9ish Ways To Improve the UK-EU Trade Agreement

Give it a go

This week the UK hosted the fourth meeting of the European Political Community, an intergovernmental forum for talking about all things European. The membership includes the EU, EU member states, and non-EU countries, such as the UK, Turkey, Ukraine and Switzerland.

As you would expect, despite this meeting not being about Brexit, lots of Brits started talking about Brexit again. In particular, ways in which the UK could improve its current trade (and security) arrangements with the EU.

This is a topic that people have written a lot about, but, short of rejoining the EU’s single market and customs union, here’s the list of specific things the UK could ask for to improve the trade relationship.

(You’ll observe it is pretty similar to everyone else’s list, but hopefully with a little more detail and context. And yes, the obvious caveat is that all of these things would only happen if the EU wanted to do them too. Obviously.)

In no particular order:

1. Mutual recognition of conformity assessment

The TCA does not currently allow for UK products destined for EU markets to be tested/certified by notified bodies located in the UK. (The one exception to this is for the mutual recognition of ‘Good Manufacturing Practice’ inspections and certificates of labs and factories that produce medical products.)

This is despite the EU having existing mutual recognition agreements allowing for such with Australia, New Zealand, Israel, Canada, and the US.

In practice, this means that if a UK-based¹ company makes a product — for example, some heavy machinery – that requires third-party certification before it can be CE marked, it needs to get the product tested by an EU-based certification body. Which can be annoying and costly.

The UK did ask for more on conformity assessment in the TCA negotiations, but didn’t get it.

Why?

There is no technical or legal reason preventing the EU entering into a mutual recognition agreement (MRA) with the UK – either wide-ranging or focused on specific sectors in the first instance – given the numerous precedents.

However, during the TCA negotiations the EU refused the UK’s request for a MRA due to its fear that the UK’s historic strength in the field of testing could result in the bulk of EU product testing taking place outside of EU territory. The EU also saw an opportunity to capture the jobs associated with the industry.

Would the UK have better luck if it asked now? Maybe? There has been enough of a gap between UK exit and now to ensure that those firms who were going to move their testing to EU-based notified bodies will have done so. This means the risk of offshoring the EU testing industry has lessened, somewhat. The UK could also narrow the ask, and focus it on a specific sector and types of recognition such as medicines and batch testing certificates.

2. Linking the EU and UK Emissions Trading Schemes

Article 392 (6) of the EU-UK Trade and Cooperation Agreement (TCA) states that [emphasis added]:

The Parties shall cooperate on carbon pricing. They shall give serious consideration to linking their respective carbon pricing systems in a way that preserves the integrity of these systems and provides for the possibility to increase their effectiveness.

So … get on with it!

Now, linking the two ETSs is not without its complications – my Flint colleague James Low² and I wrote about them for UK in a Changing Europe here – but given pretty much everyone wants it to happen doing so feels like a bit of a no-brainer.

ETS linkage also partially solves the CBAM problem — as it stands, UK exports of carbon-intensive goods, covered by the EU’s carbon border adjustment mechanism, such as steel and cement, face additional bureaucracy and, for 2026, possible charges. Linking the two ETSs makes this go away. [Note: the UK would still need to decide whether to introduce its own CBAM, which it plans to do. You could possibly have a supplementary discussion about linking the CBAMs too.]

3. Safety and security declarations

When trading goods across a border, there are a range of different declarations you need to make in addition to customs declarations. One category is safety and security declarations, which are used by border agencies to assess whether the goods entering or exiting pose a risk (rather than whether they should be hit with tariffs).

Since Brexit (well, slightly after Brexit: October 2021), UK exporters have had to submit new export summary declarations when selling to the EU. On the import side, the UK has been holding off making importers submit new declarations, but this is set to change on 1 November 2024, after being delayed many times.

But how about … we just agree not to do them?

Both Switzerland and Norway have a deal with the EU which removes the need for them. It requires some alignment on rules, and for both to be members of the relevant EU information system, ICS2.

Could the UK do a similar deal? Has anyone even asked? Who knows.

4. Veterinary/SPS deal

UK food products exported to the EU are subject to stringent regulatory controls and checks. Products such as lamb and cheese must be accompanied by a signed export health certificate and enter the EU via a designated border control post where the consignment is subject to document checks, identity checks and often physical inspection. This process increases cost and complexity for UK businesses.

A supplementary EU-UK veterinary agreement could alleviate this problem. EU veterinary agreements live on a spectrum, where greater access comes with greater obligations. Were the UK to dynamically align its own SPS regime with the EU – both as applied domestically and in relation to imports – the need for regulatory controls at the border could be removed entirely (the Swiss model). A more equivalence-based approach, which would leave the UK with more regulatory autonomy, could reduce controls, and simplify the documentary obligations (the New Zealand model). The EU has expressed a preference for the former and rejected past UK requests for the latter.

Trade-offs? Yeah …

Dynamic alignment on SPS would place more constraints on UK regulatory autonomy. This could make it harder for the UK to negotiate new FTAs if the negotiation partner wanted the UK to change its rules.

However, this constraint should not be overstated: Switzerland has trade deals with China and Indonesia, unlike the EU, despite being bound to EU SPS rules. The removal of SPS barriers between GB and the EU would also benefit goods moving from GB to Northern Ireland.

5. Temporary labour mobility

First, for the avoidance of doubt, this is not freedom of movement and anyone pretending it is should get in the bin.

On that note, UK musicians, performers and artists looking to engage in temporary work in the EU now face the prospect of possible work permit/visa requirements, which vary member-state by member-state. The UK government has engaged with member-states bilaterally in an attempt to resolve this issue, but challenges remain.

This problem could be addressed on an EU-wide basis via the negotiation of new labour-mobility arrangements. These arrangements could allow for temporary paid work to take place across the EU, for a set period (for example 30 days).

The EU proposed this in the TCA negotiations, but the Johnson government rejected the approach due, in part, to the fear it would automatically apply to future EU members, if and when they accede (such as Turkey). Instead, the UK wanted to add performers to the list of permitted activity for short-term business visitors [Annex 21, paragraph 8] … and the EU said no to that.

Interestingly, the UK **did** manage to include these provisions in its FTA with Norway, Iceland and Leichtenstein [Article XVIII, 5]:

Try again? Why not!

6. Youth mobility

As above, not free movement. The UK has deals with lots of countries that grant preferential visas to young people (definition variable, but usually under 35) to come and work in the UK for a couple of years. EU countries have similar schemes, for example, France has one with Argentina.

Let’s have one with each other!

The main difficulty here is that the UK was scoping this out with individual member states earlier this year, so the Commission decided to torpedo these by putting forward its own proposal for a centralised negotiation to try and regain control. Then, fearing that reporters would fail to differentiate between youth mobility and freedom of movement, Labour rejected the idea.

What a pointless mess.

7. PEM

The UK could also consider joining the PEM Convention. This would allow for inputs sourced from other PEM members such as Turkey and Switzerland to be considered as local for the purpose of meeting TCA rules of origin (RoO) requirements and qualifying for tariff-free trade.

However, this is not without its difficulties. The PEM convention requires its members to maintain identical RoO in their free trade agreements with each other. Given the TCA RoO are different from PEM in many instances, this would require either the PEM RoO to operate in parallel (giving companies the option to use either the standard TCA rules or the PEM rules), or for PEM to only apply to TCA RoO that match those of PEM. This may or may not be legally possible.

8. Mutual recognition of professional qualifications (MRPQs)

The TCA creates a framework to facilitate the mutual recognition of professional qualifications, but it does not automatically grant recognition.

For the benefits to be realised the UK and EU must work together to encourage the relevant professional bodies to negotiate and agree to recognise each other’s qualifications.

While an improved approach to MRPQ (for example like that in the FTA with Norway, Iceland and Liechtenstein, Article 12, which essentially says that qualifications are automatically recognised unless there is a good reason not to) is theoretically possible, the EU struggles to negotiate on this issue externally due to competence for granting qualifications being shared with member-states and private bodies.

Also, the fact that the Commission recently rejected a proposal for recognition of architect qualifications, despite the EU and UK architect qualification people wanting it, because it was too nice to the UK doesn’t bode well.

9. Other stuff

Substack tells me I’m running out of words, so here is a list of other things that could be discussed:

• Financial services equivalence. No one really talks about this anymore, and most of the financial services industry has moved on, but … there’s still no real technical reason why the EU couldn’t grant equivalence to UK financial services providers beyond the one it’s been forced to do because TINA (clearing houses). A boy can dream.

• Roaming! At a a TCA committee meeting last year, the EU asked the UK about its the provisions in its FTA with Norway, Iceland and Liechtenstein which retained free mobile phone roaming. (Para 2 of the AOB.) because it was “well jell” [I made that last bit up].

• Fish. Still very much a problem and up for renegotiation in 2026. In the first instance, the UK will need to convince the EU (mainly the Danes) to stop killing puffins.

• Data adequacy. The UK’s adequecy decisions are up for review in 2025. Will all probably be fine, but it would be nice to put them on a more long-term footing.

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Best wishes,

Sam

1. No, I have not mistakenly said “UK” when I should have said “Great Britain”. Conformity assessment is one of the slightly odd areas where Northern Ireland doesn’t get full single market [for goods] treatment: apart for instances where on-site inspections are required, NI-produced products have to be signed off by EU-based (admittedly, Ireland isn’t very far away] conformity assessment bodies.

2. Unrelated. Note the lack of an ‘e’.