UK pitched single market for goods with EU, as it pursues deeper trade ties | Brexit

The UK government has put forward the creation of a single market for goods with the EU as the cornerstone of an ambitious bid to reintegrate British business into Europe, the Guardian has revealed.

During recent visits to Brussels, Michael Ellam, the Cabinet Office’s top official on EU relations, floated the idea of ​​deepening Britain’s economic relationship with the bloc.

But in a sign of the difficulty Keir Starmer’s government faces in securing growth through a closer relationship with Europe, EU officials have rejected the idea and are instead proposing a customs union or economic alignment through the European Economic Area, sources told the Guardian.

These ideas are impossible to realize under Starmer’s red lines. He said the UK would not rejoin the EU, single market or customs union in 2024 during its lifetime. The EEA, made up of 30 single markets, mostly EU countries, would also mean accepting free movement of people, another red line for Labour.

UK government sources denied the EU had outright rejected the single market for goods and said it was among a range of options being discussed ahead of the summit, provisionally scheduled for July 13.

The UK and the EU have yet to agree a forward-looking agenda for the summit. Both sides hope to end the impasse over a veterinary agreement to facilitate trade in food, drink and animal products, an agreement linking emissions trading schemes (ETS) and a youth mobility programme; Three deals promised at the last EU-UK summit in 2025.

But Labor’s attempts to deepen the economic relationship run into the same buffers that Theresa May faced with the Checkers plan during Brexit negotiations when she tried to create a “common rulebook” for goods without the free movement of people.

EU officials want to avoid a complicated relationship with Britain that could be an attractive model for anti-EU populists in the 27 member states. For example, it has been suggested that a special deal for the UK could encourage a Eurosceptic candidate in France’s 2027 presidential election to argue that Paris should pay less attention to single market rules. It is argued that if it is accepted that the UK receives special treatment, other countries may question their contribution to the EU budget.

One EU diplomat said the EU’s approach was based on its own interests: “If you start going back to those principles – leading to a non-member being treated better than the actual member – you will certainly trigger an internal debate on the foundations of the EU. [EU] partnership.”

Both the prime minister and the chancellor have said they are keen to investigate compliance on goods. in it More lessonsRachel Reeves said there was a “strategic imperative for deeper integration between the UK and the EU because of our shared need for greater economic resilience.”

UK government sources said the EU had always been nervous about its red lines but noted that Brussels had opened talks on access to the single market for food, agricultural products and electricity.

A Cabinet Office spokesman said: “We have previously confirmed that the next UK-EU summit will be held this summer. The final date will be confirmed in due course. “We are negotiating an ambitious package of measures with the EU ahead of the summit, including the food and drink SPS. [sanitary and phytosanitary] “The agreement and the emissions trading agreement alone will contribute £9bn a year to the UK economy by 2040.”

The UK wants deals with the EU on steel and electric cars to prevent British industry from being harmed by upcoming changes to EU rules in those sectors, Cabinet Secretary Nick Thomas-Symonds told reporters in Brussels last month.

The government is also seeking deeper cooperation on defence: the Prime Minister announced earlier this month that he wanted Britain to enter into talks to join the EU’s €90bn (£78bn) EU loan to Ukraine, allowing British firms to benefit from defense contracts for Kiev.

A European Commission spokesman declined to comment on the UK’s bid for a single market in goods, adding that the commission was working to finalize the SPS agreement, ETS link and youth experience scheme.

Pointing to Britain’s desire to start negotiations on the Ukraine loan, the spokesman said, “We also see the opportunity to deepen cooperation in the area that is most important at the moment: defense industry cooperation.” The spokesman also touched on ongoing talks between the EU and the UK on an innovation fund for high-tech industries and joint work to curb irregular migration.

Following the rejection of a single market for goods, EU officials do not expect the government to do much to set the future agenda before the Makerfield by-election in June, when Labor faces a tough challenge from the anti-EU Reform Party. Labor candidate Andy Burnham, who is expected to replace Starmer as prime minister, said he would not try to return Britain to the EU and promised a “relentless domestic focus”.

In a speech aimed at saving his premiership earlier this month, Starmer said his government would be defined by “putting Britain at the heart of Europe”. Starmer called for an “ambitious” youth experience plan that would allow young people to live, work and study in Europe, as an example of the stronger relationship he says he wants.

However, negotiations were blocked. The EU continues to reject UK proposals to impose a cap on numbers and require EU students to pay much higher tuition fees for foreign students rather than the domestic fee.