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22 Sep 2023


UK-EU Relations

Keir Stamer has said Labour would use the review of the UK-EU Trade and Cooperation Agreement (TCA) to deepen and expand the terms of the agreement. Joël Reland explains why this may be more difficult than expected.

While much of Labour’s policy agenda remains undecided, when it comes to Brexit Keir Starmer could not be clearer. In a recent interview, he said the current trade deal with the EU is “too thin” and that its scheduled review in 2025 should be used to create a “closer trading relationship”.

The problem, however, is that the party will not get results simply by asking nicely in Brussels. And it’s not clear they have fully realised this.

Labour has proposed a number of measures to add to the EU deal, including an agreement on veterinary standards; mutual recognition of conformity assessments and professional qualifications; improved labour mobility arrangements; and a security pact.

This is a carefully calibrated position, designed to woo business without alienating Leave voters. Labour is willing to go further than the Conservatives in signing supplementary agreements to ease post-Brexit friction in specific sectors such as manufacturing and food imports. At the same time, however, the party can reassure Leave voters that it has no intention of breaching red lines round control of money, borders and laws.

So far so sensible. But it’s far from clear the EU will be receptive to this approach.

Labour is pinning its hopes on the aforementioned review of the UK-EU trade deal (TCA), scheduled for 2025 or 2026. David Lammy says they will use this to go through the agreement “page-by-page, seeking ways to remove barriers and improve opportunities for business”.

Yet, as our new report argues, the EU does not see things the same way. For Brussels, the review should be a brief technical exercise, taking stock of the agreement’s implementation without an obligation to change anything.

The EU considers the TCA ‘a very good agreement’. It favours trade in goods (where it has a surplus with the UK) over trade in services (where it has a deficit) and delicately balances the interests of 27 member states. Moreover, there is significant Brexit fatigue in EU circles as well as a long list of higher priorities. There is little appetite to revisit the TCA.

Therefore, should Labour come to power, it will need to persuade the EU to negotiate. That means figuring out what the EU might actually want.

An agreement on youth mobility could be one major offer (it is now much harder for young EU nationals to work or live in the UK). Member states also regret the UK’s departure from Erasmus+ (which funded study placements at UK universities). Enhanced cooperation on security and defence is another area of potential EU interest.

Another key challenge is rebuilding trust, which was badly damaged by years of fraught negotiations. Some of Labour’s proposals, like an agreement on veterinary standards, entail ongoing UK alignment with a swathe of EU regulations. The EU would need to be sure the UK would live up to its commitments, or risk compromising the biosecurity of its single market.

One means of building trust is by implementing existing commitments such as the UK’s (repeatedly delayed) border control regime or the systems required to underpin the Windsor Framework. Labour could also provide some gestures of goodwill, for instance by addressing EU concerns around its citizens’ rights in the UK (such as a lack of physical proof of settled status).

Harder to address is the problem that the EU will also have to trust future governments to maintain that good faith. It is unlikely to sign up to a high-alignment agreement on veterinary standards if it believes the next Conservative Prime Minister will simply bin it.

And then there’s the question of time and resources. The kinds of agreements Labour is proposing typically take years to conclude with the EU. Negotiations would occupy significant government bandwidth at a time when Labour is likely to have lots of other priorities. And, while the mooted agreements would be of major benefit to some sectors, they would not address most of the economic costs of Brexit – which stem from leaving the customs union and single market.

In office, Labour would be confronted by the reality that expanding the TCA is far harder than it currently seems to think. And potentially for quite limited economic and electoral reward.

Whether a Starmer government would consider it worth the effort is open to question. If it does, optimism and a friendly manner will be far from enough. The negotiation wargames will soon have to begin.

By Joël Reland, Research Associate, UK in a Changing Europe.


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