British ministers are considering joining an EU trade deal with neighboring countries as part of post-Brexit “reset” negotiations which begin in earnest this year, with Brussels confirming it would be open to the idea.
Maroš Šefčovič, the EU trade chief who is leading negotiations with Britain, said on Thursday that a “pan-European (customs) zone is something we could consider” in negotiations between London and Brussels .
Šefčovič raised in a BBC interview the idea of Britain joining the Pan-Euro-Mediterranean Convention, a customs agreement between the EU and 20 countries, including several in the Middle East and the Balkans, where all countries share the same “rules of origin”. “.
British Trade Minister Douglas Alexander hinted at the possibility of Britain joining the EMP when he told MPs this week: “It’s something we’re open to looking at.” We want to take a pragmatic view of where the national interest lies.”
However, officials said discussions about the idea within the government were in their early stages. Alexander told the House of Commons business and commerce committee: “Some stakeholders would say this would be disadvantageous to some business sectors in the UK. »
Rules of origin in trade agreements require exporters to demonstrate that their products are sufficiently manufactured locally, usually around 45 percent, to qualify for duty-free market access.
As part of the EU-UK Trade and Cooperation Agreement, the UK has agreed a set of rules of origin with the EU. But joining PEM would allow UK businesses to use inputs from these countries in their supply chains so they can export goods to the EU without tariffs.
Joining the PEM would not, however, remove other elements of bureaucracy, such as veterinary certificates, licenses and some compliance documents.
Asked about the idea on the BBC Today program, Housing Minister Matthew Pennycook said: “As for this particular arrangement, we are not looking to participate in it at the moment. »
The idea of Britain joining the EMP was defended by Labor MP Stella Creasy. “The bureaucracy of Brexit hits British businesses in many ways,” she said.
“Joining the EMP would help reduce the red tape associated with rules of origin requirements. This is why we have long argued that this should be a priority for the UK, as a way to repair the damage caused to trade by leaving the EU.”
The British Chambers of Commerce, the trade association, said the government should consider joining the convention because it “could provide additional flexibility” for businesses trading with the EU.
“The UK should offer to join the Pan-Euro-Mediterranean Convention to offer greater cumulation of rules of origin for manufacturers,” the group said in its 2023 trade manifesto, based in part on data from a survey carried out among its members.
Industry experts also said the government had consulted with some sectors on whether they would benefit from joining the EMP, but added that no decisions had been made and only a quantitative analysis of the pros and cons was still needed at Whitehall.
Since signing the Trade and Cooperation Agreement, the EU has indicated that it would be open to the UK joining the EMP in the absence of a decision from London to join a separate customs union whole.