EU 'could consider' UK joining pan-Europe customs area

Maroš Šefčovič, the new EU trade chief responsible for post-Brexit negotiations, stated in a BBC interview that "we could explore a pan-European [tariff] zone" as part of a "reset" of negotiations between the UK and the EU.

Šefčovič was referring to the idea, supported by some UK business groups, of the UK joining the Pan-Euro-Mediterranean Convention (PEM). PEM allows manufacturers to use components or ingredients from dozens of countries, from Iceland to Turkey, in tariff-free trade. The previous Conservative government did not opt to join PEM in its post-Brexit trade deal, but some businesses say it would help the UK rejoin complex supply chains damaged by tariff barriers.

Speaking at the World Economic Forum in Davos, Šefčovič said that London had not "precisely formulated" the idea, and that "the ball is in the UK's court." According to the BBC, the UK government has begun consulting with businesses on the benefits of the PEM scheme, which could help reduce red tape and improve trade. No final decision has yet been made. Šefčovič also stated that a comprehensive veterinary agreement, which would help reduce friction in agricultural and food trade, also needs to be reviewed.

The EU-UK fisheries agreement is also set to expire next year. "For the EU, a solution on fisheries is very important, and we have communicated this many times." Single market treatment for UK agricultural and food exports means that "we have to abide by the same rules, and these rules have to be upgraded at the same time, what we call dynamic alignment." Šefčovič also expressed surprise that the European Commission's proposal on youth exchanges had been "misrepresented." "It is not free movement, it is a proposal to build bridges," he said, adding "we don't want to act here like we are the demand side, because we think it is good for the UK."

The trade commissioner stated that the UK-EU relationship is "absolutely" in a better state, and that his UK counterpart, Nick Thomas-Symonds, is "on call." Sir Keir Starmer is due to attend an EU summit focused on defence and security next month. In addition to the relationship with the UK, Šefčovič also acknowledged that the EU needs to be "extremely careful and responsible" in handling trade with a Trump administration in Washington, but expressed willingness to negotiate. He also added that while the EU has a surplus in goods like cars, the US has a surplus in services.