Terms emerge on UK-EU ‘reset’ talks
Decisions on security, the youth mobility scheme, fishing and agriculture are anticipated to emerge from today’s UK-EU “reset” summit.
These talks are part of a routine five year review of the UK-EU trade and cooperation agreement, which was signed in 2020.
While agreements on key aspects of the deal have been completed, Trade Secretary Jonathan Reynolds told the BBC this morning that the “deal is not done until it is done.”
The deal is likely to spark condemnation over further fishing concessions, while Conservatives have warned Labour not to “give up trade freedoms” ahead of talks, with concerns that the UK might commit itself to inflexible EU rules, which was a key motivation for many Brexit voters.
Andrew Griffith, Shadow Trade Secretary, told City PM: “Tying the U.K. back into a bloc with 27 other countries would be to pour concrete on our own feet.”
“The successful countries of the future will be those which are agile: able to respond fast and embrace new developments.”
The fishing deal
As part of Britain’s Brexit deal, the EU gave up 25 per cent of its catch share in UK waters, phased out over five and a half years. The UK was no longer subject to the EU’s Common Fisheries Policy, which dictated the volume of fish each country was permitted to catch, and the EU and UK have annual consultations to agree on the distribution of the quotas for “allowable catches.”
The deal was set to expire in June 2026. But as of this morning, the UK government has agreed to allow access to UK waters for EU trawlers for another twelve years, until 2036, a major concession by the government that is likely to spark fury within the British fishing industry.
According to Conservative leader Kemi Badenoch, this is “three times longer than the [government] wanted.”
Reynolds said that the unexpected duration of the deal “removes the uncertainty” of an “annual haggling process,” and replaces it with “the consistency of a long one.”
Reynolds is intent on impressing that “some access” to our waters had been established by the previous government.
In return for letting EU fishers into UK waters, the UK is able to ramp up exports to the EU. Reynolds said that UK fishers benefit from this deal as well, as “what that sector needs is that market access we are hoping to secure.”
“70 per cent of our exports are to the EU” when it comes to fish and shellfish; so the deal is “not a trade off in that regard,” Reynolds said.
However, UK fishers were hoping to be able to negotiate annually for a larger share of the fish around British waters.
Food standards
Fishing rights are tied to Sanitary and Phytosanitary (SPS) rules, which aim to protect the health of livestock and vegetables that are destined for consumption. The UK will be trying to get a deal which reduces delays and red tape for UK exporters.
Steve Baker, former minister for Exiting the European Union, told City PM:“It seems Keir Starmer may have given things away for the privilege of accepting impositions,” referring to a concession on fishing rights, as well as “subordination” on SPS rules.
“It looks like incompetence on top of betrayal,” Baker added.
Reform UK’s deputy, Richard Tice, said that the deal looks like “a surrender of our ability to make our own rules, instead we’re going to go back to basically being a rule taker from the EU.”
When asked whether the UK will become “rule takers” or see a loss in sovereignty, Reynolds responded that “if there is a question of new rules in the future … it would be Parliament who would decide whether or not we take that decision.”
The UK government is vying for a deal where, moving forward, the UK can shape the EU food safety rules they have signed up to, despite not being an EU member.
However, economists suggest giving up exclusive UK fishing rights for market access will be worth it for the economic gains the UK will see.
Simon French, economist at Panmure Gordon and previous advisor to the cabinet office, said that “[w]hatever the politics of the decisions (and I suspect they will be toxic), if this fishing deal is in return for reduced phytosanitary and animal health checks on UK exports to the EU then this feels like economically additive, in aggregate.”
Youth Mobility Scheme
The “youth mobility scheme” allows adults under 30 or 35 to freely work, study, and travel between the EU and UK.
Reynolds said that there will be a cap on the number of people who can enter the UK through the scheme, as well as a time limit.
This is unlike the post-Brexit EU-settlement scheme, as it does not contain a path to residency.
The cap and time limit will not be determined today. Instead there is likely to be agreement on “how we take it forward.” Reynolds also confirmed no access for dependents and access to social security.
Gregor Poynton, Labour MP in the Business and Trade Committee, told City PM that the UK has “a hugely skilled and talented workforce and closer ties with Europe offer a tremendous opportunity to unlock that potential, particularly for young people with a reciprocal and capped Youth Mobility Scheme, for people and businesses throughout the UK.”
Reform UK is expressing concerns that the scheme will look like walking back on the government’s promise to cut down on migration into the UK.
Tice said the agreement is “dressed up” as a youth mobility scheme, but is actually “a return to freedom of movement in all but name.”
The UK is offering 13 of these schemes already with countries like Australia, South Korea, and Hong Kong, which are “net negative on immigration,” Reynolds says.
A new security agreement
Sir Nick Harvey, previously the minister for armed forces, told City PM that “we’re going to get a comprehensive defense and security agreement, which is very good news.”
Security discussions are taking place in the context of the war in Ukraine, which have created concerns around peace in Europe.
“European security has to be viewed in a different context now, with Donald Trump having appeared on the scene and raised huge question marks over America’s commitment to European security going forward.
“Therefore the UK and Europe have to coordinate much more comprehensively, and we need a structured agreement through which to do that,” Harvey said.
The agreement will most likely entail plans for joint-procurement, allowing British defense firms to bid for contracts from the EU’s €150bn SAFE fund. The UK is also vying for more access to EU security databases.
Not Brexit 2.0
The Labour Party says this is not about re-litigating Brexit.
According to Poynton, “we’ve had Brexiters say we got a bad deal, and they now want a closer relationship with Europe. This reset isn’t about re-opening arguments of the past, it’s about saying, where are we now, and how can we improve.”
“We got a deal with the US and India, which we couldn’t have done if we were still part of the EU. Whereas, the Tories took us out of Europe with no plan. Kemi Badenoch agrees.”
Raoul Ruparel, director at the Boston Consulting Group Centre for Growth and previously a Special Advisor in Theresa May’s government, said:“Today’s UK/EU reset is unlikely to be what anyone actually says it is here in the UK. It won’t be a major triumph that boosts economic growth. It won’t be a massive sellout either.”
For Ruparel, the deal is “likely to be helpful on the margin for businesses, but it won’t be a massive economic, political or diplomatic game changer. It could set the scene for deeper cooperation in future but far from guaranteed.
“The slow progress shows these negotiations remain difficult [and] have not yet moved past Brexit baggage on both sides.”