The European Union has hinted at the possibility of the UK joining the Pan-Euro-Mediterranean (PEM) Convention, a trade framework designed to facilitate tariff-free trade across Europe, North Africa, and other partner nations. The proposal could become part of broader "reset" discussions between the EU and UK to improve their post-Brexit trading relationship.
The PEM Convention establishes common rules that allow manufacturers in participating countries to source parts and raw materials from across the bloc and its partners without incurring tariffs on finished goods. Members include the EU, Turkey, North Africa, and other European and Mediterranean nations.
Currently, the UK’s trade agreement with the EU mandates that British exports must meet strict "rules of origin" criteria to qualify for tariff-free trade. For instance, if a UK clothing manufacturer sources textiles from Turkey—a PEM member but not in the EU—it incurs tariffs when exporting to the EU. Membership in PEM would remove such tariffs, as Turkey's inputs would qualify as "local content" under shared rules.
Joining PEM could simplify trade for UK businesses and reduce customs-related costs. William Bain, head of trade policy at the British Chambers of Commerce, highlighted that aligning with PEM rules "would reduce paperwork and costs for many UK firms." This would allow the UK to re-integrate into complex international supply chains more seamlessly.
Speaking at the World Economic Forum in Davos, Maros Sefcovic, the EU’s new trade chief, said the idea of the UK joining PEM had not been "precisely formulated" by London, adding, "the ball is in the UK's court."
The UK government has started consulting businesses on PEM membership, although no final decision has been made. At a Cabinet Office session, Europe Minister Nick Thomas-Symonds clarified, "We don't currently have any plans to join PEM." However, a Downing Street spokesperson did not rule it out, emphasizing that PEM membership is "not a customs union" and would not breach Labour’s red lines against rejoining the single market or freedom of movement.
This proposal reflects growing calls from British businesses for solutions to ease the burdens of post-Brexit trade. Membership in PEM could support industries like textiles, automotive, and food manufacturing, which rely on extensive supply chains.
However, there are political sensitivities. While PEM does not constitute a return to the single market or a customs union, it represents a closer alignment with EU trade frameworks—a topic that remains divisive in UK politics.
