Keir Starmer told closer EU trade ties ‘strategic necessity’ for UK firms | Trade policy

A closer trade deal with the European Union is a “strategic necessity” for British companies, according to the British Chambers of Commerce (BCC), as exporters increasingly struggle with the current post-Brexit agreement.

EU Trade Deal a ‘Strategic Necessity’ for UK Businesses

The BCC is urging the Labour government to accelerate efforts to improve relations with Brussels, stating that the existing Trade and Cooperation Agreement (TCA) is failing to support business growth in the EU. A survey of nearly 1,000 businesses revealed that more than half (54%) of exporters believe the trade deal negotiated in 2021 is not helping them.

This represents a 13 percentage point increase in dissatisfaction compared to a similar survey conducted a year prior, highlighting the ongoing economic impact of Brexit. The BCC also found that just four out of 946 surveyed firms felt the government’s support for navigating trade policy changes was comprehensive.

“With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” said Steve Lynch, the BCC’s director of international trade. “Trade is the fastest route to growth, yet firms tell us it is becoming harder, not easier, to sell into our largest market.”

The intervention from the BCC, which represents over 50,000 firms employing 6 million people, comes as Labour politicians increasingly acknowledge the damage caused by Brexit. Wes Streeting recently suggested that Britain could potentially join a customs union with the EU, though this would conflict with Labour’s manifesto promise of “no return” to the EU single market or customs union.

Keir Starmer has previously stated he does not foresee the UK rejoining the EU during his lifetime. However, several pro-European ministers within Labour, including Streeting, David Lammy, Peter Kyle, Liz Kendall, and Bridget Phillipson, are reportedly in favor of pursuing a deeper trading relationship with the EU.

The government has identified a “reset” of EU relations as a top priority for 2026, following a landmark summit with Brussels earlier this year. Labour recently agreed to terms for the UK to rejoin the Erasmus+ EU student exchange programme in 2027.

The BCC has outlined five key proposals for negotiations with Brussels in 2026, including reducing border checks on animal and plant products, finalizing links between UK and EU emissions trading schemes, establishing a youth mobility scheme, securing full UK participation in the EU’s defence fund (SAFE), and enhancing cooperation on VAT and customs simplification.

One small manufacturing firm in Greater Manchester stated, “Since Brexit our export sales have virtually stopped. The TCA has had no impact in recovering any sales into the EU.” A small retailer in Hampshire added, “Work has stopped coming to [the] UK due to high taxes and no longer being part of the EU. As a result, lots of companies have shut down and thousands of people have lost their jobs and been out of work for over two years.”

A government spokesperson said, “This government is removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”