The European Commission would be “open-minded” to discussing closer trade ties with the UK, including a customs union, a senior EU official has said.
The EU economy commissioner, Valdis Dombrovskis, told the BBC that the European bloc was “ready to engage with an open mind” when asked about a customs union.
The comments come amid growing pressure within the Labour party to enter a customs union with the EU, as the government seeks to boost economic growth at a time of geopolitical turmoil.
Keir Starmer is looking for deeper economic links with the EU single market, having said the customs union “doesn’t now serve our purpose very well”.
A customs union with the EU would call into question UK trade deals with countries such as India, Australia and Japan, which add little to economic growth but are potent symbols of Brexit. In theory, inside a customs union, the UK would be under the umbrella of the EU’s 40-plus trade agreements with about 70 countries and regions.
Starmer told reporters in recent days there were “other areas in the single market where we should look to see whether we can’t make more progress”.
Speaking after talks with ministers including Rachel Reeves in London on Monday, Dombrovskis implied the UK would not be able to pick and choose areas of the single market for closer alignment.
He said single market membership was the most “mutually beneficial” arrangement, but that would require the “four freedoms” including freedom of movement.
Since the Brexit referendum of June 2016 the EU has maintained that the four freedoms of the single market – goods, services, capital and movement – cannot be split. Nearly a decade later, EU insiders still believe it would be difficult to offer special arrangements to the UK, when member states are required to sign up to all policies.
Publicly, however, the tone is warmer. The European parliament president, Roberta Metsola, said on Tuesday that Europe and the UK “need a new way of working together” on trade, customs, research, mobility and on security and defence. In a wide-ranging speech to the Spanish senate on the geopolitical challenges facing Europe, she said: “It is time to exorcise the ghosts of the past, reset our partnership, and find solutions together.”
Responding to Starmer’s comments, the commission’s chief spokesperson, Paula Pinho, said on Monday that the EU’s single market was “really one of the treasures of the EU or, if I were to put it into a British context, it’s really the jewel of the crown”.
She added: “We very much appreciate that these advantages of the single market are recognised by Prime Minister Starmer.” An EU-UK summit – which does not yet have a fixed date – “would be the occasion to discuss with the UK what exactly they have in mind”, she said.
Talks are under way between the EU and UK on a veterinary agreement, youth exchange programme, joining the EU’s electricity market and linking emissions trading systems.
Writing in the Financial Times, the Cabinet Office minister, Nick Thomas-Symonds, said “a ruthlessly pragmatic approach” was needed to reset the UK-EU relationship.
He said the total value of food, drink and carbon trading deals now under discussion would be worth £9bn a year to the UK economy by 2040, while repeating Labour’s manifesto promise to not rejoin the single market or customs union, or to reintroduce freedom of movement.
The discussion comes as the EU focuses on how to revitalise the single market, following a hard-hitting report from the former Italian prime minister Mario Draghi in 2024 on the threat of Europe’s slowing economic growth. Speaking on Monday, Draghi said “Europe risks becoming subordinated, divided and deindustrialised at once”, while calling for a move from confederation to federation.
EU leaders will gather in Belgium next week for a special summit to discuss how to strengthen the EU single market, which the European Council president, António Costa, has described as “a strategic imperative”.
