EU Denies UK Request to Join Tariff-Reducing Trade Network

(MENAFN) The European Union has denied the UK's request to join a streamlined trade network that offers reduced tariffs to 20 countries, according to a media report on Wednesday, citing officials.

The UK had applied to become part of the Pan-Euro-Mediterranean (PEM) convention, a framework established in 2012 to standardize rules of origin across trade agreements between the EU and nations in Europe, North Africa, and the Middle East. The initiative allows manufacturers to access lower tariffs when using components sourced from multiple participating countries.

Since leaving the EU in 2020, the UK has rejected the option of rejoining the single market or the customs union. However, business leaders have advocated for PEM membership as a practical means of helping exporters navigate new trade barriers. The UK government included the proposal in its recently released trade strategy, arguing it could reduce “complex paperwork” and offer businesses greater flexibility.

Trade experts assert that the success of this initiative hinges on EU approval, as the UK would need to amend its post-Brexit trade agreement with Brussels to integrate PEM's rules—despite the convention's availability to non-EU countries.

“For 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,” Sam Lowe, trade lead at consultancy Flint Global, told media.

According to EU officials, Brussels had previously shown some openness to the idea but now believes the proposal does not align with the bloc's interests. The European Commission is reportedly concerned that UK goods could unfairly gain access to low tariffs.

This decision marks the first significant tension since both sides declared a "reset" in relations at a summit in May. During that meeting, they committed to closer energy cooperation and progress on a veterinary agreement aimed at reducing agrifood checks.

In addition, the EU is demanding full UK compliance with the Windsor Framework—an agreement made in February 2023—before it will approve a veterinary deal that could ease checks on goods moving across the Irish Sea.

Northern Ireland, part of the UK, shares a land border with the Republic of Ireland, an EU member state, and continues to follow some EU regulations to avoid a hard border. The final phase of the Windsor Framework took effect on July 1. Retailers have criticized the new labelling and customs rules, calling them “bureaucratic madness,” as hundreds of products now face additional checks when moving from Great Britain to Northern Ireland.

Despite the challenges, the UK government maintains its commitment to the Windsor Framework and continues discussions with PEM members, including the EU.

MENAFN03072025000045017169ID1109756651