Latest news with #CommonUnderstanding
Yahoo
19-05-2025
- Business
- Yahoo
No reset would be better than this damaging deal
One might be tempted to say that no reset is better than a bad one. The UK's economic reset with the EU does not produce much in the way of tangible, immediate gains for the UK. It is as much about the direction of travel. The key to any reset is to ensure it does not tie the UK's hands in future on domestic economic or trade policy. It makes sense to have a sensible and mutually beneficial working relationship with the EU. In this reset, however, the UK will have to both pay and align in return for closer ties. Brexit was a political event, about democracy, control of our laws and ensuring power remained with UK voters as the EU moves towards ever closer union. I agree with the former governor of the Bank of England, Lord King, who said in an interview: 'It isn't really an economic issue: it's a political issue.' Both the Prime Minister and EU president described this deal as 'comprehensive'. It is not just about the devil being in the details, but also about what follows. The so-called Common Understanding document accompanying the reset has many references to exploratory talks and references 'dynamic alignment with EU rules' where necessary. The Government has said it does not plan to rejoin the single market or the customs union. That's important as this will not provide a solution to the UK's economic challenge and should not be part of any pro-growth strategy. Remaining outside the single market allows the UK regulatory autonomy in key areas of future growth such as artificial intelligence. Being outside the customs union has allowed the Government to make a trade deal with India, to agree on tariffs with the US, and to reposition the UK in a changing global economy, including having membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The major driver of future growth is the Indo-Pacific, with the EU the slow growth region. This reset effectively sees the UK join the single market in the area of agricultural products. The post-Brexit border in the Irish Sea should go. The Government expects trade in agriculture to rise, but this will be at the expense of the UK being tied to EU rules. The SPS agreement, for instance, covers sanitary, phytosanitary, food safety and general consumer protection rules, so effectively the UK will come under EU rules on production, which are widely seen as anti-innovation in agricultural products. The latter ties UK agriculture's hands in gaining efficiencies with the rest of the world. The ECJ will also oversee areas of dispute. Unfortunately, one headline-grabbing aspect is the damage it may cause to the UK fishing industry, and it will have a further painful impact on deprived parts of the UK. The other is UK access to EU defence procurement. This could be positive, but the details and cost still need to be clarified. Seeking improved defence and security ties is understandable as the changing global landscape of geo-economics has led to national security being alongside economic prosperity in policy making. Access to the EU energy market and emissions trading schemes is also to be explored, but again with a cost and realignment. The reset should allow scope to address areas that, with better negotiation, should not have been in the original deal. Access to e-gates at passport control now faces 'no legal barriers', but their use is unclear. The UK wanted to address the ability of UK artists to tour, but this has not been resolved. Youth mobility is the big unknown out of this reset. Few would want to deny opportunities to UK young people, although previously these were limited by language issues and the lack of jobs in the EU. The genuine worry is the UK's tendency to underestimate badly how many people may wish to come, given our dynamic labour market and free health system and the high numbers of young people with EU residency permits. The major challenges facing the UK have long predated Brexit and solutions are not reliant on being in the EU. The UK's investment shortfall dates to the 1970s, its trade deficit problem to the mid-1980s, and regional imbalances have persisted for some time. Germany's recent recession, Italy's stagnation and France's weak growth are not blamed on Brexit, and with Britain being hit by the same global influences, our sluggish growth should not be either. The doppelgängers that some have used to suggest we would have grown faster within the EU have been shown to be flawed, with the comparator groups changing within and across economic variables. The inability of British politicians to articulate a coherent vision and deliver a properly thought-out economic policy have allowed figures vehemently opposed to Brexit to define the debate and helped to create an economically damaging narrative about the UK on the global stage. While some politicians wrongly presented Brexit as transforming the country's fortunes overnight, we are still better placed to pursue a reforming, pro-growth agenda from outside the EU. Making maximum use of the competencies that have returned to Westminster in recent years remains an opportunity, before we seek to give them away in a reset without them being used. Though this need not necessarily rule out dynamic alignment in a few sectors, the UK needs to focus on the domestic policy levers that can be pulled to boost competitiveness. Gerard Lyons is a senior fellow at the Centre for Policy Studies Broaden your horizons with award-winning British journalism. 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Observer
19-05-2025
- Business
- Observer
EU-Britain agree on trade deal
The European Union and Britain reached a tentative agreement on defence and security, fisheries and youth mobility ahead of a EU-UK summit on Monday, paving the way for British firms to participate in large EU defence contracts, EU officials said. Representatives of EU governments in Brussels received a text of a Common Understanding between Britain and the EU, and the document is now being approved by all 27 EU governments, the officials said. British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen and European Council President Antonio Costa will meet later on Monday in London. "There is an agreement ... on the different texts and parallel aspects of the EU-UK Summit," one EU diplomat said. "From my understanding, all member states seem to be happy with what's put on the table as the summit is about to start. There is now an ongoing written procedure to have the formal agreement of all member states, but it shouldn't cause any problem," the diplomat said. Britain is poised to agree the most significant reset of ties with the European Union since Brexit on Monday, seeking closer collaboration on trade and defence to help grow the economy and boost security on the continent. "With the positive signs coming from the negotiators in London in the last days and hours, the scene is now all set for a very successful and constructive reset of the relationship, that both the EU and UK will benefit from," the diplomat said. The two sides were also looking at deals allowing British travellers to use e-gates at European airports. Talks are continuing on a youth mobility scheme to allow people aged 18-30 in the UK and the EU to move freely between countries for a limited period of time.
Euronews
19-05-2025
- Business
- Euronews
EU, UK reach fishing and defence deals hours before first-ever summit
Brussels and London on Monday agreed new deals on fishing, energy, youth mobility and defence following marathon talks that concluded just a few hours before the first-ever EU-UK summit was to be held. British Prime Minister Keir Starmer, European Commission president Ursula von der Leyen, and European Council chief Antonio Costa are set to agree on three documents: a joint statement where they set out common ground on key geopolitical challenges, a security and defence partnership, and a Common Understanding. For both sides, the summit was initially aimed at showing just how closely aligned on key global issues they are at a time when the post-war multilateral world order is being attacked by Moscow, Beijing, and now increasingly Washington. But the spectre of Brexit quickly loomed large with bilateral and sectoral issues taking talks to the wire and risking to turn this summit into a damp squib. On the one side, the EU stuck to its position that nothing is agreed until everything is agreed, while on the other, Britain's Labour government had to contend with bruising local elections where Brexiteer Nigel Farage's Reform Party performed well. The Common Understanding, which sets out the parametres of the relationships over a number of bilateral issues including thorny ones such as fishing rights, Sanitary and Phytosanitary rules (SPS), and youth mobility, was therefore the hardest to thrash out, with negotiations continuing overnight on Sunday. Politically, the hardest domestic sell for host Keir Starmer, are a 12-year extension of full reciprocal access to waters to fish and the European Court of Justice having jurisdiction over SPS matters. The current fishing rules are set to expire in June 2026 and numbers that had been floated before the deal was finalised hovered around a five-year extension. British Business Secretary Jonathan Reynolds insisted on Monday morning that the government hadn't sacrificed fishing for closer alignment on other issues, stressing that access to the EU market for the UK fishing industry "is fundamental". "We need some certainty in place, you don't want things on an annual basis," he also told BBC radio. Both sides were keen to stress that the package is ambitious, balanced and crucially did not cross any red lines they both had going into the talks. An EU official said, for instance, that the summit "shows that we have entered a new chapter in our relations with UK – a neighbour, an ally and a global partner" and that "we are turning a page and moving towards a new strategic partnership". "The negotiation process in the run-up to this summit went until the last minute. But negotiations took place always in good faith on both sides, and the result is very positive for both," the official added. This good faith will need to continue as both sides will have to return to the negotiating table quickly to formalise the sectoral deals included in the Common Understanding with legal agreements. The same applies to the security and defence cooperation as the partnership struck on Monday does not yet allow the UK to take part in the EU's €150 billion SAFE programme to boost joint procurement. How much the UK will need to contribute to the EU budget to take part, for instance, has yet to be defined. The instrument, part of the EU's Readiness 2030 plan to strengthen the bloc's defence sector and capabilities, includes a so-called European preference under which some 65% of the weapon systems bought must be made in the EU or in third countries with which it has agreements in place. This currently excludes the UK and its defence manufacturers.
Business Recorder
19-05-2025
- Business
- Business Recorder
EU and UK reach tentative agreement ahead of summit, say EU officials
BRUSSELS: The European Union and Britain reached a tentative agreement on defence and security, fisheries and youth mobility ahead of a EU-UK summit on Monday, paving the way for British firms to participate in large EU defence contracts, EU officials said. Representatives of EU governments in Brussels received a text of a Common Understanding between Britain and the EU and the document is now being approved by all 27 EU governments, the officials said. EU wins post-Brexit fishing row with Britain British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen and European Council President Antonio Costa will meet later on Monday in London. 'There is an agreement on the different texts and parallel aspects of the EU-UK Summit,' one EU diplomat said. 'From my understanding, all member states seem to be happy with what's put on the table as the summit is about to start. There is now an ongoing written procedure to have the formal agreement of all member states but it shouldn't cause any problem,' the diplomat said. Britain is poised to agree the most significant reset of ties with the European Union since Brexit on Monday, seeking closer collaboration on trade and defence to help grow the economy and boost security on the continent. US recession no longer likely after trade truce, says Barclays 'With the positive signs coming from the negotiators in London in the last days and hours, the scene is now all set for a very successful and constructive reset of the relationship, that both the EU and UK will benefit from,' the diplomat said.
Local France
19-05-2025
- Business
- Local France
EU and UK 'reach deal' to reset ties ahead of key London summit
EU diplomats said member states greenlit a trio of texts to be inked at the summit: a Security and Defence Partnership, a statement of EU-UK solidarity, and a Common Understanding on topics from trade to fishing and youth mobility. Talks ran into Sunday night to resolve squabbling over key sticking points -- with the sensitive matter of fishing rights top of the list. Under the final agreement, Britain will keep its waters open for European fishermen for 12 years after the current deal expires in 2026, in return for the bloc indefinitely easing red tape on food imports from the UK. On the matter of youth mobility -- another main source of friction with London fearing any such scheme could spell a return to freedom of movement between the EU and UK -- negotiators agreed to general wording that leaves the haggling for later. More to follow...
