The European Union’s new trade chief, Maroš Šefčovič, has suggested the possibility of the UK joining the Pan-Euro-Mediterranean Convention (PEM), a trade agreement that facilitates tariff-free movement of goods across borders. However, Šefčovič emphasized that the decision ultimately rests with the UK, saying, “The ball is in the UK’s court.”
Speaking at the World Economic Forum in Davos, Switzerland, Šefčovič noted that the PEM could help streamline trade for the UK, especially in sectors like food and farming, by reducing red tape and improving supply chains. “We would have to have the same rules and upgrade them at the same time; we call it dynamic alignment,” he said.
UK Government’s Reluctance
The PEM, originally established in 2012, includes the EU alongside countries such as Switzerland, Norway, Ukraine, Georgia, and several North African nations. It allows for the tariff-free trade of goods under unified rules, benefiting industries reliant on complex supply chains.
Despite these potential advantages, the UK government has ruled out joining the PEM for now. Housing Minister Matthew Pennycook addressed the issue during an interview on BBC Radio 4’s Today programme, stating, “We’re not seeking to participate in that particular arrangement.” He added, “The Government has been very clear that we do want a closer relationship with our European partners, both in trading terms and in security and defense cooperation. But as for this particular arrangement, no, we’re not seeking to participate at the present time.”
UK Labour’s Position
Labour, which came to power last year, has expressed interest in resetting relations with the EU. While membership in the PEM was dismissed by the previous Conservative government, Labour ministers are reportedly consulting businesses on the potential benefits of the deal.
Labour MP Stella Creasy, chair of the party’s Labour Movement for Europe campaign group, expressed support for the proposal, emphasizing its benefits for British businesses. “Red tape from Brexit hits British business in many ways—joining PEM would help cut the paperwork connected to rules of origin requirements, which is why we have long argued it should be a priority for the UK as one way to undo the damage to trade leaving the EU has done,” Creasy said.
Support from Business and Opposition Leaders
The UK’s food, farming, and manufacturing sectors have shown interest in the PEM, citing its potential to simplify supply chains and reduce bureaucratic hurdles. Earlier this month, Liberal Democrat leader Ed Davey echoed these sentiments, advocating for closer EU ties. In a speech in London, Davey called a customs union with the EU “the single biggest thing we can do to turbocharge our economy in the medium and long term.”
He also highlighted the importance of closer trade and defense relations, suggesting such a move could safeguard the UK against potential political shifts in the United States.
Šefčovič’s Optimism and UK-EU Relations
Šefčovič, who took up his role as EU trade commissioner last year, expressed optimism about improving UK-EU relations. He noted that his British counterpart, Nick Thomas-Symonds, is “on speed dial,” signaling smoother communication between the two sides.
However, he acknowledged that the UK’s potential participation in the PEM remains undefined. “The idea has not been precisely formulated,” Šefčovič admitted, but reiterated that the EU remains open to the UK’s involvement if it chooses to pursue closer trade ties.
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