British ministers are considering joining the EU's trading arrangements with neighboring countries as part of post-Brexit "reset" talks that formally begin this year, with Brussels confirming it will be open to the idea.

Maroš Šefčovič, the EU trade chief in charge of negotiations with Britain, said on Thursday that "we could consider creating a pan-European (customs) area" as part of talks between London and Brussels.

In an interview with the BBC, Šefkovic raised the idea of ​​Britain joining the pan-European Mediterranean Convention, a customs agreement between the EU and 20 countries, including several in the Middle East and the Balkans, all of which Enjoy the same "rules of origin". ".

UK Trade Secretary Douglas Alexander told MPs this week about the possibility of Britain joining PEM: "We are willing to consider it. We want to take a pragmatic view of where the national interest lies."

However, officials said discussions within the government on the idea were at an early stage. Alexander told the House of Commons Business and Trade Committee: "There are some stakeholders who believe this will be detrimental to certain business sectors in the UK."

Rules of origin in trade agreements require exporters to prove that their products are entirely locally manufactured (usually around 45%) to qualify for duty-free access to the market.

Under the EU-UK Trade and Cooperation Agreement, the UK and the EU have agreed on a set of rules of origin. But joining the PEM will enable British companies to use inputs from these countries in their supply chains so that they can export goods to the EU duty-free.

However, joining a PEM will not eliminate other red tape such as veterinary certificates, licenses and some compliance documents.

Asked about this idea on the BBC today Housing Minister Matthew Pennycook said: “We are not currently seeking to participate in this particular arrangement.”

The idea of ​​Britain joining PEM has been promoted by Labor MP Stella Creeasy. “The red tape that comes with Brexit is having a lot of impact on British businesses,” she said.

“Joining the PEM will help reduce the paperwork associated with rules of origin requirements, which is why we have long argued that the UK should prioritize joining the PEM as a way of undoing the damage to trade caused by Brexit.”

Trade association British Chambers of Commerce said the government should consider rejoining the convention as it "could provide additional flexibility to businesses trading with the EU".

"The UK should propose rejoining the pan-European Mediterranean Convention to provide manufacturers with greater accrual of rules of origin," the group said in its 2023 trade manifesto, which is based in part on survey data from members.

Industry insiders also said the government has been consulting on whether some departments would benefit from joining PEM, but added that no decision had been made yet and Whitehall still needed to conduct a quantitative analysis of the pros and cons.

Since the Trade and Cooperation Agreement was signed, the EU has indicated that it would be open to the UK joining PEM if London did not decide to rejoin a full-fledged customs union.