The outcomes of parliamentary elections in Europe this summer and the UK’s upcoming general election could impact the future of trade relations between London and Brussels.
That’s the view of IOE&IT’s EU and international director Fergus McReynolds, who will be speaking on a free IOE&IT webinar on the future of the EU-UK Trade and Cooperation Agreement (TCA) on Wednesday (15 May).
“There is a review of the trade agreement scheduled for 2026,” he said. “However, we don’t yet know who will be the key political figures in this review process or what their mandates around trade will be.”
Not a renegotiation
McReynolds points out that the 2026 review is not a renegotiation and that the main tenets of the deal will likely remain. However, he notes that there are opportunities within the terms of the current agreement for addressing some of the friction that has arisen in UK-EU trade since Brexit.
“There is plenty of scope for greater trade facilitation within the TCA, which could be addressed ahead of the review,” he says.
“If there is political will, there may also be scope for the UK and EU to negotiate smaller agreements around the TCA, such as veterinary deals for goods subject to sanitary and phytosanitary rules.”
A veterinary deal was previously mooted by the Labour leadership as an option for addressing some of the friction that has arisen around the trade of agrifood products.
EU consent needed
Joël Reland and Jannike Wachowiak from UK in a Changing Europe (UKICE) agree with McReynolds that the review will not be a renegotiation of the deal, saying that the wording within the TCA about what it entails is “vague”.
They add that any moves to enhance trade between the UK and EU will require Brussels’ consent.
“For all the ambitions some in the UK might have to seek major changes to the agreement, it will require the consent of the EU to use the review for this purpose,” they wrote last year.
They say of the current EU parliament that “officials are tired of Brexit and the EU has a long list of higher priorities.”
Change on both sides to come?
The Labour Party in the UK will likely look to forge closer ties with the EU should it be voted into government. The party has consistently polled above the Conservatives over the last 12 months.
Leader Sir Keir Starmer has previously said that the current trade deal is “too thin”, while shadow foreign secretary David Lammy has identified the 2026 review as an opportunity to “improve” the agreement.
A change in the political direction of European policy is also likely in the upcoming parliamentary elections this summer.
While there have been predictions of a shift to the right in Europe, McReynolds last week exclusively told IOE&IT members that “it looks as though the polls are starting to evolve; some of that is softening, there is a little bit more of a coalition around the centre ground.”
In the run-up to the elections, McReynolds noted tension between a push towards more sustainable policies and protections for workers from left-wing parties, and hawkishness on China and migration from the right.
“In Europe, that [tension] mixed with the drive towards competitiveness is an interesting mix of policies; certainly those who look to more open markets will be concerned that those two combined forces could see a lurch towards economic security.”
Where the trading relationship with Britain stands within Brussels’ future mandate remains to be seen.
Future of the TCA webinar
McReynolds and Reland will both be speaking on an IOE&IT webinar on the future of the TCA on Wednesday 15 May at 2pm BST.
They will be joined by Jill Rutter, a senior research fellow at UKICE, Alessandro Marongiu, senior trade policy manager at the Society of Motor Manufacturers and Traders, and Sandra Cooper, a trade and customs specialist at IOE&IT.
You can sign up to the webinar for free here. IOE&IT members can also read more of McReynolds insights about the upcoming EU parliamentary elections here.
Member exclusive
