Rachel Reeves will lay the groundwork for an “ambitious” new economic partnership with the EU in Brussels on Monday, when she promises to fully honor the post-Brexit deals reached by the last Conservative government.
Reeves will become the first British chancellor to attend a meeting of European finance ministers since Brexit, reflecting her belief that improving trade with the bloc is key to boosting growth.
In a speech to Eurogroup finance ministers, Reeves will allay fears that Britain could abandon parts of the Windsor Framework, the agreement that covers trade in Northern Ireland after Brexit.
Reeves is expected to 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 common interests.
“And we will be more ambitious in taking practical steps to strengthen our economic relationship, which will benefit both the UK and the EU.”
Reeves and Jonathan Reynolds, the UK’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 pharmaceuticals, cars and agriculture.
Reynolds he told the Financial Times on Friday that he wanted to see a “very ambitious” push for better trade relations with the bloc.
Full and “dynamic” UK alignment with EU rules is seen in Brussels as key to any veterinary deal for smooth trade in food and agricultural products; it is one of the key goals of Labor Prime Minister Sir Keir Starmer in the “reset” negotiations with the EU.
While Reeves and Reynolds also hope to lower barriers to trade for other “established industries”, including pharmaceuticals and the car industry, the EU has always opposed sectoral deals – known in Brussels as “cherry picking” – that would give Britain preferential access to the single market.
However, Reeves’ pledge to fully implement the Windsor deal struck by then Tory prime minister Rishi Sunak, including enforcing labeling and reporting requirements for goods crossing the Irish Sea, will be seen in Brussels as a key first step ahead of any talks.
“Full implementation of the existing deal is absolutely essential for progress in other areas,” said one EU official, noting that the bloc remains concerned that the British government is still not fully implementing some aspects of the 2023 deal.
In his speech, Reeves will also urge European finance ministers to embrace free trade, reaffirming his desire for close ties with the EU even as Donald Trump’s return to the White House threatens to boost protectionism.
Monday’s meeting is expected to focus on developments in the wider European economy. Officials in Brussels said finance ministers would also like to hear about Reeves’ October budget, in which she eased fiscal restrictions to allow for more investment.
Senior figures from outside the EU occasionally attend meetings of the Eurogroup of Eurozone finance ministers. Last year, the group met in an “inclusive format” when US Treasury Secretary Janet Yellen was present.
Reeves is also expected to hold bilateral talks with individual finance ministers in Brussels.
Not all industries require the UK to align unilaterally with EU rules and regulations if this does not result in better access to the single market.
The Chemical Industry Association, an industry lobby group, has warned that compliance with the EU’s increasingly stringent REACH chemical regulations would not necessarily be in the interests of all businesses.
“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 have a close relationship, but not at any cost,” CEO Steve Elliott added.
Talks 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 many obstacles lie in the way of a deal, including EU access to British fishing grounds.
Brussels will to ask for better access for young EU citizens to British universities and the labor market, while Yvette Cooper, the British home secretary, is resisting any easing of border rules as the government tries 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 very importantly a key partner for the EU with whom we share common values. At a time of great change in our world, this relationship is important.”
He said: “I look forward to a joint discussion on the global economic outlook, our common challenges and our respective policy approaches to promote resilient growth.”
