The EU's new trade chief said the EU could consider including the UK in a pan-European trade agreement, but stressed that "the ball is in the UK's court".

While Britain's Labor government has ruled out a return to the single market and customs union after Brexit, the possibility of joining a continent-wide deal could open the door to closer cooperation with the EU and boost much-needed economic growth.

Maroš Šefčovič, the EU's head of post-Brexit negotiations, told the BBC that allowing the UK to join the Pan-European Convention for the Mediterranean (PEM) was "something we could consider".

PEM is an agreement originally struck in 2012 that allows the duty-free movement of goods across borders. Members include the European Union as well as some North African countries, Switzerland, Norway, Georgia and Ukraine.

Some businesses support Britain joining PEM, saying it could help their complex supply chains, reduce red tape and improve trade.

The UK’s food and farming industry is likely to benefit from this move. "We have to have the same rules and we have to upgrade them at the same time, what we call dynamic adjustment," Šefkovic said in a speech at the World Economic Forum meeting in Davos, Switzerland.

Trade and Economic Security Commissioner Šefcovic admitted the idea had not been "precisely formulated" but said "the ball is in the UK's court", putting pressure on Keir Starmer to negotiate closer trade Relationships make decisions. with the EU.

Starmer's government hopes to "reset" relations with Brussels after coming to power last year.

The previous Conservative government ruled out PEM membership, but Labor ministers have reportedly begun consulting businesses on the benefits of joining, according to the BBC.

Šefkovic, who took up the trade chief role at the end of last year, said Britain's relationship with the EU was "definitely" in a better place and that his British counterpart Nick Thomas-Symonds, who is responsible for EU relations, was on "speed dial".

Asked about Šefkovich's suggestion on BBC Radio 4's Today programme, housing secretary Matthew Pennycook said the UK government was "not seeking to be involved in this particular arrangement".

"Overall, the government has been very clear ... that we do want closer relationships with our European partners in terms of trade, but also importantly in terms of security and defense cooperation," he said.

But he added: "As to this particular arrangement, no, we are not currently seeking to participate."

Labor MP Stella Creeasy, who is also chair of the party's affiliated campaign group European Labor Movement, backed the potential deal. “The red tape brought about by Brexit is hitting British businesses in many ways – joining the PEM will help reduce the paperwork associated with rules of origin requirements, which is why we have long believed that the UK should prioritize Brexit, As a way of undoing the damage of Brexit on trade, the EU has done that,” she said.

Speaking in London earlier this month, Lib Dem leader Ed Davey said a customs union with the EU would be "the most important thing we can do to boost our economy in the medium to long term" . He also believes that closer ties with the EU on trade and defense could help Britain "fend off Trump" against a second term as the US president.