Joël Reland dissects the news that the UK and EU have reached an agreement on the UK’s re-entry into Horizon Europe. He argues that although the Horizon deal is a success, the difficulty reaching an agreement – despite mutual interest – highlights how challenging it is to build a closer relationship with the EU.
The UK and EU have reached agreement on the UK’s re-association to EU programmes Horizon Europe. This, on the face of it, is evidence of increasing warmth in bilateral relations. Yet the process also hints at reasons to be cautious when it comes to imagining the future of this relationship.
Horizon Europe is a €96bn EU programme which funds scientific research and innovation. Horizon has been an especially hot topic because researchers at UK universities have historically been some of the biggest beneficiaries of the scheme – which offers unparalleled funding and international collaboration opportunities – but they lost access because of Brexit.
The UK-EU Trade and Cooperation Agreement (TCA), which took effect in 2021, says the Parties ‘have agreed that the United Kingdom participates’ in Horizon. However, it did not specify the terms of the UK’s association. This was subject to further negotiation between the UK and EU, and talks broke down owing to acrimony over the Northern Ireland Protocol Bill.
That impasse was broken by the Windsor Framework, agreed in March 2023, which was widely seen as improving the ‘mood music’ in UK-EU relations. Earlier this summer, James Cleverly spoke of a new era of “close and friendly UK-EU cooperation”. And now we have the Horizon deal.
So far so optimistic. Yet, the negotiations over Horizon can also be viewed another way.
Horizon was presented as the lowest-hanging of fruit, to be quickly picked off in a new era of harmonious relations. Before the Windsor Framework was even finalised, European Commission President Ursula von der Leyen was talking it up as “good news for scientists and researchers” on both sides, anticipating that discussions on Horizon would begin “immediately”.
Yet agreement remained tantalisingly out of reach for another four months, with disputes centring on the UK’s financial contribution and on a ‘correction mechanism’ to limit how much more associate members can take out than they put in.
The UK government press release stresses that the new deal offers ‘improved financial terms for the UK’s participation’, including a ‘clawback’ mechanism which compensates the UK should its scientists receive significantly less money than it puts in. Value for the ‘UK taxpayer’ is mentioned seven times.
It was probably a wise decision for the two parties to take their time and come to an agreement which is mutually satisfactory and thus more likely to endure.
Yet the process merely serves to underline how difficult it is to build a closer relationship with the EU. This was an agreement which was already anticipated in a legally-binding trade agreement, and which politicians on both sides actively supported. Yet it still took years of rancorous negotiations to get it over the line. The UK had even begun mapping out its alternative to Horizon.
So, what does this tell us about other areas where cooperation could theoretically be deepened?
Issues involving financial contributions, and which stray into sensitive economic territory, are proving challenging to resolve – even where there appears to be a clear mutual benefit for both sides.
Another apparent easy fix is grace period set out in the TCA for rules-of-origin requirements for electric vehicles. Manufacturers on both sides of the Channel fear 10% tariffs on their exports from the start of 2024 unless this is extended. Yet no such agreement has been found, despite the apparent mutual interest. An EU desire to address declining domestic battery manufacturing seems to be the chief cause.
Now imagine a future Labour government which wants an agreement on veterinary standards or mutual recognition of conformity assessments. The EU would again put its own interests front and centre: demanding UK alignment, now and in the future, with a wide range of regulations, and would also seek strong binding safeguards on the UK to ensure it upheld those regulations in good faith. These would require a technical and wide-reaching negotiation, as would any attempt to secure enhanced provisions on labour mobility or financial services.
Any one of those negotiations – let alone a package of reforms – would make the Horizon and rules-of-origin talks seem like a doddle. Assuming, that is, the EU is even interested in such a process given its aversion to ‘cherry-picking’, deep Brexit fatigue in Brussels, and the fact that the EU has largely moved on to what it sees as more important issues including the accession of future members.
A better indication of the direction of relations is to be found in reading between the lines of Cleverly’s “close and friendly” speech. This was notable for the sheer range of areas where he expressed the hope that the UK and EU could make progress: security, migration, energy and AI.
What is significant about these issues is that none of them seemingly entail treaty-level negotiations, revision of the TCA, or financial contributions. Each would likely be governed by a memorandum of understanding or something similar, committing the parties, perhaps, to strategic dialogue but no formal, binding obligations.
The current government clearly sees such informal, ad hoc alliances as the path forward. Indeed, the clearest progress that has been made since Windsor has taken this form: an MoU on financial services cooperation, another close to agreement on mobility, and talks set to begin on enhanced information exchange on competition and migration.
This is the path of least resistance for the UK and EU if they want to make further progress in the relationship. For anything more, Horizon provides a salutary warning.
By Joël Reland, Research Associate, UK in a Changing Europe.