UK and EU agree deal hailing a ‘new chapter’ in post-Brexit relations

The U.K. and European Union announced a landmark deal to reset relations Monday after Britain’s acrimonious exit from the bloc in 2020.

British officials said the signing of the agreement — which covers a range of matters including security, energy, trade, travel and fisheries — with EU officials in London marked a “historic day” for the two sides, and a “new chapter” in their relationship after years of tense post-Brexit relations.

Here are some key takeaways from the deal and how it will affect British consumers and businesses:

Firstly, the deal will make it easier for British food and drink to be imported and exported as it reduces red tape for businesses which have led to lengthy lorry queues at the border. Some routine checks on animal and plant products will also be removed completely, allowing products like British sausages and burgers to be sold back into the EU again.

When it comes to security and defense, the U.K. and EU agreed on a new partnership paving the way for the U.K. defense industry to participate in the EU’s proposed new £150 billion “Security Action for Europe” defense fund.

Fisheries was a big (and thorny) part of the talks ahead of the summit. This new deal extends fishing rights for EU trawlers in U.K. waters until 2038, an agreement particularly coveted by Brussels as an existing deal was due to expire next year.

British holidaymakers will be cheering at least one aspect of the deal, which will enable them to use more “eGates” in EU airports rather than having to have their passports physically checked when they travel to the continent. That agreement should end what the government described as “the dreaded queues at border control.”

Some issues are not entirely resolved, however, including a “youth experience scheme.” Both sides said they would work toward a deal that would make it easier for young people to live and work across the continent.

The program will be designed to enable young people to work and travel freely in Europe again, but will be capped and time-limited, mirroring existing schemes the U.K. has with countries such as Australia and New Zealand.

U.K. Prime Minister Keir Starmer hosted European Commission President Ursula von der Leyen and other senior officials in London for the much-anticipated U.K.-EU summit on Monday. Both sides praised the rapprochement reached at the gathering, which took place against a backdrop of unpredictable global dynamics and changing alliances.

“This is a very positive end result for both sides,” a senior EU official told CNBC earlier in the day, while the U.K.’s lead negotiator, the Minister for European Union Relations Nick Thomas-Symonds, commented that “today is a historic day, marking the opening of a new chapter in our relationship with the EU that delivers for working people across the U.K.”

It comes after the Trump administration’s recent shift toward U.S. isolationism regarding global affairs — and particularly those more acutely affecting Europe, such as the war in Ukraine — piled pressure on the U.K. and European Union to agree on a deal.

But the U.K. government is also in a tricky position given the increased public support for Reform UK, the party belonging to Brexit architect, Nigel Farage.

Starmer’s popularity has fallen to its lowest level on record, with just 23% of Brits polled having a favorable view of the prime minister, according to YouGov research released last week, while positivity toward Farage and Reform UK has risen.

The Labour government insisted on Monday that it had not rowed back on Brexit, saying the deal “meets the red lines set out in the government’s manifesto – no return to the single market, no return to the customs union, and no return to freedom of movement.”

Critics of the deal, including Farage and Conservative Party leader Kemi Badenoch, reacted with dismay as details of the deal emerged earlier on Monday morning, with the latter saying: “We’re becoming a rule-taker from Brussels once again.”

One of the biggest stumbling blocks leading up to the U.K.-EU summit were access that EU boats have to fish in U.K. waters, with a post-Brexit deal on fishing rights set to expire in 2026 and France and Denmark pushing for those rights to be extended.

The problem for the Labour government was how to agree on thorny issues like this, without looking like it’s returning to a pre-Brexit partnership.

“Keir Starmer is really in a difficult position here,” Gesine Weber, fellow at the German Marshall Fund, told CNBC Monday.

“He will not want to appear too pro-European and go back to rejoining the EU, that is absolutely not on the table here. He has to balance domestic politics and to strike the balance between getting closer and seeing where cooperation can be approved, but also reaffirming some things that the U.K. had clearly wanted to achieve through Brexit.”

Nigel Farage, Reform UK leader, voiced discontent over earlier reports about the 12-year deal on fisheries, stating on social media platform X that, “If true, that will be the end of the fishing industry.”