After Erasmus, there are many other steps that Britain could take to create closer ties with the EU

With the government confirming we have signed up to the pan-European student exchange scheme, 2026 now presents further opportunity for greater alignment – even though the single market is still a long way off, says Joël Reland

Just in time for Christmas, the “EU reset”has delivered a result. The UK will rejoin the Erasmus+ programme in 2027, allowing Brits to take up education and training opportunities in the EU, and vice versa.

Pro-Europeans might rejoice, hoping that it heralds the start of a slow march back towards Europe. But do they have cause to be optimistic? The road ahead in 2026 looks long and winding.

First, there are the “known knowns” – issues officially on the agenda which could be next to be negotiated.

Top of the list should be the linking of the UK and EU carbon markets. From 1 January 2026, the EU “CBAM” kicks into force, levying tariffs on imports of a range of industrial goods and electricity, and creating additional paperwork for traders. Carbon market linkage would exempt British exporters from the CBAM, but unless and until it is negotiated (or the UK obtains a temporary exemption) they will have to take the hit. The clock is ticking fast.

With the government keen to demonstrate that its reset is delivering economic benefits, negotiations on food and drink – the proposed Sanitary and Phytosanitary (SPS) Agreement – will also be a priority. This would see the UK adopt EU plant and animal health rules in exchange for the removal of most Brexit-related trade bureaucracy for those goods, helping British exporters, and potentially cutting food prices at home.

But negotiations will not be easy – not least as it could mean the UK having to give up higher animal welfare standards and liberalised gene editing rules which it has introduced post-Brexit. EU minister Nick Thomas-Symonds says he wants the deal implemented by 2027, which probably requires it to be agreed next year.

The EU is also unlikely to sign off on the UK’s key asks unless it gets something in return. The top prize for Brussels is undoubtedly a youth mobility scheme, which would allow young EU nationals to come and live in the UK for a time-limited period, without needing a job or study offer, and vice versa.

The UK and EU remain far apart on many of the key details. The EU wants the scheme to be uncapped, while the UK government will undoubtedly want a limit on the number of participants, who will add to net migration figures. Other issues are how long people are allowed to stay (the EU favours four years, while the UK favours two), the age limit for participants, and whether EU nationals are exempted from overseas tuition fees and the NHS surcharge.

Oddly, Erasmus will also come back onto the agenda, given that yesterday’s agreement covers only a single year. UK participation from 2028-29 onwards is likely to entail a higher fee, given that the overall Erasmus budget is set to increase by 50 per cent.

Sitting above all these individual negotiations is the prospect of a second UK-EU summit, likely to take place in the first half of 2026. This will be a point to take stock of progress but also, potentially, put new items onto the agenda. Which brings us to the “known unknowns” – other agreements which the UK and EU could start negotiating, if they have an interest.

Two of Labour’s manifesto pledges on Europe received only cursory mentions in last May’s UK-EU summit communiqué – agreements on mutual recognition of professional qualifications and touring artists, both of which would somewhat ease EU travel requirements for UK-based professionals.

These would be nice to have for the musicians, lawyers or accountants who can’t work as freely in the EU as before, but they would do little to offset the wider economic costs of Brexit, and the EU is unlikely to agree to negotiations in any case.

There has been some talk of a customs union, but this would constitute breaking a manifesto commitment in exchange for much smaller economic gains than is widely assumed.

More significant gains could be found if the EU were to agree to greater regulatory alignment on goods – for example, through a mutual recognition agreement similar to the one which Switzerland has. This would significantly help manufacturing exports that are heavily reliant on the EU market and have been hit especially hard by post-Brexit trade bureaucracy.

But the challenge for the UK is that the EU will almost certainly ask for two conditions in return: payments into the EU budget, and free movement of people, as this is what Switzerland is signed up to – and the UK would not get any special favours. The commission has already indicated that a putative agreement to link electricity markets will require budget payments.

That is the harsh reality facing the UK government. By its own estimates, the current EU “reset” package would add only 0.3 per cent to UK GDP by 2040. If it wants to see bigger economic gains, the price will be reneging on its EU red lines, and in particular the issue of freedom of movement.

Joël Reland is research fellow at UK in a Changing Europe (ukandeu.ac.uk)