The EU trade reform agenda since the UK left in 2021 has focused on the Single Market and the Customs Union. There is broad consensus among EU leaders on what problems need to be addressed and the need for action.
At an informal leaders’ retreat in February 2026, President of the European Council, António Costa, emphasised the urgency of the reforms to the Single Market which needed to be completed during 2026 and 2027. However, according to an audit at July 2026, progress has been slow with just under 16% of the 383 Draghi reforms had been implemented (see below).
© European Union, 2026 – EP
Single Market reform
The EU plans to address the remaining gaps in the Single Market, particularly in services, capital markets, and digital.
The basis for introducing change comes from the Letta Report on how to reform the Single Market (April 2024) and the Draghi Report on European Economic Competitiveness (September 2024). The latter set targets to complete the Single Market as well as EU reforms on, for example, innovation, decarbonisation, and security. In all, the Draghi Report made 383 recommendations.
Subsequently, the European Commission’s Single Market Strategy (May 2025) set out the reform agenda with eight pillars:
- Stronger services – tackling the ‘Terrible Ten’ barriers:
- harmonise regulatory frameworks
- facilitate pan-European service provision
- harmonise authorisation schemes
- Support for SMEs with a focus on innovative start-ups and scale-ups
- Digitalisation:
- digital tools to boost efficiency
- common rules for digital set-up of businesses
- legislative proposals by Q1 2026
- Simplification and red-tape reduction:
- by 25% overall
- by 35% for SMEs by 2029
- one rule in, 27 out
- Smarter governance and enforcement
- Political and national engagement
- encourage collaboration between member states to adhere to single-market rules
- Synergy on spending:
- synchronise EU and national spending
- Protection against unfair trade practices from outside EU
Customs Union reform
In addition, the Customs Union is also undergoing a major overhaul, driven by the e-commerce explosion (a high volume of low-value consignments) and Chinese import pressures. Initially, the Commission proposed reforms in May 2023 and, after two years of discussions, on 27 June 2025, the Council adopted the Commission’s negotiating mandate on the new Union Customs Code.
At the centre of the overhaul, a New EU Customs Authority will oversee the new EU Customs Data Hub. The new approach will improve cooperation between customs, market surveillance and law enforcement authorities at EU and national levels.
The new EU Customs Data Hub will provide authorities with a 360-degree overview of supply chains and the movement of goods. Traders will be able to submit customs data and product-related information through the Hub, a single online environment. As a result, they will no longer need to submit separate customs declarations to each national authority.
Further, a new “Trust and Check” qualification will allow the most trusted traders to get quick release of goods, and in some cases release goods into the EU without any active customs intervention. Trust-and-Check traders will also be able to clear all of their imports with the customs authorities of the Member State in which they are based, no matter where the goods enter the EU.
Specifically, the modernised approach to e-commerce involves the following objectives:
- make platforms responsible for ensuring that customs duties and VAT are paid at purchase;
- abolish the threshold which exempts goods valued at less than €150 from customs duty;
- simplify customs duty calculation for most low-value goods from outside the EU, reducing thousands of customs duty categories to four.
Under the proposals, the Data Hub will open for e-commerce consignments in 2028, followed (on a voluntary basis) by other importers in 2032. Thereafter, a review in 2035 will assess whether this can be extended to all traders when the Hub becomes mandatory from 2038.
Implementation progress
The Draghi Observatory, an initiative of the European Policy Innovation Council (EPIC), monitors implementation progress. Their July 2026 Audit reported that roughly one in six (15.7%) of Draghi’s 383 recommendations had been implemented. Of these, 60 are fully implemented and a further 98 (over 25%) are partially implemented. EPIC noted that progress had slowed since January 2026.
However, EPIC noted greatest progress in areas where geopolitical pressure was greatest. These areas included Russian gas dependency reduction, defence industrial finance and external investment instruments.
Single Market and Customs Programme 2028–2034
Looking ahead, on 3 September 2025, the Commission proposed a new Single Market and Customs Programme (SMCP) as part of the overall EU budget for 2028–2034. This would merge four existing funding programmes — for the Single Market, Customs, Fiscalis (anti-tax fraud), and the Anti-Fraud Programme — into one streamlined initiative.
The Council adopted a partial negotiating mandate in December 2025.