Headfirst into the jaws of defeat
Whats wrong with the EU 'Reset'
Last week, the European Commission published its full list of demands for the UK’s ‘Reset’. This is technically the Commission’s authorisation for the opening of negotiations, but most of the contents are only slightly worse than May’s ‘Common Understanding’ document. So, I doubt the UK’s government will push back against it, but hopefully the UK public will.
This EU Demand Document is, in fact, the EU pushing the ‘factory reset’ button on Brexit and returning the UK to the EU’s Customs Union and Single Market, but without any ability to make the rules. We would become, as Boris Johnson so aptly put it, the EU’s gimp.
The UK government is proposing to give the EU the power to make UK laws and the ability to force the UK to pay the EU for this capitulation. And the amount of the payment will be determined by the EU – our government has written them a blank cheque. Similarly, the EU’s Court of Justice will determine any trade disputes, so the UK government has effectively given the EU a free pass to penalise or, more likely, fine the UK for any transgression. The EU will be the lawmaker, the policeman and the Judge – there will be no jury.
However, to ensure the UK complies with its laws, the Commission has also demanded cross-retaliation for non-compliance between the new agreements and the EU Trade and Cooperation Agreement (TCA). That is, if we don’t obey their new Customs Union rules, they can take retribution through our current trading arrangement under the TCA. This is despite the fact that EU members don’t apply EU rules uniformly, but no doubt the UK will be forced to do so. The US Trade Representative's report on Foreign Trade Barriers complains that: ‘Differences in interpretation of EU legislation by Member State authorities also create legal uncertainty and often result in trade disruptions, creating additional burden for U.S. exporters.’
How will this affect UK trade with the rest of the world?
The most concerning aspect of this capitulation is its impact on the UK’s independent trade agreements. The European Commission’s Demand Document gives the EU control over all of the UK’s agricultural and industrial imports, either via EU control of the UK’s food standards, its animal welfare, its pesticide regulations, its organic regulations, its food marketing standards and its sanitary and phytosanitary regulations (SPS), or via control of the UK’s emissions trading scheme (ETS) and the UK’s Carbon Border Adjustment Mechanism (CBAM). The EU’s CBAM currently covers imported steel, aluminium, cement, fertilisers, hydrogen and electricity. The EU is also considering including maritime emissions from import transportation.
All of these regulations will now be set by the EU, not by the UK’s elected government. So, despite voting to leave the EU in 2016, and despite none of the terrifying predictions about leaving the EU coming true, and despite the UK rolling over or improving all of the old EU trade deals and signing new trade deals with Australia, New Zealand, the CPTPP, India, and the US. All trade deals that the EU does not have. However, despite all of this, the EU will now be able to control the trade the UK conducts with these countries.
What is the point of the UK’s government?
Without any parliamentary debate or public discussion, the UK’s Minister for EU Relations, Nick Thomas-Symonds, has decided to throw away the UK’s sovereign powers and return the UK to a captive market for EU farmers, EU food manufacturers, and EU industrial manufacturers of steel, aluminium, cement, fertiliser, hydrogen, and electricity.
False statistics and a steeply sloping playing field
How did this happen? I can only assume that Thomas-Symonds has never looked at the UK’s trade statistics in detail, like so many of his parliamentary colleagues (on both sides of the house). On page four of the EU’s Demand Document, they attempt to claim that common standards and regulatory alignment will ensure a ‘level playing field’ for trade. Oh no, it won’t. The EU has a massive advantage in trade of both agricultural goods and the industrial goods presently covered by its CBAM regulations.
1. Agri-foods
The UK imports many multiples more agrifood products from the EU than it exports to it, in some cases over a thousand per cent more. (see table 1, below). The UK’s only trade surplus with the EU was in Seafood, but as the government has just given the EU control over UK fishing grounds for another twelve years, this surplus will probably be turned into a deficit as well. In the case of fruit, vegetables, products made from fruit or vegetables, and products made from meat or seafood, the UK imports over a thousand per cent more goods from the EU than it exports to it. And this is before the UK has adopted all of the EU’s agricultural regulations. When this regulatory capitulation is complete, it will be even easier for EU farmers and food manufacturers to export their goods to the UK.
Table 1. UK Agri-food trade with the EU in 2024.
And this is NOT a level playing field.
The EU still subsidises its farmers with the Common Agricultural Policy’s annual payments per hectare of farmland owned. In contrast, the UK has unbelievably decided to pay its farmers for NOT GROWING FOOD but for growing wildflowers, birdseed, recreating bogs, and reforesting farmland. Alternatively, UK farmers can rent their land to government-subsidised solar electricity production, which is less risky and more lucrative than farming. Both environmental payments and solar panel subsidies have taken UK farmland out of productive use, increasing prices of UK-produced foods both in the UK and in its export markets, including the EU. Higher UK prices have also made it easier for subsidised EU agricultural products to undercut UK products. Handing the EU the power to dictate the UK’s import regulations will only exacerbate this trade imbalance.
The UK is not self-sufficient; we import about 40% of the food that we consume each year. Agreeing to the EU’s Demand Document will ensure that the UK remains a captive market for EU producers. Unless the UK public complains very loudly, the EU will now be in charge of what we can import, not just from them, but from any other country as well, including countries with UK trade agreements.
The EU does not follow international product regulations
All countries regulate their imports of agrifood goods through their SPS regulations, which encompass human, animal, and plant health, and their food standards, animal welfare regulations, and pesticide regulations. The Codex Alimentarius Commission sets international standards for trade in animal health, food safety, and plant health. But according to the US Trade Representative’s report on Foreign Trade Barriers, the EU has failed to follow Codex rules on maximum pesticide residues, Codex’s guidance on official trade certificates, nor does the EU follow Codex rules on product names, instead the EU has tried to make them protected geographical indications.
So why are we letting the EU make our trade rules?
The EU has a poor record on farm animal diseases
Three EU countries have had outbreaks of foot-and-mouth disease so far this year, and 13 of the 27 EU members have had outbreaks of African Swine Fever in their domestic pig populations. The UK does not have either of these diseases, but without border checks, it will only be a matter of time before they cross the Channel.
As for human health, the EU was one of the last developed nations to address the problem of antimicrobial resistance. Even as late as 2017, five EU countries were on the red list of countries with the highest antimicrobial use in farm animals per weight of production. In contrast, the US was the first country to address this important issue, withdrawing the use of fluoroquinolones for use in poultry in 2005. Both Australia and New Zealand had much lower use of antimicrobials in farm animals than the UK in 2022, when their Free Trade Agreements with the UK were being scrutinised by the UK’s Trade and Agriculture Commission, of which I was a member.
But now we will let the EU make our animal health laws?
The EU has lower animal welfare regulations
The UK has banned live animal exports, is phasing out the EU’s ‘enriched’ cages, and CCTV is mandatory in English slaughterhouses. The UK is also in the process of lowering maximum journey times for animal transportation. The UK banned fur farming in 2000, and a private members' bill is currently being considered in parliament, sponsored by Ruth Jones MP, to prohibit the import and sale of fur. (I wonder if she knows about the Reset?) The UK has also banned the import and trade of hunting trophies.
However, across the Channel, five EU countries still permit the force-feeding of ducks and geese: most EU members allow caged farming of hens, rabbits and ducks; several still allow killing of male chicks: tail docking, beak trimming and castration without pain relief is widespread across the EU. The EU still permits fur farming of mink, foxes, raccoon dogs, and chinchillas; but it has added American mink to the list of invasive species.
Controlling the competition with non-tariff barriers
So, why is the EU trying to impose its poor track record in following international guidance, its lack of control over disastrous farm animal diseases, and its lower animal welfare standards on the UK?
The answer from the EU’s point of view is simple: EU goods may be cheaper than UK goods, but they are not cheaper than goods from the rest of the world. The EU maintains its domestic market share by imposing substantial tariffs and restrictive non-tariff barriers to limit the import of goods from outside the bloc. The EU’s non-tariff barriers are hidden in its SPS, food standards and food marketing rules. The same rules the EU now wants to extend over the UK to prevent us from buying better and less expensive goods from the rest of the world.
For example, the UK imports between 700,000 and one million tonnes of sugar each year. Before Brexit, about 400,000 tonnes were imported from France. Following Brexit, the UK established a tariff-free quota of 260,000 tonnes of sugar per year, imports above this level pay a tariff of £280 per tonne. Consequently, Brazil became the UK’s largest sugar supplier. In 2024, the UK imported 277,000 tonnes of Brazilian sugar at an average price of $449 per tonne, while sugar from France dropped to only 132,000 tonnes at an average price of $892 per tonne, even though sugar is imported tariff-free under the UK-EU TCA. France can only compete in the world sugar market if its products are protected by tariffs and non-tariff barriers. EU tariffs on raw cane sugar are €339 per tonne.
The same has happened with many other agricultural goods and refined products, where UK imports are increasing from non-EU countries and decreasing from the EU following Brexit and the UK’s new trade deals. This is why the EU wants to control the UK’s regulations and ensure it has the same non-tariff barriers, so that the British can’t buy goods from the world's most efficient producers, but will have to buy EU products instead.
Why would anyone let the EU make its laws?
A more important question would be why the UK has decided to turn its trade and agricultural law-making over to an organisation that doesn’t follow international trade rules, or protect its farm animals from diseases or cruel practices? Why would we do this?
2. Manufactured goods
Allowing the EU to control the UK’s emission trading scheme (ETS) and its Carbon Border Adjustment mechanism (CBAM) will eventually give the EU control over all of the UK’s manufactured goods imports, which are often goods that the UK no longer produces. The EU’s Carbon Price is not only more expensive than the UK’s, but it also does not protect the two industries, ceramics and glass, that are still viable in the UK at the UK’s lower carbon price.
The deindustrialised UK has lower carbon prices than the EU
The EU’s carbon price is between 20% and 45% higher than the UK’s. The reason for this is simply market forces. The UK has deindustrialised more than the EU: UK industries with significant carbon emissions have reduced their production in the UK or closed. For example, oil and gas production has fallen from 53 million tonnes in 2019 to only 34 million tonnes in 2023, the Lindsey oil refinery and the Grangemouth oil refinery both closed in 2025, the steel blast furnaces at Port Talbot closed in 2024, Liberty steel has been mothballed in 2024, and INEOS is moving its chemical production outside the UK. So, we shouldn’t be surprised that the UK’s carbon price is lower than the EU’s. Fewer UK manufacturers need to purchase emissions allowances, resulting in a current surplus of allowances. In contrast, the EU has tightened the supply of its allowances by reducing its free allocations, and it will auction fewer allowances from 2026.
Joining the EU’s ETS scheme will force all remaining UK industries to pay higher prices for their carbon emissions, even if they don’t export to the EU. This will probably drive the UK’s last remaining industries out of business, as UK businesses also pay much higher industrial energy costs than their EU counterparts.
Joining the EU’s Carbon Border Adjustment Mechanism will also make imported goods more expensive, especially from India, the US and some CPTPP countries.
Hilariously, the EU claims that aligning with their CBAM would help UK companies avoid paying the EU’s CBAM on the UK’s tiny exports to the EU. Of the goods covered by the EU’s CBAM, the UK has a trade deficit with the EU in all of them. (see table 2, below) The UK imports 170% to 424% more CBAM goods from the EU than it exports to the EU, and the EU intends to extend the scope of its CBAM to cover industrial heat generation and international maritime transport and eventually all manufactured goods.
Table 2. UK CBAM goods trade with the EU
Joining the EU’s CBAM will harm UK exports as well
With only the Scunthorpe steel blast furnaces still in operation and the UK’s largest aluminium smelters closing down over ten years ago, the UK must import the steel and aluminium it needs to make cars, aircraft engines, aircraft parts and other precision instruments, which are the UK’s major export products. Allowing the EU to make UK raw material imports more expensive by increasing UK carbon prices to EU levels would consequently make UK exports less competitive internationally. This is not in the UK’s national Interest.
Given that the CO2 emissions from the production of aluminium are 15 tonnes per tonne of aluminium produced,[i] the UK’s proposed CBAM would have added roughly 15% to the import price of aluminium assuming a carbon price of £42 per tonne. Using the EU’s carbon price of €71–73 per tonne would add 22% to the price of imported aluminium. Similarly, the UK’s proposed CBAM would have added roughly 5% to the imported price of new (non-recycled) steel, as new steel production emits 2.32 tonnes of CO2 for every tonne of steel produced[ii]. The EU’s carbon price would add 7.4% to the price of imported steel. Both the UK’s and the EU’s CBAM’s are reduced by any emissions payment made in the production country.
The UK’s proposed CBAM is intended to protect UK industries, including ceramics and glass. However, if the UK proceeds with this, it will instead be adopting a CBAM specifically designed to protect the EU’s industries.
Plus ça change, plus c'est la même chose.
What can be done about this?
Complain to your MP, write to your local newspapers, tell everyone you know about how the government is planning to allow the EU to make UK laws and how this will push up the price of food and industrial goods in the UK, limit our imports and make our exports more expensive. If we don’t complain, we will get the government we deserve – one that is happy to give away its powers. Any MP who does not want to make UK laws but instead pass that responsibility to Brussels should be forced to stand down. They obviously can’t handle the job they have been elected to do.
[i] International Aluminium Institute, “Aluminium industry reports decline in greenhouse gas emissions”, (Aluminium industry reports decline in greenhouse gas emissions - International Aluminium Institute)
[ii] World Steel, “Sustainability performance of the steel industry 2003 to 2021”, December 2022, (Sustainability-Indicators-2022-report.pdf)