EU Trade Reset Crucial for UK Firms’ Growth 2026

Published: 23 December 2025. The English Chronicle Desk. The English Chronicle Online.

Keir Starmer’s government has been urged to pursue closer trade ties with the European Union, highlighting a growing challenge for British exporters navigating post-Brexit agreements. The British Chambers of Commerce (BCC) described a strengthened EU trade deal as a “strategic necessity” to ensure companies can thrive, warning that the existing Trade and Cooperation Agreement (TCA) is increasingly failing to support business growth.

A recent survey conducted by the BCC of nearly 1,000 UK exporters—predominantly small and medium-sized enterprises—found that 54 percent reported the current deal was insufficient for expanding their sales into the EU. This represents a 13-percentage-point increase from dissatisfaction levels recorded in a similar study last year, reflecting mounting frustrations over trade barriers and administrative complications.

The BCC’s findings underscore the economic consequences of Brexit, which continues to disrupt established trade patterns. Only four of the 946 firms surveyed felt government support on trade policy changes was thorough, signalling widespread concern over inadequate guidance for businesses dealing with shifting EU regulations.

Steve Lynch, the BCC’s director of international trade, emphasised that accelerating the EU “reset” was no longer a matter of political preference but a crucial economic strategy. He stated, “Trade is the fastest route to growth, yet firms tell us it is becoming harder, not easier, to sell into our largest market.” His remarks underline the urgency for policy interventions designed to simplify exports and reduce friction for UK companies.

Labour’s frontbench increasingly recognises the challenges posed by Brexit, with senior figures advocating for a closer relationship with the EU. Over the weekend, Wes Streeting suggested the possibility of joining a customs union with the EU, a move that would conflict with Labour’s manifesto commitments against re-entering the single market, customs union, or reinstating freedom of movement. Starmer has reiterated that rejoining the EU is inconceivable during his lifetime, though some pro-European ministers, including David Lammy and Bridget Phillipson, are reportedly exploring options for deeper integration.

The BCC’s call coincides with government priorities to reset EU relations following a landmark summit earlier in 2025. Labour has also recently confirmed the UK’s return to the Erasmus+ student exchange programme in 2027, signalling broader engagement with Europe despite Brexit constraints.

In its “business manifesto for the EU reset,” the BCC outlined specific recommendations to reduce trade friction and enhance UK competitiveness. These include streamlining border checks on animal and plant products, connecting UK and EU emissions trading schemes, establishing a youth mobility scheme, securing full participation in the EU’s SAFE defence fund, and improving VAT and customs processes.

Survey participants highlighted tangible impacts of Brexit on their operations. One small manufacturing firm in Greater Manchester reported that export sales “have virtually stopped” and that the TCA had not aided recovery. Similarly, a small retailer in Hampshire described severe consequences, stating that high taxes and exclusion from the EU have caused business closures and long-term unemployment for thousands.

The findings illuminate the broader economic challenges facing the UK, particularly in sectors reliant on European markets. Exporters argue that without effective government intervention, post-Brexit trade will continue to stagnate, limiting opportunities for growth and undermining job creation across the country.

Government officials responded by affirming their commitment to reducing trade barriers, stating that ongoing negotiations with Brussels aim to strengthen UK-EU relations while supporting jobs and business expansion. While progress has been made, businesses emphasise the urgent need for practical solutions to navigate complex regulatory frameworks and restore confidence in cross-border trade.

Analysts note that the debate over EU trade relations also carries political significance for Labour, as party leaders balance manifesto commitments with calls from influential business groups. The tension between economic pragmatism and political positioning will likely shape the party’s approach to trade policy throughout 2026.

As the UK moves into the new year, exporters remain wary of continued bureaucratic obstacles and evolving EU regulations. Industry representatives stress that any meaningful “reset” must address structural inefficiencies, enhance cooperation on trade and customs, and provide clearer guidance for firms operating in diverse markets. Without decisive action, the BCC warns that the UK risks falling further behind its European competitors, with long-term implications for economic resilience and growth.

Ultimately, the call for a strengthened EU trade agreement reflects a broader concern about Britain’s post-Brexit positioning. Exporters seek not only regulatory clarity but also tangible support for expanding operations abroad. The BCC’s manifesto aims to provide a roadmap for achieving these objectives, urging policymakers to recognise trade as a critical engine for economic recovery and sustainable growth.

The discussion over EU trade relations is likely to remain a focal point for UK politics in 2026. Businesses, policymakers, and political parties will continue navigating the delicate balance between sovereignty, economic pragmatism, and the pressing need for international collaboration. With export sales struggling to recover and firms reporting widespread difficulties, the BCC’s recommendations underscore the importance of strategic engagement with the EU to secure Britain’s economic future.