EU opens door for UK to join pan-Europe customs scheme, trade chief says

UK could join pan-Europe customs scheme: A pan-European customs area including the UK is something the EU "could consider" as part of trade relations’ "reset" discussions between the UK and the EU, the bloc’s new trade chief told the BBC in a report published last week, referring to the UK entering the Pan-Euro-Mediterranean Convention (PEM). The PEM allows parts and components for manufacturing supply chains to be sourced from multiple member-countries throughout Europe and North Africa, facilitating trade without tariffs.

Where do things currently stand? Under the Brexit agreement, UK goods sold to the EU are exempt from tariffs as long as they are made with a specified percentage of materials sourced from either Britain or the EU. If a UK clothing manufacturer produces garments primarily using textiles from Turkey — outside the EU — and exports them to the EU, the importing company would incur a tariff. However, if the UK were to join the PEM Convention, which includes Turkey as a member, the importing company would not have to pay tariffs on the goods.

Moving forward: The UK government has started consultations with businesses regarding the potential benefits of the PEM plan, but no final decision has been reached, according to the BBC.

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