Rachel Reeves has said the UK is “absolutely happy” to look at joining a tariff-free trading scheme with Europe after the EU left the door open to British membership.
The Chancellor indicated the Government would consider the prospect of signing up to the Pan-Euro-Mediterranean Convention (PEM), as it would any “constructive ideas” consistent with its “red lines” about not returning to the EU.
Labour has ruled out rejoining the customs union or single market but committed to seeking closer co-operation with Brussels as part of a “reset” in UK-EU relations.
EU trade commissioner Maros Sefcovic this week suggested Britain could join the PEM, which allows for tariff-free trade of goods across Europe, as well as some North African and Levantine nations.
Speaking to Sunday broadcasters, Ms Reeves said she was “happy to look” at the prospect of the UK joining the scheme with Europe.
Asked if Britain would enter the PEM, the Chancellor told Sky News’ Sunday Morning With Trevor Phillips: “It was really interesting to see Maros Sefcovic this week suggest the UK might be welcome in that pan-European and Mediterranean customs framework.
“We are absolutely happy to look at these different proposals because we know that the deal that the previous government secured is not working well enough.
“It’s not working well enough for small businesses trying to export, it’s not working well enough for larger businesses either.
“We’re grown-ups who admit that, whereas the previous government said there were no problems at all.
“And where there are constructive ideas we are happy to look at those, as long as they’re consistent with the red lines we set out in our manifesto.”
The Tories cast doubt on the scheme and suggested the move may risk “undoing Brexit by the back door”.
Shadow foreign secretary Priti Patel accused Labour of “unpicking Brexit” and attempting to “drag” Britain back into the trading bloc.
Shadow business secretary Andrew Griffith said: “This scheme is not the silver bullet to growth the Government thinks it is.
“Whenever Labour negotiates, Britain loses. So, we need to make sure they don’t surrender important assets like our fishing rights.
“We must avoid undoing Brexit by the back door by aligning with the EU’s low-growth model.”
