![\"Rachel](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2024\/12\/Rachel-Reeves-at-Europa-Building-Brussels-9-12-24.png\")
Chancellor Rachel Reeves has given the strongest signal yet of a desire for closer relations with the EU in in a speech referring to \u201cdeeper integration\u201d with the bloc.\u00a0\u00a0<\/p>\n
Setting out the government\u2019s case for closer economic and security ties with its nearest neighbours, Ms Reeves acknowledged the scale of trade with the EU compared with other markets.<\/p>\n
\u201cThe biggest prize is clearly with the EU,\u201d she said at an event at the London School of Economics. \u201cThe truth is economic gravity is reality.\u00a0Almost half of our trade is with the European Union. We trade\u00a0almost as\u00a0much with the EU as the whole of the rest of the world combined.\u201d<\/p>\n
In a message to hardline Brexiteers as well those calling for the Brexit deal to be negotiated, she added: \u201cThere are three big\u00a0trading\u00a0blocs\u00a0in the\u00a0world \u2013\u00a0there\u2019s\u00a0the US, there\u2019s China, and there is Europe. We want to make Europe as strong as possible,\u00a0and that means not putting up the drawbridge.\u201d\u00a0<\/p>\n
With global trade facing increasing fragmentation, Ms Reeves made clear that Britain would resist the turn towards protectionism and instead\u00a0seek\u00a0to bring down barriers to trade with trusted partners. <\/p>\n
This includes the EU, with the Chancellor confirming that Britain will align with EU regulatory standards where it is in its national interest, removing barriers to trade and giving businesses the confidence to invest.\u00a0\u00a0<\/p>\n
The resetting of relationships with the EU is a central pillar of the Chancellor\u2019s \u201csecuronomics\u201d approach to build resilience through stability, investment and reform at home while tearing down barriers to trade abroad.\u00a0\u00a0<\/p>\n
Tom Brufatto from the economics research group Best for Britain, said:\u00a0 \u201cThis is the most significant intervention from the UK government on the prospect of aligning our service sectors with the EU, going beyond just goods. <\/p>\n
\u201cThe Chancellor is right to say that \u2018the biggest prize\u2019 is a comprehensive deal with the EU. Our economic modelling, carried out by Frontier Economics, shows that the greatest GDP growth \u2013 and therefore the best opportunity to tackle the cost of living \u2013 comes from aligning on both.\u201d<\/p>\n
Its research shows that deep alignment in both\u00a0goods and services\u00a0could grow GDP by\u00a01.7% to 2.2%. Alignment on\u00a0goods alone\u00a0would still boost GDP by\u00a01% to 1.5%, with manufacturing-heavy regions seeing the biggest gains.<\/p>\n
Ms Reeves also placed importance on security and defence benefits from closer ties with the EU.<\/p>\n
\u201cI strongly believe that Britain\u2019s future is inextricably bound with that of Europe\u2019s \u2013 for economic reasons, but also reasons of security, resilience and defence,\u201d she said.\u00a0\u00a0<\/p>\n
\u201cOn defence, we\u00a0don\u2019t\u00a0want to create more barriers. We want to be bringing those barriers down. We want to greater integrate supply chains, not damage them by taking a sort of inward-looking approach.\u00a0<\/p>\n
\u201cBut\u00a0I\u00a0don\u2019t\u00a0think any Chancellor\u00a0actually believes\u00a0we are getting the value for money that we should. Things like interoperability, joint procurement, not every country in Europe having different specifications when\u00a0they\u2019re\u00a0buying equipment \u2013 the potential there is huge.\u201d\u00a0<\/p>\n
The Chancellor was speaking at an event on security in Europe held by Brussels-based economic think tank Bruegel to mark its 20th<\/sup>\u00a0anniversary.\u00a0\u00a0\u00a0\u00a0<\/p>\n \t <\/div>\n