Business Leaders Welcome New Agreement with EU

Business News Wales

20-05-2025

Business leaders have welcomed a new UK agreement with the European Union.
As part of the deal, a new SPS agreement will make it easier for food and drink to be imported and exported by reducing red tape.
Some routine checks on animal and plant products will be removed completely, allowing goods to flow freely again, including between Great Britain and Northern Ireland. The UK will also be able to sell various products, such as burgers and sausages, back into the EU again.
The UK Government said that closer co-operation on emissions through linking respective Emissions Trading Systems would improve the UK's energy security and avoid businesses being hit by the EU's carbon tax due to come in next year.
Combined, the SPS and Emissions Trading Systems linking measures alone are set to add nearly £9 billion to the UK economy by 2040, the UK Government said.
Meanwhile a new Security and Defence Partnership will pave the way for the UK defence industry to participate in the EU's proposed new €150 billion Security Action for Europe (SAFE) defence fund.
The UK Government said that with more than 160 firms employing more than 20,000 people in defence, Wales was 'well-placed to benefit' from an increase in defence spending, adding that it was 'exploring access' to the EU defence fund for firms based in Wales.
Ben Cottam, Head of Wales at the Federation of Small Businesses, said:
'As Wales's most important trading partner, FSB welcomes the announced easing of trade barriers between the UK and the EU.
'In particular, simplifying exports for Welsh food and drink SMEs provides a vital injection of confidence and certainty for these key businesses, enabling them to unlock new opportunities for growth and innovation in the EU market.
'There is a role now for Wales's business support organisations to proactively engage with businesses to provide comprehensive guidance on what the deal means for them and how they can capitalise on the benefits of this improved trading environment.'
Kate Nicholls, Chief Executive of UKHospitality, said:
'The new agreement with the EU to remove trade barriers is positive news for hospitality businesses and will help to further increase access to high-quality, affordable food and drink for business and consumers alike.
'We're pleased that there is a clear commitment to co-operate further on a youth experience scheme. These schemes are beneficial for those already working in hospitality, tourism and other cultural sectors to live and work in either the UK or EU. Not only does it provide economic benefits, but it also provides new opportunities for critical cultural exchange, which ultimately delivers richer experiences for customers.
'I urge both parties to pursue a model with maximum flexibility, and mirroring existing schemes with Australia and New Zealand is a sensible approach.'
Nick Farmer, Partner and Head of Outbound Services at accountancy and advisory firm Menzies, welcomed the announcement but warned that without broader reform, business will remain constrained by unnecessary red tape.
He said:
'This is the reset businesses have been crying out for – but it must be the start, not the end. If the Government is serious about supporting growth, this has to lead to wider reform. Today's news provides much-needed positivity, but true progress means tackling the broader non-tariff frictions still making UK-EU business harder than it needs to be.
'We need to see real momentum on lifting the trade barriers, red tape and regulatory hurdles that are still holding companies back. Exporters in many sectors are still facing unnecessary constraints – practical, coordinated action is now essential to get UK trade back to where it should be.'
Offshore Energies UK (OEUK) said the opening of UK-EU talks on key areas such as grid linkage and emissions trading offered opportunities to drive down costs for homes and businesses, boost energy security and accelerate the drive to net zero.
OEUK's head of energy policy Enrique Cornejo said:
'I hope we can work with our European partners to drive down costs and unlock a new era of innovation and collaboration across our shared energy mix from offshore wind, hydrogen to carbon capture – all secured by domestic oil and gas production and our world class supply chains.
'With Europe's largest CO2 storage capacity – 78 gigatonnes, equivalent to 200 years of UK emissions – the UK can develop international carbon storage services for European countries lacking capacity, creating a £7 billion market by 2040, while also becoming a leader in low-carbon hydrogen production, both blue and green, for countries with limited production capacity such as Germany.
'The linkage of UK-EU emissions trading systems could help to create a more robust market and avoid significant costs for UK exporters as the EU Carbon Border Adjustment Mechanism comes into force. This has the potential to reintegrate UK and EU electricity markets, reducing frictions and costs to consumers.
'By transforming the North Sea into an integrated hub that produces low-cost, high-value energy for consumers, the UK and its neighbours can capitalise on the existing resources, supply chains, skills and expertise we have built up together over many decades.'
Prime Minister Keir Starmer said:
'I'm determined that Wales will feel the benefit. Take iconic Welsh lamb for example. More than 90% of Welsh lamb exports go to the EU. This agreement will slash costs and red tape for this £190 million industry. Welsh producers used to sell thousands of tonnes of cockles and mussels each year, but since 2021 they've been banned from selling to the EU. We're ending this unfair treatment so exports can resume. Reducing barriers to trade will be good for the economy, good for businesses and good for Welsh workers.
'But we're not stopping there. Wales has more than 160 defence companies that employ more than 20,000 people. We're exploring access to the €150 billion EU defence fund for firms based in Wales. That will benefit companies and their workers in Wales, as well as making our continent more secure in this new era.
'We're protecting British steel and jobs; by restoring how much we can export tariff free – so more UK steel can be exported to the EU. And we're securing opportunities for young people across Wales too, restoring the chance for young people to live and work in the EU.'
The UK Government said it would continue to hold talks with the European Union on the details of each commitment.