BusinessEurope Outlook on EU-UK relations

Key messages

• The trade and investment relationship between the EU and UK remains indispensable for businesses on both sides of the channel. While the Trade and Cooperation Agreement (TCA) has allowed businesses to avoid an abrupt transition resulting from the UK’s exit from the single market and customs union, there remain many unnecessary barriers to trade and investment flows. Following the impetus provided by the elections of new governments in the EU and UK, there is a clear opportunity to upgrade the relationship between the two economies to deliver for businesses and citizens.
• In order to minimise the non-tariff barriers associated with regulatory divergence between the two jurisdictions, businesses welcome initiatives for regulatory cooperation between the EU and UK in a range of areas, as well as some degree of consultation and coordination on the broader regulatory agendas pursued by the two governments. New legislation from both sides should always consider the potential impact on Northern Ireland and ensure respect for the TCA’s level playing field provisions.
• Additional customs formalities since the UK’s exit have resulted in significant delays and higher import and export costs. Agreements on rules of origin and mutual recognition of conformity assessment for products, as well as active engagement between customs authorities to simplify transit procedures, can significantly reduce the administrative burden for companies trading goods, especially as new border control requirements are introduced with the EU’s Entry-Exit System and the gradual application of the UK’s Border Target Operating Model.
• Agreements to enhance the mobility of professionals would be instrumental in limiting the labour shortages that firms are facing in the EU and the UK, including on the mutual recognition of professional qualifications as well as providing clarity on the visa requirements for short term business visitors. Facilitating the mobility of contract service suppliers between the EU and UK is a clear priority for the liberalisation of trade in services.
• As like-minded partners faced with common challenges ranging from the climate crisis to increased geopolitical tensions, the EU and UK should strengthen their partnership by adopting common approaches to issues such as de-risking supply chains, pursuing the green transition and cooperating on energy and supply chain security. This cooperation would ensure that measures taken do not impose unnecessary obstacles to our trade and investment relationship for businesses.