UK-EU relations : negotiations begin to dismantle post-brexit trade barriers
London, UK/Brussels, Belgium/London-UK, November 26, 2025
BRITISH ECONOMY:
Government Pushed by CBI and Worsening Trade Deficits to Secure SPS and ETS Agreements, Signaling a Major Policy Pivot to Reduce Non-Tariff Barriers with the European Union
In a significant diplomatic and economic pivot, the United Kingdom government has initiated High-Stakes Negotiations with the European Union, marking the most ambitious attempt yet to roll back the costly friction introduced by the Trade and Cooperation Agreement (TCA).
The formal opening of talks on key regulatory alignment issues—specifically food safety and carbon pricing—underscores a shift in policy, driven by persistent economic headwinds and intense lobbying from businesses struggling with bureaucracy.
The UK-EU Relations Reset:
High-Stakes Negotiations Begin to Dismantle Post-Brexit Trade Barriers, offering the first serious hope for UK exporters since the end of the transition period.
The necessity of this “reset” is rooted in grim economic data. Despite the elimination of tariffs, UK trade with its largest partner remains severely constrained by non-tariff barriers—the endless checks, complex paperwork, and regulatory divergence that have choked supply chains and disproportionately affected smaller enterprises.
The UK has continued to run a substantial trade deficit with the EU, which stood at approximately £93 billion in 2024, with service sector gains unable to offset the persistent decline in goods trade.
Crucially, the Confederation of British Industry (CBI) and other major business groups have intensified their demands in late 2025, urging the government to prioritize stability and practical solutions to restore investment confidence, which has remained stagnant since 2021.
The Critical Fronts: SPS and ETS
The new round of negotiations, authorized by the European Council on November 13, 2025, focuses on two key, high-impact areas that directly address the core trade friction:
I. The Sanitary and Phytosanitary (SPS) Agreement
This is the most critical deal on the table for the food and agriculture sectors. An SPS Agreement would aim to reduce or eliminate the costly, time-consuming border checks on animal and plant products moving between Great Britain and the EU.
These checks—required to protect the EU’s single market—are currently mandatory at the point of entry and represent a massive administrative and logistical burden.
Securing a trusted agreement on common health and safety standards would allow UK goods to flow more freely, significantly lowering the cost of exporting British food and agricultural products and offering a much-needed boost to one of the most impacted sectors.
The government has expressed hope that an agreement can be in place by 2027.
II. The Emissions Trading Scheme (ETS) Agreement
Negotiations on an ETS Agreement are designed to link the UK’s own carbon pricing mechanism with the EU’s scheme. Such alignment would prevent UK exporters from facing the EU’s impending Carbon Border Adjustment Mechanism (CBAM) tariffs, which are set to penalize goods imported into the EU based on their carbon footprint. A successful ETS linkage is essential for protecting the competitiveness of energy-intensive British manufacturers.
Political Pragmatism and the Northern Ireland Factor
This pragmatic pivot from London effectively supersedes the formal 2026 TCA review, which was initially seen as a potential opportunity for a massive, high-stakes renegotiation.
By opting for a sectoral, collaborative approach now, the government is signaling a commitment to resolving immediate economic issues through alignment and cooperation, rather than pursuing further divergence.
Domestically, the ongoing stability of the Windsor Framework—which governs trade between Great Britain and Northern Ireland—remains a backdrop to these talks.
While the new negotiations focus on GB-EU trade, any successful reduction of friction on the Irish Sea (as an indirect result of an SPS deal) would significantly ease political tensions within Northern Ireland.
Independent monitoring reports in November 2025 noted that, while the Windsor Framework is technically working, there is persistent pressure to suggest “practical solutions to unnecessary trade barriers” faced by smaller Great Britain businesses trading with Northern Ireland.
For the London-UK-based CJ Global, these negotiations are a defining moment for the current political administration.
The success of the “reset” is tied not just to the political narrative but to tangible economic outcomes:
lower trade barriers, increased investment, and a measurable contraction of the crippling trade deficit with the European Union.
The outcome of these talks will determine whether the UK economy can finally move on from the post-Brexit contraction phase and secure a stable, competitive trading future.
Headline Points
TCA Review Trigger:
The UK-EU have initiated high-stakes negotiations on specific sectoral agreements, effectively acting as the first major review of the Trade and Cooperation Agreement (TCA).
Economic Drivers:
The negotiations are driven by the massive £93 billion trade deficit with the EU in 2024 and intense pressure from the CBI to address costly non-tariff barriers on UK exports.
Key Negotiations:
Talks focus on the Sanitary and Phytosanitary (SPS) Agreement (to reduce checks on food/agriculture) and the Emissions Trading Scheme (ETS) Agreement (to link carbon pricing and avoid new EU tariffs).
Policy Shift:
The UK government has embraced a more pragmatic, alignment-focused approach, prioritizing economic stability and cooperation over previous political ambitions for divergence.
Northern Ireland Context:
While focused on GB-EU trade, the success of the talks is hoped to indirectly ease tensions and reduce bureaucracy related to the Windsor Framework and GB-Northern Ireland trade.
