UK-EU deal unpacked: All the Brexit red tape set for a chop

LONDON — When it comes to rebuilding Britain’s post-Brexit relationship with the EU, the course of true love never did run smooth. But a new pact means it may just get a bit less bumpy. 

On Monday negotiators unveiled a sweeping agreement on defense and fishing, as well as a pledge to work towards deals on energy, agrifood rules, climate, migration and policing, after years of Brexit bad blood. 

While the devil will be in the final details of the deal, the agreement could pave the way for smoother trade and travel between the U.K. and EU, freeing whole sectors from reams of red tape. Britain estimates the deal will be worth around £9 billion a year to the U.K. economy by 2040.

Aligning on agri-food standards

A key part of the deal is a commitment to “work towards establishing a common sanitary and phytosanitary (SPS) area” — also known as a veterinary agreement — which would see the U.K. stay aligned to EU single market rules on plant and animal health.

According to a “common understanding” document published on Monday, the deal would enable the “vast majority” of plant and animal products to be able to move between the U.K. and the EU without the certificates or controls that are currently required. These benefits will also apply to the movement of goods between Great Britain and Northern Ireland, the document confirmed.

The agreement also states there should include a “short list of limited exceptions to dynamic alignment.” However, these exceptions can only be agreed if they do not lead to “lower standards as compared to European Union rules.”

In a move likely to rile up hardline Brexiteers, the agreement will be subject to a “dispute resolution mechanism with an independent arbitration panel that ensures the Court of Justice of the European Union is the ultimate authority for all questions of European Union law.” This may also raise some eyebrows in Labour circles, given Prime Minister Keir Starmer’s insistence that Britain will be a “rule-maker” rather than a “rule-taker.” 

Overall, however, the news was greeted positively by U.K. businesses, who have complained of extensive delays, increased costs and paperwork since the introduction of border controls on EU animal and plant products at British ports last year. 

“A permanent deal to remove unnecessary checks on food and drink exports in both directions is a huge boost; it will cut costs, reduce waste and increase sales,” said Shevaun Haviland, director general of the British Chambers of Commerce.

NFU President Tom Bradshaw said the deal had the potential to deliver a “more mutually beneficial trading environment for U.K. farmers and growers.”

However, he said there remained “important questions about what is within the scope of this agreement and, where current rules and regulations do differ, if there will be any exclusions.”

“As negotiations in this area continue, it’s vital that our government safeguards the progress we have made in policy areas such as precision [plant] breeding to enable the farming sector to continue to move forward in sustainable, resilient and innovative food production.”

News of the agreement will also bring some relief to traders in Northern Ireland, who have voiced frustration over border controls introduced as part of the Windsor Framework imposing checks on GB goods at risk of entering the single market.

In addition to the reduction of checks at the border, an SPS deal could remove the need for costly “Not for EU” labels on food at risk of entering the Republic of Ireland. 

But news of a potential SPS deal is bitter-sweet for the U.K.’s commercial ports, which invested over £100 million of their own cash into specially designed border control posts to carry out checks on EU animal and plant products entering the U.K. As reported by POLITICO last year, they fear that an SPS deal could render the facilities redundant, and are now demanding compensation. 

“This agreement means that many new border control posts that were built at a cost of over £120m to industry to manage checks that never fully materialized are now likely to become obsolete,” said Richard Ballantyne, chief executive of the British Ports Association. “Government should cover the full costs of these white elephants and put this episode behind us."

Energy and climate cooperation

In a move likely to be welcomed by carbon-intensive industry in the U.K., both sides have committed to link their respective emissions trading schemes — effectively exempting each from upcoming carbon taxes.

Linking the schemes means U.K. firms will avoid sending “£800 million directly to the EU’s budget,” Downing Street said in a statement Monday.

The move is designed to sidestep costs associated with the so-called carbon border adjustment mechanism (CBAM), which is applied when taxes on polluting outside the EU — the carbon price — are lower than inside the bloc.

The EU CBAM is set to start kicking in from Jan. 1, 2026, with the U.K.’s own version starting a year later.

In documents released alongside the summit, the U.K. and the European Commission agreed to “work towards establishing a link between carbon markets by way of a European Union-United Kingdom agreement.”

The commitment is stronger than predicted by some U.K. energy experts, who expected only a promise of future talks on CBAM alignment, although they also warned that aligning carbon tax systems can take many years to implement. 

The deal commits the U.K. to a cap on greenhouse gas emissions and an emissions reduction “pathway” under its emissions trading scheme that are “at least as ambitious” as the EU’s.

Currently, the U.K.’s climate goals are more ambitious than the EU’s — but future governments may want to change that. The clause was branded a “catastrophic surrender” by Richard Tice, deputy leader of the Reform party, who vowed to “repeal everything” if his party ever gained power.

The Conservatives' Shadow Energy Secretary Andrew Bowie said the clause was “the bit that really concerns me.” It “removes any sovereignty of the U.K. over setting its own caps,” he said. “If we were ever to want to diverge or reduce it to support a specific industry or sector we are now not allowed to under the terms of this deal that has been agreed.”

Both sides also agreed to move toward reintegrating their electricity markets, with the U.K. effectively heading back into the single market for the energy sector.

Industry has voiced concerns that the weak post-Brexit electricity trading system was holding back green investment in the North Sea and raising prices for electricity consumers. 

Brussels has long resisted the idea of letting the U.K. participate in the single market for just some sectors — something it long decried as “cherry picking”.

The change will mean more “dynamic alignment” with EU rules for the U.K., with some “decision-shaping” power reserved for London. 

Visas for young people

Despite some misgivings from the U.K. side on any kind of mobility agreement with the EU, the deal does include tentative commitments targeted at young people and holidaymakers. 

Both sides have committed to working towards a “balanced youth experience scheme on terms to be mutually agreed.” While details are yet to come, the scheme would provide a “dedicated visa path,” allowing young people from the EU and U.K. to take part in work, studies, au-pairing, volunteering or traveling for a limited period of time.  

In addition, the agreement commits to working towards association of the U.K. to the EU’s Erasmus+ programme. 

In another provision targeted at holidaymakers, the agreement could also pave the way for Brits to use eGates in Europe. However, the agreement leaves this at the discretion of national governments.

Meanwhile, pets will also be able to travel more easily with the introduction of “pet passports” for U.K. cats and dogs, removing the need for animal health certificates. 

Zia Weise contributed to this report.