The French and German governments commissioned a report recommending a new outer tier for non-members, which could be open to the UK, in a bid to forge closer economic ties.
Under the associate membership plan, outer-tier countries would be expected to contribute to the EU’s annual budget in exchange for “participation” in the bloc’s single market.
Labour insisted the idea was a “non-starter” – but eyebrows were raised when it emerged that Sir Keir had told fellow leaders at a conference in Canada that “we don’t want to diverge” from EU rules.
British trade chiefs frustrated by Brexit red tape told The Independent that they welcome the idea of associate membership – saying it would be “fantastic” to remove tariff barriers and cut down on current friction.
It came as The Independent revealed that Sir Keir and French president Emmanuel Macron held secret Brexit talks in Paris and “covered all the difficult issues, not just pleasantries” – although Sir Keir has ruled out rejoining the bloc if Labour comes into power.
Nick Allen, chief executive of the British Meat Processors Association (BMPA), said: “Anything that makes trading with the EU more seamless would be a good thing – it would be a big improvement on what we have.”
He added: “I’d like to think Labour, and all parties, would keep an open mind about associate membership. When it comes to regulation and standards, at the moment we’re behaving as though we were in Europe – but with all this bureaucracy and costs that are damaging productivity and adding to inflation.”
The BMPA has backed Labour’s plan to seek a new veterinary agreement in an effort to remove some agriculture and food checks when Boris Johnson’s Brexit deal – the trade and cooperation agreement (TCA) – is reviewed in 2025.
But Mr Allen said it is worth going further and exploring the option of associate membership if it would mean wider alignment with EU rules. “We would want to see full regulatory alignment,” he said. “It would make things a lot easier. We could still discuss with the EU some of the ways we would like to diverge at certain intervals, like Switzerland does.”
Shane Brennan, chief executive of the Cold Chain Federation, said Britain’s food supply chain has suffered badly since waves of confusing new rules came into force with Brexit.
“A model that would see a more sensible economic arrangement between the two sides would be fantastic – so much better than the last six years. From a business point of view, we want the UK and EU to be as cooperative as possible,” he said.
But the supply-chain leader warned that full regulatory alignment would make Britain a “rule-taker” – an outcome that is unlikely to be popular with either a Labour or a Tory government.
Mr Brennan said a bespoke “equivalence” agreement on some mutually shared regulations might be better, adding: “It’s all about the details. If associate membership is about regulatory equivalence, to remove a lot of the friction in the movement of goods, it would be attractive.”
William Bain, head of trade at the British Chambers of Commerce, said associate membership is an “interesting idea” – but added that the UK remains “substantially down the list” when it comes to the EU’s desire to open up talks on a new trading relationship.
Asked about the prospect of Labour picking up the idea, Mr Bain said: “A new political dynamic can change things, but it’s difficult to see any appetite in Brussels at the moment to substantially rewrite the TCA or come up with a bespoke agreement.”
Germany and France commissioned an EU overhaul blueprint, dubbed “Macron’s onion”, which proposes the creation of three new tiers. The most closely aligned states would form an “inner circle”, with a secondary group of less closely integrated members and an outer tier of non-members with access to the single market.
A European diplomatic source told The Times that the plan had been designed with Labour in mind, despite Sir Keir having ruled out rejoining the EU single market.
A video clip of an event in Canada showed Sir Keir suggesting that the UK could have a stronger economic relationship under Labour because the party has the same ideas as Brussels on regulation.
“Most of the conflict with the UK being outside of the [EU] arises in so far as the UK wants to diverge and do different things to the rest of our EU partners,” the Labour leader said.
He added: “Actually, we don’t want to diverge, we don’t want to lower standards, we don’t want to rip up environmental standards, working standards for people that work, food standards and all the rest of it.”
The Tories accused Sir Keir of plotting to “unpick” Brexit. The chancellor, Jeremy Hunt, said: “I think those kinds of comments about not wanting to diverge will worry a lot of people that what he really wants to do is to unpick Brexit.
“And we are going to make a tremendous success of Brexit. We’ve already started to do so. And there’s lots more to come.
“We want to be good friends with our neighbours across the Channel. But I think any suggestion that you want to align our laws and regulations with the EU will worry a lot of the people who voted for Brexit.”