Entering a new phase
Part of a series of monthly updates in which UK Trade and Business Commission Expert Adviser David Henig brings updates and analysis on the evolving trade relations between the UK and EU.
‘Reset’ turned out to be the right word. What was unveiled at the UK-EU Summit on 19 May was a new start for the relationship, to develop a new partnership around a Free Trade Agreement model while lessening the emotion all round.
Attention now turns to what can be implemented during the similar terms of this UK Government and EU Commission. Notwithstanding warm words and clear scope, nothing can be taken for granted.
Summit outcomes were solid but unspectacular
Linking Emissions Trading Schemes, UK alignment with EU food and drink (SPS) policy, fisheries, youth mobility, and a defence agreement were identifiable in February 2025 as the heart of the UK-EU package. This was widely briefed in April, and survived typical last-minute haggling on detail. Various stories about what else might have been mentioned are best ignored as at best unprovable and at worst contradictory or serving particular political purposes.
Potential UK participation in the EU energy market was an upside surprise even to the industry, Erasmus+ being an aspiration was also a bonus, but little else was unexpected. That the outcome was roughly as forecast should be a reasonable guide to what is to come, both sides are confident that paths through will be found, but this might not be elegant or swift.
There is also some hope for issues where commitments are weak or non-existent such as on touring artists or mutual recognition of conformity assessment. Precedent has been set that if UK and EU industries come together persuasively enough then issues can be added to discussions.
Though nothing announced will be economically transformational, a relationship on a new path will have value. Given everything that had happened in and between the UK and EU, this is a decent outcome.
Setting realistic expectations for results
Some rather optimistic briefings coming in the aftermath of the summit suggested UK citizens using all EU e-Gates this summer or an SPS deal by the end of the year. At the other end of the spectrum, one could use as an illustration the initial agreement between the EU and Switzerland to remove food and drink checks which took 10 years from the start of negotiations to full implementation.
Certainly, for food arriving at a British port to have full free movement through the EU will take a level of trust that is not currently present. That is about inspections, but there will also be questions of scope, exceptions, processes, and UK contributions to costs. These are not trivial matters.
Similarly, we have already seen the controversy in the UK Government over youth mobility, and there are bound to be many questions of implementation, such as numbers, duration, linkages to Erasmus, student fees and much besides. Talks will not be easy, and public controversy easy to imagine.
While technically the summit package does not constitute a ‘single undertaking’ that all has to move at the same speed, both sides will be looking at balance. Then there are the obviously more pressing issues such as avoiding Carbon Border Adjustment Mechanism charges due to be introduced by the EU from 2026, and in the UK from 2027, and of course common security challenges. Given all of the challenges, better communication from both sides will be needed.
UK and EU internal processes will be important
For the EU, Member States will need to agree mandates for EU Commission negotiators. As was already seen in preliminary discussions over youth mobility, these have a tendency to include a broad range of asks around the subject. Initial indications suggested ETS and defence mandates would be prioritised, but in any event it is unlikely that they would all be agreed before Autumn this year.
There is no formal UK equivalent, but Ministers will be thinking through the handling of Parliament before making commitments to wide-ranging alignment. Stakeholders such as farming groups and some heavy industries are already concerned about some potential implications, and these could easily grow to cause political difficulty. Third countries including FTA partners and the US are also monitoring the position carefully and will want to know how they may be affected.
UK officials are already thinking about whether different approaches will be needed for the next phase of relations, both in London where robust negotiating team structures will be necessary, and in terms of communications across the EU and Brussels. There is particular awareness that while the summit commitments are significant there is still a lot of work to do to reach legally-binding agreements. A first change to update the Trade and Cooperation Agreement on fish may help focus minds quickly.
Keeping momentum
Taking into account political imperatives and negotiating challenges, reaching formal agreements on defence and Emissions Trading Schemes in 2026, and youth mobility and SPS in 2027 would seem to be the aim. This would also provide an outline agenda for the next two summits.
Negotiations can often run into difficulty without sufficient political oversight, and this is where other ministerial dialogues will be important. UK officials are confident suitable structures exist though these are not formalised in summit outcomes. These should not just be between the principals, Nick Thomas-Symonds and Maros Sefcovic, but also a regular programme between counterparts such as on trade, agriculture, and energy.
While this is already a busy agenda, other issues can’t be ignored. Touring artists and professional qualifications are mentioned in the summit outcome, conformity assessment and UK membership of the Pan-Euro-Med rules of origin zone remain of interest. There is a review of the TCA scheduled for 2026 which has no set format, although an interesting suggestion is that this could consider issues raised by respective Domestic Advisory Groups.
Looming large over all of this is the European response to the continuing damage wrought by President Trump to world trade rules. Both the EU and UK have shown an understanding that this means seeking partnerships elsewhere, but are uncertain on how to do this. Their own relationship provides that opportunity if the reset of emotions in particular can hold.
What this may look like in practice is a formal process of permanent negotiation overseen at political level. There is a point to doing this properly, steadily, to build goodwill and foundations for the future. That as well as delivering specific agreements is the challenge for the next period.
