New UK-EU agreements – What this means for British businesses

The UK government has committed to negotiating a series of new agreements with the EU. This will lead to changes for UK businesses in the future, particularly those in the agri-food sector, manufacturing sector or operating in carbon intensive industries such as steel. While many key changes have been announced, further detail is still to be released. In many cases, the EU have published the terms on which they would like the agreements to be agreed upon. While expected to remove and reduce red tape, documentation and taxes, the EU are also seeking UK financial contributions to support the operation of the agreements. Additionally, further dynamic alignment with EU law will be required. This may hold up implementation due to the politically sensitive nature of these requirements.

SPS agreement

Relevant sectors: Agri-food / retail

A new permanent agreement for the movement of goods subject to sanitary and phytosanitary (SPS) controls will be negotiated. The aim is to establish a common SPS area. SPS controls impact a wide range of goods including plants, plant products, animals and products of animal origin. Changes will be particularly important for the agri-food sector.

The EU have stated the agreement should result in the vast majority of movements of animals, animal products, plants, and plant products between Great Britain and the EU being undertaken without certificates or controls. The UK announcement describes the removal of “some routine checks” on UK exports. It illustrates how certain UK refrigerated meat products that have faced EU restrictions will be able to be sold on the EU market.

The scope of the agreement appears to be broad, with the EU aiming for it to cover sanitary, phytosanitary, food safety, organics, marketing standards and general consumer protection rules. Dynamic alignment with EU rules will be used, with limited exceptions to be agreed and consultation processes drawn up. Dispute resolution, when relating to the interpretation of EU law, will ultimately to be performed by the Court of Justice of the European Union.

Fishing

Relevant sectors: Agri-food

Full reciprocal access to waters to fish has been granted until 30 June 2038. Yearly quotas with the EU and Norway will be agreed, with the UK government continuing to issue licences. This will be paired with a £360m “fishing and coastal growth fund”, which will be used for investment in fishing equipment and technologies.

Security

Relevant sectors: Defence

A security announcement represents the first in a planned multi-stage agreement on defence integration with Europe. The aim is for UK businesses to be able to access the EU’s €150 billion SAFE loan scheme for defence procurement. It appears further negotiations, including on financial contributions, will be required before this is available for UK defence suppliers.

Emissions trading and carbon border adjustment mechanisms

Relevant sectors: Carbon intensive industries (iron, steel, aluminium, cement, electricity etc)

The UK and EU are seeking to link their Emissions Trading Systems. While no explicit detail has been published, if this takes place, it should relieve both UK and EU businesses from costs associated with new Carbon Border Adjustment Mechanisms (CBAM). The reporting of emissions embedded within carbon intensive imported goods such as steel, aluminium and cement etc. is already a requirement in the EU. Major changes are planned for 1 January 2026, from which date carbon certificates must be purchased and surrendered when importing relevant goods into the EU.

Any future alignment may remove the need for EU importers to purchase carbon certificates to allow the import of UK origin goods subject to the EU’s CBAM. EU origin goods may also escape UK taxes due under the UK’s CBAM (due to launch 1 January 2027). Further negotiations will need to take place before this can be confirmed.

Steel

Relevant sectors: Steel industry and exporters of steel goods

UK origin steel will also be “protected from new EU rules and restrictive tariffs”, under a bespoke agreement.

Travel

Relevant sectors: Tourism / business travel

British citizens will be able to use “more” eGates in Europe. eGates are already available to British passport holders in some EU airports, such as Amsterdam Schiphol. They are used for facial recognition, allowing fewer border guards. It appears likely that availability will depend on the local resources and provisions available in each airport.

This has not changed EU plans to introduce the EU Entry/Exit system EES for UK travellers. From October 2025, this will replace the current manual passport stamping system with the registration of biometric data. This will include fingerprints and facial scans which will be used to register travellers from non-EU countries. EU plans requiring visa exempt passport holders to register and pay a fee for the European Travel Information and Authorization System (ETIAS) have been delayed until at least October 2026.

If you would like any support, please get in touch with our VAT & customs team.