Rachel Reeves will on Monday lay the ground in Brussels for an “ambitious” new economic partnership with the EU, when she promises to fully honour post-Brexit deals struck by the last Conservative government.
Reeves will become the first British chancellor to attend a meeting of European finance ministers since Brexit, reflecting her belief that improving trade with the bloc is crucial to boosting growth.
In a speech to Eurogroup finance ministers, Reeves will allay fears that Britain might renege on parts of the Windsor framework, the deal covering post-Brexit trading in Northern Ireland.
Reeves is expected to tell the Eurogroup: “Yes, we will implement our existing agreements with you in good faith. But we intend to build on those agreements to reflect our mutual interests.
“And we will be more ambitious in taking practical steps to strengthen our economic relationship, benefiting both the UK and the EU.”
Reeves and Jonathan Reynolds, UK business secretary, want to lower trade barriers in a number of sectors and are pushing for Britain to permanently align with EU rules in areas such as pharmaceuticals, cars and agriculture.
Reynolds told the Financial Times on Friday that he wanted to see a “very ambitious” push for better trading relations with the bloc.
Full and “dynamic” British alignment with EU rules is seen in Brussels as essential for any veterinary deal to smooth trade in food and agricultural goods; that is one of Labour Prime Minister Sir Keir Starmer’s key objectives in “reset” talks with the EU.
While Reeves and Reynolds also hope to lower barriers to trade for other “established industries”, including pharmaceuticals and automotive, the EU has always opposed sectoral deals — known in Brussels as “cherry picking” — that would give Britain privileged access to the single market.
However Reeves’ promise to fully implement the Windsor deal struck by then Tory prime minister Rishi Sunak, including enforcing labelling and reporting requirements for goods crossing the Irish Sea, will be seen in Brussels as an essential first step before any talks.
“The full implementation of the existing deal is absolutely critical for progress in other areas,” said one EU official, noting that the bloc continued to be concerned that the UK government was still not fully implementing some aspects of the 2023 deal.
In her speech Reeves will also urge European finance ministers to embrace free trade, reaffirming her desire for close relations with the EU even as Donald Trump’s return to the White House threatens to boost protectionism.
Monday’s meeting is expected to focus on developments in the broader European economy. Officials in Brussels said finance ministers would also want to hear about Reeves’ October Budget, in which she eased fiscal constraints to allow greater investment.
Senior non-EU figures occasionally attend Eurogroup meetings of Eurozone finance ministers. Last year the group met in an “inclusive format” when US Treasury secretary Janet Yellen was present.
Reeves is also expected to hold bilateral talks with individual finance ministers in Brussels.
Not all industries are clamouring for unilateral UK alignment with EU rules and regulations if that does not result in improved access to the single market.
The Chemicals Industries Association, the industry lobby group, has warned that adhering to the EU’s increasingly onerous REACH chemical regulations would not necessarily be in the interests of all businesses.
“Alignment doesn’t necessarily mean automatic access if the UK is outside of the single market and still needs to prove compliance at the border and therefore does not benefit from levels of friction-free access,” the CIA said last week.
“We do want to have a close relationship but not at any price,” added chief executive Steve Elliott.
Talks on a new UK-EU economic relationship are under way and expected to culminate in a meeting between Starmer and EU leaders next spring. António Costa, the new president of the European Council, will travel to London on December 12 for talks.
But many obstacles lie in the path of an accord, including EU access to British fishing grounds.
Brussels will seek better access for young EU citizens to Britain’s universities and labour market, while Yvette Cooper, UK home secretary, is resisting any relaxation of border rules as the government attempts to lower net migration.
Paschal Donohoe, president of the Eurogroup, said he hoped the meeting would represent “a further step in deepening our co-operation”, adding that the UK was a “close neighbour, a friend and very importantly a key partner for the EU with whom we share common values. At a time of great change in our world, this relationship matters.”
He said: “I look forward to discussing together the global economic outlook, our shared challenges and our respective policy approaches to promote resilient growth.”