Reversing Brexit: How Far Can the EU and the UK Go?

Brexit has harmed Britain, but a speedy re-accession is neither likely nor desirable. The UK should instead rejoin the customs union and single market, enhanced with special deals in energy and climate policies, and on security and defence. The EU and the UK should strike up a strategic political-economic-security agreement (EU-UK SPESA), containing a future ‘membership perspective’ without a fixed timetable.

Britain’s new prime minister, Andy Burnham, in power since July, wasted no time tearing up his predecessor Sir Keir Starmer’s red lines on EU policy: getting closer to the EU without joining either the customs union or the single market, or, of course, full accession to the EU.

Burnham says he is willing to consider all these and other unspecified options. On full accession, he introduces due caution, saying he would want to see it in his lifetime, which, given that he is only 56 years old, leaves some decades to play with.

The debate is now alive and wide open in both the UK and the EU, with the British government due to take a clearer position ahead of the forthcoming summit between the two parties, scheduled for 20 November.

Problems with Speedy Re-Accession

A number of commentators in the British media like the idea of fast re-accession. There are two reasons why this is not a sound proposition. First, the UK needs to move on from the still bitter disputes over Brexit. Public opinion polls now show majorities of around 58% in favour of rejoining, but much less when the commitment to join the euro and Schengen is specified. Nigel Farage’s Reform UK party retains around 22% support, down from a peak of 28%, and opposes any undoing of Brexit. Public and political opinion would need to move closer to consensus on the case for rejoining before resubmitting an application. Various EU member state leaders, including those of France and Spain, have said they would welcome re-accession, but if it became a serious possibility, the issue of political consensus within the UK would surely surface. Renewed accession talks would quickly lead to difficult negotiations, with the EU insisting that the UK not reinstate its opt-outs (from participation in the euro and Schengen) and special deals (budget rebates). This would certainly cool re-accession ardour in the UK.

Public and political opinion would need to move closer to consensus on the case for rejoining before resubmitting an application.

The second reason is about the political future of the EU itself, given the rise of radical Eurosceptic parties that oppose further enlargement. This has been the position of Marine Le Pen of France, who might become president in April or May next year. The position of Germany’s AfD party, while further away from power at the federal level, seems to be even more stridently against any further development of the EU, including its enlargement. In short, the EU would have to move past its present major political uncertainties if the UK were to know what it was joining. It may require a decade or more for Eurosceptic tendencies to burn out, or settle down to minority support only.

Towards a Strategic Political-Economic-Security Agreement

This means that the economic options of joining the customs union and the single market without full EU membership are currently the most obvious ones. Both systems have clear, well-tested content and can be joined legally without accession under any of the three sub-options. First, Norway, Iceland, and Liechtenstein are in the single market under the European Economic Area (EEA) treaty, but not in the customs union. Second, Türkiye is in the customs union but not the EEA. And third, the UK could go for both together, which would make the most economic sense.

Joining the customs union alone would ease some of the problems Brexit has posed for the manufacturing industry. The need to rejoin the customs union appears to be growing stronger as the EU deepens its protective measures against the China Shock 2.0. France and Germany have indicated that they would agree to include the UK in the ‘Made in Europe’ legislation, on the condition that the British government align with the EU’s position on tariffs on Chinese electric vehicles. This should allay concerns about the UK positioning itself as a proverbial Chinese economic aircraft carrier.

Joining the customs union alone would ease some of the problems Brexit has posed for the manufacturing industry.

But the customs union is only part of the solution for manufacturing. A vast array of non-tariff standards and regulations in the single market needs to be respected to ensure friction-free supply to the EU market. Individual companies can meet them by adapting their products to EU standards, but this still means market access is not automatically friction-free. Hypothetically, the UK could seek full access to the single market for goods only, but this would draw a sharp ‘cherry-picking’ objection from the EU.

Indeed, the depressing impact of Brexit on the UK economy is attributed to a lack of full access to the EU market for both goods and services. The UK is likely to seek special deals for financial market regulation, which the EU would be reluctant to accept on any substantial scale. The loss of freedom of movement has meant the hassle of border controls for travellers, visas for students and those seeking employment, and residence for retirees. Freedom of movement cuts both ways. The question of reopening the border for EU citizens to migrate to the UK is still highly contested. But in reality, the political crisis in the UK over ‘uncontrolled’ immigration has, since Brexit, been a story of immigration from Asia and Africa, whereas Europeans have, on balance, been returning to the continent. The UK political debate on immigration still needs to catch up with this reality.

Of course, rejoining the single market would also mean the UK becoming a rule taker. But here, the UK has discovered that ‘taking back control’ was a costly illusion. Meanwhile, the EU’s ongoing enlargement process sees proposals to extend participation in Council formations with observer and speaking rights but no formal decision-making powers. This could form part of an agreement with the UK, which could be all the more significant since a well-articulated voice in the Council can help shape policy in a consensus-based system, where most decisions are taken without a vote. The UK has had traditional allies in EU policy orientations, and its voice would strengthen like-minded member states’ positions in decision-making.

The UK has had traditional allies in EU policy orientations, and its voice would strengthen like-minded member states’ positions in decision-making.

Several crucial policy sectors are not completely, or not at all, covered by the single market – energy, climate, and defence – and could be added to accession to the single market. For energy, negotiations are underway for the UK to join energy trading platforms, integrate emissions trading systems, and cooperate on renewable energy and North Sea interconnector infrastructure. Similarly, key parts of the EU’s climate policies are not fully covered by the single market acquis, including target dates for zero emissions and the Carbon Border Adjustment Mechanism (CBAM). The fast-developing field of EU defence policy already has several mechanisms to which the UK could contribute prior to full accession, including the Security Action for Europe (SAFE) loan instrument for joint procurement and the European Peace Facility for military assistance to close partners (notably Ukraine). In addition, the UK is already participating in the Horizon research programme and has negotiated a return to the Erasmus+ programme for higher education cooperation starting with the 2027–28 academic year.

This combination of the customs union and the single market, alongside other existing and emerging programmes and policies the UK could join, provides the foundation for a new comprehensive relationship between the UK and the EU. It could be named a ‘Strategic Political-Economic-Security Agreement’ (SPESA), to distinguish it from the Association Agreements in force with other smaller neighbouring states (e.g., Andorra and San Marino) and candidate countries. In some respects, it would build on the Deep and Comprehensive Free Trade Area (DCFTA) in the current Association Agreements with eastern European partners, which already foresees a high degree of integration with the single market. But the EU’s policy has since moved substantially beyond the single market. Crucially, a SPESA with the UK would include the key ‘membership perspective’ wording, consistent with Burnham’s declarations, which had been denied in the Eastern European DCFTAs. It would also set short time frames for the full re-adoption of the single market acquis, without the complication of formal accession to the European Economic Area (Norway, Iceland, and Liechtenstein), or of the European Free Trade Association (including Switzerland) before that.

Beyond the Illusion

While Burnham has said all options are on the table, in reality, one option seems to have a commanding lead over the others. The option of rapid re-accession encounters the objections already mentioned. The idea of trying to join only selected parts of the single market most favourable to the UK is an illusion, since it would most likely be rejected by the EU as cherry-picking. A more limited menu of cooperative actions would become a mere extension of Starmer’s approach, which Burnham rejects as unsatisfactory.

The recommendation is to rejoin the customs union and single market, enhanced with special deals on energy and climate policies, along with the security and defence initiatives the EU is currently developing.

The recommendation is to rejoin the customs union and single market, enhanced with special deals on energy and climate policies, along with the security and defence initiatives the EU is currently developing. Taken together, these could form the basis of a strategic political-economic-security agreement (EU-UK SPESA), containing a future ‘membership perspective’ without a fixed timetable.

Views expressed in ICDS publications are those of the author(s).