Improving trade ties with the European Union could boost the economy and drive up living standards, Rachel Reeves claimed, as she attended a meeting of EU finance ministers.

She said becoming the first Chancellor to attend a meeting of European counterparts since Brexit was a “milestone moment” as the UK seeks to “reset” its relationship with Brussels.

It is “in our national interest to have more normal trading relations with our nearest neighbours and trading partners”, she said.

Ms Reeves told reporters in Brussels: “Economic growth is not a zero-sum game.

“Countries right across Europe, inside and outside the European Union, including the UK, have struggled with low growth, poor productivity and stagnant living standards these last few years.

“Competitiveness and trade, crucially, are really important for driving productivity and growth.

“And so, as we reset our relations, it is with the purpose of growing our economy and improving living standards for ordinary working people.”

German finance minister Jorg Kukies said it was a “good signal” that the Chancellor was visiting Brussels, but suggested there were limits to what could be achieved within the Government’s red lines of not rejoining the single market or customs union.

He said: “It’s a good signal that there is this dialogue now and that there are these ideas.

“But of course, the new British Government has made commitments to the British electorate and I don’t think it would be appropriate for us to call those into question, because those are part of the electoral platform on which it was elected.”

Asked if he wanted to be as ambitious as possible on lowering trade barriers, Mr Kukies said: “Germany is a very open country to trade, and we’ve seen that the intensity of trade with the United Kingdom has gone down quite substantially, if I measure it against our trade partners in the world.

“We used to do a lot more on relative basis with United Kingdom than we are doing now, and we are very actively looking to diversify our trade partners and to do more in terms of trade.

“So, of course, any progress would be highly welcome, but we completely understand that the UK population has taken a different decision. And we have to respect that.”

Ireland’s Jack Chambers said Ms Reeves’ presence at the meeting of eurozone finance ministers marked the “turning of a new leaf” in UK-EU relations.

He said it was “an important day in terms of wider EU-UK reset of relations”, adding: “I think the fact that, as a starting point, the British Government wants to have such an engagement compared to what was there in the previous number of years, where we had a very different type of language from the British Government, is welcome.”

Paschal Donohoe, the Irish public spending minister and president of Eurogroup, said Monday had not been about laying out “detailed views regarding what the future could like” but instead setting the tone for negotiations due to start in the new year.

“The issue of fisheries, of youth mobility, all those other matters are for another day. Instead what we had was an exchange of views and a reminder of what we have in common,” he later told a press conference alongside the Chancellor.

Ms Reeves said: “I did not come here today to start a negotiation or to lay down a set of demands. Those conversations about the reset and those negotiations will begin in the new year.

“But what I was aiming to do today was to begin to rebuild those bonds of trust that have been fractured in the last few years under the previous government and to show our friends, neighbours and allies in the European Union that we want a reset of those relationships… I hope that’s what I achieved in the meeting today.”

Yes, the UK will always remain committed to our relationship with the US

Ms Reeves said the notion that Britain or the EU should “choose between” allies was “completely wrong”.

“Yes, the UK will always remain committed to our relationship with the US… And yes, we must also find the right way to build a stable, long-term relationship with China where we recognise both the value of co-operation in addressing global challenges like climate change but also the importance of robust challenge where needed,” she said.

“But we want to and we will seek a deeper, more mature relationship with our European neighbours too after too many years of actively looking to move away.”

Asked whether the UK Government needed to be more ambitious in the scope of its reset with Brussels in order to boost growth, the Chancellor said: “We got a mandate at the election in July to grow our economy and we also included in that manifesto a number of red lines in terms of our relationship with the European Union: no return to the single market, the customs union or free movement of labour.

“Those red lines remain, but subject to those we want to build closer trade relationships, but also defence and security co-operation with our neighbours and trading partners in the European Union, because it is in our collective national interest to do so.

“I recognise that the deal the previous government secured post-Brexit was not the best one for our country and indeed has reduced trade flows not just from the UK to the European Union but also from businesses based in the European Union into the UK.

“And so there is a shared objective and a shared challenge to improve those trade flows, to improve those investment flows in the interests of citizens not just in the UK but also in countries in the European Union too.”

Looks like Labour’s plan is to follow EU rules for nothing in return

Shadow business secretary Andrew Griffith suggested Ms Reeves should look to Donald Trump rather than the EU for trade growth.

He said: “If she is interested in growth, she should tell the Prime Minister to jump on a plane to the US and talk to Trump about getting a US-UK trade deal done, not trying to take Britain backwards into the slow-growth EU.”

Shadow chancellor of the Duchy of Lancaster Alex Burghart said: “Looks like Labour’s plan is to follow EU rules for nothing in return.

“If the Chancellor wants to improve growth and trade, she should learn the lesson that clobbering businesses with high taxes and unleashing borrowing sprees will make our country less attractive, not more.”

Daisy Cooper, Liberal Democrat deputy leader and Treasury spokeswoman, said: “It’s difficult to understand why they are failing to pursue the UK-EU youth mobility scheme, which would be a good first step, provide a boost to the economy and give young people opportunities to live and work across Europe.”