Too big to ignore, too unstable to support broader aims – the UK-EU relationship must change

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19 September 2024

David Henig is the Director of the UK Trade Policy Project at the European Centre for International Political Economy (ECIPE). 

The Conservatives seriously proposed a Brexit with no deals with the EU. Since the UK-EU Trade and Cooperation Agreement (TCA) has been in place, the EU has said it can’t be reopened in any circumstance. Now Labour wants a reset but would prefer a quiet one that nobody really notices.

What is it about the world’s second-largest trade relationship[i] that means it is talked down consistently? Similarly, an integrated UK and EU is surely crucial for European competitiveness and security, so why does neither side see this?

Why the UK and EU need each other

Most obviously, this is the ongoing aftermath of a divorce so messy that both parties simply want to pretend everything is now fine for them. Except, geography means the relationship can’t just be ended, not to mention a billion euros of annual trade, which is rather a lot of customers dependent on governments to help them. Then there’s Northern Ireland, which has already been called the unwanted child of a Brexit split. Not to mention, shared objectives for a transition to net-zero, and of course the need to work together to defeat Russian aggression on the eastern flank.

In reality, neither the UK nor the EU have got over the split, and putting to one side protestations to the contrary, that needs to change. There are simply too many shared challenges starting with the growth that both badly need. Global Britain or an EU-Mercosur trade deal are a poor substitute for that.

This is a relationship of almost unfathomable breadth. Beyond what’s mentioned above, there’s everything to do with mobility, for work or those under 30. Negotiations over specific arrangements for Gibraltar. Cooperation over sanctions and economic security, and indeed the shared incentive of ensuring strong supply chains. Data transfers and financial services in trade, and so on.

A better relationship needs mutuality

Improving cooperation across this piece requires, more than anything, a shared understanding and trust – of which there has been little sign since 2016. However, that’s not possible until the UK and EU are honest with themselves in their own ways. For the UK, “Take Back Control” is inevitably fettered for a trading economy in an interlinked world, and for the EU, that this will be a relationship of variable institutional structures rather than contained within a single arrangement.

Of course, a reset has to start with the implementation of what has already been agreed, but it also needs much stronger political relations that derive from regular summits at the level of leaders and senior politicians, and also building on existing institutions such as the Parliamentary Assembly and Domestic Advisory Groups.

Mutual understanding would ideally lead to a joint ongoing work programme. Start with the shared interests in security and energy. The UK should align with the EU Emissions Trading Scheme and EU CBAM, and the EU should facilitate this for the energy security needs of both parties. UK stakeholders hoping to find some hitherto even better solution or EU maximalists demanding the UK aligns with everything in return should not be the decisive voices.

Such a shared programme would show that there’s an ongoing relationship and not just one shot at improvement. A single undertaking makes sense for joining or leaving the bloc, not for the complex relationship we have now. Where there are things that one side or the other wants, we will need a process to find agreed solutions, and there will be some linkages. For example, fish and Sanitary and phytosanitary measures (SPS), mobility, and regulation. It will also require working groups with suitable reporting to the political level, some of which will be simple cooperation so as not to dive straight into the complex divisive issues. There are also unilateral decisions, such as the UK joining Erasmus, and EU data adequacy, to bring considerable goodwill.

The benefits of a better relationship and what needs to change

Thickening engagement can build the way towards the inevitably more difficult detailed negotiations on removing barriers to food and drink trade, which is likely to be a process more than a single event. Similarly, mutual recognition agreements around conformity assessment make sense where stakeholders of both sides agree.

All of this will need change from both sides. For the UK, it means moving into the 21^st century for negotiating, away from Whitehall knows best and let’s keep secrets, towards a team approach. There always has to be a realisation that everything will be reciprocal, and the correct answer to an ask from the EU is ‘we’ll listen’. Having a central coordinating team in the Cabinet Office with political leadership is crucial.

Meanwhile, the EU has to stop treating the UK like any other neighbour, because this is arguably the most crucial relationship for both sides given an allied US turning inwards, on which the UK and EU should also cooperate. There’s also a need to move away from the simplistic statements about not reopening the TCA, this provides a perfect foundation for expanding the relationship and avoiding another Swiss-style relationship.

Commentators and stakeholders have their part to play to support a much more informed public debate recognising a relationship evolving, but where progress is possible. Equally, we need to ditch the idea that this can all be fixed with the UK joining something like the Customs Union, Single Market, or the EU since all of these will be difficult and lengthy negotiations requiring strong political support which is not currently present on either side. For stakeholders, it also means focusing on the practical.

None of this relationship deepening will happen easily. Negotiations are rarely an easy ride. Where there is so much politics, there will be constant tensions and miscommunications. We’re already seeing this over the EU ask on youth mobility. The UK media is likely to continue to be hostile, and this is all the more reason why coordinators on both sides will need regular contact.

Diplomats know the challenges, that’s why they often talk of a load-bearing structure, like negotiators are actually engineers. Perhaps that’s not the worst analogy: Brexit replaced multi-modal links with a single-lane road and rail connection. It must next be dualled and double-tracked, and there are a lot of parts to such a project, you can’t just expect the structures to support expansion.

Notwithstanding the issues, there is goodwill. There are many on both sides that would like improvement, almost certainly including Prime Minister Keir Starmer and EU President Ursula von der Leyen. That should, however, never be mistaken for the expectation of special deals.

In truth, geography requires more from the UK-EU relationship, and the most likely outcome is that it will slowly happen. This probably won’t be the dramatic single event so many want to see, but a gradual evolution to something a little better.

• Negotiating Uncertainty by David Henig

Footnotes

[i] US-EU is the world’s largest trade relationship. UK-EU and US-Canada compete as the second largest.

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