Post-Brexit Pragmatism? What the UK–EU Reset Summit Means for SMEs

The long-anticipated UK–EU Reset Summit, held in London on 19 May 2025, marked a significant, despite cautious, turning point in the post-Brexit relationship between the United Kingdom and the European Union. As the first structured political dialogue since the implementation of the Trade and Cooperation Agreement (TCA) in 2021, the summit offered a new platform for cooperation, and crucially, it placed pragmatic collaboration above entrenched political posturing.

For UK SMES, which have been disproportionately affected by the costs and frictions of Brexit, this summit offered the first signs of tangible relief. While far from a comprehensive economic reset, the agreements struck—centred on agrifood trade, energy, defence, and youth mobility—could provide meaningful support to internationally active SMEs and may signal the beginning of a more responsive trade and regulatory framework.

A political summit with economic implications

The summit produced three formal outcomes: a UK–EU Security and Defence Partnership, a Joint Declaration on Global Challenges, and a “Common Understanding”—a roadmap for future negotiations on a wide range of sectoral issues. These outcomes were underpinned by a willingness on both sides to rebuild trust and restore functional channels of cooperation.

Importantly for SMEs, several areas of agreement, though not headline-grabbing, will have real economic effects. Chief among them is a new veterinary and sanitary/phytosanitary (SPS) agreement, which will dramatically reduce the border checks and regulatory friction on agrifood trade between Great Britain and the EU. For SMEs exporting perishable goods across agrifood sectors—especially live animals, meat, dairy, and seafood—this agreement addresses a critical pain point.

Also notable is the UK’s re-entry into Erasmus+, alongside a commitment to negotiate a structured youth experience scheme. Though framed in educational and diplomatic terms, these provisions could ease recruitment and skills acquisition for SMEs across several sectors—from tech to tourism to the creative industries.

Why SMEs should care

Brexit has created a particularly harsh trading environment for UK SMEs. Unlike larger firms, most small businesses lack the capacity to absorb the costs of regulatory compliance, manage complex customs documentation, or maintain operations across multiple jurisdictions. As research from the Enterprise Research Centre and others has shown, the combination of uncertainty, new barriers, and administrative burden has led many SMEs to reduce or exit EU markets altogether.

The Reset Summit addressed this context, albeit selectively.

1. Agrifood and fisheries SMEs

The SPS agreement is a lifeline for small exporters in agrifood and fisheries—especially those tired of seeing their cheese held hostage at the border. The removal of paperwork and delays at the border will help SMEs that suspended EU trade to reconsider their market strategies. Our research shows that a veterinary agreement could raise UK agri-food exports to the EU by 22.5% and boost sectoral value added—particularly benefiting small and medium-sized exporters hit hardest by post-Brexit trade frictions. The extension of fisheries access quotas to 2038 offers greater predictability in a historically contested area and formed part of the broader compromises that enabled agreement at the summit.

2. Labour mobility and skills

While the UK–EU trade relationship no longer includes free movement, youth experience schemes offer a tailored alternative. If structured well, such schemes can support short-term placements, internships, and seasonal work—helping SMEs fill vacancies in industries with persistent labour shortages. Rejoining Erasmus+ also supports early-career skill development, international exposure, and employer-university collaboration.

3. Green growth opportunities

The agreement to re-integrate into the EU’s electricity market and align emissions trading systems (ETS) may open doors for SMEs in clean tech, energy services, and green manufacturing. Easier cross-border energy trade and a harmonised carbon price reduce compliance complexity and help SMEs compete in EU-linked supply chains.

4. Defence and dual-use innovation

Less discussed, but potentially significant, is the new UK–EU Security and Defence Partnership, which could benefit SMEs operating in advanced manufacturing, cyber, and dual-use technologies. By re-opening UK access to EU programmes such as the €150 billion SAFE fund, the summit creates new procurement and R&D opportunities for innovative SMEs in defence-adjacent supply chains. These firms often struggle to scale without stable funding or cross-border contract opportunities—this agreement could begin to shift that.

What’s missing

Despite these gains, the summit stopped short of tackling several areas critical to SME internationalisation. There was no agreement on services trade, no mutual recognition of professional qualifications, and no easing of customs procedures for industrial goods. Financial and digital services remain outside the scope of this reset, and the complex requirements for rules of origin and regulatory compliance continue to deter smaller firms from re-engaging with the EU market.

Crucially, there was no progress on mutual recognition of conformity assessment (MRCA)—the mechanism that would allow UK and EU authorities to accept each other’s product testing and certification results. Without MRCA, SMEs face costly duplication of testing and delays when exporting to the EU. This remains one of the most tangible technical barriers for manufacturers and tech firms that previously traded seamlessly across the Channel.

The summit also failed to address broader questions of supply chain resilience, regulatory cooperation, or economic security—issues increasingly central to SMEs in manufacturing and high-tech sectors navigating global disruption.

While this reset does not alter the fundamentals of the post-Brexit trading framework, it delivers meaningful improvements at the margins—and, crucially, reopens channels for further progress. It may not yet represent a step change, but it is a credible and constructive move in the right direction. Given the political constraints on both sides, what has been achieved at this summit is likely as ambitious as current conditions allow—and it lays important groundwork for the future.

What comes next?

The UK–EU Reset Summit marks the start of a more pragmatic phase in post-Brexit relations. For SMEs, it offers a platform to re-engage—but real benefits will depend on follow-through. Key measures, like the SPS reforms and youth mobility scheme, must be implemented with clarity and minimal burden. Crucially, SME voices need to shape the next phase—on services, mobility, and regulatory alignment. The Common Understanding sets out a path; what matters now is turning that into practical progress that reflects the real-world needs of smaller firms.

Professor Jun Du, Aston Business School and Enterprise Research Centre

Please note that the views expressed in this blog belong to the individual bloggers and do not represent the official view of the

Enterprise Research Centre, its Funders or Advisory Group