Rachel Reeves is set to pave the way in Brussels for a new “ambitious” economic partnership with the EU on Monday, where she pledges to uphold post-Brexit agreements made by the previous Conservative government.
As the first British chancellor to participate in a meeting of European finance ministers post-Brexit, Reeves emphasizes the importance of enhancing trade with the EU to drive growth.
During a speech to Eurogroup finance ministers, Reeves reassures that the UK will honor existing agreements in good faith, including the Windsor framework governing post-Brexit trade in Northern Ireland.
She states, “Yes, we will implement our current agreements with you in good faith. However, we aim to enhance these agreements to align with our mutual interests.”
Reeves and Jonathan Reynolds, the UK business secretary, advocate for reducing trade barriers across various sectors and advocate for a permanent alignment with EU regulations in industries such as pharmaceuticals, automobiles, and agriculture.
Reynolds expressed his desire for a “very ambitious” push for improved trade relations with the EU, emphasizing the importance of full and dynamic alignment with EU rules for a veterinary deal to facilitate trade in food and agricultural products.
While aiming to lower trade barriers for established industries like pharmaceuticals and automotive, the EU has historically opposed sectoral deals that could grant the UK preferential access to the single market.
Reeves’ commitment to fully implement the Windsor deal negotiated by former Tory Prime Minister Rishi Sunak, including enforcing labeling and reporting requirements for goods moving through the Irish Sea, is seen as a crucial initial step by Brussels before further negotiations.
In her address, Reeves urges European finance ministers to embrace free trade and highlights her commitment to close ties with the EU amidst concerns over rising protectionism with Donald Trump’s return to the White House.
The meeting is anticipated to concentrate on broader economic developments in Europe, with a focus on Reeves’ October Budget and the relaxation of fiscal constraints to encourage greater investment.
Reeves is also scheduled to engage in bilateral discussions with individual finance ministers in Brussels.
While some industries are in favor of UK alignment with EU rules, others are cautious about the potential drawbacks if it does not lead to improved access to the single market.
Talks on a new UK-EU economic relationship are ongoing, with expectations of a meeting between Starmer and EU leaders in the coming spring. António Costa, the new president of the European Council, will visit London on December 12 for discussions.
Despite challenges such as EU access to UK fishing grounds and border control policies, Paschal Donohoe, the president of the Eurogroup, remains optimistic about deepening cooperation between the UK and the EU, emphasizing the significance of their partnership and shared values.
He looks forward to discussing the global economic outlook, common challenges, and policy strategies to foster resilient growth during the meeting.