Investing.com -- The upcoming U.K.-EU summit on Monday is anticipated to open the door to new trade agreements and policy frameworks that could benefit U.K. companies across the defense, energy, and food sectors.
These expectations were highlighted in a Jefferies-hosted session featuring William Bain, Head of Trade Policy at the British Chamber of Commerce, who underscored the summit’s potential to deliver meaningful gains for these industries.
One of the anticipated outcomes of the summit is a non-binding defense pact that could unlock up to €150 billion in new procurement opportunities for U.K. defense firms.
This arrangement would permit U.K. companies to participate in the EU SAFE defense initiative and form consortia with EU companies to bid for contracts.
Furthermore, U.K. firms would be allowed to bid for procurement contracts in EU member states, marking a significant step in post-Brexit collaboration.
The summit is also expected to make progress in agricultural trade, with a potential agreement that eliminates the requirement for export health certificates for agri-food and plant exports.
This Sanitary and Phytosanitary (SPS) agreement could lower trade barriers. However, it is yet to be clarified whether this agreement would apply to the entire U.K. or only to Great Britain.
In the realm of environmental policy, the U.K. and EU are expected to agree on linking their Emissions Trading Schemes (ETS). This move could impact industries such as green hydrogen, iron, steel, and fertilizers.
While this linkage may limit the U.K. government’s ability to issue free allowances, U.K. companies are expected to be exempt from the EU’s Carbon Border Adjustment Mechanism (CBAM), reducing potential cost impacts.
The summit will also address future mobility schemes, with the U.K. likely needing to compromise on its preferred 1-in-1-out scheme to accommodate a more flexible arrangement sought by the EU.
However, not all sectors are expected to benefit from the upcoming negotiations. The Chemicals sector is not anticipated to gain from these discussions.
On the other hand, the Food and Beverages and Energy sectors, along with Iron, Steel, and Green Hydrogen industries, are likely to benefit from increased regulatory certainty and new trade opportunities.
The outcomes of the summit will not only mold the U.K.’s trading relationship with the EU, but also shape the strategic and economic landscape for key industries in the future.