Estimated reading time: 5 minutes

The month of June in the UK saw the political parties hitting the hustings in the lead up to the July 4 general election. While the usual topics of health policy, taxes and immigration have been hotly debated, the UK’s relationship with the EU has barely been mentioned by either of the major parties. Where it has been mentioned, Labour have stated they would seek an improved UK-EU trade deal and the Liberal Democrats have stated it is a long term goal to rejoin the EU. 

Would a Labour government, after a term or two in government, consider a path to reentry? Audley Director Chris Maitland looks at some of the barriers that would tie the hands of a future government.   

European recalcitrance 

The first hurdle a UK government would face is convincing the EU to come to the table. EU negotiators in Brussels are in no mood to reopen negotiations. The UK-EU trade deal (the Trade and Cooperation Agreement signed in 2020) covers 782 articles and runs to thousands of pages. The EU Commission now has its own issues to grapple with, not least the latest round of enlargement and the rise of an EU-skeptic hard right in elections across Europe this year. 

Even if the UK overcame the challenge of getting the EU to the negotiation table, the most difficult question will be for a UK government to convince the EU that it had the mandate domestically to reenter. The EU can’t function when one of its largest members is exiting and entering every 5 to 10 years.

The EU would likely need to see clear bipartisan support to be convinced that the UK wouldn’t change tack again. Short of another referendum, this would need to take the form of consistent polling over a number of years showing that over two thirds of Britons seek to rejoin. 

Current polls show that 50% of Britons support re-joining the EU, compared to 35% who believe the UK should stay out. Despite these numbers, the truth is that few in Britain will have the appetite to go through the political and emotional trauma of reopening the Brexit debate. It is unlikely a fresh Labour government, or even one seeking re-election, would want to bring this upon itself. 

A staged approach

Both Labour and the Liberal Democrats support improving the UK-EU trade agreement. Labour, for example, seeks for better terms for the chemicals industry, a mutual recognition deal for professional qualifications and improved veterinary arrangements. The Liberal Democrats have sought to use an improved deal as a step towards rebuilding trust with the EU and ultimately seeking to rejoin. 

Were a future government to take the next step to rejoining, from a trade perspective, there are a number of technical challenges that would need to be resolved. 

Technical hurdles to reentry

Reversing the UK’s MFN tariff regime

If the UK sought to simply join the customs union (like Türkiye for example) then to do so it must accept as its WTO MFN tariff regime the EU’s Common Customs Tariff for goods entering the UK. This is the scheme that applies to the portion of trade not covered by a preferential agreement or concessions to developing countries. 

Therein lies the first technical challenge. The UK would need to unpick its own WTO tariff scheme, the UK Global Tariff (UKGT), which has been in force since 1 January 2021. 

The UKGT has diverged from the EU scheme in a number of areas, given that the UK has had a free hand to tailor the regime to the unique contours of the UK market. The EU’s CCT caters to the varying preferences and interest groups of its 27 members. For example, the UKGT removed tariffs on products which are either used as an input in UK production making UK finished products cheaper or are products which are not made in the UK, thus offering cheaper products on the shelf for UK consumers. 

Unpicking FTAs

The UK would also need to unpick all of the shiny new free trade agreements (FTA) that it has signed with partners since exiting the EU. This includes deals with Australia, New Zealand, Japan the awkwardly named Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) which includes 11 countries across the Asia-Pacific. 

The UK could not rejoin the EU’s customs union and maintain its FTAs with third countries. The UK’s new FTA partners, several of whom form part of a broader UK strategic objective to tilt to the Indo-Pacific, are unlikely to take kindly to seeing their trade treaty, signed in good faith, ripped up. 

The UK would also need to cancel and reverse the sixty plus ‘roll over’ trade deals, the former EU FTAs with countries like Chile and Canada that the UK rolled over to become UK-only deals after leaving. These would be among the easier elements to reverse as the UK version of these deals preserved most of the original commitments. But it would require tearing up these new deals and reentering the EU agreements. 

Legislative overhaul

Assuming a committed UK government had considered it was worth all of this effort of unpicking all its trade deals and WTO tariff regime and rejoining, it would also face the mind-numbing challenge of reinserting all of the references to EU legislation that were excised following EU Exit. 

The way the EU achieves consistency of outcome across the 27 member states is by requiring the legislature in each member to enact domestic laws and regulations giving effect to the laws and regulations passed in Brussels and Strasbourg (the ‘acquis communautaire’). 

Since 2020, when the UK formally departed the EU, the Parliament in Westminster has undertaken a painstaking task of passing primary legislation and statutory instruments to replace the myriad EU laws and regulations that had become stitched into the UK legal fabric over the 47 years of its membership. Rejoining the customs union would require reestablishing laws necessary to make it function, such as customs legislation and regulations governing standards and quality assurance for goods.

In sum

Despite reasonable support among Britons for rejoining the EU, few are likely to welcome a future UK government filling its legislative agenda with the technical challenges set out above. While these technical and political challenges to rejoining are not insurmountable, they sufficiently tie the hands of the government to present a daunting prospect for any reentry project. Let’s see how the next five years pan out.