EU Trading Relationship

Catherine Fookes Excerpts

Thursday 24th April 2025 Westminster Hall

[Andrew Lewin (Welwyn Hatfield) (Lab) [R]]

I beg to move,

That this House has considered the trading relationship with the EU.

I declare an interest as the chair of the UK Trade and Business Commission. I am grateful to the Backbench Business Committee for granting this debate, and to colleagues on both sides of the House who supported the application.

It has never been so timely to talk trade, but before we look forward, we need to look back at how we arrived here. It has been 4,744 days since Prime Minister David Cameron promised the country a referendum on our future relationship with the European Union: in his words, a

“simple in or out choice”.

Ever since, the UK’s relationship with the European Union has been anything but simple.

In the decade that followed Cameron’s speech, successive Conservative Governments did everything in their power to distance the UK from our largest trading partner. In 2020, the trade and co-operation agreement was signed with an ideological zeal to diverge as much as possible from the EU. Agreed by the Conservatives and cheered on by Reform, it is a choice that we are all paying for. According to the Office for Budget Responsibility, the barriers to trade that were put up by leaving the EU have set the UK economy on course to lose more than £100 billion over the medium term. The London School of Economics has found that the increased barriers to trade have left the average person paying £250 more every year on their food shop.

Repairing the UK’s trading relationship with the EU is all the more important given the dramatic change in the position of the United States. Our Government deserve praise for their calm and measured response to tariffs, but none of us can presume to know what the position of the White House will be in six days, let alone in six months. By contrast, it is certain that the EU will remain the UK’s largest trading partner. The EU accounts for 42% of UK exports and 52% of imports. That is our most essential trading partnership.

I welcome all that the Labour Government have done in our first nine months to begin to repair and reset that relationship. Ours was the first Chancellor to attend a Eurogroup meeting since Brexit, and the Prime Minister has been in lockstep with fellow European leaders in shared support of Ukraine. The leadership of the Prime Minister and the Chancellor has established the opportunity for a substantive change in UK-EU relations, but it is vital that we seize that opportunity. I want to see the most ambitious trading deal possible and will focus my remarks on three points: first, the importance of a deal that includes mutual recognition of conformity assessments; secondly, the case for deep alignment between the UK and EU on goods and services; and thirdly, a bespoke visa-based youth mobility deal.

One of the failings of the trade and co-operation agreement was the lack of a mutual recognition agreement on conformity assessments, which are used to determine whether a product meets a country’s regulations for goods and to ensure safety, performance and compliance with legislative requirements. Conformity markings include the UK conformity assessed mark and the EU’s CE mark. With a mutual recognition agreement, countries that recognise each other’s conformity assessment bodies and procedures avoid duplication of testing and certification for goods. Without such an agreement, products made in the UK and intended for the EU cannot be tested here, and vice versa. The EU has conformity assessment MRAs in place with countries including Switzerland, Australia, New Zealand, Japan and Canada. The UK has them with the USA, Switzerland, Canada, Australia and New Zealand. Last month, a coalition of 19 business groups, including the Confederation of British Industry, Make UK and techUK, called for a UK-EU mutual recognition agreement and said that it would support export-led growth, particularly for small and medium-sized enterprises. I look forward to hearing the practical steps that the Minister is taking to help make that a reality.

My second point is about alignment with the EU on goods and services. When the Conservatives signed the TCA, the winners were the ideologues who advocated for the UK to become a version of Singapore-on-Thames. The losers were our businesses, especially those exporting goods. The last Government made an active choice to diverge from European Union regulations and standards. If we listen to business, it does not take long to see the impact. The British Chambers of Commerce surveyed its members on how they had been affected by the TCA: they listed challenges for business from red tape, bureaucracy, paperwork and delays in goods flowing through customs. Recently, the Chartered Institute of Export and International Trade has found that that has caused a staggering 2 billion extra pieces of paperwork for businesses since we left the EU.

Part of the answer must now come from closer alignment on goods and services once again. Earlier this year, Best for Britain commissioned Frontier Economics to model a scenario with

“an expansive approach to mutual recognition, in which the UK and the EU take active steps to minimise regulatory divergence and commit to recognising the equivalence of each other’s regulations.”

[Catherine Fookes (Monmouthshire) (Lab)]

At my recent business roundtable in Monmouthshire, I spoke to Tri-Wall, a business that exports to the EU. Instead of sending one lorryload of its goods to different countries all across the EU, it now has to send a different lorry to every country, which really increases its costs. Does my hon. Friend agree that we need closer alignment to avoid that kind of problem?

[Andrew Lewin]

I agree entirely. I have heard far too many stories exactly like that in communities across the country.

--- Later in debate ---

[Catherine Fookes (Monmouthshire) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I thank my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin).

The post-Brexit trade deals delivered by the previous Conservative Government have just been appalling. They have not worked well for Wales. We have been flooded with New Zealand lamb—and, as we all know in this room, Welsh lamb is of course the best-tasting lamb in the world. I congratulate the Paymaster General and Minister for the Cabinet Office, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds), on his continued work on an SPS deal. We desperately need that for our hard-pressed farmers and for the businesses in my constituency of Monmouthshire.

I recently had a business roundtable with businesses such as TXO, Siltbuster, GreenMeadow and others. They said to me that they are drowning—of the 2 billion pieces of paper that were mentioned earlier, the businesses in my constituency must have 1 billion of them. They are drowning in paperwork, and it is slowing them down. To be honest, after I met with them, during my two-hour business roundtable, I was astonished and amazed that they had all stayed in Monmouthshire, employing local people, while continuing to face such a barrage of barriers and administration.

The No.1 thing that those businesses need is for us to remove some of those trade barriers. In order to smooth their trade, we need to keep our standards the same as those in the EU. That was the No.1 priority of all those businesses, and I congratulate all those who signed the letter saying that. We must have regulatory alignment if we are to grow. We must remember that this Government’s No.1 mission is economic growth. If we align with EU standards and continue to grow our trade with the EU, that is exactly what we will get.

I am delighted to be a member of the UK-EU Parliamentary Partnership Assembly and to have gone to Brussels recently. We were welcomed with open arms by our MEP colleagues, because they said they felt that the grown-ups were back in the room; they were delighted with the leadership of the Prime Minister bringing us closer to Europe. I encourage the Government to continue to do that work.