The EU reset moment: Can rhetoric match ambition?

Hot off the heels of today's announcement that GDP grew at 0.7% in the first quarter of this year, the UK’s long-trialled “EU reset” moment has finally arrived.

Next Monday is as important for British businesses and economic growth ambitions as any trade deals struck in recent weeks with India and the United States.

Despite Brexit, the European Union remains, by a significant margin, the UK's largest trading partner in terms of exports and imports. Indeed, over half of the UK's imports still come from our European neighbours.

Public sentiment in the UK also seems to have changed recently, with the majority now favouring closer ties with Europe. A  report published only last week by the Good Growth Foundation found that 73% of Britons support “some” or “a lot” of trade and economic co-operation with the EU, and 71% support closer ties on security and defence. Throw in low growth forecasts for all major European economies, war in Ukraine, and a UK ruling party that instinctively favours relatively closer ties to the EU, and a conducive environment for forging a better relationship with the EU may be emerging.

So, what will be on the table when Prime Minister Sir Keir Starmer welcomes the EU's top diplomat Kaja Kallas, Council President António Costa, and Commission President Ursula von der Leyen to London for fresh talks? While the sentiment has changed, there may be some pause for thought regarding the potential for a sweeping trade deal.

Negotiations remain difficult, as shown by reports this week that the EU is demanding further concessions from the UK over fishing rights and youth mobility. Primarily led by the French, the EU remains determined to secure access to British water for its fishermen and lower university fees for European students. It has also been mooted that the EU will push the UK to contribute financially to the bloc. UK ministers have repeatedly refused to rule out that Britain would accept "dynamic alignment" with EU rules, which serve as a backstop for the European Court of Justice in any disputes.

The UK's main prize could be a “veterinary” deal that lowers supermarkets' costs by agreeing on improved terms on food and fish.

Starmer is also hoping for closer collaboration with the EU over immigration. Leaked extracts from former Conservative Minister Chris Philip show that the previous government was surprised to learn that, since the UK was no longer party to the Dublin agreement following Brexit, UK asylum seekers could not be returned to European nations where they had already made a claim.

In addition to overcoming complex policy issues, political factors are likely to slow progress. The EU has greater concerns in the form of a deal with the US, with President Trump labelling the bloc as "nasty negotiators". The UK will likely only take baby steps, with Reform riding high in the polls and a spring in their step following their resounding victory in local elections held earlier this month.

Ultimately, both sides approach the summit with refreshed intentions and goodwill. But the re-opening of painful Brexit wounds of the past and the challenging geopolitical environment will likely keep us on our toes about whether a deal can be secured where the UK’s rhetoric matches its ambitions.