This shift could alter assumptions that many companies have treated as fixed since 2020. Businesses with exposure to UK-EU supply chains, hiring, compliance or market-entry planning may soon face a more favourable environment for cross-border trade, but one that emerges unevenly by sector rather than through a single grand bargain. The opportunity lies in moving early where friction may fall first, while the risk is to overestimate the speed of political change and commit capital before rules actually improve.
Key Risk
A sector-by-sector reset creates a sequencing problem for smaller firms. Large manufacturers absorbed post-Brexit compliance costs – customs declarations, rules of origin paperwork, conformity assessment duplication – by building dedicated regulatory teams. SMEs could not. If the reset prioritises politically visible wins (agri-food via an SPS agreement, pharma via EMA re-association discussions) while services and professional mobility lag, smaller firms in lower-priority sectors face continued friction precisely as competitors in favoured sectors gain ground. The asymmetry widens, not closes.
Strategic Opportunity
The clearest near-term gains sit in two specific mechanisms: a UK-EU sanitary and phytosanitary (SPS) agreement, which would eliminate the most burdensome agri-food border checks and directly reduce cost-per-shipment for food manufacturers and retailers; and renewed UK participation in the European Medicines Agency framework, which would remove the need for duplicate regulatory submission processes that currently delay UK market entry for new treatments. Companies already maintaining dual UK-EU regulatory submissions are positioned to move fastest – the friction they built compliance architecture around may become the first friction to fall.
Historical Context
Switzerland’s relationship with the EU offers the more instructive parallel. Rather than a framework agreement, Bern negotiated a rolling series of bilateral deals across discrete sectors – free movement, air transport, land transport, research, agriculture – each on its own timeline and with its own internal politics. The result was durable but deeply uneven: Swiss firms in covered sectors operated near-seamlessly inside the single market while those in uncovered areas faced full third-country terms. The unevenness was not a transitional problem – it became structural, reshaping which industries clustered in Switzerland and which did not. A UK reset following similar logic would produce similar distortions over a longer horizon than most strategic planning cycles currently assume.
What to Watch
- Progress on a UK-EU SPS agreement – the most advanced active negotiation; a deal here signals the sequencing logic for what comes next
- UK association with Horizon Europe research funding – already partially restored, but full terms affect where R&D-intensive firms locate headcount
- EMA re-association discussions – the mechanism that determines whether pharma regulatory duplication ends or continues indefinitely
- The UK-EU Trade Specialised Committee on Goods meeting schedule and published outcomes – the working-level body where rules of origin and conformity assessment moves first appear
Read more: Brexit isn’t working: British voters are ready for a European future →
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