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The Labour party has promised to improve the UK’s trading arrangements with Europe if elected on July 4, but within strict limits. These include not agreeing measures that would increase migration, or rejoining the EU single market or customs union. Trade experts have warned that Labour’s manifesto commitments on undoing Brexit will bring “minimal” economic benefits.
However, some say that improvements are possible within the party’s red lines, and that these could deliver real advantages to the UK. A veterinary deal to boost exports Labour has pledged to sign a veterinary agreement with the EU. A deal could reduce the amount of red tape at the border for plant and animal products, but the scale of any benefits would depend on how ambitious the UK wanted to be.
A “New Zealand-style” deal would only partly reduce checks and paperwork on goods entering the EU. Meanwhile, a high-alignment “Swiss-style” deal could remove almost all cumbersome red tape but would require the UK to accept it would automatically follow EU law and the jurisdiction of the European court of justice. A study this year by Aston University found that a high-alignment agreement could increase UK food and plant exports to the EU by 22 per cent, or around £2bn a year based on current exports of £8.6bn in 2023.
John Springford, a trade economist at the Centre for European Reform think-tank, said a £2bn uplift would be “a nice to have” but still relatively meagre when set against total UK exports to the EU of more than £150bn a year. Regulatory alignment on industrial goods Shadow chancellor Rachel Reeves has indicated that the UK under Labour could look to align with EU industrial regulations in areas like the chemical industry in order to reduce border frictions for UK exporters. Experts warn that unilateral alignment will have limited benefits since UK companies would still need to demonstrate compliance at the border.
Greater market access would require submitting to the jurisdiction of EU courts and regulatory agencies. However, trade groups like the British Chambers of Commerce have urged unilateral alignment even with primary EU regulations on traded goods, arguing it will still mitigate costs for businesses forced to comply with two different regulatory regimes. Anton Spisak, a former UK government official and associate fellow at the Centre for European Reform, said that while unilateral alignment would not provide automatic market access, it would give clarity over the future regulatory environment. He noted this would be of “significant value” to many businesses but mean trade-offs for others. ....
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