New UK-EU Accord Aims to Reduce Trade Barriers and Food Costs

By Ursula F. Ott, The Conversation

It is now almost a decade since the U.K. voted for Brexit and since the tariffs of President Donald Trump’s first term increased global trade frictions. Brexit removed the U.K. from the European single market for goods and services. Now, though, the country is proposing a pivot back toward alignment with EU regulations.

What could not have been widely predicted back in 2016 was the COVID pandemic, nor a war on European soil. The U.K. has been exposed to these shocks without the EU support system. So, what may once have been impossible to imagine is now on the cards — adopting EU single market rules under new U.K. legislation.

In May 2025, the U.K. and EU reached a new trade agreement, paving the way for both sides to move closer on their economies and business. Unpredictable U.S. trade tariffs and a weakening of the U.S.-U.K.-EU relationship hastened this. In addition, it has been estimated in a comprehensive study that Brexit has reduced the size of the U.K. economy by 6-8%.

Politically, the approach announced by the U.K. prime minister, Keir Starmer, is a courageous step. U.K. legislation would allow the country to adopt new EU laws without the need for parliament to vote each time. But any plan is certain to provoke strong opposition from the Conservatives and Reform U.K.

However, it is a signal of the seriousness of the U.K.’s intentions to move closer to the EU by adapting to its regulations and giving up independence from EU law. That is a costly move for the U.K. in terms of its credibility, but the U-turn should reinforce its commitment to the EU.

BENEFITS TO U.K.

But beyond this, there are three clear benefits to the U.K.

1. The EU is built on rules and regulations that guide the bloc’s labor market, trade and security systems. Alignment would clearly help U.K. businesses, consumers, and individual workers to maneuver within these systems.

2. By breaking from the single market, the U.K. chose a costlier approach to trading and investing across the EU border. Aligning regulations would reduce cross-border bureaucracy.

3. The EU is looking for new trading partners after supply chain disruptions from COVID and the Ukraine war — not to mention the current impact on oil and gas supplies. The EU does not need to rely on the U.K., but a new direction in the relationship could reduce the threat of supply chain disruption in the future.

BETTER DEAL FOR CONSUMERS?

So, what could this mean for U.K. businesses and consumers? Food producers trading within the U.K.-EU zone would have a quicker turnaround of their fresh produce. This would reach shop shelves in the U.K. and EU more quickly, giving shoppers better-quality fresh foods.

Reducing the amount of complex paperwork and export health certificates at borders would allow a free flow of fresh food even between Great Britain and Northern Ireland (which remained part of the single market). This trade has been disrupted since Brexit and affects both trade between food producers due to paperwork and border delays, and food security.

Border checks, paperwork and adapting to legal requirements are expensive and increase food prices (and with that, inflation). Bringing trade between the EU and the U.K. closer could reduce these costs and should also allow producers to benefit more from global value chains.

Going forward, it will be resilience, rather than trade efficiency, that will be important for both businesses and nations. Both will want to be able to reconfigure networks at speed.

If inflation rises due to product shortages, governments have limited fiscal space to offer direct support to citizens (which would mean increased levels of spending) or to cut taxes.

Another benefit could come in the form of foreign direct investment into the U.K. from overseas. In 2025, this began shifting from low-cost developing countries toward capital-intensive and technologically-driven investments in developed countries — and especially in the EU (Germany, Italy and France).

Alignment with EU regulation could give investors more confidence to commit to the U.K. Foreign direct investment in renewable energy and AI products, for example, would benefit both the U.K.’s workers and its consumers.

This is a time of new geopolitical alliances and cooperation. Trading and investment options could help secure economic, political, and societal stability in a volatile world. So far, this is a relatively small step by the U.K., but starting to align to EU regulations could ease a complex relationship.

Professor Ursula F. Ott is the head of the International Business, Strategy and Decision-Making Research Centre at Nottingham Business School, Nottingham Trent University, England.