The UK’s new business and trade secretary, Jonathan Reynolds, is to tell trade ministers at the G7 Trade Ministerial Meeting today (16 July) in Italy that “Britain is back” and willing to pursue a “more mature, more level-headed relationship with our friends in the EU”.
‘Outward-looking’
The government has detailed today that Reynolds will set out a vision of the UK as “a confident, outward-looking, future-facing” nation, “willing to play [its] part on the international stage”.
Reynolds is set to meet European Commission vice-president for trade Valdis Dombrovskis and the German vice chancellor, Robert Habeck.
He will also describe the EU as “our nearest and largest trading partner”, adding that “we also intend to forge better trading relationships with countries around the world”.
‘Cannot rely on the invisible hand’
Supply chain resilience is set to be a particular theme of Reynolds’ remarks, which will address trade disruption caused by the war in Ukraine and Houthi rebel attacks in the Red Sea, which have forced ships to divert around the Cape of Good Hope, inflating shipping costs.
Reynolds will also state directly that “superpowers like China using harmful policies and practises are distorting free, fair trade”.
The solution, Reynolds will argue, is government guidance of markets:
“Governments cannot rely on the invisible hand of the market to do this for them. Fair, open markets with healthy competition can only be achieved through purposeful interaction between governments, business, and institutions like the G7.”
“It’s why the UK wants to work in partnership with you to increase supply chain resilience. Doing so gives businesses the confidence to invest and grow by planning not just for the next year but for the next decade.”
Challenges
The EU’s receptivity to warming relations with the UK was put in some doubt by recent remarks from EU officials to Politico that the UK would have to become a “rule-taker” and accept European Court of Justice (ECJ) oversight as part of negotiations for a new agreement with the bloc. Labour has said it will seek an updated agreement on veterinary imports and exports.
Michel Barnier, the EU’s former Brexit negotiator, also warned last month that the country would be required to sign back up to freedom of movement if it wished to renegotiate areas of the Trade and Cooperation Agreement (TCA) with the EU.
A review of the agreement scheduled for 2025 or 2026 has been identified by Labour as an opportunity to renegotiate elements of the TCA but, as noted by the UK in a Changing Europe think-tank last year, this may “face a hard collision with reality” if Brussels sees the review merely as a “technical exercise”.
‘Open-minded’
There have been warmer words from some since Labour’s win at the recent UK general election.
Irish leader Simon Harris said he will give the new government a “fair hearing” and that there could be progress on a veterinary agreement:
"Is there space to have a veterinary agreement, is there space in terms of student mobility, is there space to work closer together on issues? I think there absolutely is.
"And I do think there would be a willingness in Europe to have those conversations in due course, should that be the wish of the British government."
Prime minister Sir Keir Starmer said his government had already begun work on aligning the UK more closely with the EU last week, the Telegraph reported, though he has ruled out returns to the EU customs union or single market despite promising “closer trading ties”.
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