UK strikes EU trade and defence reset in ‘new era’ for relations

Britain agreed the most significant reset of defence and trade ties with the European Union since Brexit on Monday after US President Donald Trump’s upending of the global order pushed the two sides to move on from their acrimonious divorce.

Nearly nine years after it voted to leave the bloc, Britain reached a wide-ranging deal with the EU including a security and defence pact, fewer restrictions on British food exporters and visitors, and a contentious new fishing agreement.

Trump’s tariffs, alongside warnings that Europe should do more to protect itself, forced governments around the world to rethink trade, defence and security ties, bringing British Prime Minister Keir Starmer closer to European leaders.

Starmer, who backed remaining in the EU in the Brexit referendum, also bet that offering benefits to Britons such as the use of faster e-gates at EU airports will drown out the cries of “betrayal” from Brexit campaigner Nigel Farage.

Flanked by EU Commission President Ursula von der Leyen and European Council President Antonio Costa at London’s Lancaster House, Starmer said the deal marked “a new era in our relationship”.

Von der Leyen said it sent a message: “At a time of global instability, and when our continent faces the greatest threat it has for generations, we in Europe stick together.” Britain said the reset with its biggest trading partner would reduce red tape for agricultural producers - making food cheaper - improve energy security and, by 2040, add nearly 9 billion pounds ($12.1 billion) to the economy, which is about 2.6 trillion pounds in size.

It is the third deal Britain has struck this month, after agreements with India and the US, and while it is unlikely to lead to an immediate economic boost, it could lift business confidence, drawing much-needed investment.

At the heart of the reset is a defence and security pact that will let Britain be part of any joint procurement and pave the way for British companies including BAE, Rolls-Royce and Babcock to take part in a 150 billion euro ($167 billion) programme to rearm Europe.

On fishing, British and EU vessels will have access to each other’s waters for 12 years - removing one of the UK’s strongest hands in any future talks - in return for a permanent reduction in paperwork and border checks that had prevented small food producers from exporting to Europe.

In return, Britain has agreed to the outline of a limited scheme to let young EU and British people live and work in each others’ territories for periods, with the details to be hammered out in future, and it is discussing participation in the Erasmus+ student exchange programme.

The agreement was denounced by the opposition Conservative Party - which was in power when Britain left the bloc and spent years negotiating the original divorce deal - who said Britain will now have to accept EU rules.

Nigel Farage, head of the right-wing, pro-Brexit Reform UK party, called the deal an “abject surrender - the end of the fishing industry”. The Scottish Fishermen’s Federation called it a “horror show” because EU fishermen will be able to access British waters for far longer than had been expected.

Chris Curtis, a Labour member of parliament, said the deal would correct some of the problems created by the Conservatives’ original deal agreed after Brexit and said he believed most people wanted improved relations.

“It is very easy to pretend that there are no tradeoffs, that you can get everything you want, and you don’t have to give anything away, but that is clearly baloney,” he told Reuters.

Britain’s vote to leave the EU in a historic referendum in 2016 revealed a country that was badly divided over everything from migration and sovereignty of power to culture and trade.

It helped trigger one of the most tumultuous periods in British political history, with five prime ministers in office before Starmer arrived last July, and poisoned relations with Brussels.

Polls show a majority of Britons now regret the vote although they do not want to rejoin. Farage, who campaigned for Brexit for decades, now leads in opinion polls in Britain, giving Starmer limited room for manoeuvre.

But collaboration between Britain and European powers over Ukraine and Trump has rebuilt trust.

Rather than seek a full return to a pillar of the EU such as the single market, for fear of angering Brexit voters, Starmer sought to negotiate better market access in some areas - a move that is often rejected by the EU as “cherry picking” of EU benefits without the obligations of membership.

Removing red tape on food trade required Britain to accept EU oversight on standards, but Starmer will argue that it is worth it to grow the economy and cut food prices. Trade experts said breaking the taboo of EU oversight for something that would benefit small companies and farmers was good politics.

Reuters