Starmer sets his sights on new Brexit deal with EU

Keir Starmer traveled to Brussels this week for the first time since becoming the UK’s prime minister in July, to meet European Commission President Ursula von der Leyen. In the coming months there might be a once-in-a-decade window of opportunity for a significant renegotiation of the 2020 UK-EU Trade and Cooperation Agreement — but there are many potential pitfalls to avoid, too.
The stakes are high. A new, more constructive UK-EU partnership might bring benefits for both sides, especially given the possibility of a second Trump presidency in the US during a time of global geopolitical flux.
In the three months since taking power Starmer has met several key European leaders, including French President Emmanuel Macron, German Chancellor Olaf Scholz, and Italian Prime Minister Giorgia Meloni.
As he seeks to reshape British relations with the 27-member EU, more than four years after the UK formally left the bloc, he said: “I want to ensure that we’ve got a closer trading relationship if we can … I’m not going to pretend it’s easy but I think it’s possible. This is the beginning of quite a long process.”
While the specifics of upcoming renegotiations are not yet fully clear, there are some key building blocks on the government’s agenda. They do not, however, include any possibility of rejoining either the European single market or the Customs Union, both of which Starmer has ruled out.
Key elements of a potential new deal might include the UK signing up to the so-called Brussels “rule book” in certain sectors, including chemicals. This would result in closer alignment with EU regulations.
Companies involved in the trade in chemicals in and between the UK and the EU would benefit from closer regulatory alignment because it would mean fewer differences in safety standards, for example. Since Brexit, the EU has added more than 30 chemicals to its list of “Substances of Very High Concern.” The UK has not added any, leading to differing regulatory requirements. This divergence means separate product registrations and compliance processes are required in each market.
Greater alignment would eliminate the need for duplicate registrations and streamline regulatory compliance, yielding a more harmonized approach to safety regulations.
Therefore the new UK government might be agreeable to being more of a rule-taker than rule-maker in certain well-established industries. However, it will prefer to retain more post-Brexit regulatory flexibility in relation to emerging technologies such as artificial intelligence.
Another building block that might be part of a revised deal is a so-called “veterinary agreement” to reduce the trade barriers on agrifoods. There is also the possibility of greater mutual recognition of professional qualifications, given the benefits this could bring in various sectors, including financial services.
Beyond these issues, one of the huge omissions from the 2020 Brexit deal was the lack of any agreement on issues that extend beyond European borders, such as defense and security. Starmer has said that this “needs to be done and can be done in a closer relationship with the EU,” especially given the continuing war in Ukraine.

He is trying to shift the heart of the debate away from “Leave vs. Remain” toward how best to make Brexit work for Britain.

Andrew Hammond

Another potentially pressing issue is the possibility of a youth-mobility deal, covering some or all people under the age of 30. The EU is prioritizing this issue but Starmer might prefer any agreement on it to be part of a wider 2025 “grand bargain” between London and Brussels.
He is acutely aware that any deal that makes it easier for more people from European countries to move to the UK might be criticized by Brexiteers who were motivated during the 2016 referendum to vote “Leave” over concerns about immigration issues arising from the free movement of people within the EU.
All this underlines the huge political sensitivity in the UK related to the Brexit renegotiation that lies ahead. Indeed, one of the major paradoxes during campaigning for the general election was the absence of any discussion about Brexit.
Part of the reason for this was that Brexit has divided the political right since the referendum, given the widespread perception that the UK has not prospered since leaving the EU. Nigel Farage, for example, who was one of the driving forces of the “Leave” campaign and is now leader of the Reform UK party, declared that “Brexit has failed.” His argument, echoed by a growing number of “Leavers,” is that Conservative prime ministers failed to take full advantage of the perceived significant freedoms offered by Brexit.
While a significant number of opinion polls indicate a majority of the UK public would now support rejoining the EU, a key challenge for those who advocate for this is the fact that the terms of entry would probably be different to those the UK enjoyed as a member at the time it exited the club in 2020. Over the years, British authorities negotiated a number of opt-outs as part of their EU membership, including a rejection of the Eurozone’s single currency, and these would no longer be collectively available.
It is therefore unclear whether a majority of voters would support revised terms of membership in any future referendum that might be required to ratify a UK return to the EU; the growing support for such a return since 2016 is wide but might prove to be shallow.
Starmer is therefore trying to shift the heart of the debate away from “Leave vs. Remain” toward how best to make Brexit work for Britain. What is increasingly clear is that the 2020 deal created significant trade problems. The EU got much of what it wanted in the agreement, including a zero-tariff, zero-quota deal for goods, in which it runs a surplus with the UK. But Brussels gave away little on services, which is a key UK strength.
The longer the agreement remains unchanged, therefore, the more economic activity might potentially migrate from the UK given that the 2020 deal puts Britain at a disadvantage compared with competitors that remain inside the European single market.

• Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.