Petty EU stops UK from joining trade bloc because of Brexit

Sir Keir Starmer is keen an a reset with Ursula von der Leyen's EU (Image: GETTY)

A bid by the UK to join a European trade arrangement aimed at easing post-Brexit export difficulties has apparently been blocked by Brussels — despite strong support from British industry. Officials on both sides confirmed the European Commission had rejected the UK’s attempt to join the Pan-Euro-Mediterranean (PEM) convention, a regional agreement covering the EU and 20 partner countries across Europe, North Africa and the Middle East.

The decision has provoked frustration in Whitehall, where it is is being seen as a petty political move by Brussels — the first real sign of friction since the so-called “reset” in relations touted so frequently by Prime Minister Sir Keir Starmer. The PEM convention permits manufacturers in member countries to source goods and components from one another while still qualifying for lower tariffs when trading under free trade agreements. Theoretically, the system could reduce the amount of red tape facing British exporters and make it easier to participate in European supply chains — but only if the EU would allow the UK access.

Keir Starmer speaks with von der Leyen in Brussels

Signing up would not have meant rejoining the EU’s single market or customs union, both of which Labour leader Sir Keir Starmer has ruled out.

However, it was seen as a pragmatic step to ease Brexit-related trade headaches for UK manufacturers — many of whom have struggled with increased paperwork, delays and costs since the Trade and Cooperation Agreement (TCA) came into force in 2021.

Supporters of the move include the British Chambers of Commerce, which has argued that PEM membership would help revive stagnating goods exports by offering “greater flexibility” on where UK firms can source their inputs.

Nevertheless Brussels has gone cold on the idea, according to reports in the Financial Times.

Sir Keir Starmer and Ursula von der Leyen at a UK-EU Summit in London earlier this year (Image: Getty)

Four sources familiar with the discussions told the paper the European Commission believes letting the UK into the bloc would increase the risk of products unfairly benefiting from low-tariff access to the single market.

Trade expert Sam Lowe, of consultancy Flint Global, explained that for UK membership to be effective, the EU would have to agree to embed PEM rules into the TCA — giving Brussels a de facto veto.

Although the EU previously said it was open to the idea, recent efforts to revive the discussion have stalled, with officials now saying they want to stick to the agreements outlined during the May 18 UK-EU summit.

David Henig, a former UK trade negotiator, said the decision reflected a broader unwillingness within the EU to support improved relations with Britain.

He said: “The EU isn’t united on the importance of the UK reset, and issues like PEM can easily get caught up in that — even though it’s technically straightforward."

Brussels is also understood to be using supermarket compliance with the Windsor Framework as leverage in ongoing talks over a separate veterinary agreement — adding to the sense that the bloc is still playing political games nearly four years after the UK officially left.

A UK government spokesperson said: "This Government has secured a new agreement with the EU to support British businesses and jobs and put more money in people's pockets. We have also published a new Trade Strategy setting out how we will boost trade further.

"We aren't going to provide a running commentary on our ongoing discussions with the EU."