UK Looks to Establish ‘Closer, More Mature’ Trade Relations with EU

New Business Secretary to Announce UK's Global Re-emergence at G7 Meeting

The United Kingdom is initiating steps to enhance its trade relations with the European Union during discussions between the newly appointed Business Secretary, Jonathan Reynolds, and international peers in Italy.

On his inaugural overseas visit since Labour’s significant electoral victory, Reynolds will address a G7 meeting of trade ministers in Reggio Calabria, Italy, emphasizing the UK's intent to cultivate a “closer, more mature relationship with our friends in the EU.”

Seeking to stabilize relations following a tumultuous period under successive Conservative governments post-2016 Brexit vote, Reynolds plans to inform international ministers that Britain is “back on the world stage and ‘open for business’.”

Reynolds is set to articulate, “We aim to develop a closer, more mature, and more rational relationship with our friends in the European Union – our nearest and largest trading partner. Additionally, we aspire to establish stronger trading connections with countries globally.”

These discussions coincide with Keir Starmer’s efforts to strengthen ties with Brussels, highlighted by hosting EU leaders at Blenheim Palace near Oxford on Thursday for a one-day European Political Community summit.

The prime minister is balancing efforts to enhance EU relations while assuring voters that his administration will not reintegrate the UK into the single market or customs union. Starmer is focusing on moderate reforms and fostering a more positive rapport with Brussels.

During the election campaign, the prime minister firmly stated that the UK would not rejoin the EU during his lifetime. Instead, Labour’s manifesto emphasizes developing stronger trade and investment links with the EU, including a veterinary agreement, support for touring artists, and mutual recognition deals for professional qualifications.

In 2023, the EU accounted for 41% of the UK’s exports of goods and services and 52% of imports. Business leaders have pressed Starmer to reinforce ties with Brussels due to the EU market's significance to UK companies, while also advocating for more flexible migration policies to access EU workers.

The Brexit deal, finalized by Boris Johnson’s government in December 2020 and effective since January 2021, mandates that the UK and EU review the agreement’s implementation every five years. Starmer is expected to oversee the first review in 2026.

Some experts suggest this review could provide an opportunity to renegotiate the deal, although EU officials believe the process may only allow for limited adjustments.

On Tuesday, Reynolds is expected to have his initial face-to-face meetings with G7 counterparts, including EU Commission Vice-President Valdis Dombrovskis and German Vice-Chancellor Robert Habeck, since his recent appointment.

The new government aims to use this “reset” in international relations to elevate Britain’s status among global businesses and investors, contributing to its goal of achieving the highest sustained economic growth rate in the G7.

This initiative also occurs amidst increasing geopolitical tensions and political uncertainties globally. Last week, US President Joe Biden expressed support for Starmer’s pursuit of closer EU ties, suggesting this could also fortify the transatlantic alliance with Washington.

Article source: https://www.theguardian.com/business/article/2024/jul/16/uk-ready-to-build-closer-more-mature-trade-links-with-eu

Photo attribution: Niels Johannes, Containerships Borealis (IMO 9866249), CC BY-SA 4.0