Hopes by the British government to ease post-Brexit supply chain challenges by joining a major pan-European trade convention are being held up by Brussels, according to sources on both sides of the negotiation. As reported by the Financial Times, the European Commission has signaled it will not currently support the UK’s entry into the Pan-Euro-Mediterranean (PEM) convention, frustrating efforts in London to boost struggling goods exports.
The PEM convention, which includes the EU and 20 partner countries across Africa and the Middle East, allows components used in manufacturing to be sourced from multiple countries without jeopardizing preferential tariff access under trade deals. The UK government, backed by several major trade groups including the British Chambers of Commerce, sees PEM membership as a practical way to reduce red tape and restore flexibility for exporters disrupted by Brexit.
But despite signs earlier this year that the EU might consider the UK’s request, officials in Brussels have cooled on the idea. Four individuals familiar with the discussions told the Financial Times that the European Commission now believes allowing the UK to join could risk products unfairly gaining low-tariff access to EU markets. That stance, insiders say, has left UK trade officials “frustrated.”
This marks the first notable disagreement between the UK and EU since their diplomatic “reset” at a May 18 summit, where leaders pledged improved cooperation on energy trading and a long-awaited veterinary agreement to ease agrifood export checks.
Trade experts warn that even though PEM is not exclusively an EU institution, the UK’s accession would require EU cooperation to amend the current post-Brexit Trade and Cooperation Agreement (TCA). “This gives the EU de facto blocking powers,” said Sam Lowe, trade expert at consultancy Flint Global.
Sir Keir Starmer’s Labour government has ruled out rejoining the single market or forming a new customs union with the EU. However, it views PEM as a practical middle ground to help manufacturers, especially amid growing pressure from industry.
David Henig, a former UK trade negotiator now with the ECIPE think tank, said the EU’s stance shows the continuing political sensitivity of UK-EU relations. “The EU isn’t united on the importance of the UK reset, and issues like PEM can easily get caught up in that—even if they’re technically straightforward,” he said.
Complicating matters further, the EU is insisting on the full implementation of the Windsor Framework before progressing talks on a veterinary agreement that would remove many checks on goods moving between Great Britain and Northern Ireland. The final phase of the framework came into effect on July 1.
Retailers, however, are pushing back. Marks & Spencer CEO Stuart Machin last week criticized the new rules as “bureaucratic madness,” highlighting the burden of labelling and customs requirements for over 1,000 products.
EU officials remain firm: no veterinary agreement will move forward until full compliance is demonstrated. According to industry insiders, UK European relations minister Nick Thomas-Symonds recently called a meeting with supermarket chains to urge full adherence, warning that failure could derail wider trade talks.
In response, the UK government reiterated its commitment to implementing the Windsor Framework and said it will continue reviewing the potential benefits of joining the PEM convention in consultation with member countries, including the EU.
“We aren’t going to provide a running commentary on our ongoing discussions with the EU,” the Cabinet Office said. The European Commission declined to comment.
