The UK-EU “reset” may ease some post-Brexit trade frictions, but the economic gains are modest.

While the new agreement marks progress in easing trade with the UK’s largest economic partner, it primarily reduces a fraction of the non-tariff barriers introduced after Brexit. The sanitary and phytosanitary (SPS) deal cuts red tape for over 1,500 products, notably benefitting agri-food exporters burdened by costly checks and compliance costs. The estimated £8.9bn boost by 2040—roughly 0.3% of GDP—pales next to the 4% hit to potential output caused by Brexit. Economic logic may favour deeper integration, but many political red lines remain firmly in place, limiting the scope of recovery. Some argue that the UK should consider entering a customs union or even rejoin the single European market to boost economic growth. For them, this could be seen as a step in the right direction.

Will UK-EU deal mean 'huge' boost for economic growth? - BBC News

1. Explain the key differences for the UK between agreeing a customs union with the EU and rejoining the single European market.

2. Discuss how a regulatory agreement, such as the SPS deal of food standards, can support agricultural trade between the UK and EU and help reduce the costs faced by UK farmers.

3. Evaluate whether a better trading agreement between the UK and the EU is likely to lead to more economic growth. Use economic theory to underpin your arguments and refer to the article.