Negotiating Uncertainty in UK-EU Relations: Past, Present, and Future

by David Henig

Ten key points to negotiating the UK-EU relationship

Europe has been weakened by difficult UK-EU relations at a time of international challenge. Eight years after the Brexit referendum a new UK government and European Commission provides a good opportunity to reset approaches and put obstructions aside. Too big for either side to ignore, this will always be an important, time-consuming, and slightly chaotic relationship – which thus needs a much firmer footing based on the following shared understanding:

1. Probably the broadest, deepest bilateral relationship in the world, adding the world’s second largest trade flow to integrated neighbourhood challenges, meaning inevitable complexity and ongoing negotiation of many different topics. This has been insufficiently recognised, and should ideally be considered jointly, e.g. in terms of a shared vision, road map, scoping, implementation, otherwise even agreeing sequencing will always be problematic;
2. Wide scope, with inevitable challenges and tensions, requiring regular senior-level contact, this should start with annual summits that develop mutual understanding, supported by regular meetings between UK Ministers and Commissioners, senior official meetings, and the sharing of information at expert level. There should not be a single undertaking negotiation;
3. Divorce taking time to overcome, emotions on both sides are settling but still livelier than normal between nominal allies, with many involved who would simply like the unattainable return to the pre-2016 state, and others just as strongly opposed in various ways;
4. EU needs to be less rigid given the UK will not neatly fit into existing models, there being too many mutual interests, from which will flow multiple arrangements and deals. Showing greater willing to a now more constructive counterpart means creativity in how to structure the relationship to deliver mutual interests as well as specific asks of both sides;
5. Negotiations must informally include many actors, such as businesses, civil society, lower-level governments, academics, listening to whom should be the basis for the UK and EU shaping mutually acceptable deals. All of these stakeholders will equally have to learn to live with the uncertainty and difficulties of an ongoing relationship with multiple strands;
6. UK previously a na?ve negotiator?failing to understand this collaborative yet still competitive, and increasingly public, nature of modern trade negotiations, or its new third country status. Positive signs of learning shown with the Windsor Framework should be developed – to include ‘Team UK’ negotiating, openly testing ideas with specialists, and understanding the EU, importance of trust in implementation, and limits of taking back control;
7. Northern Ireland will always require special handling?as a part of the UK whose peace process requires strong relations with the rest of the country and the EU. Ambiguity and flexibility will continue to be needed;
8. There is no perfect model for future UK-EU relations, all potential options having drawbacks rendering them somewhat unstable, and no swift negotiating path to most of them. While the UK is not a member of the EU there will always be barriers to trade and movement of people which both sides with their priorities will aim to discuss, negotiate, and seek to ease;
9. Public communications and understanding around the relationship must be improved, whether that is in terms of negotiating progress, realistic options for both sides, care with overly-simplistic messaging, or particular terminology with often multiple meanings;
10. Despite uncertainty there will be a steady move towards deeper, more robust arrangements, since both UK and EU have strong interests in making these happen, but this will not be a quick or steady process, instead it will come from considerable engagement, flexibility, and patience, to create something that is tolerable if always slightly sub-optimal.

UK-EU relations matter for both sides. Economically, as the UK is the EU’s second largest trade partner, and the EU first for the UK. As neighbours in confronting shared regional challenges such as war in Europe and moving to net-zero. Historically, with the legacy of the UK’s membership.

In the UK, the aftermath of the Brexit referendum of 2016 has been intense, questions of economic impact and the future of Northern Ireland to the fore amidst tumultuous politics seeing six Prime Ministers in just over eight years. While less dramatic in Brussels and across the EU, there have been strong emotions as long-standing ties with the UK need to be reconsidered.

Though key to this story, relationship dynamics and negotiations have received little attention. For once politicians have made their decisions, it is for officials to reconcile their content, experts to advise on feasibility, and stakeholders to seek their influence. That is the prime focus of this paper, considering past and future against ideal third-country negotiations in which broad teams set objectives, test red lines, find common ground, and manage domestic politics. This is of course rather a different model to that of all-powerful lead negotiators assumed by previous UK governments.

Relative size and power always play a part in such negotiations. The UK needed a deal more than the EU, because approximately 48% of its trade was at stake?compared to 13%. As will be shown, involvement of two major countries, USA and Japan, added to the pressure on the UK. Nonetheless, this relationship must matter to the EU as probably the world’s second largest trade flow*.

Figure 1: Top EU and US Trading Partners in 2022 (sources Eurostat and USTR)

Tales of Brexit take many different starting points, and this one uses 2016 in focusing mostly on the immediate past and future. Many prior tales can be debated, for example those suggesting the UK was always special or never a mainstream part of the EU, but ultimately this is just speculation. Likewise, it only considers in passing potentially transformative developments in the future such as a shrinking UK, or dissolved EU. Negotiators should have a wide hinterland of knowledge and views, but mostly focus on the matters at hand to achieve their overall policy goals.

*US figures for 2023 have yet to be published, however the UK remained the EU’s second largest trade partner. Figures indicate different statistical approaches, notably towards services, making exact comparison difficult.

Read the complete Policy Brief by David Henig here.