The European Union's new trade chief responsible for post-Brexit negotiations has mentioned to the BBC the potential consideration of a "pan-European [customs] area" in the upcoming talks between the UK and EU. Maros Sefcovic has highlighted the idea of the UK aligning with the Pan-Euro-Mediterranean Convention (PEM).
This convention involves common regulations allowing the sourcing of parts, ingredients, and materials from various countries across Europe and North Africa for tariff-free trade within manufacturing supply chains.
The UK government is reportedly in discussions with businesses regarding the advantages of the PEM proposal, aiming to streamline processes and enhance trade, although no final decision has been reached yet.
While the Conservatives did not pursue PEM in their post-Brexit dealings, some companies believe it could help the UK reintegrate into intricate supply chains affected by customs constraints.
Mr. Sefcovic, speaking at the World Economic Forum in Davos, mentioned that London has not yet clarified the idea precisely, implying that the decision rests with the UK.
Under the Brexit agreement, UK goods exported to the EU avoid tariffs if they contain a certain percentage of materials from either the UK or EU.
Joining the PEM Convention, which includes Turkey, could potentially eliminate tariffs for products made in the UK from textiles sourced from non-EU countries like Turkey when sold within the EU.
William Bain, a trade policy expert at the British Chambers of Commerce, noted that aligning regulations under PEM could reduce paperwork and expenses for UK firms in terms of sourcing components and raw materials for exports.
On the subject, Sir Keir Starmer, the Prime Minister, is set to attend an EU summit with a focus on defense and security next month.