niche government preoccupation to one with the attention of the Cabinet’s big hitters.
And the wider political winds are changing too. Donald Trump is viewed by UK voters as a greater threat to the national interest than terrorist organisations, while public support for closer EU ties has gone up as trust in the US as an ally has declined. Rachel Reeves took many by surprise recently with the uncharacteristically forthright assertion that the EU is the UK’s most important trading partner – and it is one which may well not have happened were Kamala Harris sat in the White House.
The government is also aided by its two recently-penned trade deals with India and the US. It will be hard for opposition leaders to stand up and call any new EU trading agreements a ‘betrayal’ of Brexit when the government can point to the US and India deals as evidence of it grasping the very ‘Brexit freedoms’ which the Conservatives promised but failed to deliver.
We are in a very different world to a year ago. The Labour government may still be instinctively very cautious on EU relations, but shifts in the geopolitical winds mean it is willing to show a little more ambition than many previously anticipated.
