Rachel Reeves will lay the foundations of an “ambitious” new economic partnership with the EU on Monday in Brussels, promising to fully honor the post-Brexit agreements concluded by the last Conservative government.
Reeves will become the first British chancellor to attend a meeting of EU finance ministers since Brexit, reflecting her belief that improving trade with the bloc is crucial to boosting growth.
In a speech to Eurogroup finance ministers, Reeves will allay fears that Britain could roll back parts of the Windsor Framework, the agreement covering post-Brexit trade in Northern Ireland.
Reeves should tell the Eurogroup: “Yes, we will implement our existing agreements with you in good faith. But we intend to build on these agreements to reflect our mutual interests.
“And we will be more ambitious in taking practical steps to strengthen our economic relations, to the benefit of both the UK and the EU. »
Reeves and Jonathan Reynolds, Britain's business secretary, want to reduce trade barriers in a number of sectors and are pushing for Britain to permanently align with EU rules in areas such as as pharmaceuticals, automobiles and agriculture.
Reynolds told the Financial Times on Friday that he wanted to see “very ambitious” action for better trade relations with the bloc.
The UK's full and “dynamic” alignment with EU rules is seen in Brussels as essential to any veterinary agreement aimed at facilitating trade in food and agricultural products; This is one of Labor Prime Minister Sir Keir Starmer's main aims in the 'reset' negotiations with the EU.
While Reeves and Reynolds also hope to reduce trade barriers for other “established industries”, including pharmaceuticals and automobiles, the EU has historically opposed sectoral deals – known in Brussels as “pick-and-drop” card” – which would give Britain privileged access to the single market. .
However, Reeves' promise to fully implement the Windsor Agreement reached by the then Conservative Prime Minister Rishi Sunak, including enforcing labeling and reporting requirements for goods crossing the Irish Sea, will be considered in Brussels as an essential first step before any negotiations.
“Full implementation of the existing agreement is absolutely essential for progress in other areas,” an EU official said, stressing that the bloc remained concerned that the British government was still not fully implementing some aspects of the 2023 agreement.
In his speech, Reeves will also urge European finance ministers to embrace free trade, reaffirming his desire for close relations with the EU, even as Donald Trump's return to the White House threatens to increase protectionism.
Monday's meeting is expected to focus on developments in the European economy as a whole. Officials in Brussels said finance ministers would also like to hear about Reeves' October budget, in which she eased budget constraints to allow more investment.
Senior officials from third countries occasionally attend meetings of the Eurogroup of eurozone finance ministers. Last year, the group met in an “inclusive format” with US Treasury Secretary Janet Yellen in attendance.
Reeves is also expected to hold bilateral talks with various finance ministers in Brussels.
Not all sectors are calling for the UK to unilaterally align with EU rules and regulations if this does not result in better access to the single market.
The Chemical Industries Association, the industry lobby group, has warned that adhering to Europe's increasingly onerous REACH chemicals regulations would not necessarily be in the interests of all companies.
“Alignment does not necessarily mean automatic access if the UK is outside the single market and still needs to demonstrate compliance at the border and therefore does not benefit from frictionless levels of access,” the CIA said. last week.
“We want to maintain a close relationship, but not at any cost,” added managing director Steve Elliott.
Discussions on a new economic relationship between the UK and the EU are underway and are expected to culminate in a meeting between Starmer and EU leaders next spring. António Costa, the new president of the European Council, will travel to London on December 12 for talks.
But there are many obstacles standing in the way of a deal, including EU access to British fishing grounds.
Brussels will look better young EU citizens' access to UK universities and the job market, while UK Home Secretary Yvette Cooper resists any relaxation of border rules as the government attempts to reduce net migration .
Paschal Donohoe, president of the Eurogroup, said he hoped the meeting would represent “a further step in deepening our cooperation”, adding that the UK was a “close neighbour, a friend and, above all, a key partner for the EU with whom we share common values. In a time of great change in our world, this relationship is important.
He said: “I look forward to discussing together the global economic outlook, our common challenges and our respective policy approaches to promote resilient growth. »
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