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Rachel Reeves has declared Britain’s trading relationship with Europe to be “arguably even more important” than its one with the US, as she sought to shift Britain’s focus away from its trade spat with the Trump administration to a crucial upcoming summit with the EU.
The chancellor is pushing for an ambitious “reset” of relations with the EU, including opening up a youth travel scheme and aligning the UK with Brussels’ rules in an attempt to reduce barriers to trade.
“I understand why there’s so much focus on our trading relationship with the US, but actually our trading relationship with Europe is arguably even more important,” she told the BBC.
“It is so important that we rebuild those trading relationships with our nearest neighbours in Europe, and we’re going to do that in a way that is good for British jobs and British consumers.”
Sir Keir Starmer has insisted he will not “choose” between Europe and America as he tries to balance the UK’s two key global relationships.
Reeves is set to discuss trade issues with Scott Bessent, her US counterpart, in Washington on Friday, as the two countries move towards striking a possible trade deal.
Downing Street on Friday attempted to clarify Reeves’ remarks, conscious of Donald Trump’s antipathy to the EU, which he has claimed was set up to “screw” the US.
“The EU is our largest trading partner,” Number 10 said. “It is factually a matter of public record. Both have incredible importance to us. And we treat both with enormous respect.”
The US accounted for 21.2 per cent of British exports in 2023, compared with 41.2 per cent for the EU, according to UK government figures.
Reeves has made it clear in Washington this week that she is open to cutting British tariffs on US goods — including cars and agricultural products — to help secure a deal.
But she is also pushing for an ambitious deal with the EU, including creating a youth visa scheme to promote travel and aligning with EU rules in areas such as agriculture to reduce trade barriers.
Reeves and Starmer also want to negotiate more mutual recognition of professional qualifications, improved access to the EU for British touring musicians and a new energy partnership.
Downing Street is softening up public opinion for the inclusion of a youth mobility visa scheme — which critics have said amounts to a form of free movement — to be included in the communique to be issued after the May 19 EU-UK summit in London.
Starmer’s spokesman declined to rule out such a scheme, although he has ruled out a return to free movement. “We will not be defined by the debates and arguments of the past,” he said, adding that details would be hammered out over many months of negotiation.
“The prime minister is clear that he will seize any opportunity to improve the lives of working people in the UK, drive growth and keep people safe,” Downing Street added.
EU diplomats speak in glowing terms about Starmer’s 45-minute meeting with Ursula von der Leyen, European Commission president, on Thursday at which the summit was discussed.
“Outstanding warmth, great body language, genuine pleasure of being together, full alignment of intents,” said one diplomat briefed on the encounter. “I think everything is gaining momentum.”
The May 19 summit will see the agreement of a new EU-UK defence and security pact and will be accompanied by a communique setting out areas for further negotiation later in the year.
People briefed on the plan say there will be a “package” of measures to be negotiated, including on youth mobility, food trade, energy, professional qualifications and arrangements for touring musicians.
Both sides expect the existing fishing deal between Britain and the EU, due to be renewed next year, to be rolled over — perhaps for another two years — in order to head off a row with France and other coastal states.
May 19 is seen by both sides as a “starting point” for haggling over the details of the package, including the structure of a youth mobility scheme and future fish quotas, with many trade-offs to be made along the way.
Meanwhile, the National Farmers’ Union president Tom Bradshaw said the UK could not compromise its access to the EU market for the sake of a US trade deal.
“If you look at the financial value of an EU deal, food exports to the EU are worth six or seven times what our food exports to the US are worth,” he told the Financial Times.
Bradshaw said he had received assurances from the government that it would not sacrifice animal health and welfare standards for the sake of a deal with the US — echoing something Reeves said publicly earlier this week.
“The ongoing EU negotiation helps us with that,” he said. “Because I think they are very concerned about the jeopardy that any US trade deal could bring to EU accessibility and an SPS [veterinary] agreement.”
