LONDON — The architects of Britain's first post-Brexit trade deals have warned that the country's independent trade policy is under threat after Andy Burnham pledged a major review of the country’s relationship with the EU.
Their intervention marks the latest salvo in a political fightback against Burnham's EU policy as the Conservative Party conference gets underway in Birmingham this weekend.
Burnham this week vowed to discuss a revamped relationship with Europe, including rejoining the EU's customs union, moving closer the bloc's single market — or even pushing to outright rejoin the bloc. It marks a fundamental shift from a Labour Party that has previously ruled out all three.
Customs union membership — a popular option among some members of Burnham’s Cabinet — would ease trade between the U.K. and its largest trading partner, but require Britain to sacrifice the trade deals it has struck since leaving the bloc six years ago.
Greg Hands, who served as trade minister four times between 2016 to 2024 under Conservative governments, said that all options presented “grave consequences for Britain's independent trade policy.”
“Depending exactly on what is agreed, it is likely to invalidate or make very difficult most — if not all — of those existing trade agreements, or many of those existing trade agreements,” he said.
Since Brexit, the U.K. has negotiated free trade deals with nations including Australia, New Zealand, Japan and — more recently — the Asia Pacific trading bloc CPTPP, India, the Gulf states, as well as upgraded deals with South Korea and Switzerland.
Although the U.K. could technically copy-and paste EU versions of trade deals, Hands warned that the terms might not be so favorable, highlighting that the U.K.-Japan deal he had helped to negotiate “has got much more liberal rules on data” than the EU equivalent.
As a non-EU member, the U.K. would also surrender its ability to negotiate the terms of any new trade deals, Hands argued. “Why would the EU prioritize the U.K., which is not a paying member of the EU, over paying full members of the EU when it does trade agreements?”
But the issue goes further than free trade agreements, he said, pointing out that entering a customs union with the EU would affect the U.K.’s global tariff — the independent system of taxes and duty rates applied to goods imported from other countries. This would be a “huge diminution of the U.K.'s influence in the world to align or take the EU's customs tariff,” Hands added.
Moreover, by signing up to a customs union, the U.K. would also lose its ability to erect its own trade defenses and be forced to implement EU measures like tariffs on steel and electric vehicles, Hands warned.
He also cautioned that closer alignment could complicate relations with the U.S., which has been critical of U.K. ambitions for closer alignment with the EU. “The U.S. is our single largest bilateral trading partner and I don’t think it would be in the U.K.’s interest to mess up that relationship.”
End of CPTPP membership
Liam Fox, a self-proclaimed “staunch euroskeptic” who served as trade secretary in the immediate aftermath of the referendum, between 2016 and 2019, said rejoining the EU or customs union would “mean an end to Britain’s independent trade policy and any strategy influence we have from membership of organizations such as [the Asia-Pacific trade bloc] CPTPP.”
“This vague language from Andy Burnham is all about keeping the Labour left quiet whatever the consequences,” Fox added. “Rejoining the EU would mean being part of Schengen with free movement of people and adoption of the Euro. If that is what Andy Burnham wants, let him make the case for it, stop his mealy-mouthed pandering to his own party and start acting like a real prime minister.”
A third former Tory trade minister — granted anonymity to speak frankly — told MTUK the risks to Britain’s new trade deals was “real” and would “undermine new relationships with some of the fastest growing middle-class economies in the world.”
“As the mature EU markets continue to be a smaller part of U.K. export opportunities, the prime minister should be focusing on supporting U.K. businesses to win export contracts where huge new markets exist,” the former minister argued.
