🔗 Share this article

The Labour administration has been advised that securing a deeper trading relationship with the European Union is a "critical imperative" for companies in Britain, as a growing number of exporters report greater difficulty to operate under the existing post-Brexit trade deal.

Growing Exporter Frustration with Post-Brexit Arrangements

Urging the government to hasten its EU relationship reset, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was failing to help them increase exports in the EU. Over 50% of exporters in a poll of nearly one thousand firms – most of whom were SME companies – said the trade deal negotiated by Boris Johnson’s government was failing to assist.

“With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a business-critical need, not a matter of political preference,” said the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a 13 percentage point increase from the proportion of unhappy firms in a similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules was adequate.

Calls for Action for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – comes amid growing recognition within the government's senior ranks about the economic impact of leaving the EU. Recently, Wes Streeting became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no return” to the EU internal market, customs bloc, or free movement. Starmer has also stated in the past he could not foresee a situation where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

According to a document setting out a “business manifesto for the EU reset”, the business group said the government must focus its work to reduce barriers to trade for exporters to help boost the UK economy. Quoting frustrated survey respondents, it said firms were finding it ever harder to adapt to new rules in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have all but ceased. The TCA has had zero effect in winning back any business into the EU,” said one small manufacturing firm in Greater Manchester.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• A deal to reduce inspections on animal and plant products.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on tax and border simplification.

An official representative said: “This government is removing red tape and obstacles to trade to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”