The agreement adds: “The question of UK accession therefore merits further review, and this is reflected in feedback from business. We will now engage business and PEM members to consider the benefits of joining PEM.”
But the document says the government recognizes “that PEM rules could have varying effects on businesses” and says it will assess “whether we are using our current trading relationships with these partners to best effect.”
PEM covers the 27 EU member states, as well as dozens of other countries in the region ranging from Turkey, Morocco and Syria to Serbia, Moldova and Ukraine.
The agreement is not a customs union, and the U.K. would still retain an independent trade policy and set its own tariffs and quotas.
But it would mean businesses such as car manufacturers sourcing parts of their products from other PEM countries would face less red tape.
Rules of origin
Under international trade rules, products can only benefit from the low tariffs in free trade agreements if they are actually made in the countries that are party to the agreement.
