The Chancellor has said she is “absolutely happy” to consider joining a European customs group after Brussels indicated that the UK would be welcome to join.
Speaking from Davos earlier this week, European Commission Vice President Maros Sefcovic suggested the UK could join the Pan-Euro-Mediterranean Convention (PEM), a trade agreement that simplifies rules of origin among its 25 members.
However, he added that Britain would need to lead the way in joining the PEM, saying: “The ball is in the UK’s court.”
Asked on Sky News’s Sunday Morning with Trevor Phillips programme whether she would take up Sefcovic’s offer, Rachel Reeves said she was “absolutely happy” to look at taking part in the PEM.
“We are absolutely happy to look at those proposals because we know the deal that the previous government secured is not working well enough,” she said.
“It’s not working well enough for small businesses trying to export, and it’s not working well enough for larger businesses either. We’re grown up enough to admit that, whereas the previous government said there were no problems at all.
She continued: “If we want to grow our economy, we’ve got to boost trade, not just with European countries, but around the world, whether that is the US or fast-growing economies like India, China and the Gulf countries. We want to do that because it’s good for British business and, therefore, the jobs here in Britain.”
However, she cautioned that she was only happy to consider “constructive ideas” for trade that were “consistent with the red lines we set out in our manifesto.”
The PEM—which includes the EU, Switzerland, Norway, Morocco, Tunisia, and Egypt among its members—allows materials originating in one member country to be treated as local when incorporated into goods in another member country
For example, a product assembled in Morocco using components from Germany and Turkey could still qualify for preferential treatment under EU trade agreements.
It is not an EU scheme, though the EU is signed up to the agreement, and is designed to facilitate tariff-free trade across Europe and North Africa.
Ministers had indicated that the UK was not looking to take up Sefcovic’s offer, with housing minister Matthew Pennycook telling BBC Radio 4’s Today programme on Thursday: “We’re not seeking to participate in that particular arrangement.”
He continued: “I think in general the Government’s been very clear… that we do want a closer relationship with our European partners, both in trading terms, but also importantly in terms of security and defence co-operation, where we need to work far more closely.”
Pennycook appeared to leave the door open to joining the scheme, however, adding that the UK was “not seeking to participate in it at the present time”.
This was echoed by Cabinet Office minister Nick Thomas-Symonds, who said on Thursday the UK was looking to develop relationships with its European neighbours and reduce trade barriers.
But he insisted the Government has “no current plans” to join a European customs union, telling MPs he would not give a running commentary on discussions.
“We want to increase trade, increase exports, all around the world. It is hugely important, as the Prime Minister said we don’t choose between allies. We look to deepen all our relationships.”
But he added that the Government does “not currently have any plans to join PEM, and we are not going to provide a running commentary on every comment that is made.”
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