The UK will leave the door open to join the European customs scheme

British ministers are looking to join an EU trade deal with neighboring countries as post-Brexit “reset” talks begin later this year, with Brussels confirming they are open to the idea.

“A pan-European (customs) area is something we can look at,” EU trade chief Maroš Šefčovič, who is leading talks with Britain, said as part of talks between London and Brussels on Thursday.

In a BBC interview, Šefčovič mentioned the idea of ​​Britain joining the Pan-Euro-Mediterranean Convention (PEM), a customs agreement between the European Union and 20 countries, including several countries in the Middle East and the Balkans. Rules of Origin”.

Speaking to MPs this week, UK Business Secretary Douglas Alexander hinted that Britain might join PEM: “It’s something that’s open to looking at.” We want to take a realistic view of where the national interest lies.

But officials say discussions on the idea are at an early stage in the government. Alexander told the House of Commons trade and commerce committee: “There are some stakeholders who would argue that there could be disadvantages in some sectors of trade in the UK.

Rules of origin in trade agreements require exporters to demonstrate that enough of their products are made domestically, usually 45 percent, to qualify for tariff-free entry into the market.

Under the EU-UK Trade and Cooperation Agreement, the UK has agreed rules of origin with the EU. But joining the PEM will allow UK companies to export goods to the EU tariff-free, using inputs from those countries in their supply chain.

Joining PEM, however, does not eliminate other red tape items such as veterinary certificates, licenses and certain compliance documents.

He was asked about the idea by the BBC. Today Housing Minister Matthew Pennycook said on the program: “We do not wish to participate in this particular event at this time.”

The idea of ​​Britain joining PEM was introduced by Labor MP Stella Creasey. “The red tape from Brexit will hit British business in many ways,” she said.

“Joining the PEM will help reduce the paperwork associated with exit requirements, which is why we have long argued that the UK should be prioritized as one of the ways to deal with the damage to trade from leaving the EU.”

British Chambers of Commerce, the trade association, said the government should consider rejoining the convention as it could “provide more flexibility” for businesses trading with the EU.

“The United Kingdom should rejoin the Pan-Euro-Mediterranean Convention and propose to provide manufacturers with rules of origin,” the group said in its 2023 trade manifesto, based in part on a survey of members.

Industry insiders also stated that the government has been consulting some sectors on whether joining PEM would be beneficial, but no decision has been made and added that a quantitative analysis of the pros and cons is still needed in Whitehall.

Since the signing of the Trade and Cooperation Agreement, the EU has indicated that the UK is open to joining the PEM if there is no decision in London to join the full customs union.