The UK and the EU have announced a new agreement governing the relationship between the jurisdictions, some nine years after the Brexit referendum split the two apart.
According to the UK government statement on the agreement, which follows the first ever UK-EU Summit, it is intended to “support British businesses, back British jobs, and put more money in people’s pockets”.
The statement further says it “will help make food cheaper, slash red tape, open up access to the EU market and add nearly £9 billion to the UK economy by 2040”.
The gains are primarily built on a deal covering food and respective emission trading systems. For example, the deal is intended to make it easier to export food from the UK to the EU – such as sausages, an item that caused much difficulty when trying to find agreement on the status of Northern Ireland for trade purposes following Brexit; NI remained in the single market as a result.
The UK government confirms that Brexit caused significant rupture to supply chains leading to a “21% drop in exports and 7% drop in imports seen since Brexit”.
Other parts of the agreement concern travel of people and pets. Talks will progress about sharing facial image data. UK travellers will be able to use eGates when arriving in the EU. Pet passports will be introduced for cats and dogs visiting the Continent.
UK firms will be able to access a EUR150bn fund set up to finance defence contracts.
And the two have agreed to cooperate on a youth exchange scheme to facilitate younger people living and working in each other’s jurisdiction.
The big give from the UK side has been to sign a 12 year agreement to allow continued access to UK waters by the EU fishing fleet.
However, neither side has committed to further removing barriers to cross-border trade in financial services. And details of the commitments touched on in the agreement are yet to be worked out.
The UK government statement is here: https://www.gov.uk/government/news/pm-secures-new-agreement-with-eu-to-benefit-british-people
The joint statement issued through the European Council is here: https://www.consilium.europa.eu/en/press/press-releases/2025/05/19/eu-uk-summit-2025-outcome-documents/
This article was first published on our sister website Investment International
