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Monday 23/02/2026

EU and UK Explore Closer Trade and Defence Ties Amid Global Uncertainty

European Union and United Kingdom flags together
Alex CarterAlex Carter

In This Article

HIGHLIGHTS

  • The EU is open to discussing a customs union with the UK, which could reduce trade barriers but limit independent trade deals.
  • Labour leader Keir Starmer advocates for renewed talks on the EU's €150bn Safe defence fund, emphasizing increased European defence collaboration.
  • High-level discussions between UK and EU officials signal a willingness to explore closer economic and security ties amid global uncertainties.
  • The UK has recently secured significant defence deals with Norway and Turkey, highlighting ongoing bilateral military cooperation.
  • The EU's trade commissioner, Maroš Šefčovič, is set to discuss trade, energy, and fisheries with UK officials, with potential future defence talks on the horizon.

In a significant development, the European Union has expressed openness to discussing a potential customs union with the United Kingdom, a move that could reshape post-Brexit trade dynamics. European Commissioner for Finance Valdis Dombrovskis stated that Brussels is "ready to engage" with the UK on this matter, following high-level talks with British ministers, including Chancellor Rachel Reeves.

Customs Union Discussions

The prospect of a customs union, which would eliminate tariffs on goods between the UK and the EU, has gained traction among Labour MPs. However, it remains contentious due to concerns that it could restrict the UK's ability to negotiate independent trade deals. Labour's current stance, as outlined in their election manifesto, rules out joining the existing EU customs union or re-entering the single market, which requires adherence to the EU's "four freedoms."

Defence Cooperation Talks

Meanwhile, Labour leader Keir Starmer has called for renewed discussions on the EU's €150bn Safe defence fund, emphasizing the need for Europe to bolster its security capabilities. Starmer's comments come amid a backdrop of geopolitical tensions and a desire for increased collaboration on defence spending and military capability. Talks on the UK's participation in the Safe fund collapsed in 2025, but there is renewed interest on both sides for a future agreement.

Ongoing Bilateral Defence Deals

The UK continues to strengthen its defence ties with European allies through bilateral agreements. Notably, a £10bn deal with Norway for anti-submarine warships and an £8bn agreement to sell Typhoon fighter jets to Turkey underscore Britain's commitment to military cooperation.

Future Prospects for UK-EU Relations

As the EU's trade commissioner Maroš Šefčovič prepares for discussions in London, trade, energy, and fisheries are on the agenda, with potential defence talks anticipated at upcoming international summits. The evolving dialogue between the UK and EU reflects a mutual interest in addressing shared economic and security challenges.

WHAT THIS MIGHT MEAN

The willingness of both the UK and EU to explore closer trade and defence ties could lead to significant shifts in post-Brexit relations. If a customs union is pursued, it may streamline trade but also necessitate careful negotiation to balance sovereignty with economic benefits. On the defence front, re-engagement with the EU's Safe fund could enhance Europe's collective security posture, though it requires overcoming past disagreements on entry terms. As global uncertainties persist, the outcome of these discussions could redefine the UK's role in European and international affairs, with potential implications for future trade and security policies.