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As President Trump sets out sweeping global tariff barriers and ahead of the May summit between Prime Minister Sir Keir Starmer and European Commission President Ursula von der Leyen aimed at resetting UK-EU relations, the BTC is publishing a draft ‘Green Paper’ setting out twenty ways the UK and the EU can reset their relationship for mutual benefit.

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• Business and Trade Committee

In evidence to the Committee, think tank Best for Britain calculated that closer alignment with the EU in goods and services would “more than offset” the impact of the burgeoning US trade war for the UK - and the EU could also offset about a third of the threatened tariffs’ impact.   

The BTC is producing this report for consultation with UK business, trade unions and consumer groups after a series of meetings in Brussels and at the WTO, and after the Government declined to publish its own Green Paper on the potential routes to growth that could be achieved by a reset of relations with the EU.

The BTC report will be submitted to Parliament as ‘the Green Paper we believe ministers should have published’. It sets out some key issues the UK and EU face in negotiating what a future relationship could look like.  

Proposal

The Committee’s 20 practical proposals in the short and medium term spanning economic security and defence, boosting trade in goods, services, energy and culture, to reset relations:  

• A new EU-UK security pact, facilitating a shared approach to defence industrial strategy, co-operating to protect shared Critical National Infrastructure, and strengthening co-ordination to tackle unfair trade practices like industrial subsidies, state-owned enterprise advantages, and forced technology transfers in competitors like China
• Prioritise energy co-operation reconnecting electricity trading systems to unlock the potential of the ‘world’s largest wind farm’ in the North Sea , and developing a shared Carbon Border Adjustment Mechanism 
• Transform support for the UK goods sector, which has struggled to grow in recent years in comparison to OECD countries, through an ambitious SPS agreement, a multi-year settlement on fisheries, and bold action to cut red tape at the border with an overhaul of  customs co-operation, and rejoining the Pan-Euro-Mediterranean Convention on rules of origin. 
• Clear long term regulatory road maps to maximise compatible regulation for sectors where there are mutual gains to both UK and EU, plus an ambitious review of mutual recognition of conformity assessments on product safety
• Support Britain’s burgeoning services trade through measures including agreeing a permanent data adequacy agreement, deepening research and development, better regulatory cooperation in financial services, engaging on potential mutual recognition of professional qualifications, and an ambitious but number limited visa-based youth mobility scheme.       

Chair comment

Rt Hon Liam Byrne MP, Chair of the BTC, said:

“Times have changed and so must our relationship with Europe. Russia’s bloodthirsty aggression is undiminished and requires a heftier deterrent. China’s race to arms accelerates, while America looks like a weary titan in retreat from the system it authored at the end of World War II. The consequences are obvious. In the UK and Europe we must both step up and on the world stage, step forward. To do so effectively demands we raise the rate of economic growth.

“These challenges, that will define this Parliament, will be easier to wrangle if we draw closer to Europe. But our relationship with the EU today is stuck in yesterday’s logic. Mere tinkering will not do, but making the leap to re-join the Customs Union or Single Market risks re-opening old wounds and imperiling the unity and political stability secured at the last election. We must find a bold but pragmatic new way forward.

“And so today the Business and Trade Committee is publishing a draft of the Green Paper on the UK-EU reset that we think ministers should have published. At its heart are twenty big ways in which we can draw closer to our neighbour, strengthen our joint security, grow our economy faster and raise the standard of living for the people we serve.   

“We’ll be asking the business, trade unions and consumer groups for their views on our ideas before finalising our Report to Parliament ahead of the Prime Ministers summit with President von der Leyen. There is so much at stake, we must all help ensure the reset is as bold and effective as it can be.”

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Further information

• About Parliament: Select committees
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