Britain’s Prime Minister Keir Starmer and European Commission president Ursula Von der Leyen at the European Political Community summit, in Tirana on May 16, 2025.
Leon Neal | Afp | Getty Images
The U.K. and European Union announced a landmark deal to reset relations Monday after Britain’s acrimonious exit from the bloc in 2020.
British officials said the signing of the agreement — which covers a range of matters including security, energy, trade, travel and fisheries — with EU officials in London marked a “historic day” for the two sides, and a “new chapter” in their relationship after years of tense post-Brexit relations.
The new deal will “support British businesses, back British jobs, and put more money in people’s pockets,” the British government said in a press release. It added that it will also help make food cheaper, slash red tape, open up access to the EU market and add nearly £9 billion ($12 billion) to the U.K. economy by 2040.
The deal will make it easier for food and drink to be imported and exported as it reduces red tape for businesses which had led to lengthy lorry queues at the border. Some routine checks on animal and plant products will also be removed completely, allowing goods to flow freely again, the government said.
“The EU is the U.K.’s largest trading partner. After the 21% drop in exports and 7% drop in imports seen since Brexit, the U.K. will also be able to sell various products, such as burgers and sausages, back into the EU again, supporting vital British industries,” it added.
In addition, both sides agreed on a new “Security and Defence Partnership,” paving the way for the U.K. defense industry to participate in the EU’s proposed new £150 billion “Security Action for Europe” defense fund. The deal also extends fishing rights for EU trawlers in U.K. waters until 2038, an agreement particularly coveted by Brussels as an existing deal was due to expire next year.
British holidaymakers will be cheering at least one aspect of the deal, which will enable them to use more “eGates” in EU airports, ending what the government described as “the dreaded queues at border control.”
Pets will also be able to travel more easily, with the introduction of “pet passports” for U.K. cats and dogs — eliminating the need for animal health certificates for every trip.
Both sides said they would work toward a deal that would make it easier for young people to live and work across the continent. The so-called “youth experience scheme” will be designed to enable young people to work and travel freely in Europe again, but will be capped and time-limited, mirroring existing schemes the U.K. has with countries such as Australia and New Zealand.
U.K. Prime Minister Keir Starmer hosted European Commission President Ursula von der Leyen and other senior officials in London for the much-anticipated U.K.-EU summit on Monday. Both sides praised the rapprochement reached at the gathering, which took place against a backdrop of unpredictable global dynamics and changing alliances.
“This is a very positive end result for both sides,” a senior EU official told CNBC earlier in the day, while the U.K.’s lead negotiator, the Minister for European Union Relations Nick Thomas-Symonds, commented that “today is a historic day, marking the opening of a new chapter in our relationship with the EU that delivers for working people across the U.K.”
Intense talks
The deal comes after talks between both sides intensified in the run-up to the gathering at Lancaster House in central London, with last-minute haggling over emotive issues, including the potential youth mobility scheme and fishing rights.
Discussions between the U.K. and EU’s teams went on past midnight, Sky News reported, with one person describing Sunday as a “crazy” day of ups and downs. A press conference will be held at 12:30 pm London time Monday.
The Trump administration’s recent shift toward U.S. isolationism when it comes to global affairs, and particularly those more acutely affecting Europe, such as the war in Ukraine, make the case for an ambitious reset in U.K.-EU relations, Mujtaba Rahman, managing director of Europe at Eurasia Group said ahead of the summit.
But the U.K. has also been negotiating at a time of increased public support for Reform UK, the party belonging to Brexit architect, Nigel Farage.
Starmer’s popularity has fallen to its lowest level on record, with just 23% of Brits polled having a favorable view of the prime minister, according to YouGov research released last week, while positivity toward Farage and Reform UK has risen.
The Labour government insisted on Monday that it had not rowed back on Brexit, saying the deal “meets the red lines set out in the government’s manifesto – no return to the single market, no return to the customs union, and no return to freedom of movement.”
Critics of the deal, including Farage and Conservative Party leader Kemi Badenoch, reacted with dismay as details of the deal emerged earlier on Monday morning, with the latter saying: “We’re becoming a rule-taker from Brussels once again.”
Sticking points
Two of the biggest stumbling blocks in talks leading up to this U.K.-EU summit were access that EU boats have to fish in U.K. waters — with a post-Brexit deal on fishing rights set to expire in 2026 and France and Denmark pushing for those rights to be extended — as well as a youth mobility scheme that could enable people aged between 18 and 30 to travel and work freely between the U.K. and EU for a limited amount of time.
The problem for the Labour government was how to agree on thorny issues like these, without looking like it’s returning to a pre-Brexit partnership.
“Keir Starmer is really in a difficult position here,” Gesine Weber, fellow at the German Marshall Fund, told CNBC Monday.
“He will not want to appear too pro-European and go back to rejoining the EU, that is absolutely not on the table here. He has to balance domestic politics and to strike the balance between getting closer and seeing where cooperation can be approved, but also reaffirming some things that the U.K. had clearly wanted to achieve through Brexit.”
Nigel Farage, Reform UK leader, voiced discontent over earlier reports about the 12-year deal on fisheries, stating on social media platform X that, “If true, that will be the end of the fishing industry.”
U.K. Chancellor Rachel Reeves, who was hosting a reception for business owners in Downing Street on Monday, hailed Monday’s reset deal, the details of which are still emerging and yet to be officially published, as a “really big day after a number of big days over the last few weeks.”
“We can all see over the last months how much the world is changing, but the British government isn’t just going to stand by and watch that change. We ought to shape it in our national interest,” she said, according to comments reported by Sky News.
“Our biggest trading partners are our friends in the European Union, and for too long it’s been too difficult to export, to bring in talent, to trade with our nearest neighbors. That’s not good enough.”