One year on from last year’s Leader’s Summit, at which the UK and EU agreed a roadmap to ‘reset’ relations, businesses are broadly optimistic about the future of cross-Channel trade.
At a Global Trade Live webinar hosted by the Chartered Institute of Export & International Trade this week, most of the delegates said they were either ‘very optimistic’ (8%) or ‘quite optimistic’ (69%) about UK-EU trade.
“This government has repeatedly said that economic growth is their top focus, and they clearly understand that a reset in the EU relationship is a vital element of driving export growth,” said the Chartered Institute’s UK public affairs lead, Grace Thompson.
Advancing the ‘common understandings’
At last year’s summit in London, both sides agreed a series of ‘common understandings’ on a range of issues spanning trade, security and mobility. These have formed the basis for negotiations between the two sides since.
The summit marked “not simply a reset in tone, but the launch of a renewed agenda for cooperation built around shared European interests,” said Madelaine Tuininga, minister and head of trade and economic affairs at the EU delegation to the UK.
Since last year, talks have continued on sanitary and phytosanitary (SPS) rules for agrifoods, emissions trading schemes, mobility and security. A second leaders’ summit is expected to take place later this summer, with the EU’s focus expected to be on “implementation, continuity and ambition,” according to Tuininga.
Tuininga said Russia’s war against Ukraine, broader European economic security concerns and wider global uncertainty had “accelerated the logic” for closer coordination between the two sides.
Business reaction
While delegates on the webinar were broadly positive about the future of the relationship, there were concerns about how the reset will play out practically for businesses.
Sean McGuire, Europe and international director at the CBI, said last year’s commitments had been welcomed, while cautioning against overclaiming the impact of any eventual deal.
“A deal in itself is not just good enough,” he said.
“It will be the content, scope and therefore the implementation of the deal before businesses can see the real benefit.”
Delegates also raised concerns about reports that the UK could dynamically align with some EU single market rules, including on food standards, electricity and carbon trading.
“We should only dynamically align where it is in our national economic interest to dynamically align,” said McGuire, arguing for a sector-by-sector approach instead of a blanket model.
Anna Doherty, customs practice director at the Chartered Institute, said an SPS deal could remove some certification and checking requirements, but would not restore frictionless trade.
“It’s not as simple as we’re going to remove the health certificates and we’re going to get back to frictionless trading,” she said, warning that businesses must still contend with changes such as the EU’s ICS2 system, deforestation rules and wider customs reform.
The need to align with EU standards could also have repercussions for some of the simplifications bought in for imports from countries outside the EU under the post-Brexit Border Target Operating Model, she added.
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