EU trade chief: Bloc may consider UK joining pan-Europe customs scheme


EU trade chief: Bloc may consider UK joining pan-Europe customs scheme

23 Jan 2025 Faisal Islam & Dearbail Jordan Economics editor and business reporter The European Union's new trade chief responsible for post-Brexit negotiations has told the BBC that a "pan-European [customs] area is something we could consider" as part of "reset" discussions between the UK and EU. Maros Sefcovic referred to the idea of Britain joining the Pan-Euro-Mediterranean Convention (PEM). These are common rules that allow parts, ingredients and materials for manufacturing supply chains to be sourced from across dozens of countries in and around Europe and North Africa to be used in tariff-free trade. But Europe Minister Nick Thomas-Symonds told the Commons the government "doesn't currently have plans to join PEM". The BBC understands the UK government has begun consultations with business over the benefits of the PEM plan that could help cut red tape and improve trade. No final decision has been made yet. The Conservatives did not pursue PEM as part of its post-Brexit deal, but some businesses have said it will help the UK rejoin complex supply chains that have been hit by customs barriers. Speaking at the World Economic Forum in Davos, Mr Sefcovic said the idea has not been "precisely formulated" by London yet and the "ball is in the UK's court". Under the Brexit deal, UK goods sold to the bloc are not subject to tariffs provided they are made with a certain percentage of materials from Britain or the EU. If a UK clothing manufacturer makes garments mainly from textiles it has sourced from Turkey - which is not in the EU - and sells them into the EU, the British firm would pay a tariff. But if the UK joined the PEM Convention - of which Turkey is a member - the clothing maker would not pay tariffs. William Bain, head of trade policy at the British Chambers of Commerce, said joining PEM "would reduce paperwork and costs for many UK firms as it would align rules and regulations on both sides in relation to the sourcing of components and raw materials used in exports". Speaking at Cabinet Office Questions, Thomas-Symonds said he welcomed the "positive, constructive tone" from Mr Sefcovic. "We are always looking for ways to reduce barriers of trade, but within our manifesto red lines, because we take a pragmatic view as to where the national interest lies. However, he added: "We don't currently have any plans to join PEM."