Lord Frost, the Conservative architect of Britain’s Brexit deal, has dismissed concerns that joining an EU trading scheme would compromise the UK’s Brexit “freedoms”.
The former chief negotiator said membership of the Pan-Euro-Mediterranean Convention (Pem) “didn’t see it as raising any issue of principle” during previous negotiations.
“We didn’t see it as raising any issue of principle, but we equally didn’t consider it to be particularly in UK interests,” Lord Frost said.
He noted that discussions about joining the scheme had been examined during the original Brexit trade negotiations, but interest waned on both sides.
The former chief negotiator said membership of the Pan-Euro-Mediterranean Convention (Pem) “didn’t see it as raising any issue of principle” during previous negotiations
gbnews
Trade experts have supported this assessment, indicating the deal would not amount to a fundamental realignment of the UK’s trading relationship with the EU.
Pem, launched in 2012, is a trade agreement that harmonises rules of origin across 25 countries in Europe, North Africa and the Mediterranean.
The convention includes nations such as Turkey, Morocco and Algeria, allowing goods with components from multiple member countries to be treated as a single entity.
This means products can typically be exported tariff-free between member countries.
MORE LIKE THIS:
A practical example shows how the system works: a product manufactured in France using mostly Turkish parts would be considered “made in France” when exported to Norway, qualifying for reduced or zero tariffs.
The UK was previously a member through its EU membership, but this ended following Brexit.
If Britain joined Pem, it could count imports from member countries under rules-of-origin criteria when exporting to the EU.
The proposal has sparked a mixed political response in Westminster.
Rachel Reeves, the chancellor, has indicated support, saying she was “happy” to look at any proposal to improve UK-EU trade.
However, the suggestion has faced strong opposition from Brexit supporters.
Dame Priti Patel, the shadow foreign secretary, accused Labour of “unpicking Brexit” and attempting to “drag Britain back into the EU through the back door”.
Reform leader Nigel Farage was equally critical, describing the proposal as totally “self-destructive”.
Reform leader Nigel Farage described the proposal as totally “self-destructive”
PA
These reactions came after the EU’s trade chief, Maros Sefcovic, suggested Brussels was open to Britain joining Pem as part of a wider post-Brexit “reset”.
Research from the Centre for Inclusive Trade Policy suggests any benefits from Pem membership would be marginal for British businesses.
The think tank found that ingredients sourced from Pem countries outside the EU make up no more than 2.8 per cent of UK-made products.
Anton Spisak, an economist at the Centre for European Reform, questioned the scheme’s value, noting very few British companies use significant components from Pem countries.
“The amount of difference this would make to UK exporters would be very, very small,” he said.
Research fellow Nicolò Tamberi from the UK Trade Policy Observatory reached similar conclusions.
“Joining Pem would not be a game-changer for UK exports to the EU,” Tamberi said. “Looking at the numbers they are very small and unlikely to have a big impact.”
Despite the limited UK benefits, experts suggest the scheme could have greater advantages for EU exporters.
David Henig, a former UK trade official now at the European Centre for International Political Economy, noted the potential impact for specific sectors.
He identified automotive manufacturing and chemicals as industries that could see benefits due to their complex supply chains.
However, Henig pointed out that EU countries might gain more from the arrangement.
This is because their supply chains are already more integrated with other Pem members.
This follows Maros Sefcovic’s recent suggestion that the EU would welcome British participation in the scheme
PA
“It is possible that it would potentially benefit the EU more but if Britain joined it could open up supply chains so it is important not to look at these things in isolation,” Henig said.
Ministers have indicated openness to exploring Pem membership, though they have stopped short of explicitly backing the proposal.
This follows Maros Sefcovic’s recent suggestion that the EU would welcome British participation in the scheme.
The proposal forms part of what Brussels describes as a wider “reset” in relations with the UK.
The idea of UK membership isn’t entirely new to Brexit negotiations.
Discussions about Britain joining Pem in its own right took place during the 2020 trade talks with the EU.
Lord Frost revealed these talks “came to nothing” not due to ideological differences, but because the UK side didn’t see significant advantages.
The current ministerial response suggests a more open stance to examining potential trade arrangements with the EU.
