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Stay informed with free updates<\/p>\n
Simply sign up to the EU trade myFT Digest — delivered directly to your inbox.<\/span><\/p>\n<\/iframe><\/div>\n<div id=\"article-body\">\n<p>British government hopes of joining a pan-European trade area to reduce post-Brexit supply chain challenges for UK goods exporters are being blocked by Brussels, according to officials on both sides.<\/p>\n<p>The UK announced it was considering whether to join the Pan-Euro-Mediterranean (PEM) convention as part of its new trade strategy published last week, arguing it could help boost the UK\u2019s flagging goods exports.<\/p>\n<p>However, the European Commission has made clear to the UK that it would not currently support such a move, according to four people familiar with discussions, in a move the officials acknowledged had \u201cfrustrated\u201d London.\u00a0<\/p>\n<p>The blockage is the first sign of friction between the UK and EU since the two sides<a href=\"https:\/\/www.ft.com\/content\/78f17b34-996d-4003-b031-4800f4e16918\" data-trackable=\"link\"> announced a \u201creset\u201d<\/a> of their relationship at a summit on May 18, promising to improve energy trading arrangements and sign a so-called veterinary agreement to remove checks on agrifood exports.\u00a0<\/p>\n<p>The PEM convention is an agreement between the EU and 20 other countries in Africa and the Middle East that allows inputs for manufacturing supply chains to be sourced across multiple countries in order to qualify for low-tariff access to markets under free trade agreements.<\/p>\n<p>Joining PEM is a move supported by UK trade groups, including the British Chambers of Commerce. According to the UK\u2019s trade strategy published last week it could reduce \u201ccomplex paperwork\u201d and \u201cincrease flexibility for UK exporters where they source their inputs\u201d.<\/p>\n<p>EU officials familiar with the discussion said the Commission had decided that the UK joining PEM was not currently in the EU\u2019s interests, because it would increase the risk of products unfairly qualifying for low-tariff access to the bloc.<\/p>\n<p>Sir Keir Starmer has ruled out rejoining the EU single market or re-entering into a customs union with the EU, but industry has pushed the government to consider joining the PEM convention as an interim step to help goods exporters.<\/p>\n<p>Trade experts said the UK would need EU co-operation to join the convention because it would require rewriting the terms of the existing post-Brexit EU-UK trade deal \u2014 even though the PEM is not exclusively an EU arrangement.<\/p>\n<p>\u201cFor it to be meaningful for the UK, the EU would need to agree to incorporate the PEM rules of origin into the EU-UK Trade and Cooperation Agreement. This gives the EU de facto blocking powers,\u201d said Sam Lowe, trade lead at consultancy Flint Global.<\/p>\n<p>Brussels indicated previously that it was open to the UK joining PEM, but has since gone cold on the idea, arguing that it wants to stick closely to the agreements proposed in the \u201ccommon understanding\u201d set out between the two sides at the May 18 summit.<\/p>\n<p>In 2023, PEM was <a href=\"https:\/\/www.ft.com\/content\/465b8ee1-7d32-4c62-bbbc-de6a3ed9d185\" data-trackable=\"link\">mooted<\/a> as a solution to a stand-off over post-Brexit tariffs on electric vehicles, while as recently as January this year EU trade commissioner Maro\u0161 \u0160ef\u010dovi\u010d said was something the EU \u201ccould consider\u201d.<\/p>\n<p>David Henig, a former UK trade negotiator now at the ECIPE think-tank, said the EU Commission\u2019s reluctance demonstrated the ongoing political challenge of repairing relations with the bloc.<\/p>\n<p>\u201cThe EU isn\u2019t united on the importance of the UK reset and issues like PEM can easily be caught up in this even though technically straightforward,\u201d he said. \u201cThe UK government is going to have to work hard in London and Brussels to build momentum.\u201d<\/p>\n<p>Separately, in another point of tension, the EU is still demanding full implementation of the Windsor framework deal on Northern Ireland ahead of any veterinary agreement that would remove the need for most checks on goods crossing the Irish Sea.\u00a0<\/p>\n<p>The final phase of the Windsor framework deal came into force on July 1. M&S boss Stuart Machin last week described the <a href=\"https:\/\/x.com\/MachinStuart1\/status\/1938531172713173281?s=19\" data-trackable=\"link\">implementation as \u201cbureaucratic madness\u201d,<\/a> saying it requires 1,000 products to have \u201cnot for EU\u201d labels, and 400 more will have to undergo full customs checks.<\/p>\n<p>Machin added the promised EU-UK veterinary agreement \u201ccan\u2019t come soon enough,\u201d but EU officials said the Commission was being \u201cvery firm\u201d on the point that the deal must be fully implemented ahead of any EU-UK veterinary agreement.<\/p>\n<p>Industry insiders said that European relations minister Nick Thomas-Symonds had called supermarkets to a meeting in Whitehall last Thursday to urge them to comply with the deal or risk jeopardising talks over the veterinary agreement.\u00a0<\/p>\n<p>The EU has repeatedly raised concerns that many big UK supermarkets are not fully complying with the rules.\u00a0<\/p>\n<p>The Commission did not immediately respond to a request for comment.<\/p>\n<p>The UK government said it was committed to full implementation of the Windsor framework and would review the merits of joining PEM through engagement with the trading group\u2019s members, including the EU. <\/p>\n<p>\u201cWe aren\u2019t going to provide a\u00a0running commentary\u00a0on our ongoing discussions with the EU,\u201d the Cabinet Office added. <\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/0cb56d25-b08a-42cc-83bf-2979208a6745\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the EU trade myFT Digest — delivered directly to…\n","protected":false},"author":6,"featured_media":32991,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-32990","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/32990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32990"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/32990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/32991"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/iframe><\/div>\n<div id=\"article-body\">\n<p>British government hopes of joining a pan-European trade area to reduce post-Brexit supply chain challenges for UK goods exporters are being blocked by Brussels, according to officials on both sides.<\/p>\n<p>The UK announced it was considering whether to join the Pan-Euro-Mediterranean (PEM) convention as part of its new trade strategy published last week, arguing it could help boost the UK\u2019s flagging goods exports.<\/p>\n<p>However, the European Commission has made clear to the UK that it would not currently support such a move, according to four people familiar with discussions, in a move the officials acknowledged had \u201cfrustrated\u201d London.\u00a0<\/p>\n<p>The blockage is the first sign of friction between the UK and EU since the two sides<a href=\"https:\/\/www.ft.com\/content\/78f17b34-996d-4003-b031-4800f4e16918\" data-trackable=\"link\"> announced a \u201creset\u201d<\/a> of their relationship at a summit on May 18, promising to improve energy trading arrangements and sign a so-called veterinary agreement to remove checks on agrifood exports.\u00a0<\/p>\n<p>The PEM convention is an agreement between the EU and 20 other countries in Africa and the Middle East that allows inputs for manufacturing supply chains to be sourced across multiple countries in order to qualify for low-tariff access to markets under free trade agreements.<\/p>\n<p>Joining PEM is a move supported by UK trade groups, including the British Chambers of Commerce. According to the UK\u2019s trade strategy published last week it could reduce \u201ccomplex paperwork\u201d and \u201cincrease flexibility for UK exporters where they source their inputs\u201d.<\/p>\n<p>EU officials familiar with the discussion said the Commission had decided that the UK joining PEM was not currently in the EU\u2019s interests, because it would increase the risk of products unfairly qualifying for low-tariff access to the bloc.<\/p>\n<p>Sir Keir Starmer has ruled out rejoining the EU single market or re-entering into a customs union with the EU, but industry has pushed the government to consider joining the PEM convention as an interim step to help goods exporters.<\/p>\n<p>Trade experts said the UK would need EU co-operation to join the convention because it would require rewriting the terms of the existing post-Brexit EU-UK trade deal \u2014 even though the PEM is not exclusively an EU arrangement.<\/p>\n<p>\u201cFor it to be meaningful for the UK, the EU would need to agree to incorporate the PEM rules of origin into the EU-UK Trade and Cooperation Agreement. This gives the EU de facto blocking powers,\u201d said Sam Lowe, trade lead at consultancy Flint Global.<\/p>\n<p>Brussels indicated previously that it was open to the UK joining PEM, but has since gone cold on the idea, arguing that it wants to stick closely to the agreements proposed in the \u201ccommon understanding\u201d set out between the two sides at the May 18 summit.<\/p>\n<p>In 2023, PEM was <a href=\"https:\/\/www.ft.com\/content\/465b8ee1-7d32-4c62-bbbc-de6a3ed9d185\" data-trackable=\"link\">mooted<\/a> as a solution to a stand-off over post-Brexit tariffs on electric vehicles, while as recently as January this year EU trade commissioner Maro\u0161 \u0160ef\u010dovi\u010d said was something the EU \u201ccould consider\u201d.<\/p>\n<p>David Henig, a former UK trade negotiator now at the ECIPE think-tank, said the EU Commission\u2019s reluctance demonstrated the ongoing political challenge of repairing relations with the bloc.<\/p>\n<p>\u201cThe EU isn\u2019t united on the importance of the UK reset and issues like PEM can easily be caught up in this even though technically straightforward,\u201d he said. \u201cThe UK government is going to have to work hard in London and Brussels to build momentum.\u201d<\/p>\n<p>Separately, in another point of tension, the EU is still demanding full implementation of the Windsor framework deal on Northern Ireland ahead of any veterinary agreement that would remove the need for most checks on goods crossing the Irish Sea.\u00a0<\/p>\n<p>The final phase of the Windsor framework deal came into force on July 1. M&S boss Stuart Machin last week described the <a href=\"https:\/\/x.com\/MachinStuart1\/status\/1938531172713173281?s=19\" data-trackable=\"link\">implementation as \u201cbureaucratic madness\u201d,<\/a> saying it requires 1,000 products to have \u201cnot for EU\u201d labels, and 400 more will have to undergo full customs checks.<\/p>\n<p>Machin added the promised EU-UK veterinary agreement \u201ccan\u2019t come soon enough,\u201d but EU officials said the Commission was being \u201cvery firm\u201d on the point that the deal must be fully implemented ahead of any EU-UK veterinary agreement.<\/p>\n<p>Industry insiders said that European relations minister Nick Thomas-Symonds had called supermarkets to a meeting in Whitehall last Thursday to urge them to comply with the deal or risk jeopardising talks over the veterinary agreement.\u00a0<\/p>\n<p>The EU has repeatedly raised concerns that many big UK supermarkets are not fully complying with the rules.\u00a0<\/p>\n<p>The Commission did not immediately respond to a request for comment.<\/p>\n<p>The UK government said it was committed to full implementation of the Windsor framework and would review the merits of joining PEM through engagement with the trading group\u2019s members, including the EU. <\/p>\n<p>\u201cWe aren\u2019t going to provide a\u00a0running commentary\u00a0on our ongoing discussions with the EU,\u201d the Cabinet Office added. <\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/0cb56d25-b08a-42cc-83bf-2979208a6745\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the EU trade myFT Digest — delivered directly to…\n","protected":false},"author":6,"featured_media":32991,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-32990","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/32990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32990"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/32990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/32991"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}