From Andrew Hammond
Since 2020, Europe has experienced the worst pandemic for a century, the largest war on the conti-nent since 1945 and the biggest energy shock since the 1970s. Far from being a Belle Epoque of peace and prosperity, it has been much more of a time of troubles.
While this misfortune is unrelated to Brexit per se, it frames the context for the upcoming renegotia-tion of the 2020 EU-UK Trade and Cooperation Agreement, alongside Donald Trump’s reelection to the US presidency. The Trade and Cooperation Agreement is the deal agreed at a fast pace between Lon-don and Brussels to try to cement a post-Brexit relationship.
In a UK political landscape in which there is next to no possibility of the country rejoining the EU in the 2020s, there is nonetheless appetite from both sides to deepen ties. The agreement was a “hard Brex-it” option that saw the UK’s economic ties with the EU significantly reduced, at the instigation of then-Prime Minister Boris Johnson.
Indeed, the UK-EU agreement may have been the first trade negotiation in history where barriers went up, rather than down, and was therefore only a starting solution to the two sides’ future eco-nomic collaboration. For instance, the deal is a key obstacle for parts of the services sector, which ac-counts for a large part of both the UK and EU economies.
Yet, significant as the economic retrenchment is under the 2020 deal, defense and security policy did not even feature at all. At the time, this was a surprise, as a proposed future relationship on this front had been extensively previewed.
Talks before 2020 had pointed to significant future cooperation in this area, including with the UK po-tentially being invited to participate in EU military initiatives and foreign minister meetings. But the Johnson team shifted position during the negotiations, despite the largely complementary nature of London and Brussels’ positions on many key global issues.
Part of the challenge with the 2020 agreement is that it was struck in just eight months. What has been called a bare-bones agreement was the almost inevitable result.
Developments since 2020, including Russia’s invasion of Ukraine, highlight the value of greater UK-EU post-Brexit security and foreign policy cooperation. So, it is likely a deal on this pillar will be done in 2025.
On the economic front, what is becoming clearer five years on from the signing of the Trade and Co-operation Agreement is that it has created structural impediments to trade that are not improving sig-nificantly. This has been highlighted by national business groups like the British Chambers of Com-merce, not just politicians. The EU got much of what it wanted from the agreement, including a zero-tariff, zero-quota deal for goods, in which it runs a surplus with the UK. Meanwhile, Brussels gave away little on services, which is a British strength. The longer the agreement remains unchanged, the more pressing it is for London to reform it.
It is in this context that there is growing support in the UK for a closer economic relationship with the EU. For some, like the Liberal Democrats and Scottish National Party, this ultimately means rejoining the bloc. However, with Prime Minister Keir Starmer having ruled out a return to EU membership and the Conservatives now having very few pro-Brussels legislators in their midst following the purges un-der Johnson’s premiership, it is unlikely the country will return during this political generation, if ever.
So, Labour’s focus is now much more on making Brexit work better for the country, with the center of debate increasingly turning away from “Leave versus Remain.” A key, pragmatic reason for Starmer taking this stance is the political turmoil that engulfed the country for much of the period following the 2016 referendum, with no clear post-Brexit settlement emerging under the Conservatives. If Starmer had sought to rejoin the EU, a hugely disproportionate part of the energies of his government would have needed to be focused on this touchstone issue.
What this means, however, is that the 2025 UK-EU renegotiation is probably not going to be as ambi-tious as some 2016 Remainers favor. Rather than seeing the next few months as a one-time-only pro-cess, it is likely the coming period may see further UK-EU bilateral deals to refashion the partnership, potentially in a similar scenario to recent Swiss-EU relations. –FP
