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.

Times have changed in UK-EU relations. Negotiators from London and Brussels appear to have been in a negotiating “tunnel” in early April, and the outside world didn’t notice. In amidst the closer cooperation may even be a certain amount of joint briefing designed to suggest how both sides are fighting for their interests on difficult topics, such as fish, to be triumphantly announced as being solved at the May 19 Summit.

Progress made

Those involved in UK-EU talks on both sides privately acknowledge better atmospherics and some progress. There is a reasonable level of confidence of a package of summit announcements that centres on a defence and security agreement. This will include something on irregular migration as befits Labour’s focus on this issue. 

At the heart of the trade agenda will be progress on Labour’s manifesto commitment of a food and drink agreement to reduce or eliminate checks between UK and the EU, which will also do the same for products going from Great 91��Ƶ��ַ to Northern Ireland. Full negotiations are expected to be given the go-ahead, to commence by the Autumn once the European Commission has a mandate from Member States.

Talks will also be launched on the EU’s top priority of a possibly renamed youth mobility scheme, and on linking Emissions Trading Schemes. This will avoid Carbon Border Adjustment Mechanism charges soon to be introduced, an ask of industry on both sides. Some sort of UK commitment on fishing rights is also expected.

Undoubtedly this package would not have been agreed by the previous UK governments. How these commitments will be presented is uncertain, but quite possibly there will be a joint document similar to the “Common Undertaking” that underpinned the most recent EU-Switzerland talks, which in turn led to an agreement in just 14 months. Progress on this and perhaps the review of the Trade and Cooperation Agreement could be reported to a summit next year.

Opportunities and challenges remain

Whether this package counts as a sufficiently meaningful reset is open to question. While UK alignment with EU food and drink rules will be positive, it delivers very little of the potential 2% GDP growth available from more comprehensive regulatory alignment. Perhaps it can best be seen as a reasonable first step that should be accompanied by a plan to go further within respective red lines.

Agreeing such a wider vision and plan for the future would certainly be substantial progress, but it is unclear whether both sides will go so far. To do so would however respond to President Trump’s attacks on Europe and trade by committing to progressively deepening the UK-EU relationship. New political dialogues on issues such as future regulation, global trade, and economic security would be a part, as would the UK joining European schemes and agencies such as the Pan-Euro-Med Rules of Origin zone.

Laying out such a future pathway would also help address a criticism the UK government may face that it has offered up too much and received rather limited concessions in return. Accepting the EU’s asks on youth mobility and fish in return for a food and drink agreement that follows the Brussels high-alignment approach runs the risk of leaving the UK with little to offer in future negotiating rounds. Some of this was an almost inevitable follow-on to previous governments poisoning relations, but current Ministers have arguably also not publicly put forward a sufficiently persuasive vision to the EU.

Tied to this is the potential for rather difficult negotiations around details to follow. UK stakeholders including the Food and Drink Federation and National Farmers Union have concerns about some EU food and drink regulations that would be part of the agreement. There will be a need for the government to explain how exceptions could be negotiated, and what the process will be for influencing regulations before adoption. Typically such agreements take some years to negotiate because of the number of specific issues to be resolved.

Linkage of Emissions Trading Schemes will raise similar challenges of the UK appearing to be a rule taker. These would be best addressed by ensuring an overall package that demonstrates both sides showing respect for the asks of the other. Given the importance of the UK-EU relationship to Europe as a whole, establishing a broad range of structures to support this seems entirely reasonable.

Preparing for a final push

Looming large in the background is President Trump, and while it does not currently seem that UK-US talks are inhibiting those with the EU, this requires continued care from the government. Improved engagement does not remove suspicions that grew during the Brexit years, just as the US threats do not immediately mean changes to the way the EU operates. While Member States and MEPs are broadly positive towards the UK, this is somewhat provisional.

Stakeholders on both sides are helping the final push ahead of the summit, sometimes working together. Progress on energy has come in large part thanks to a concerted joint push, and more recently a number of organisations put forward a common view on Mutual Recognition of Conformity Assessments. The UK government is expected to follow its usual approach of seeking business support for the summit outcome.

As previously, the Commission is slightly more downbeat than an optimistic UK government about the chances of a meaningful trade outcome from the summit. That said, there is clearly significant common ground on the main elements to be agreed. With a further political push on all sides this could yet be seen as a substantive reset package.

What trade does the UK do with the US?

The announcement on 2 April that America would impose a 10% tariff on all British goods and a 25% tariff on all foreign-made cars is likely to further damage the UK's manufacturing sector following Brexit. President Trump has enacted 10% tariffs on almost every country in the world , arguing that the trade deficits the US has with many other countries put the US at a disadvantage. It is his hope that imposing tariffs will reduce the trade deficit and motivate international companies to bring industry back to the US.

What is a trade deficit? - A trade deficit relates to when a country's total value of imports exceeds the total value of its exports, meaning it buys more goods and services from other countries than it sells to them. 

How do the US tariffs work? - Trump's tariffs are effectively an import tax which must be paid by the importing company to the US Treasury on goods produced from foreign countries. 

At the end of the third quarter of 2024, the UK was running a trade surplus with the US of (this includes goods and services). In particular, the three goods which the UK exports most to the US are: 

• Cars (£8.3bn per year)

• Pharmaceuticals (£7.2bn per year)

• Generators (£5.2bn per year). 

As the US is the UK's after the EU, Trump's new 25% tariff on automobile imports will hit UK car manufacturers hard - Jaguar Land Rover has this week all shipments of cars to the US for a month - with fears of job losses rising across the industry.

How damaging will tariffs be for the UK?

US tariffs are expected to deliver a 0.7% hit to the UK economy, seven times the growth secured by the government last quarter. Because tariffs are currently only imposed on goods rather than services, it is the manufacturing sector which will be most affected, particularly in the industrial hubs of the North East and Midlands. This additional hit to manufacturing will prove to be particularly damaging to a sector which has struggled following 91��Ƶ��ַ’s decision to leave the EU. Research by the has found that following Brexit, the value of the goods exported to the EU from the UK has fallen by 13.2% (£27 billion). Further research by suggests that by 2035 leaving the EU will have lowered the gross value added (GVA) of manufacturing by 17.2%. 

Fortunately independent research carried out by on behalf of Best for 91��Ƶ��ַ found that deep regulatory alignment on goods and services between the UK and the EU can provide some insulation from the effect of Trump’s tariffs and claw back around a third of the GDP loss caused by Brexit. The research also shows that deep regulatory alignment on goods and services between the UK and the EU would deliver up to 1.5% GDP growth in the long term. Crucially, this growth will be most keenly felt by the UK’s industrial centres, which would otherwise be most affected by Trump’s tariffs. For example, rather than seeing a 0.14% constriction in regional GVA per year, deep regulatory alignment with the EU on goods and services would deliver 0.24% growth in regional GVA per year for the North East. It is a similar picture across the North West, Midlands, and Yorkshire with a with the EU both protecting these regions from tariffs and delivering crucial growth.

Will there be more tariffs in the future?

Trump has shown himself time and again to be temperamental and erratic and there is no guarantee that these tariffs will be the end of the road. Shortly after ‘Liberation Day’, the reported that the next industry in the crosshairs of the Trump administration may be. As mentioned, pharmaceuticals are the UK's second largest export to the US after cars, so a future tariff on foreign-made medicines would damage the UK economy further. 

The inconsistency (and irrationality) of the Trump administration's isolationist economic policy has spooked markets across the world, from their domestic to the UK’s . Markets after tariffs between China and America have rapidly escalated - at the time of writing Chinese imports to the US are subject to a , whilst US imports to China are now subject to an with Beijing hinting further tariffs may lie ahead. The increased tension between the two economic superpowers means a global trade war is increasingly likely. The UK's position outside of the EU has made our country more vulnerable to US tariffs. Having left the , 91��Ƶ��ַ stands alone with less bargaining power and ability to retaliate in any trade dispute. 

What should the Government do in response to US tariffs?

for Best for 91��Ƶ��ַ found that three times as many Brits (43%) want the government to respond to US tariffs by deepening ties with our main trading partners such as the EU, rather than cosying up to Trump in the hopes of an exemption. Additionally, a poll of almost 15,000 people on behalf of Best for 91��Ƶ��ַ released earlier this year found that 46% of people said the EU should be the Government's top priority when it comes to trade, compared to less than half that number who would opt for the US (even before the imposition of tariffs).

Rather than prioritising a deal with the US, the UK government should pursue a deal with the EU that delivers deeper goods and services alignment, as - according to the previous Conservative government's own modelling - it would deliver twice as much economic growth as a US-UK FTA. A US trade deal that lowers our food standards is very unlikely to be a popular move with the UK public - recent polling by found that 62% of Brits oppose allowing chlorinated chicken into our food market, a for any kind of trade deal.

Regulatory alignment with the EU drives regional growth whilst insulating the UK from the negative economic effects of Trump’s tariffs. With public opinion evidently in favour of prioritising trade with the EU and against the lowering of British food standards, the government must use the UK-EU summit on 19 May to pursue that protects UK businesses and consumers and unlocks economic growth.

First published by

could remove the need for British manufacturers to repeat costly testing processes to sell their products in both the UK and EU while increasing regulatory stability, increasing confidence for investment.

This was first proposed by the cross party UK Trade and Business Commission in its landmark 2023 report. 

Naomi Smith, Chief Executive of Best for 91��Ƶ��ַ said,

“After seeing costs spike from new barriers to trade with our largest market, British manufacturing is facing yet another economic cyclone from Trump’s trade war which is aimed specifically at goods.

“At this extremely challenging time, removing artificial trade barriers with the EU can be a life ring to UK manufacturers, while independent economic analysis shows that even deeper alignment on goods and services would offset the impact of US tariffs on the UK entirely, boosting growth in our manufacturing heartlands particularly in the North and Midlands.”

Titled, ‘Twenty ways to fix Brexit’s growth hit’ the report was informed by evidence provided by the UK Trade and Business Commission (UKTBC) including in ain front of the Committee in February.

Their recommendations include key policies published by the UKTBC in 2023 such as advancing regulatory alignment between the UK and EU including the mutual recognition of conformity assessments on product safety which would cut costs for consumers.

shows deeper regulatory alignment as part of a with the EU would also boost the UK economy by as much as 2.2% meaning more money for public services and more jobs across the country.

The report also recommends a EU-UK Youth Mobility Scheme, something which shows is consistently popular among British voters.

Other recommendations include a new EU-UK security pact, greater energy co-operation, a  data adequacy agreement,  and the UK rejoining the Pan-Euro-Mediterranean Convention on rules of origin. 

Andrew Lewin MP, Chair of the cross-party UK Trade and Business Commission said,

"We have agency in how we respond to President Trump's tariffs and the greatest opportunity for our economy lies with the UK/EU reset.

“Now is the moment to pursue an ambitious new trade deal, with deep alignment on goods and services.

“If we tear down barriers to UK/EU trade, we can gain significantly more from our largest trading partner than we stand to lose as a result of the decision made in Washington."

Naomi Smith, Chief Executive of Best for 91��Ƶ��ַ, Secretariat of UKTBC said, 

“Despite having a trade surplus with the USA, Donald Trump has levied the same 10% tariffs on the UK that he has for many countries with a trade deficit, proving he puts little stock in the special relationship. The recommendations in the Business & Trade Committee Green Paper take us closer to the with our largest trading partner, that we now need more than ever, to shield us from a trade war.

“Our evidence to the Committee showed deep UK-EU alignment in goods and services, would more than offset the effect of Trump’s tariffs on the UK, and would reduce their harm on the EU by a third. Keir Starmer and Ursula Von Der Leyen must take this opportunity to restore stability in the midst of an increasingly volatile economic environment.”

Rt Hon Liam Byrne MP, Chair of the Business and Trade Committee, said, 

“Times have changed and so must our relationship with Europe. Russia’s bloodthirsty aggression is undiminished and requires a heftier deterrent. China’s race to arms accelerates, while America looks like a weary titan in retreat from the system it authored at the end of World War II. The consequences are obvious. In the UK and Europe we must both step up and on the world stage, step forward. To do so effectively demands we raise the rate of economic growth.

“These challenges, that will define this Parliament, will be easier to wrangle if we draw closer to Europe. But our relationship with the EU today is stuck in yesterday’s logic. Mere tinkering will not do, but making the leap to re-join the Customs Union or Single Market risks re-opening old wounds and imperiling the unity and political stability secured at the last election. We must find a bold but pragmatic new way forward.

“And so today the Business and Trade Committee is publishing a draft of the Green Paper on the UK-EU reset that we think ministers should have published. At its heart are twenty big ways in which we can draw closer to our neighbour, strengthen our joint security, grow our economy faster and raise the standard of living for the people we serve.   

“We’ll be asking the business, trade unions and consumer groups for their views on our ideas before finalising our Report to Parliament ahead of the Prime Minister's summit with President von der Leyen. There is so much at stake, we must all help ensure the reset is as bold and effective as it can be.”

UKTBC Chair Andrew Lewin MP responds to US tariffs

On 2 April, President Trump announced a new set of global tariffs, including a 10% tariff on all UK imports to the US and a 25% tariff on all foreign manufactured automobile imports to the US.

Responding to the introduction of new tariffs on UK imports to the US, Andrew Lewin MP, Chair of the cross-party UK Trade and Business Commission said,

"We have agency in how we respond to President Trump's tariffs and the greatest opportunity for our economy lies with the UK/EU reset.

“Now is the moment to pursue an ambitious new trade deal, with deep alignment on goods and services.

“If we tear down barriers to UK/EU trade, we can gain significantly more from our largest trading partner than we stand to lose as a result of the decision made in Washington."

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.

Summit Opportunity

President Trump has in effect ended eighty years of close partnership between North America and Europe. While there have been tensions before, all previous US administrations thought of European relations as an essential security and economic alliance. Second time round, President Trump does not. His Vice-President seems to treat Europe as the enemy.

Europe is responding. Various emergency meetings are bringing together leaders and other senior figures. Security – and Ukraine in particular – is the pressing topic. Underpinning this is the question of economic power. 

After the US, the UK is the EU’s largest economic and security partner. May’s Summit to be held in London is thus a crucial moment. More than any other single event it will be examined as to whether Europe can stand together without outside help. 

If there is not a significant outcome to the UK-EU Summit, then this will be judged accordingly as a failure, with all this would entail. There will be other opportunities in the future, but perhaps none so crucial.

Progress is steady but unspectacular

There are mixed signs of progress in relations between Brussels and London. Defence and security is being seen as the priority, and there is confidence in both the UK and EU that there will be a deal agreed. This is likely to be the main summit deliverable.

With energy security similarly being a priority for both the UK and EU there is also expected to be progress on this issue. Formal talks are expected to commence on linking Emissions Trading Schemes to avoid the need for any payments to be made under the Carbon Border Adjustment Mechanism. There may also be wider discussions on energy trading.

On other trade issues there has been slightly less movement. UK asks for an SPS agreement and those of the EU on youth mobility are expected to be taken forward to the next stage, including joint scoping and seeking of mandates. Importantly, it seems like the UK has decided on aligning food and drink rules with the EU’s, perhaps in the hope of more narrowly scoping the youth mobility scheme. Fish is also likely to feature, perhaps in an acknowledgment that the current situation is the starting point for future discussions.

Such a set of deliverables would of course have been unthinkable a year ago. Even a couple of months ago there was disquiet on the EU side while the UK team were talking up prospects. Events are leading to some level of rethink in Brussels.

Redefining UK-EU relations

Given a difficult inheritance even this progress made in restoring a functional trade relationship is significant. More is however needed to meet the mood of the moment, and in particular, a shared vision for the relationship. Ruthless pragmatism, as Cabinet Office Minister Nick Thomas-Symonds has described his approach, is not sufficient. Effective implementation of existing agreements, as often repeated by EU Commission Maros Sefcovic, likewise.

What the UK and EU should be committing to is to support growth and security across Europe through the deepest possible trade partnership consistent with mutual red lines. Neither side has yet come close to this point. 

In particular the opportunity is for the UK to commit to alignment with EU rules, and for the EU to respond by providing far greater market access through mutual recognition. This would provide a significant economic boost to both, as shown by analysts.

What is really needed is a partnership programme spelling out aspirational timelines for negotiations on subjects including fish, SPS, wider alignment, mutual recognition, mobility, and the UK accession to the Pan-Euro-Med convention on Rules of Origin. There should also be a regular schedule of ministerial level dialogues on subjects of common interest including on economic security, regulatory cooperation, and protecting global trade rules.

Two months to reset nine years

Both the EU and UK are nervous of making such commitments. Memories remain sore, of the UK’s political meltdown in 2019, and of the EU having to deal with hostility from UK Ministers and officials until 2022. Suspicions remain, that the EU will lock the UK into burdensome commitments, or that the UK is too unreliable, or too close to the US. These should not be easily dismissed, but can be overcome with mutual goodwill and more regular contact.

What leaders should bear in mind is that the process of negotiating specific deals such as on SPS and youth mobility is always difficult, as decisions inevitably bring criticism. There was never a moment as propitious as that of political convergence prior to the start of talks. That opportunity is provided unexpectedly by events in the US.

Most likely the summit will deliver a result just enough to satisfy the doubters, keeping the ball rolling but with some regret as to what didn’t happen. Just possibly though there will be a step change that redefines the UK-EU relationship for the years to come. That is what needs to be decided in the next two months.

What challenges has leaving the EU caused the retail sector?

The introduction of trading barriers with our biggest (and let us not forget, closest) trading partner has proven to be disastrous for British businesses. Following the adoption of the TCA with the EU, each industry has been affected in its own particular way and the retail industry is no exception. 

Research by and , an e-commerce service, highlighted a number of factors following 91��Ƶ��ַ’s exit from the EU that have restricted British retailers. These include:

1. Trade friction: Increased customs paperwork requirements, complex requirements for declarations, and greater regulation. These trade frictions have slowed down exports and increased operational costs for retailers.

2. Talent gap: The increased bureaucratic burden resulting from the TCA has left retailers with a shortage of expertise in customs compliance and international trade regulations. It was an area where many retailers, particularly SMEs that only exported to the EU, simply had no experience prior to 91��Ƶ��ַ leaving the single market.

3. Financial burdens: Requirements for VAT registration across multiple EU countries.

4. Regulatory divergence: The bigger the risk of the UK and EU diverging on issues like product safety regulations, the more costly it is for British retailers who have to prove their compliance with EU regulations to keep exporting their goods to the Single Market.

5. Supply chain disruptions: Delays to the transportation of materials between the EU and the UK due to trade frictions, such as an increase in time-consuming customs paperwork and checks on imports, have led to shortages across the retail sector.

Published in May 2024, the above research does not include the substantial effect of the on British retailers. Added to the already bleak picture, GPSR further raises the bureaucratic burden for British retailers who wish to export their goods to the EU or Northern Ireland by requiring them to find an in an EU country, or in NI, to act on their behalf, amongst other requirements.

How has this affected the economy?

Between 2019-2023, UK exports for non-food products to the EU shrunk from , an 18% drop. But it is not just 91��Ƶ��ַ’s exporters who have paid the price, British consumers have been faced with shortages and reduced choice due to the supply-chain issues mentioned earlier.

In an poll, 18% of shoppers said that items in their weekly shop had been unavailable, a number which has been rising 1% year-on-year. According to , 80% of British businesses think that Brexit has been the biggest issue for their supply chains over the last 12 months, whilst research by McKinsey found that 70% of British businesses have seen their supply side costs rise since 91��Ƶ��ַ left the single market. Zycus also reported that 50% of businesses had experienced significant delays at the border following the introduction of the TCA, particularly damaging for those firms who operate on ‘Just in Time’ methods of manufacture.

These effects have come at a particularly volatile time for British retailers, the effect of the Ukraine-Russia war, spiking energy prices and COVID-19 have all made British businesses more vulnerable to the trade frictions stemming from leaving the EU. With increasing geopolitical tensions around the world, including potential U.S. tariffs, it is more important than ever that the UK is able to reduce the unnecessary burden of our current trading relationship with the EU on British retailers.

How can the government help our retail sector?

So what can be done to help 91��Ƶ��ַ’s retail sector? One way in which the government can make an immediate impact is by focusing their attention on the regulatory alignment of both goods and services between the UK and EU. A , commissioned by Best for 91��Ƶ��ַ, found that closer alignment on goods and services could deliver between 1.7%-2.2% GDP growth in the long term. By making trade easier with our closest and largest trading partner, and reducing trade barriers for British retailers, the government could claw back between a quarter and half of the 4% GDP loss that the OBR estimates leaving the EU has cost our economy.

One such method would be the introduction of a (MRC). An MRC is an agreement between two trading partners - countries, or blocs of countries - to remove technical barriers to trade, to create smoother trade flows and reduce costs for businesses, like the duplication of costly paperwork and tests. Another route could be through deep regulatory alignment, with the UK adopting new EU regulations where such a move was deemed to be in the UK’s interests. This would remove the trade barriers associated with regulatory divergence, allowing British goods to enter the EU market more freely, and vice versa.

Closer regulatory alignment was one of the 114 recommendations made by the inaugural UK Trade and Business Commission (UKTBC). In addition, the UKTBC suggested modernising 91��Ƶ��ַ’s visa system. For retailers who are currently struggling with a skills shortage of experts in customs compliance and the like, a potential relaxation of business visitor rules would enable companies in the sector to bring skilled workers into the UK more easily for short term projects. The UKTBC also called for the UK Government to conduct a review of the visa costs and paperworks facing UK businesses, with a view of making the system more accessible to businesses of all sizes.

First published at

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.

Slow moving trains

Recently there has been a discussion in the media as to whether UK or German trains are less punctual. This doesn’t say much for the state of the railways in either country, but it serves well as an analogy for the state of the UK-EU ‘reset’ in that both sides have been struggling to set out a vision that does justice to a shared desire to move on from Brexit towards a deeper relationship.

While the government’s positivity towards the EU has been received as a welcome change, the failure to move on from public messaging first used in 2022 has led many across Europe to think they lack the intent to follow through. This was particularly the case in the latter months of 2024 when repeated negative messaging about the EU’s desire for a youth mobility scheme caused real concerns among Member States.

Brussels institutions were not however immune from criticism. As the new Commission was forming it was clear that growth and security would be priorities, but there appeared to be no picture of how a strengthened relationship with the UK, its second most important partner in both of these matters, could contribute. Even some hitherto UK-critical voices found this something of a dereliction of duty.

A disruptive President

Into which enter a Trump sized problem which might mean that the UK is now the EU’s most significant partner. In the President’s threats over tariffs and cutting a deal with Russia on its terms the whole of Europe has been forced into emergency meetings and actions. Perhaps the US can return to its previous role as friend and guarantor, but right now the signs do not look good.

Or perhaps, to return to the previous analogy, the US President has in effect jammed half the signals on the already poorly performing train network, leaving officials scrambling to both get the trains running and stop the damage. At the very least this means that officials are heavily distracted away from improving UK-EU trade relations towards dealing with the fallout.

UK and EU minds could of course turn to the neighbourhood as a result of Trump, though equally the US President’s demonstrable desires to divide and rule could increase suspicion in a relationship only just recovering from several years of Brexit turmoil. At best this is going to provide a limited boost to London and Brussels, at worst it could encourage those on both sides who think the other is behaving unreasonably.

Timetables drawn

That HMG moved too slowly after the election is by now well recognised, but in the corridors of Whitehall there has been a noticeable uptick in activity. Most significant it seems that Cabinet has signed off UK policy positions towards the EU reset. First evidence of this came in the form of a story in The Times that the government could be open to the youth mobility that is a core ask of the EU and in particular Germany.

This however was something of an inevitability, since the UK could not credibly say no given existing schemes such as with Australia, even if details will need to be negotiated. Much more important is the question of alignment with EU rules, which recent modelling suggests could be worth 1-2% in GDP, a boost simply not available from any other policy tool. To an extent this will be required to meet the manifesto commitment of an SPS agreement, which also featured in the story, and there has been talk of making a wider ‘bold offer’ to the EU, though this is currently undefined.

Better personal relations will have allowed for some private briefing to the Commission about UK progress. This does in turn create an issue for the Commission who have been somewhat contrary on mutual recognition based on UK alignment with EU rules, suggesting with little basis this as the only way forward on SPS and unacceptable on other policy areas. In the corridors of Brussels they are probably preparing now in much the same way as the UK Government, but with the added complication of needing to seek a mandate from Member States (incidentally UK government consultation with devolved governments has been notably improved).

Constructive UK attitudes towards working with Europe over security should help moves things forward, but there is a lot more that needs to be done. In particular the UK needs to find a way to say more around Brussels to shape the debate. Stakeholders are now being encouraged to work with EU counterparts, a welcome change from pre-2024. Various intermediaries are also now working between officials on both sides to seek to reduce misunderstandings. In both cases however this will take time to come to fruition and be held back by Ministerial nervousness about saying too much whether because of rather exaggerated domestic or negotiating sensitivity.

The train departing on May 19

Not everything will be decided when Keir Starmer meets Ursula von der Leyen and Antonio Costa on May 19 in the UK. This summit will however be a pivotal moment not least in shaping what can realistically be delivered in this Parliament.

Some in London have been sending out optimistic signals that major agreements can be reached at this point. This view is not currently shared in Brussels, where even a security deal is regarded as being fraught with difficulty. Notwithstanding anything else, the Commission needs that permission to enter into negotiations on trade matters with the UK. 

Regular reporting on topics ranging from fish to the Pan-Euro-Med convention on rules of origin is all part of the negotiating noise, as the package to be agreed starts to take shape at the summit. That probably will include something substantive on security, and formal negotiations linking Emissions Trading Schemes should also commence given severe time pressure in this area. In other areas it seems likely that both sides will enter a more intense scoping phase. Importantly all of this will need to be balanced between UK and EU asks.

Suggest such an outcome to UK officials, and they will say this is the least of their hopes. On the other hand, EU officials will suggest this is the limit of their ambitions. So a reasonable balance exists, perhaps.

What overwhelmingly supportive UK stakeholders need to be doing is keep applying the pressure in both London and Brussels. For there are plenty of green signals, but also a few warning signs that this will continue to be a challenging process.

This week Best for 91��Ƶ��ַ into the economic impact of closer EU-UK alignment, which also accounts for external factors including new tariffs imposed by the US. While we have been encouraged by the reception this work has received, from parliamentarians, commentators and the public, have questioned not only the validity of the exercise, but the justification for taking it on in the first place.

The first thing to say is that while Best for 91��Ƶ��ַ commissioned this report, it is completely independent research by economic experts at Frontier Economics, using the same methods used by the Treasury.

Frontier’s projection of a 2.2% economic boost from deep UK-EU alignment on goods and services should not only be a tempting offer for a government that has pegged their political fortunes to growth, but exciting for all who want to see the UK rebuild ties with our closest allies and largest market.

'This is what real levelling-up looks like'

Notably it gives this government a chance to succeed where the last one comprehensively failed. Deep alignment on goods in particular sees the greatest projected growth for areas like the West Midlands, Yorkshire and the North East. This is what real levelling-up looks like. But to the substantive point flagged in Jonty Bloom’s response to our research, published in the pages of the New European, that deep alignment is impossible outside the single market, on this point we must respectfully disagree.

The existence of the Trade and Cooperation Agreement between the UK and EU is itself proof that the UK does not need to copy a Swiss or Norwegian style deal. The very reason we undertook this research was precisely because we wanted to know what can be achieved within the political constraints the government bound itself to in its 2024 manifesto. Anything else is ignoring political reality.

Whether you agree with Keir Starmer or not, his red lines mark out the pitch we have to play on, and it is not insignificant. Deeper alignment through mutual recognition agreements in particular, which both the UK and EU have with many other nations but not with each other, can have a profound impact in reducing costs for businesses and consumers.

'Removing technical barriers to trade will yield the growth our report identifies, and all of this is achievable within Starmer's red lines'

The EU has such an agreement with Canada, covering everything from toys to tyres. As the EU’s neighbour, we should be even more ambitious. Removing technical barriers to trade will yield the growth our report identifies, and all of this is achievable within Starmer's red lines. This level of alignment goes beyond the current important policies dominating the conversation such as a veterinary (SPS) agreement or youth mobility, and as a result the projected growth also goes beyond some analysts more modest estimates.

Much has been made of the EU’s unwillingness to grant the UK any kind of new arrangement, but the world has changed since the original Brexit negotiations. Global events have thrown the importance of the UK-EU alliance into sharper focus, and after almost a decade, Brussels has a more willing partner in Downing Street.

Unlike his predecessors, Starmer has repeated his commitment to honouring international agreements, including the full implementation of TCA, Windsor Framework and membership of the European Court of Human Rights. This, along with the uncontroversial passage of the quietly important Product Regulation and Metrology Bill through parliament, should boost trust in the EU over beneficial alignment, and assuage their fear that a new, low regulation “Singapore on Thames” might emerge this side of the Channel.

Our report shows there are economic benefits on offer from alignment for both the EU and the UK, and it goes without saying that any offer of closer economic ties would be linked to broader negotiations on issues including the EU priorities of defence and youth mobility.

'if politics is the art of the possible, our report shows what is possible in our current political reality'

The economic dividends are just one reason europhiles in the UK should back this move. The unfortunate truth of Brexit is that for almost every day we remain unaligned with our largest market, the regulatory gulf increases, making the prospect of the UK ever rejoining ever more difficult. While some will see anything short of rejoining as an unpalatable compromise, the fact remains that the challenges for businesses and consumers increase every day that the UK is not aligned with the EU.

Jonty Bloom is right to say that politics trumps economics and Brexit was perhaps the clearest demonstration of this fact. But if politics is the art of the possible, our report shows what is possible in our current political reality. It is a possibility for growth that our government would be mad to pass up.

Originally published in

For years, British businesses have faced unnecessary costs, delays, and red tape when trading with our largest market: the European Union. Since Brexit, regulatory divergence has added friction and uncertainty, stifling investment and pushing up costs for consumers. But a by Frontier Economics, commissioned by Best for 91��Ƶ��ַ, has revealed a clear path to boosting the UK economy—closer regulatory alignment with the EU.

The findings are stark: greater alignment could grow the UK economy by 1.7% to 2.2%, recovering up to half of the economic hit caused by Brexit. Even a more limited approach—aligning only on goods—would still deliver significant benefits, particularly for regions outside London. With a rare opportunity to renegotiate our trading relationship in 2026, the Government must act. Below is a quick summary of why people are talking about the report and why you should be too. 

1. Regulatory alignment means real economic gains

The report models the economic impact of aligning UK and EU regulations across goods and services. The results are clear:

• Deep alignment in both goods and services could grow GDP by 1.7% to 2.2%.

• Alignment on goods alone would still boost GDP by 1% to 1.5%, with manufacturing-heavy regions seeing the biggest gains.

• By making trade easier, alignment could recover between a quarter and a half of the long-term GDP loss caused by Brexit, estimated at -4% by the Office for Budget Responsibility (OBR).

2. Benefits for businesses and workers across the UK

Businesses, particularly SMEs,are being strangled by Brexit-induced bureaucracy. UK exporters have to navigate different product standards, added certification costs, and border delays. Alignment would cut unnecessary red tape, making it easier to sell to the EU without costly compliance hurdles. And the economic benefits wouldn’t just stay in London. In fact, the regions that would gain the most from alignment on goods include the Midlands, Yorkshire and beyond. By helping sectors like manufacturing, these regions would see a disproportionate economic boost, creating jobs and strengthening local economies.

3. The EU wants a better deal too

The EU also stands to gain from closer cooperation. The study finds that regulatory alignment would increase EU exports by $29.7bn—almost as much as the $32.9bn boost for the UK. This mutual benefit makes an improved deal politically feasible, particularly in a post-Trump world where the EU and UK face common economic and security challenges.

4. A smarter trade strategy than post-Brexit deals

The government has spent years chasing trade deals that barely move the needle. The combined impact of the Australia and New Zealand deals is forecast to add just 0.1% to GDP over a decade—ten times less than the gains from EU alignment. Similarly, the much-debated Heathrow expansion is expected to add only 0.43% to GDP by 2050, at enormous costs, and primarily benefiting London. The message is simple: if the UK wants growth, it needs to focus on its biggest trading partner.

5. Public support is overwhelming

Our polling shows that voters overwhelmingly back closer alignment. Across 91��Ƶ��ַ, support for following some EU rules to improve trade access is the most popular option in all but two constituencies. A majority of 54% of voters would accept following some EU rules and regulations to improve trade, almost double the 29% who would not.

In 426 constituencies (67%), the most popular option was to improve trade access even if it meant following all EU rules. The mandate for action is clear—voters want a government that prioritises prosperity over post-Brexit dogma.

A golden opportunity the government must seize

The Labour government has pledged to rebuild relations with the EU, and the first official review of the Brexit deal in 2026 presents a crucial moment to make that happen. As Andrew Lewin, Chair of the UK Trade and Business Commission, put it:

“The Chancellor was right to say that when faced with policy choices about how we grow the economy, the answer can’t always be no. Now is the time to say yes to closer regulatory alignment with the EU and start to undo the damage done by the failed deal of the last government.”

Aligning with the EU isn’t about reopening old Brexit debates—it’s about facing economic reality. Cutting trade barriers, boosting GDP, and creating jobs should be a no-brainer for a government serious about growth. 91��Ƶ��ַ has a chance to reverse some of the self-inflicted economic harm of Brexit. It must take it.

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The, which was commissioned by Best for 91��Ƶ��ַ and undertaken by Frontier Economics, models the impact of greater EU-UK regulatory alignment on the UK economy along with the impact of external factors - specifically, the effect of potential new import tariffs imposed by the USA. 

The independent study found that the UK Government can secure significant growth (1.7% to 2.2%) through a policy of deep alignment in both goods and services with the EU while alignment on goods alone can also drive growth (1% to 1.5%). Significantly, alignment on goods offers disproportionate economic dividends for areas outside London with largest growth in this scenario projected in the West Midlands, East Midlands, North East and Yorkshire. And it’s not just a boon for the UK. In monetary terms, alignment delivers similar growth in exports for the EU ($29.7bn) as for the U.K. ($32.9bn). In the scenario of US tariffs being applied, deep alignment between the EU and UK shields the EU by offsetting some of the lost US trade with friction free UK trade. 

Closer regulatory alignment will not only save costs for British and EU businesses, over time, this could help the UK recover between a quarter and a half of the economic hit of Brexit to UK GDP, which the OBR had calculated at -4%. In the shorter term, the growth effects are around double the government’s 2019 upper estimates of the effects of a UK-US Free Trade Agreement. The proceeds from such growth could also be used to finance much needed public investments - for example, close to two years of the Government’s desired increases to the NHS capital budget.

The results suggest that the boost to the UK economy provided by a closer trading relationship with the EU could be 10 times larger than the combined effect of the post-Brexit trade deals signed with Australia and New Zealand, which are together expected to deliver a mere 0.1% over the next ten years.

Supporting this groundbreaking research, of nearly 15,000 people undertaken by YouGov on behalf of Best for 91��Ƶ��ַ found that support for alignment with EU standards and regulations was the most popular option in all but two constituencies in 91��Ƶ��ַ (Castle Point and Clacton). 

Two in five (41%) said the UK should be more closely aligned with the EU with one in five saying they either; favour the status quo (19%), think the UK should be less closely aligned with the EU (22%)  or that they don’t know (18%). 

The poll also found that in every seat in GB bar one, the most popular option was for the UK to improve trade access with the EU even if it required the UK to follow some specific rules, standards, and regulations. In Farage’s Clacton seat, the results are extremely close with 42% opposing and 39% supporting. In topline polling numbers this means a majority (54%)  of British voters would be willing to follow some EU rules, standards and regulations to improve trade access, almost double the number who would not (29%) .  

Amazingly, the poll also found that in 426 constituencies (67%) across England, Scotland and Wales, the most popular option was for the UK to improve trade access with the EU even if it required the UK to follow all specific rules, standards, and regulations.

Across the country, more voters would be willing to follow all EU rules (44%) compared to those who would not (38%). 

Andrew Lewin MP, Chair of the UK Trade and Business Commission,  said,

“The Labour Government is the first in more than a decade with a stated aim of negotiating a stronger and closer trading relationship with our allies in the EU. This timely new report shows the opportunity on offer, with an uplift to our economy worth tens of billions of pounds and benefits flowing to all parts of the country.

“The Chancellor was right to say that when faced with policy choices about how we grow the economy, the answer can’t always be no. Now is the time to say yes to closer regulatory alignment with the European Union and start to undo the damage done by the failed deal of the last government.”

The government advises that the General Product Safety Regulation (GPSR) applies to all consumer products which are to be placed on the EU or Northern Irish markets. The manufacturer must make sure that all goods meet the safety requirements outlined in the regulation and conduct an internal risk assessment that is then written up into a document.

Manufacturers must make sure that products are easily identifiable by consumers by including a batch or serial number where possible. If not, the information should be on the packaging of the product. Products should, where needed, contain instructions for use in languages that consumers can understand. This means that translations of instructions from English to the necessary EU language are needed. 

All manufacturers must make sure that consumers can contact them if they want to. This means that your product or its packaging must include: 

• Your company's name, registered trade name or registered trademark

• A contact point such as a webpage

Economic operator (also known as a “Point of access”, or "Authorised representative") 

To continue to sell your goods into the EU and Northern Ireland, having made sure that you meet the safety regulations outlined within GPSR, your business must find an economic operator. This operator must be based in the EU or Northern Ireland and is responsible for confirming that your goods meet the standards they need to. 

These economic operators, also known as a  “point of access” or "authorised representative", ensure that your business is contactable if your product causes damage or injury. This legislation was designed to stop countries like China flooding the European market with goods that might be unsafe without any way of identifying the original supplier, or checking what standards the goods meet (such as a CE Mark).

The EU economic operator must check that your product's documentation is in line with GPSR and then store that documentation for a period of ten years from the date the product is placed on the market. This is so that the EU can quickly and easily check the conformity documentation, if necessary,  ‘in house’ rather than seeking to secure the documentation directly from your business. 

The economic operator for your business can be:

• An EU or NI based manufacturer of your goods

• An EU or NI based importer of your goods

• An authorised individual who legally lives in the EU or NI

• A company who provides: warehousing, packaging, addressing, dispatching  

What other resources are available?

The current set of current government advice:  

The current set of guidance from the European Union:  

For guidance from Made in 91��Ƶ��ַ, a non-profit organisation helping businesses with trade marking issues:  

For more general guidance regarding international trade and exporting for your business view the Federation of Small Business:  

What can I do?

If you are feeling overwhelmed and are unsure what to do, it is important to contact your sector’s trade body for more personalised advice and information. If you have EU or NI businesses that import your goods, then it may well be worth asking them if they are prepared to become your EU economic operator.

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Today, hidden from the icy January cold inside the Capitol, Donald Trump becomes the 47th President of the United States. The President is riding on a high, fresh from hosting a rally for his supporters on Sunday where he promised to bring down inflation, bring back jobs to America and impose tariffs on competitors around the world. But whilst Trump may be insulated from the cold today, how might the UK’s economy fare when exposed to an increasingly protectionist United States?

What has Trump said about tariffs?

Prior to the election, Trump promised to impose a and up to 20% tariffs on goods from elsewhere. But despite labelling himself “Tariff Man”, Trump’s other pledges - such as bringing down inflation - would be hard to achieve with such a policy, as American businesses would almost certainly need to hike prices for domestic customers to cover the extra import costs.As it stands, the American economy does not have the capacity to completely isolate itself from global supply chains.

More recently, Trump has promised to on his first day in office, often bemoaning the latter as a backdoor entrance for Chinese goods into the American market. Elsewhere, Germany’s Economic Minister, Robert Habeck has that his country may be the main target of Trumpian tariffs on the European Union. Trump’s first presidency illustrated his dislike of the EU and during his campaign in 2024 he asserted that .

What has the UK government said about Trump's tariffs threat?

publicly that he doesn't believe Trump would place tariffs on UK goods - but that doesn't mean the Government isn't preparing for such an eventuality. Business and Trade Secretary Jonathan Reynolds has about the potential impact of tariffs given the “very globally oriented (nature of the) economy” - fears felt across global markets that reactionary reciprocal tariffs could lead to inflation throughout the international supply chain. Currently the UK exports around £60 billion worth of goods to America, accounting for 15.4% of our total goods exports.

On Friday, Prime Minister Keir Starmer with the US for a UK-US trade deal, despite previous concerns over lower US standards on agricultural goods such as . 

What happened during Trump's last presidency?

Trump is famed for his unpredictability, and with the difficult challenge of appeasing American consumers and his own protectionist instincts the next four years are likely to be erratic. The first 15 -months of Trump’s first term saw tariffs placed on just . He focused initially on China before extending tariffs to the EU, with particular tariffs on steel and aluminium for UK exports.

When the first Trumpian tariffs were imposed on the UK, the country was still a member of the EU and therefore acted as part of the trading bloc to introduce on a wide range of US goods. Upon leaving the EU, Liz Truss (then-International Trade Secretary) of retaliatory tariffs on American goods. Whilst Trump did follow through on his promise from his first Presidential campaign to pursue high tariffs on Chinese goods, his other suggestion that he might enact a blanket tariff of 10% on all imports was instead focused on specific products like steel and aluminium.

How should the UK respond to Trump?

To mitigate the threat from an erratic President who clearly views trade as a bargaining tool, the UK should prioritise trade with our largest and closest trading partner. The in 2023, over three times the amount of goods exported to America. In total, EU trade accounts for 42% of all British exports in goods and services, and with the EU likely to be under a similar tariff regime (if not more stringent) to the UK, a Trump presidency offers both the UK and EU an incentive for closer cooperation.

Lord Kim Darroch, Former British Ambassador to the USA and member of the UK Trade and Business Commission: “The US is an invaluable British ally but by definition, the Government cannot prioritise trade with both America and the EU, a strategy that risks delivering the worst of all worlds. Recent history suggests that Trump responds to strength and there is strength in numbers. We are better working with the incoming US administration in concert with our European allies.” 

The belief that 91��Ƶ��ַ's trading priorities should lie with the EU rather than the US is shared by the public. A poll of over on behalf of Best for 91��Ƶ��ַ illustrated that think that 91��Ƶ��ַ's economic future lies with the EU compared to just 19% who favour prioritising trade with the USA. As the world braces itself for four more years of MAGA mania and all the corresponding uncertainty a Trump presidency brings, now is the time to align with our closest and most reliable allies in the form of the European Union. 

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Mutual Recognition Agreements of Conformity Assessments (MRCs) might sound a bit technical, and in a lot of ways they are. But they are also pretty important, especially when it comes to economic growth and the ongoing UK-EU reset. So to help you out we have created a handy FAQ outlining what they are, why they matter and most importantly, how they impact our relationship with the EU, so that you too can be an expert on all things MRC related.

What are conformity assessments? 

Conformity assessments are procedures used to determine whether a product meets the necessary standards or regulations, ensuring safety, performance, and compliance with legislative requirements. These assessments are essential for maintaining consumer trust, safety standards  and regulatory compliance. 

Taking electrical and electronic products as an example, it is likely that you will have come across both the EU’s and the UK’s conformity assessment markings. In the EU, if products have been assessed for conformity they will bear the ‘CE mark’. In the UK, post Brexit, some products must bear both the CE mark and the UK’s own ‘UKCA mark’. Businesses that want to sell their product in a country must pay to test their products and gain these marks before they can do so. 

What are Mutual Recognition Agreements or MRCs? 

A mutual recognition agreement of conformity assessments (MRC)  is an agreement between two trading partners  - countries or blocs of countries - to remove technical barriers to trade to create smoother trade flows and reduce costs for businesses, like the duplication of costly paperwork and tests. 

MRCs can be arranged without or alongside wider free trade agreements. Australia, Israel, New Zealand and the US have MRCs with the EU, without a wider free trade agreement. Canada, Japan and South Korea have MRCs within the context of their respective FTAs.

The EU offers two types of MRCs: traditional and enhanced.

Traditional MRCs

A traditional MRC is an agreement to recognise a trading partner’s  ‘conformity assessment’ bodies and procedures, in order to avoid the duplication of testing and certification. 

Traditional MRCs may cover a single sector or they can be multi-sectoral and cover a range of sectors. The Comprehensive Economic and Trade Agreement between Canada and the EU (CETA) is a trade deal which includes an MRC with the broadest sectoral coverage to date, covering virtually all sectors and aspects of Canada-EU trade from automotive standards to pharmaceutical manufacturing.

It is important to note that traditional MRCs do not require trading partners to align standards and regulations, nor do they require partners to recognize each other’s requirements as equivalent. They are merely limited to the recognition of the competence of each partner’s Conformity Assessment Body (CAB) to carry out testing, inspection, or certification of conformity. Put simply, a Canadian business can get their product marked as safe for both Canada and the EU by the same testing facility in Canada.

Enhanced MRCs 

Enhanced MRCs involve both the mutual recognition of conformity assessments and the automatic acceptance of regulatory standards. Examples include some sectors of the EU’s Switzerland agreement; the marine equipment agreement between the EU and US, which is based on the rules of the International Maritime Organisation (IMO) of which both are members.

In all cases, enhanced MRCs are concluded either on the basis of broad and deep regulatory alignment or conformity through compliance with international standards. 

Does the UK have any MRCs of conformity assessments in place?

Yes. After Brexit, the UK replaced many of the EU’s MRCs with continuity agreements to maintain smooth trade post-departure. Some of these continuity agreements have since been superseded by new MRCs as the UK has established Free Trade Agreements (FTAs) with individual countries.

Notably, even Boris Johnson’s Conservative Government agreed to include MRCs of conformity assessments with Australia and New Zealand, as part of his administration's post-Brexit FTAs with both countries.  

In addition to the bilateral MRCs the UK has adopted since Brexit, the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), spearheaded by Rishis Sunak’s Conservative Government, has also introduced provisions for MRCs. As a result, now that the UK’s accession to CPTPP has taken place, the UK will enjoy a higher level of mutual recognition with 11 countries in the Pacific region compared to our closest neighbours and largest trading partner across the Channel.

Does the EU have existing MRCs in place?

Yes. The EU has a range of MRCs in place, both traditional and enhanced, depending on its relationship with the trading partners in question. The most recent and most relevant MRC deal negotiated by the EU is the EU-Canada CETA deal, which came into force in 2017.

Does the UK have an MRC in place with the EU?

Incredibly, not currently. This means that UK businesses exporting to the EU, as well as EU businesses exporting to the UK, face additional non-tariff barriers as they have to ensure products meet both conformity regimes, including the UKCA and CE requirements, and acquire certification separately in order to export. This duplication increases costs for businesses and consumers, and hampers economic growth.

What does UK industry want?

In May 2023, the UK Trade and Business Commission published an important report, Trading our Way to Prosperity which recommended, among other things, that the UK Government work closely with the EU in order to establish a plan for the mutual recognition of conformity assessment results to reduce trade friction for UK businesses trading into the EU.

The report was put together with over 80 hours of live testimony from 234 expert witnesses, industry leaders and business owners. And with evidence submissions from over 200 organisations as part of an open consultation.

The Commission is due to be relaunched in January 2025 to provide original research and evidence based solutions to the problems businesses face after Brexit. This comes after new Best for 91��Ƶ��ַ revealed that almost half of all voters (44%) think that 91��Ƶ��ַ’s economic future lies with the EU compared to those who think the Government should prioritise trade with the USA (19%). 

A report by the British Chambers of Commerce, published in December 2024, highlighted that 41% of exporters say the Brexit deal is hindering their growth, and recommended that the UK Government “Negotiate a supplementary mutual recognition agreement on conformity assessment and markings of industrial, electrical and electronic goods”.

What does EU industry want?

Industry support within the EU for new MRCs with the UK signals potential for progress towards a UK-EU MRC. Indeed, a recent conducted in 2023 by the European Commission’s Directorate General for Trade among EU-based conformity assessment bodies found strong support for expanding MRCs, with the UK among the countries with above-average interest. 

What does this all mean for a UK-EU trade deal? 

The EU and the UK have established notable precedents for incorporating MRC clauses within larger trade agreements. Examples include the previous Conservative UK Government's post-Brexit trade deals with Australian and New Zealand, and UK’s accession to the CPTPP. On the EU’s side, the EU’s CETA deal with Canada provides a comparable precedent. 

In this context, an EU-UK MRC should be seen as a feasible, mutually beneficial policy proposal, within the UK Government’s negotiating red lines. Any such agreement, or agreements, would significantly reduce trade barriers for businesses on both sides, facilitating economic growth in both the UK and EU.

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On 13 December, the European Union’s new General Product Safety Regulation (GPRS) law came into effect, impacting businesses across 91��Ƶ��ַ by updating requirements on manufacturers, importers, and distributors of products into the EU and NI  by introducing new obligations around risk assessment.

The biggest change is that legislation requires that businesses must now have a named representative (‘a responsible economic operator’) within the EU or NI to ensure compliance tasks are fulfilled.  

Larger businesses are likely to be compliant with the new rules without much adjustment - many larger manufacturers and suppliers already have a responsible person nominated for other regulatory purposes. But for smaller businesses or sole traders, the new obligations are a game-changer. Below we look at how these businesses can get a point of contact in the EU or NI.

Please note that this post is not extensive or exhaustive. It does not seek to be or act as a substitute for legal or professional advice. For further information on the GPSR, please visit the UK Government , and seek any necessary legal advice.

What does the legislation say?

Article 16 of GPSR sets out that products can only be placed on, or made available to, the EU and NI markets if there is a responsible economic operator established in either territory to fulfil certain compliance tasks and act as a point of accountability with market surveillance authorities.

‘Established’ means having a presence in NI or the EU, it cannot simply be a PO Box address. For a business, this can be a registered office, headquarters, or your permanent place of business (for example, a retail outlet, distribution centre, or other functions) in that country. For an individual, this can be the place where you are resident.

Who can be a responsible economic operator?

A responsible economic operator can either be the manufacturer, the importer, a fulfilment services provider (involving two of the following – warehousing, packaging, addressing or dispatching – but not parcel, postal or freight services), or an authorised representative.

For small businesses and sole traders exporting to the EU or NI, it is likely that their economic operator will be an authorised representative. An authorised representative is a natural or legal person that a manufacturer appoints to represent them and carry out certain duties on their behalf. 

What is the economic operator responsible for?

The role of the responsible economic operator is, where necessary, to cooperate with the relevant regulatory bodies, which includes ensuring that all product safety incidents are reported. 

In practice, this means the economic operator has responsibility for verifying technical documentation and keeping it in case it is requested by the authorities for proof of compliance, as well as making sure products have the right information on them (e.g. safety information or serial number). If the product does not comply or if risks are reported, the economic operator must inform relevant regulatory bodies.

The name, registered trade name or registered trademark, and contact details (including postal address) of the responsible economic operator must also be indicated on the product or on its packaging, the parcel, or an accompanying document.

What happens if you do not have a responsible economic operator in the EU?

Where there is no responsible economic operator established in NI or the EU already, the manufacturer placing the product on the market should take steps to ensure someone is in place to undertake those compliance tasks or the product cannot be placed on the market.

If the product does not comply with GPSR legislation but is placed on the EU or NI markets anyway, then a range of penalties exist, ranging from fines, to product recall and even legal action in severe breaches of legislation. Sellers will be held accountable for safety issues, even if unaware. 

How to find a responsible economic operator?

If you are a small business or sole trader there are a number of services online where you can pay a professional to act as your responsible person. Online marketplaces may also provide this service.

Where a manufacturer has not arranged an authorised representative within the EU or NI, an importer (e.g., a retailer) seeking to sell those products in NI, or a fulfilment service provider (where no other economic operator is established in the EU or NI) will act as the responsible economic operator.

How can you trust these services?

Small business owners and sole traders may be naturally cautious about paying someone they’ve never met in another country to provide this service. Legitimate service providers should have an Economic Operators Registration and Identification number (), and the validity of EORI numbers can be checked on the .  As with anything else, it is worth checking reviews from past customers and Businesses should always seek official guidance from the UK Government.

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Today is the United Nations' International Migrants Day, a day to shine a spotlight on the invaluable contributions of millions of migrants around the world. In a debate so often defined by negativity and misrepresented by those on the right of British and European politics, we want to highlight six ways immigration benefits the UK.

Supporting health and social care

Without immigrants our public services would not be able to function. More than 17% of all NHS staff are from overseas, rising to , the lifeblood of the NHS. Migrants are and without them we would be faced with mass labour shortages. 

Even with the addition of these individuals, the Health and Social Care Committee in Parliament has warned of a in the sector, with 9.9% of all social care roles currently vacant, equivalent to . Concerningly, the latest figures show that there has been a in the number of Health and Social Care visas granted in the UK, after the last Conservative government banned direct care workers from bringing dependents on their visa.

A net contributor to public finance

One of the most egregious myths surrounding immigration is the idea that immigrants act as a drain on the public finances - when in fact the opposite is true, with migrants contributing more to the public finances than the average native-born Brit.

While British natives likely take more out of public finance by being born and educated here, most migrants move to this country once they are of working age. The Office of Budget Responsibility has projected that the average migrant, who moves to this country at the age of 25 and lives until 80, will contribute over the course of their lives - more than the average Brit. Compared to the average UK adult, skilled worker migrant tax receipts were approximately , providing a much-needed boost to the Treasury. And if immigrants are unemployed, they are - 22% compared to 31%.

Filling labour shortages

It is not just the health and care sectors that rely on immigrants. Across the UK, businesses large and small rely on foreign-born talent. From hospitality and farming to technology and law, migrants are a crucial composite of the labour force in this country. 

Post-Brexit, industries that rely on seasonal workers have struggled to fill labour shortages, with new barriers to entry and a lack of British workers willing to fill the gaps. We've seen fruit rotting on vines, in supermarkets, HGV driver shortages and a in the run-up to Christmas. 

The story is different in 'higher-skilled' sectors such as IT and healthcare, which account for many of the new arrivals into the UK. Migrants filling these roles are likely to have than the average Brit, not only positively contributing to public finances, but overall increasing the wages of native British workers on the median salary and above - busting the myth that immigration results in wage suppression. Overall, migrants take up , a 5% higher share than their proportion of the UK population. With the number of British natives that are economically inactive increasing post-Covid, immigrants will be imperative for economic growth. 

Helping to address our ageing population

Birth rates in the UK are now, according to the ONS, at their lowest levels since records began in 1938, at a . With a rapidly ageing population, migrants will be essential to replace UK-born workers as they retire, paying into the public finances that we need to fund pensions and healthcare - and helping avoid the trap of population decline, which is heavily linked to economic stagnation .

With an ageing population comes a demand for care workers: there are currently more than 150,000 unfilled roles in the sector, and rising demand means are expected to be needed in the next decade. Prior to Brexit, the sector relied on what the Nuffield Trust called the 'relief valve' of EU migration, in a system that didn't (and still doesn't) have an effective way to train and keep British care workers. ONS data shows one in four care workers and home carers was born outside of the UK - but the new restrictions on bringing dependents on Health and Social Care visas is likely to compound existing shortages in the sector. 

Driving economic growth and productivity

Migration has long been known to , and this is no different for the UK. Not only does migration fill job shortages and drive dynamism, but the published a report which found that the higher the level of migration, the less borrowing and debt the UK would be in by the end of the forecast period of 2028-29. The analysis also estimated that a high migration scenario would lead to more than a , whilst a low migration scenario would decrease GDP by more than 1%. 

A vibrant culture

Finally, the diversity of this country is our great strength and we are fortunate to live in a thriving multicultural society. We have a British-Nigerian Leader of the Opposition, who follows in the footsteps of a Prime Minister descended from East African-born Hindu parents of Indian Punjabi descent. We cheer on English football players with roots across Africa and the Caribbean (15 of England’s 26-team squad could have played for another country). We dance to music from Asia to South America (the biggest UK artists like Raye and Dua Lipa are often dual nationality). We are a nation made richer by immigration, both figuratively and literally. 

When we wake up from our Swedish beds and step into our German cars driven by Arabic logarithms and American technology, when we drink our Italian coffee and eat our Chinese takeaway, when we listen to Jamaican music through Japanese sound systems, when we connect with each other on the basis of our shared humanity rather than an abstract nationality, we are all the richer for it.

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Today the European Union’s new General Product Safety Regulation (GPSR) comes into effect, impacting businesses across 91��Ƶ��ַ by introducing new post-Brexit trade barriers with our closest overseas market, and delivering another blow to businesses exporting to Northern Ireland. 

Below we go into detail, exploring what GPSR is, who it will affect and why it matters the most for small businesses and sole traders. 

Please note that this post is not extensive or exhaustive, and does not seek to give legal advice. For further information on the GPSR, please visit the UK Government .

What is GPSR?

The General Product Safety Regulation (GPSR) was introduced by the EU to better protect consumers in the bloc against potentially dangerous products sold offline or online.

Legislative changes became necessary following the rapid growth of e-commerce and which has made it increasingly common for professional and legitimate-looking websites to deliver substandard or even dangerous goods.

It replaces the EU’s old directive regulating product safety, the General Product Safety Directive (GPSD).

When does GPSR go into effect?

The GPSR came into force on 13 December 2024. From this date, all traders selling in the EU must ensure any new products placed on the market comply with GPSR requirements, or bring them into compliance with the new requirements. 

After this date, products that don’t comply might need to be withdrawn from the market and traders may face sanctions.

What is covered by GPSR?

The GPSR will apply to all consumer goods, including digital products, placed on the EU and Northern Ireland markets - including - that aren’t already subject to product specific legislation that ensures they are compliant with EU rules. 

This means that businesses of all sizes are impacted, from small companies and local shops to international giants. 

Does GPSR apply to the UK?

GPSR does not apply to goods being placed on the GB market. GPSR does not impact goods coming into 91��Ƶ��ַ but it applies to businesses of any country that want to sell into the EU and Northern Ireland that are not already part of the single market. This includes UK businesses that sell their goods into the EU Single Market.

What does it mean for Northern Ireland?

Businesses must follow the same rules when exporting to Northern Ireland. This is because of the last Government’s Brexit deal - the alternative would be border checks along Northern Ireland's 500km border with the Republic of Ireland. It means that many small businesses in 91��Ƶ��ַ have now made the decision to to this part of the UK. 

In practice, what will GPSR mean for businesses?

GPSR essentially updates the requirements on the manufacturers, importers, and distributors of products into the EU and NI by introducing new obligations around risk assessments, documentation and labelling requirements. The potential gamechanger is that the legislation also requires businesses to have a named representative within the EU or NI to vouch for the safety of products. 

Businesses could face penalties for non-compliance.

Why is it such a big deal for British businesses specifically?

The UK’s legislation for general product safety is based upon the EU’s old directive regulating product safety, the General Product Safety Directive (GPSD). Legislation in 91��Ƶ��ַ is not changing, meaning that there will now be some divergence in approaches to general product safety between 91��Ƶ��ַ and the EU. This means that from today, handling a cross-border product safety issue is likely to become even more complex.

A lot of British businesses, in particular sole traders and those of a smaller size, are weighing up whether or not it is practical to keep selling to the EU and NI. For small businesses already under strain from increased paperwork and costs from Brexit, having to fund a member of staff in the EU will be too much for many to make exporting financially viable. With 60% of the UK’s workforce employed by SMEs, it is feared this could cost jobs and economic growth.

What does it mean for UK consumers?

People in Northern Ireland could see a reduction in the choice of goods sold by sole traders based in 91��Ƶ��ַ. For consumers in England, Scotland and Wales, it may result in price increases as SMEs seek to replace lost income from their inability to sell in the EU or Northern Ireland. 

What can be done to make things better?

While it is unclear exactly how damaging this development will be and how the new regulation will work in practice, anything the UK Government can do to remove trade barriers, reducing costs for businesses and consumers, will be essential.

To ease trade frictions resulting from the GPSR in the short term, the UK Government could use the Product Regulation and Metrology Bill to bring product safety regulation in GB back into alignment with regulations in the EU and NI, once the Bill becomes an Act.

In the longer term, the UK Government could use the relationship reset with the EU and upcoming review of the Brexit deal to agree to a general policy of beneficial regulatory alignment between the EU and UK, as outlined by the UK Trade and Business Commission in their report, Trading our way to Prosperity. 

Alignment is one of 114 recommendations to remove barriers to trade between the UK and the EU. Brexit trading arrangements are due to be reviewed in 2026.

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The first 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.

Where do relations between the UK and EU stand at the end of 2024?

July’s General Election has already been consequential for UK relations with EU Member States and the institutions based in Brussels. New ministers have engaged with counterparts in a way that just hadn’t been seen since 2016, as friends and partners. This has been particularly the case for Nick Thomas-Symonds with his ministerial portfolio coordinating the extensive range of UK interests. Perhaps taking inspiration from Bob Dylan there’s a seemingly ‘never ending tour’ of engagements across Europe which has been generally well-received and hadn’t previously been seen.

Brussels had prepared for a Labour government with a plan to reward such positivity with an early 2025 summit that would cement deeper relations. While this has been agreed there was pushback from some around the EU feeling the new UK Government had not changed enough substantively, for example in dismissing an EU priority like youth mobility.

What is the next step in the UK-EU relationship reset?

Such tensions serve as a reminder that we are just at the start of the process of deepening trade relations. Thinking of the stages of such a negotiation, they would look something like:

1. Establish friendly relations / desire to deepen existing agreements

2. Define internal interests and positions

3. Agree overall agenda and scope of talks

4. Negotiate detailed substantive provisions

5. Conclude talks

6. Ratify agreement domestically

Having passed that first stage, the EU and UK are now considering in more detail their objectives, with a view to shaping a joint forward programme at the summit. This is arguably the crucial part of any international trade negotiations, when the two parties agree the scope for improvements around their objectives and red lines. For the UK, Labour’s manifesto suggested SPS, mobility for touring artists, and recognition of professional qualifications. Known EU interests include protecting their fishing rights and an EU-wide scheme for movement of young people. Much more will be added.

Indeed, with numerous potential ways to improve relations this process is likely to be iterative, and individual subjects can be at different stages of negotiation. For example, arrangements concerning Gibraltar have been in substantive talks for some time, and credible reports suggest that both the UK and EU have already agreed on the broad outline of a security deal. 

What deadlines should the UK and EU be working towards?

On trade there are two particularly important deadlines. First is the start of 2026, when certain UK goods exports will be hit with extra costs under the EU Carbon Border Adjustment Mechanism (CBAM). Then there is 2028, by which time a UK Government is likely to want to wrap up new deals in time for an election. Three years is not long for a complex negotiation on details, one year even tougher. To those who would note the original Trade and Cooperation Agreement was negotiated in that timescale, this is one of the reasons for its inadequacy. There are other ongoing issues such as data, and implementation of the TCA is due for review in 2026. These are likely to be incorporated in the ongoing process.

Such international talks are rarely easy, and the current moment in UK-EU relations is particularly challenging given very different approaches. EU negotiating positions are agreed semi-publicly taking into account inputs from Member States and stakeholders, as we see on youth mobility. Meanwhile the UK since 2016 has taken a position of secrecy ahead of detailed talks, which has left the EU mostly setting the public agenda. This is starting to change, with experienced UK officials learning from past problems. UK stakeholders can help and play an important role here, for example with the UK Trade and Business Commission Blueprint of 2023 respected in Brussels as one of the best outlines of potential UK business ‘asks’. 

Is the UK in a strong negotiating position with the EU?

Previous UK negotiating performance has been weak, and the EU are tough negotiators, even with friends. This can already be seen. Though the EU will almost certainly benefit more than the UK from an SPS deal given a large surplus, this is seen as a UK ‘ask’. Putting pressure on the UK Government through their core demand of a youth mobility scheme, and including maximalist asks on reduced student fees for EU students, is another example. Arguably the UK has yet to find equivalent demands, but a well-functioning EU committee in the House of Commons would both help shape the agenda, and provide negotiators with reasons to push back on the basis that ‘Parliament wouldn’t accept that’.

That said, the UK does have some strengths in the process. There are many friends of the UK in Brussels and Member States, right up to the top of the Commission, which could be crucial given they are the lead negotiators with third countries. There’s never a single EU view, and there are many sceptics, but at the very least this provides a basis to work with. Contrary to the media frenzy, a clear message from the UK Government that it will not be risking EU relations for a US trade deal has gone down well in Brussels.

Overall, progress in UK-EU relations since July has probably been to expectation, there will always be ups and downs, but time now presses and acceleration is needed. From the UK Government this means publicly moving beyond known manifesto points and starting to shape a programme of work, starting with CBAM. Talk within the UK of going further, beyond stated red lines, is unhelpful in this regard, for the UK must first overcome the damage of the previously destructive negotiating approaches. Few people in London realise just how much work will be needed on the relationship in the coming years, but at least a start has been made.

Following Labour’s ascension to Government there has been a conscious effort to reset the relationship between the EU and the UK. From Starmer meeting von der Leyen, Lammy attending the EU Foreign Affairs Council and Reeves meeting the Eurogroup finance ministers, what progress has been made? And what more can we expect in 2025?

This week marks five years since Boris Johnson won the 2019 General Election, promising to “Get Brexit done”. Five years of an increasingly fractious relationship with the European Union under the governments of Johnson, Truss and Sunak - until Labour came to power this summer, promising a 'relationship reset'.

What was promised in Labour’s manifesto?

promised to ‘reset the relationship (with the EU) and seek to deepen ties with our European friends, neighbours and allies’, but also committed to not returning to the single market, customs union or freedom of movement. In sharp contrast to the previous government's messaging, Labour have been open and consistent in their desire for building ties rather than burning bridges with their EU counterparts.

Labour’s manifesto also laid out three areas they planned to negotiate with the EU:

1. A veterinary agreement that would align the UK with EU animal and plant health rules to reduce trade barriers

2. To aid performing artists abroad with a

3. Mutual recognition of professional qualifications

What has been negotiated so far?

Sandro Gozi, the newly elected head of the European Parliament's delegation to the UK, that “it is the UK government who has to spell out what they mean with resetting” - but so far there has been little announced publicly in the way of concrete negotiations. In October, Keir Starmer appeared to for a youth mobility scheme, though there is hope that an agreement could be reached next year as it is regarded as . German MEP and ally of EU President Ursula von der Leyen, the importance of the issue for the EU saying “the UK Government will have to be judged on its willingness to compromise on this issue with regard to other areas of negotiation”. 

Domestically, there has been movement towards a closer relationship with the EU through the , which is currently at the Committee Stage in the House of Lords. The Bill, positioned as legislation to update product safety law, also empowers the Secretary of State to make regulations correspond to relevant EU legislation, reducing or mitigating the environmental impact of products - and, crucially, aligning standards, which would make trading products easier. If the Bill passes through both chambers next year then this legislation would offer a valuable tool for the UK government to reduce the regulatory trade barriers stymieing British business.

How is the UK-EU reset going?

There has been genuine progress made by the UK government to reopen dialogues and rebuild the personal relationships that are necessary for future negotiations. 

On October 2nd, the relationship reset sprang into action with Starmer and von der Leyen meeting in Brussels. Both leaders released a affirming their commitment to working together to address global challenges such as migration, and climate change. Shortly after on October 14th, the Foreign Secretary David Lammy attended the EU Foreign Affairs Council. Lammy became the first UK Foreign Secretary to attend the meeting since . Hailing the meeting as “a historic moment that marks our EU reset”, Lammy discussed the "indivisible" nature of UK-EU security relations.

Most recently on December 9th, Rachel Reeves attended a meeting of Eurogroup finance ministers, the first Chancellor to do so since Brexit.In her speech, Reeves outlined further aspects of the relationship reset, namely that new trade negotiations would begin . The British Chambers of Commerce who represent tens of thousands of UK businesses , saying: “We must export more…[UK businesses are struggling under huge regulatory and paperwork burdens”. Reeves' speech follows a rare intervention by Andrew Bailey, the Bank of England Governer, who stated that the UK must with the EU. 

What is planned for the UK-EU reset in 2025?

The new year should usher in a period of concrete negotiation. It has been that the EU's position on a 'youth experience scheme' treaty with the UK is set to be approved by Member States' representatives, which could set the ball rolling on further negotiations, particularly on the areas laid out in Labour's manifesto. Starmer and von der Leyen have committed to holding regular UK-EU summits, with one scheduled for the first half of 2025, by which time it is hoped that an agreement on breaking down some of the barriers of the first Brexit deal would be in place.

2025 also sees the return of Donald Trump, his protectionist tariff agenda and scepticism towards the EU and NATO. In this turbulent geopolitical landscape, it is more important than ever for the UK and EU to formalise their relationship reset. And the British public agrees. Our revealed that 66% of Brits believe the EU shares our values, and 48% view the EU as our most important trading partner - compared to just 19% who want the UK to prioritise trade with the US. 

Keir Starmer clearly has the public's support to rebuild relations with Europe, and to be bold on breaking down trade barriers. Trying to achieve economic growth with Boris Johnson's disastrous Brexit deal holding back businesses is like driving with the handbrake on. The can no longer be ignored - if this government wants to put money in people's pockets, a better deal with Brussels is the place to start.

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