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The Prime Minister's very notable shift on the UK's post-Brexit connections to the EU recently was designed to signal to industry, to European institutions, and to European partners, alongside his political supporters.

A New Process for Dialogue

Tighter following Brexit trade links are now expected to be examined as through an regular schedule of direct negotiations rather than just at this year's official assessment of the UK-EU deal.

This represented the stated position to political questions regarding a wider-ranging post-Brexit overhaul that entailed returning to the customs union.

Political Pressure

Several parliamentarians, union leaders and government figures have added their voices to ideas highlighted by legislative actions last year that culminated in a non-binding vote.

"It is better looking to the single market as opposed to the customs union for our future cooperation," Sir Keir Starmer stated.

He provided a definitive response that re-entering the tariff union was a lower priority, as it undermines what he regards as a key achievement of the last twelve months: the signing of comprehensive trade pacts with the US and the Indian subcontinent, with further in the pipeline in the Gulf region.

Prioritising the Internal Market

Instead of the customs union, his emphasis is on developing a "closer relationship" with the single market, which would not mean abandoning those recently signed agreements elsewhere.

When the UK officially exited the EU in early 2021, the agreement at the time emphasised independence from EU regulations instead of frictionless trade for British firms across Europe.

The current reset envisages harmonising with EU rules in three key areas to promote the easier passage of trade: agricultural products, electricity, and emissions trading.

Industry Requests

A major business group last month published a list of new proposals in various industries to help exporters navigate administrative barriers that has impacted the export of products.

Its internal research indicated that a large proportion of business members agreed that the UK-EU trade deal was failing to support commercial success.

A range of additional sectors could, realistically, see a similar approach – convergence with internal market standards – in exchange for lowering post-exit friction across industry, in automotive, pharmaceuticals, or for example in VAT procedures.

EU Perception

European capitals were unimpressed by the lack of ambition in the previous recalibration, particularly the London's refusal of suggestions put forward by some analysts regarding the virtual readmission of UK products to the single market.

The exact terms on energy cooperation and food and farm standards is still to be finalised. A proposal for UK defence firms to be participate in a major defence loan fund has been delayed over the scale of the membership fee, after opposition from the French government. Canada has joined the programme.

Broader Landscape

The UK has reached an agreement to rejoin a university exchange programme and to discuss a youth mobility program. This has facilitated progress for further UK-EU talks.

Analysts close to government suggest that the recent publication of a American national security strategy has altered the environment on UK European policy.

The document noted that the US would "cultivate resistance" to continental trends and applauded the "increasing clout" of certain political parties.

Within the administration, there is some recognition that the global landscape has evolved further.

Political Calculations

Domestically, the administration also foresees being outflanked on Brexit by one political rival, but additionally another, which is campaigning in its stronghold regions in upcoming council elections.

The Premier's latest comments are borne of a combination of economics, domestic pressures and international relations as the UK enters a year that will commemorate the decade milestone of the decision to leave the European Union.