Making social science accessible

19 Sep 2023

Europe

UK-EU Relations

Joël Reland and Jannike Wachowiak set out the findings of UK in a Changing Europe’s new report on the potential paths for the Trade and Cooperation Agreement review. They highlight that if the UK wants to the review to be expansive, as the Labour Party has suggested, it will have to think carefully about how it incentivises the EU to agree to this.

Keir Starmer said this week he thinks the current UK-EU Trade and Cooperation Agreement (TCA) is “too thin” and that, if elected Prime Minister, he will use its scheduled five-year review to seek a “closer trading relationship”.

Yet our new report finds that there are significant barriers to using the review in this way.

Starmer’s position is indicative of an emerging trend in the Brexit debate, which sees this review as the moment for a potential reset in the UK-EU relationship. A growing number of politicians, think tanks and business groups have expressed dissatisfaction with the impact of the TCA on trade and wider cooperation, and argue that its terms should be expanded.

Recommendations for improvements range from alignment on veterinary standards and mutual recognition of conformity assessments, to business travel and youth mobility schemes, and institutionalised cooperation on foreign and security policy.

And, for proponents of reform, the obligatory ‘TCA review’ in 2025 or (more likely) 2026 represents something of a beacon on the horizon.

Shadow Foreign Secretary David Lammy has identified the review as an opportunity to “improve our trade deal with the European Union”, by going through the TCA “page-by-page, seeking ways to remove barriers and improve opportunities for business”. Northern Ireland Secretary Steve Baker, in a similar vein, says “it is possible that we could achieve great things in that TCA review”.

Our new report on the TCA review, finds, however, that there is a stark difference between those aspirations and the attitude of the EU. Vice-President Maroš Šefčovič has said the review “does not constitute a commitment to reopen the TCA”. Discussions in Brussels about it are few and far between. Quite simply, officials are tired of Brexit and the EU has a long list of higher priorities.

Herein lies the fundamental challenge of the TCA review, which has not yet been fully acknowledged in the UK. The treaty is a set of negotiated compromises. For all the ambitions some in the UK might have to seek major changes to the agreement, it will require the consent of the EU to use the review for this purpose.

As for the TCA review clause itself, its wording is vague. It implies anything from a light-touch stock-take of how the treaty is functioning, to a comprehensive set of negotiations to expand the agreement. But again, whatever form it takes, the UK and EU will have to agree on the process.

Two key factors will thus shape the nature of the review. One is political will. If the UK wants to make the review expansive – and provide the opportunity to secure benefits that it either did not seek or failed to negotiate first time round – it will have to think carefully about how it incentivises the EU to agree to this. (Spoiler: while the UK wants trade easements, EU interests lie in issues like youth mobility and security cooperation).

The other factor is process. A more expansive review entails multiple, potentially complex negotiations, demanding significant time and administrative effort. The UK and EU will have to consider whether and how the review can be structured in a manner which is commensurate with their ambitions.

This report outlines three models the TCA review could follow.

Examine the TCA: The EU and UK could treat the review simply as a light-touch stock-take as part of their existing annual/biennial implementation reports. These reports summarise the overall functioning of the institutional framework, (sectoral) implementation issues, and regulatory developments on both sides, with no ambition to change the agreement. This approach is most in line with the EU’s current interpretation of the review.

Exploit the TCA: In addition, the EU and UK could seek to improve the TCA’s governance framework and act on as-yet unfulfilled commitments in the treaty. This could range from a fairly limited exercise (perhaps tweaking how Specialised Committees function) to a quite wide-ranging review involving, for instance, improvements to the efficiency of energy trading and the linking of emissions trading schemes. They could also discuss upcoming deadlines in the TCA like the changing rules of origin for electric vehicles in 2027. Almost all the work could be managed by the joint Partnership Council which governs the TCA and, while these changes need not wait for 2026, the review could become a focal point for discussions.

Expand the TCA: The parties could widen or deepen the scope of the TCA into new areas for cooperation. This is what the Labour Party proposes, and it could include trade easements such as a veterinary agreement or mutual recognition of conformity assessments and professional qualifications. It could also cover areas like youth mobility or foreign and security policy. Expanding the agreement would require political buy-in from both sides. A ministerial/leaders summit could offer an opportune moment to discuss ambitions for an expanded partnership, which could amount to a package deal or series of standalone agreements. Depending on their scope, these could take several months or years to finalise.

It may seem somewhat premature to outline these models, given the review is still two to three years away and there will be elections both in the UK and EU before then.

Yet, given the ambiguity of the review clause, it is incumbent upon the UK and EU to define its ambitions and structure. And, if a future UK government wants to use the review to expand the TCA, they will soon have to start thinking about how that works in practice and how to get the EU to agree to it.

By Joël Reland, Research Associate, and Jannike Wachowiak, Researcher, UK in a Changing Europe. 

MORE FROM THIS THEME

Can the UK learn from the new EU approach to fiscal governance?

Will 2024 bring a new momentum for EU enlargement?

How strong is public support for Ukraine in Europe? 

EU enlargement remains on life support, despite the opening of negotiations with Ukraine and Moldova

Maritime security cooperation in the Red Sea: towards flexible European approaches?

Recent Articles

Subscribe to our newsletter

* indicates required