Joining the group would enable the UK to trade with the EU and 24 other countries tariff-free

The chancellor Rachel Reeves has said she would be ‘happy’ to look into the UK government joining the Pan-Euro-Mediterranean (PEM) convention.

At the World Economic Forum in Davos last week, EU trade commissioner Maroš Šefčovič said that the EU is open to the UK joining the PEM convention to strengthen trade relations.

The PEM Convention, which includes the EU and 24 other countries, including Norway, Algeria, and Ukraine, simplifies trade by allowing products to preserve their “origin status” when goods are processed across multiple countries within the PEM zone.

For UK businesses, joining the PEM Convention would allow them to use components from any PEM country and trade tariff-free in some cases, provided the goods meet the required origin rules.

In an interview with Sky News yesterday, Reeves said: “We’re happy to look at different proposals because the current deal isn’t working well enough.

“As long as they’re consistent with the red lines we set out in our manifesto. If we want to grow our economy, we’ve got to boost trade, not just with European countries, but with countries around the world.”

While Reeves signalled that the government was open to joining the PEM convention over the weekend, last week, the housing minister Matthew Pennycook and minister for EU Relations, Nick Thomas-Symonds said there were no immediate plans to pursue membership. 

Tory shadow foreign secretary Priti Patel and Andrew Griffith, shadow business secretary, continue to whip up anti-EU sentiment, claiming that signing up to a tariff-free trade framework will amount to the UK rejoining the EU through the “back door”.

This is despite the fact that the PEM is not equivalent to a customs union and 24 non-EU countries are members of it.

In response to government ministers seemingly ruling out joining the PEM late last week, Liberal Democrat Leader Sir Ed Davey described it as an “act of economic negligence”. 

In a statement, he said that as well as negotiating with China, the government should first “look at a better trading arrangement with our closest neighbours in Europe”. 

He added:  “If the government thinks it will get growth back in the economy by borrowing Boris Johnson’s playbook on European negotiations it is going to end up being sorely disappointed.

“It is time for a proper UK-EU customs arrangement so we can strengthen our negotiations with Donald Trump, cut the red tape on our businesses and grow the economy.”

Separate to this, Davey has called on ministers to negotiate a new deal with the EU this year, with the goal of forming a Customs Union by 2030, arguing this will allow the UK to “deal with President Trump from a position of strength, not weakness”.

Olivia Barber is a reporter at Left Foot Forward

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