UK-EU Trade Deal
In the latest in a string of international ‘wins’ for the Government, the UK and the EU have agreed to the most substantial reset in relations since Brexit. The Prime Minister hailed the deal as a pragmatic "new chapter," designed to reduce trade friction, deepen defence cooperation, and stabilise Europe's economic and security future.
On the issue of EU/UK relationships, the Government was always going to face criticism. Be seen to cosy-up too close to European leaders and those on one side of the Brexit argument label you a coward, don’t cosy-up close enough and many from the Prime Minister’s own party label him something worse. But what today’s announcement shows is the Prime Minister’s focus on the economic reality we find ourselves in, and his steadfast pursuit of economic growth as the only tonic.
Today’s Summit came as no shock, and neither really did the content of the agreement. This reset was part of Labour’s manifesto and Starmer has been clear for a while that the UK will accept some EU oversight on standards in exchange for economic benefit - a move he’s presenting as "pragmatic delivery". Critics may well view this as a creeping return to EU regulatory orbit, but for Starmer, this is about delivery and about high-level negotiations in which compromise must be made - similar to those compromises made during the recent negotiations with both India and the United States.
By securing better market access while staying outside the single market, Starmer treads a fine line - one that could attract accusations of "cherry-picking" from Brussels and betrayal from domestic Brexiteers. Yet, the EU's willingness to engage on narrow technical terms signals a potential softening of its stance, likely influenced by wider geopolitical pressures and the need for Western unity. Ursula Von der Leyen even attempted to shield Starmer from criticism by asserting that the deal “shows the sovereignty of the UK” - because it chose to make it.
What has emerged today is a vision of pragmatic sovereignty, in which ideological purity has been set aside, to be replaced by economic stability and global cooperation. Labour is likely hoping this approach will drown out the familiar cries of betrayal from figures like Nigel Farage, focusing instead on the tangible benefits to business, security, and consumers. Whether this narrative lands successfully remains to be seen, and opposition figures have already pointed out that the key strands of today’s agreement – a youth mobility scheme, defence cooperation and easier cross-border travel - only help the so called ‘elite’, while punishing everyday (fishing) communities. No10 will be doing all they can to shake off this notion and have already framed the deal as improving “jobs, bills and the border”.
The long-term legacy of this reset will depend on whether it builds enduring trust - and whether it satisfies the competing domestic pressures within Britain. For now, Keir Starmer can claim a significant diplomatic and political win. But as with Brexit itself, the real test will come in the implementation – with further negotiations still set to take place on what this will look like.
And in the meantime, the trio of agreements negotiated in recent weeks do at least give us a clear insight into the Prime Minister’s approach and mindset – to not let perfection be the enemy of the good. Starmer and his team will be hoping that will be good enough in the eyes of the voters come the next General Election.
Below is an overview of the key provisions in the deal announced so far:
Defence & Security:
- The New Defence and Security Partnership will enhance UK-EU cooperation on European security, enabling UK participation in proposed €150 billion EU SAFE defence fund.
- British companies will be able to compete for at least 35% of procurement contracts from the fund.
- Both sides have agreed to closer alignment on defence in a pact under which British troops could fight alongside European armies.
- Both sides have promised to “strengthen co-operation to enhance military mobility” to ease the movement of troops and equipment across Europe.
- British soldiers could also take on EU military missions and crisis management.
- The deal included provisions for UK-EU operations if the US refused to take part under NATO.
People (Youth Mobility & Migration)
- British citizens will have access to EU eGates.
- ‘Pet Passports’ will be reintroduced, simplifying travel for cats and dogs and eliminating the need for health certificates.
- The introduction of a reciprocal Youth Mobility Scheme. The scheme will be a time-limited, capped program allowing young Brits to work and travel in the EU.
- Both sides agreed to the outline of a limited scheme, with the details to be hammered out in the future.
- The deal included a joint UK-EU commitment to address illegal crossings and enhance returns cooperation.
- This includes an agreement to give UK boarder agents additional information without formal access to databases containing information such as facial recognition and closer coordination with third countries and EU-led initiatives.
- The deal will also see greater operational cooperation between Europol and the National Crime Agency.
- The UK will enter into the Hauge Convention on Judgements effective 1 July 2025 – this was previously ratified by the Conservative Government in June 2024.
- The UK and EU will improve judicial cooperation in civil, commercial and family law.
- An agreement to support touring music artists.
- Plans for the EU to take back some refugees who have previously claimed asylum elsewhere in Europe was not included as a part of the deal, despite being highlighted by media.
- The EU was also pressing for Britain to waive the £1,035 NHS surcharge for young Europeans, but this was not included. Neither was any discount in tuition fees, which concerned the Higher Education industry last week.
Trade & Food Standards
- British and EU vessels will have access to each other's waters for 12 years in return for a permanent reduction in paperwork and border checks that has prevented many small food producers from exporting to Europe.
- Britain has said that will not result in an increase in the amount of fish EU vessels can catch in British waters.
- The UK has announced a £380m investment in the UK fishing industry and coastal communities to complement the deal, such as upgrading equipment.
- The Government has agreed to align with EU food safety and animal welfare standards in a new SPS (Sanitary and Phytosanitary) Agreement. In return, Brussels will ease checks on British produce sold in Europe – including shellfish and meat.
- The SPS agreement:
- Reduces red tape on food and drink imports/exports.
- Removes some routine checks on animal and plant products.
- Facilitates smoother trade between Great Britain and Northern Ireland.
- Is expected to lower food prices and boost supermarket choice.
- Has no time limit on the agreement – long-term certainty for businesses.
- The UK will get a bespoke arrangement avoiding new EU tariffs on Steel, saving the sector £25 million annually.
- Regular dialogue will be established on health security, including pandemics, and a proposal for a working arrangement between UK authorities and the EU Drugs Agency.
- The UK and EU will set up dialogues on services trade, including
- The recognition of professional qualifications
- Business mobility (including the entry and temporary stay of natural persons)
Energy & Climate
- Both sides have agreed to merge their emissions trading schemes while promises of electricity market liberalisation will allow more interconnectors to be built between the UK and Europe.This will avoid £800m in annual EU carbon taxes for UK businesses.
- The UK and EU will explore UK participation in the EU’s electricity market.
- Both sides committed to tapping into the North Sea’s vast potential for cheap, homegrown green energy.