Sir Keir Starmer faces a pivotal moment as he attempts to secure a Brexit reset deal at a crucial summit in London on Monday. Analysis shared with The Independent suggests the removal of trade barriers on key goods such as food, drink, and electronics could generate a £25bn annual uplift in exports and boost the UK’s GDP by 2.2 per cent in the long term. This would represent a significant gain compared to recent trade agreements signed with India and the United States. However, failure to strike a deal could result in a 2.7 per cent fall in exports by 2027, costing the economy close to £30bn, according to the National Institute for Economic and Social Research (NIESR).
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Commentators including Lord Jim O’Neill and Stephen Millard have stressed the economic significance of closer alignment with the EU, given that UK exports to the bloc far outweigh those to India or the US. Beyond trade in goods, reforms may also include mutual recognition of professional qualifications, allowing smoother access to the European market for UK service providers. Business leaders warn, however, that the upcoming deal may fall short of expectations if it fails to prioritise high-growth sectors such as digital services. Dame Emily Thornberry, Labour chair of the Commons foreign affairs committee, called on the Prime Minister to show more ambition in negotiations.
A youth mobility scheme is also on the table, potentially allowing 18- to 30-year-olds to work and live in the EU and UK for a limited period. According to research by the Centre for European Reform, such a scheme could raise GDP by 0.45 per cent over the next decade and bring up to 31,000 young EU workers into the UK annually. Yet tensions remain around high tuition fees for EU students and fishing quotas, which could become stumbling blocks. EU students currently pay significantly more than their domestic counterparts, and enrolment from the bloc has halved since Brexit.
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Both the UK and EU are expected to gain from the proposed agreement. The EU could see a £22.4bn boost to its own goods and services exports, with agricultural products alone accounting for £5bn. Closer trading ties may also help offset the economic damage inflicted by US-imposed tariffs, with analysts predicting that losses of £4.3bn in GDP under the US deal could be partially reversed by reclaiming up to £8.1bn through improved EU access. While political challenges remain, economists argue the potential rewards from a more integrated trade relationship with the EU far outweigh those from more distant partners.
