Sir Keir Starmer and Rachel Reeves will mount a charm offensive in the coming months as they seek to secure closer economic and security ties with the European Union.
Next week Reeves will become the first chancellor since Brexit to attend a meeting with the EU group of finance ministers in Brussels.
The prime minister is also due to travel to Belgium in February to take part in an “informal retreat” with EU leaders to discuss European security in the light of Donald Trump’s election.
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The meeting is expected to lay the groundwork for a new UK-EU security pact that could lead to British participation in EU common security and defence policy initiatives.
It comes before a key moment in the spring when Starmer meets Ursula von der Leyen, president of the European Commission, and António Costa, president of the European Council, for the first British-EU summit since Brexit.
Starmer’s plans to reset and bolster ties with the European Union are particularly sensitive given the views of the US president-elect. During the election campaign, Trump described the EU as a “mini-China” and senior advisers have suggested that Britain will have to choose between the US and “socialist” Europe on trade.
Starmer has rejected that analysis and said that Britain will pursue closer ties with both the EU and the US.
The British-EU summit next year will formally launch negotiations on an updated trade and co-operation agreement with the EU alongside announcement of other areas of co-operation.
One proposal is to hold the summit in Brussels at the same time as an EU summit to allow for formal talks between Starmer and the 27 EU leaders. Whitehall officials said that while details of the summit were still being negotiated, it would mark a “very significant moment” in the resetting of relations.
“The summit is going to be the big milestone,” one official said. “That is where you are going to see the framework for future co-operation outlined. A lot of work is going on behind the scenes to make it a success.”
Starmer has announced plans to appoint a senior official to lead the detailed negotiations that will stem from the summit on an improved trade deal.
The so-called Sherpa who will hold the rank of a permanent secretary will be responsible for negotiating changes to the trade and co-operation agreement signed by Boris Johnson in 2020.
The role was previously filled by Sir Oliver Robbins and Lord Frost but fell vacant after Britain left the EU.
The EU reset comes amid warnings that Starmer needs to improve economic ties with the EU to offset the probable damage caused by the imposition of new 10 per cent tariffs on UK exports by the Trump administration.
The Resolution Foundation, an economic think tank, said the tariffs would be “roughly equivalent in scale” to the non-tariff barriers that Brexit imposed on goods sales to the EU.
It said that these had resulted in sales growing by an average 0.3 per cent a year since 2019, compared with an average among developed countries of 4.2 per cent.
A separate report by the Centre for Inclusive Trade Policy said that food exports alone had declined by £3 billion each year since the end of the Brexit transition period.
The foundation said that Starmer needed to prioritise reducing trade frictions between Britain and the EU urgently to offset the damage to the economy of US protectionism.
It added that the government should be “mindful” of the fact that 47 per cent of all UK goods exports went to the EU and that “close relations with our nearest trading bloc should remain a priority”.
“With the dust still settling on how Brexit has changed how firms trade, the threat of universal tariffs on goods by president-elect Trump risks widening this trade divide further,” said Emily Fry, a senior economist at the Resolution Foundation.
“The government should respond by doing what it can to avoid taking sides on tariffs, easing cross-Channel trade for goods and taking a truly global approach to reducing barriers to the flow of services trade in and out of Britain.”
