The European Commission has released its complete list of demands for a “reset” with the UK. If introduced, it would effectively return the UK to the EU’s customs union and single market, but without any ability to make the rules. It would prevent the UK’s government from setting trade regulations that benefit the UK economy.

Without any parliamentary debate or public discussion, the minister for EU relations, Nick Thomas-Symonds, could throw away Britain’s sovereign powers, ensuring it remains a captive market for EU farmers, food manufacturers and producers of steel, aluminium, cement, fertiliser, hydrogen and electricity. The government would no longer control food standards, agricultural regulations, plant health, animal welfare or health regulations, nor its carbon emissions from domestic industry and imported goods. Instead, the EU would set all these regulations. The bloc would also compel the UK to pay for such a capitulation, and decide the payment amount.

The EU’s Court of Justice would settle any trade disputes and penalise or fine the UK for any transgression. And to ensure compliance, the Commission has demanded cross-retaliation between the new agreements and our current trading rules. Even though EU member states don’t apply EU rules uniformly, no doubt the UK would be compelled to do so.

The EU and some UK politicians are claiming that common standards and regulatory alignment would ensure a “level playing field” for cross-Channel trade. However, the EU has a massive trade advantage in both agricultural and industrial goods; common regulations would not change this.

The most concerning aspect is the potential impact on the UK’s independent trade agreements. Despite voting to leave the EU in 2016, the reset would give Brussels control over UK imports from other countries, including those with which the UK has signed trade deals, including Japan, Australia, New Zealand, India, the United States and other Pacific countries. All British agricultural and industrial imports from these countries would have to meet EU regulations and standards.

The same applies with food. Britain is not self-sufficient; we import almost 40 per cent of the food we consume. Agreeing to the EU’s reset demands would ensure that Britain remains a captive market for Europe’s producers. Brussels would control the food we import, not just from the EU, but from any other country as well.

Already, the UK imports many multiples more food products from the EU than it exports to the bloc — over a thousand per cent more in terms of fruit and vegetables, and products made from meat and seafood. The EU still subsidises its farmers, while the UK pays its farmers for not growing food. Higher UK prices have made it easier for subsidised EU agricultural products to undercut British ones. Handing the EU the power to dictate the UK’s import regulations would only exacerbate this imbalance and keep non-EU food out of the UK market.

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The EU has a poor record on farm animal diseases, with outbreaks of foot-and-mouth and African swine fever in several member states. Without border checks they are likely to cross the Channel. The UK also has higher animal welfare standards, so why lower them to aid EU exporters? The UK’s only agri-food trade surplus with the EU was in fresh seafood, but the government has just given the bloc control over British fishing waters for another 12 years, so this too will probably turn into a deficit.

Joining the EU’s carbon Emission Trading Scheme (ETS) would be equally disastrous. The EU’s carbon price is between 20 per cent and 45 per cent higher than the UK’s. This is due to deindustrialisation, as British industries with significant carbon emissions have reduced their production or closed. But joining the EU’s ETS would make all remaining UK industries pay higher prices for their carbon emissions, even if they don’t export to the bloc.

Then there is the EU’s Carbon Border Adjustment Mechanism (CBAM), a carbon tax on imports of heavy materials. UK industrial electricity is too expensive to produce industrial base materials or recycle metals. Instead, the UK imports 60 per cent of its steel, 70 per cent of its aluminium, 60 per cent of its nitrogen fertiliser and a third of its cement. Joining the EU’s CBAM would make these essential imports more expensive.

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The UK’s largest export sector by some margin is machinery and transport equipment, and these products are made with imported steel and aluminium. Again, membership of CBAM would make UK aircraft and car exports less competitive in its main export markets — the US and China.

The EU maintains its domestic market share by imposing high tariffs and restrictive non-tariff barriers to limit imports from outside the bloc. The EU’s non-tariff barriers are hidden in its rules and checks on food standards, food marketing and now its carbon emissions — the same rules the EU now wants to extend over the UK to prevent us buying better and less expensive goods from the rest of the world.

Allowing the EU to make UK regulations is not in the national interest and must be prevented.
I doubt the government will push back against it, but hopefully the British public will. If we don’t complain, we will get the government we deserve — one that is happy to give away its powers.

Catherine McBride is an economist and was a member of the UK’s Trade and Agriculture Commission 2021-24

Alice Thomson is away