Keir Starmer's Many Rivers to Cross

Former Senior EU Trade Negotiator John Clarke has some salient advice for the new Labour Government

Prime Minister Keir Starmer. Photo: Kay Nietfeld/Empics

The new Labour Government has many rivers to cross. Or for our purposes the English Channel. What a pity that the new Business Secretary made the United Arab Emirates his first foreign destination, and not the European Union! A visit to Brussels is needed as soon as possible, to underline that they want to turn the page on the last lot and reset the relationship with the UK’s best friend and biggest trading partner.  

When Jonathan Reynolds does go to Brussels, he will be cordially received. There is considerable goodwill across the EU for the new Government who are seen as honest – unlike the Conservatives – and less anti-European.

But Minister Reynolds cannot ask for the moon on trade. The EU is suffering Brexit fatigue, is chary about taking commitments that might be reversed in five years’ time, and will not – in some cases, legally cannot – offer sweetheart deals to what is now just another third country sitting between Ukraine and Uruguay… pour décourager les autres.

Starmer’s first moves towards Brussels have themselves been curiously underwhelming and cautious. And for Brussels, faced with the challenges of the Ukraine war, economic insecurity, immigration, the green transition and more, UK trade relations are a low priority. The Trade and Cooperation Agreement (TCA) works reasonably well from the EU perspective, so no renegotiation is warranted.

So the Minister’s challenge, when he does eventually get on the Eurostar at St Pancras, will be to define an agenda to improve two-way trade without renegotiating the TCA, one attractive to both parties and that can be expanded over time. The long-term aim presumably being to re-join the Single Market.

If, through a series of mini-agreements over the next decade, the UK can get a little over half way to the Single Market, those last steps will be less politically controversial and technically feasible. After all, how many British citizens know or care about the role of the European Court or indeed ‘Dynamic Alignment’? Isn’t that something the plumber does when he fixes your toilet? And the EU for its part is now open as never before to mini-deals and sectoral agreements.

In this writer’s view, the Minister could propose the following set of negotiations: harmonisation of customs’ IT systems (they are incompatible today); alignment of the UK’s carbon border adjustment mechanism (CBAM) with that of the EU; negotiations on mutual recognition of product certification (quite easy since most approved certification bodies are multinationals present in both jurisdictions); the UK joining the Multi Party Interim Arrangement or MPIA, the new temporary dispute settlement court in the World Trade Organization, (which the Tories turned their back on under US pressure); pharmaceutical and chemicals recognition arrangements; a dialogue leading to recognition of professional qualifications notably legal, financial and construction; a strategic dialogue on digital and AI building on the G7 consensus, and, before too long, a volte face on the EU’s proposed youth mobility and education scheme, which has nothing to do with stopping the boats but which is of great EU interest and a money earner for the UK too.

A veterinary agreement will also give a big fillip to trade, but there is a humungous trust deficit to plug first. The previous government postponed four times checks on EU food imports. Labour has continued to postpone. Either the UK lacks the vets and infrastructure to check the safety of imports – in which case they can hardly verify the safety of UK exports – or else pre-election, the Tories sought to avoid any measure that might raise food prices. Either way, it’s not a good look. The UK will have to demonstrate it has both the resources and the will to operate a quality inspection system and build trust with EU regulators. That takes time. But it’s feasible by 2028.

The EU does not do Big Bangs. Though often compared to a bicycle, it is more a supertanker – slow to manoeuvre or change tack. The Minister is advised to avoid any outlandish Big Bang proposals. It would be unwise, for example, to suggest that the UK will join the EU’s nascent military capability in return for cherry-picking free trade deals. The EU runs shy of this kind of trade-off, in part because of split competences between the Commission (in charge of trade), and Member States (in charge of foreign affairs and defence). Perhaps over time Starmer can start to explore linkages, but not now. As T S Eliot wrote: “You must go by a way wherein there is no ecstasy”, even if Germany has been flying kites in recent weeks suggesting a package deal involving defence, security and trade.

Competent governments look ten years ahead. The jewel in the crown for the UK is surely re-joining the Single Market and enjoying the “four freedoms” – free movement of goods, services, capital and people. Two electoral cycles is quite sufficient to prepare British public opinion for what is frankly an economic no-brainer. Starmer can set up a Royal Commission reporting back next year on the desired EU relationship (The FT’s Robert Shrimsley’s brainwave, not mine), and any Royal Commission worth its salt will, as a minimum, say re-join the Single Market (far more useful than the Customs Union). That will give Starmer his Keynesian alibi: “When the facts change, I change my views. What do you do Sir?”.

An even more imaginative approach would be to negotiate the UK’s re-integration into the Single Market simultaneously with Ukraine’s accession, since each will take between seven and ten years. The UK is a major sponsor and military backer of Ukraine, will be a net contributor to the EU budget if it re-joins the Single Market, but can argue that some of that Budget (from say 2035) will be directed to boost Ukraine’s economy and EU integration (noting that UK along with France will profit most from Ukrainian reconstruction). A major political coup.

So, with an eye on that big prize, the new Labour Government is advised to take the long view on its interests in Europe but, at least at first, go step by step. To paraphrase Jimmy Cliff, the UK has many rivers to cross. Will it find its way over? Or remain lost on the White Cliffs of Dover?

---

John Clarke is a former senior trade negotiator for the European Union.  He was the EU’s Head of Delegation to the WTO and UN in Geneva, and also represented Hong Kong in the GATT negotiations in the 1990s.