Whenever the topic of the Trade and Cooperation Agreement (TCA) review comes up, the Pan-European Mediterranean (PEM) origin cumulation zone is one of the topics mentioned as potentially in scope. Recently, several reports and organizations have included rejoining PEM as one of the recommendations for the new Government. Rejoining PEM is indeed one of the steps that could improve market access for products from all industries. It could also be done within the current format of the TCA. This means it could be done without changing the essential character of the relationships, i.e. one based on a simple and fairly basic trade agreement.

Rejoining PEM would allow cumulation of origin with a number of third countries in the region, including the EU. This could help UK businesses to (re)integrate themselves into European and regional supply chains.

But if that is the case why is this topic not gaining more momentum? One reason is that this is a fairly technical area and one where quantifying potential benefits for the UK is particularly tricky. It’s also because, just like with other suggestions (e.g. veterinary agreement) there are trade-offs and costs. It is not a simple decision and one that requires an in-depth analysis. It’s also not just about the electric vehicles (EV) industry, although it is an important point to consider.

This article aims to shed light on some of these complexities and present an overview of the pros and cons of rejoining the PEM Convention. It does not aim to provide a clear yes/no answer but rather to discuss trade-offs and considerations that would need to be taken into account by the new UK Government. It concludes with recommendations.

Full paper available on the UKTPO website (available here).