An offer from the UK to participate in a European trade scheme aimed at relieving export problems after the Brexit is apparently blocked by Brussels-all support from the British industry. Officials on both sides confirmed that the European Commission attempted the VK to participate in the Pan-Euro-Mediterranean (PEM) Convention, a regional agreement that covers the EU and 20-partner countries in Europe, North Africa and the Middle East.
The decision has caused frustration in Whitehall, where it is seen as a small political move by Brussels-the first real sign of friction since the so-called “reset” in relationships so often promoted by Prime Minister Sir Keir Starmer. The PEM convention allows manufacturers in Member States to find goods and components of each other, while still being eligible for lower rates in the actions under free trade agreements. Theoretically, the system would reduce the amount of bureaucracy with which British exporters are confronted and make it easier to participate in European supply chains – but only if the EU would give the UK access.
Registering would not have meant that they join the internal market or customs union of the EU, which both Labor leader Sir Keir Starmer has excluded.
However, it was seen as a pragmatic step to alleviate the Brexit-related commercial headache for British manufacturers of whom many struggled with raised paperwork, delays and costs since the Trade and Cooperation Agreement (TCA) came into force in 2021.
Proponents of the relocation include the British Chambers of Commerce, which has argued that PEM membership would help revive stagnant goods by offering “greater flexibility” about where British companies can find their input.
Nevertheless, Brussels has become the idea cold, according to reports in the Financial times.
Four sources that are familiar with the discussions told the newspaper that the European Commission is of the opinion that in the UK the block would increase the risk of products that unfairly benefit from the low Tariff access to the internal market.
Trade expert Sam Lowe from Consultancy Flint Global, explained that the EU in the UK membership should be effective in ordering pem rules in the TCA -to give Brussels a de facto veto.
Although the EU said earlier that it was open to the idea, his recent efforts to breathe new life into the discussion, with officials who now say they want to adhere to the similarities described during the UK-EU top of 18 May.
David Henig, a former British trade negotiator, said that the decision reflected a broader unwillingness within the EU to support improved relations with Great Britain.
He said: “The EU is not united about the importance of the British reset, and problems such as Pem can easily be entangled in that – although it is technically simple.”
Brussels is also supposed to use the compliance of supermarket with the Windsor window work as a lever in current conversations about a separate veterinary agreement – which contributes to the feeling that the block is still playing political games, almost four years after the VK had officially left.
A spokesperson for the British government said: “This government has concluded a new agreement with the EU to support British companies and jobs and to place more money in people’s pockets. We have also published a new trade strategy that will set how we will stimulate trade.
“We are not going to comment on our continuous discussions with the EU.”
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