It’s hard to see this policy changing. The TCA already provides tariff- and quota-free trade. Rejoining the Customs Union would require the UK’s post-Brexit trade deals to be amended or abandoned to ensure compliance with CU rules and would mean the UK having to provide preferential trade terms to countries that had agreed a customs deal with the EU on the same basis as provided by Brussels, but with no guarantee of reciprocity.
Alignment with EU standards will not automatically give greater preferential access to the Single Market. Were Starmer to accept dynamic alignment, UK exporters would still need to provide proof that they’d met EU standards and complied with Rules of Origin regulations.
UK regulators are not authorised to determine whether EU standards have been met and it’s hard to see the Commission agreeing to any market-wide change. It is possible that sectoral deals could be struck, the most likely being on human and veterinary medicines, where the EU has already agreed some mutual recognition of conformity assessments with the United States, Australia, Canada and Japan.
Historically, the EU has been reluctant to liberalise services, with Germany, anxious to protect its meister system, particularly resistant. So a deal on services, such as the mutual recognition of professional qualifications, would be tough to agree.
Starmer, like any British Prime Minister, would also hesitate before committing to dynamic alignment with the EU on financial and professional services when the UK, as a third country, would have no say in the drafting of those rules.
The same risk applies to dynamic alignment with the EU on new technologies. Starmer would have to decide whether (like Sunak) to look for commercial advantage from divergence in AI, life sciences and data, or to opt for Britain’s best interests being served by alignment, even as a rule-taker.
Since the UK already has, by global standards, an open economy, there are few concessions of value Starmer could make on trade and investment in return for a move from the Commission. Nor, given the existential threat from Russia, could he plausibly make defence cooperation conditional on trade concessions by the EU.
Concessions on free movement, UK participation in a European scheme to manage migration, or concessions on fisheries would play badly with the domestic audience in Britain.
As a result, changes in the UK/EU relationship are likely to be incremental rather than revolutionary.