𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The UK could be set to join a Europe-wide trading agreement with the European Union, the Business and Trade Secretary, Jonathan Reynolds has suggested.

Joining the Pan-Euro-Mediterranean Convention (PEM) would not cross Labour’s Brexit “red lines”, said Mr Reynolds, leaving the party free to make the move.

Earlier this week, Maros Sefcovic, the EU’s trade chief, also said that the UK becoming a member of the PEM was “something we could consider”.

These comments have not dampened Conservative Party fears that the Government plans to unpick Boris Johnson’s Brexit deal, with Sir Keir Starmer making improving ties with the EU one of his top priorities.

Downing Street previously ducked questions about entering the agreement and said the Government would not provide a “running commentary” on specific options for its “reset” in relations with Brussels.

However, at the World Economic Forum in Davos, Switzerland, this week, Mr Reynolds was noticeably warmer on the subject, welcoming Mr Sefcovic’s “incredibly positive and helpful contribution.”

The PEM allows for tariff-free trade of goods across Europe and some North African and Levantine nations. Some business groups have backed joining PEM as it would help to maintain complex supply chains.

As part of the Brexit deal, the UK already has tariff-free trade with the EU – but the PEM also includes regulations on the origin of materials used in manufacturing that would smooth disruption to supply caused by Brexit.

Any sign of the UK forming closer bonds with the bloc could also raise red flags for newly inaugurated Donald Trump, a long-time critic, who this week said at the WEF that while he “loves Europe”, the EU is riddled with tax and bureaucracy issues.

Asked if he was ruling out the UK joining the PEM, Mr Reynolds told the BBC: “That was an incredibly positive and helpful contribution from commissioner Sefcovic.

“I had a conversation with him today, a bilateral meeting in the jargon here, and I thanked him for that.”

He said that he believes that the terms of trade with the EU can be improved “in a way which doesn’t revisit customs unions or single markets or the arguments of Brexit,” while also pursuing closer trade links with the rest of the world.

“I call it the twin-track strategy, the best of everything. I think we have seen a very positive response here in Davos to that,” Mr Reynolds added.

Asked if joining the PEM would cross Labour’s Brexit red lines, Mr Reynolds said: “No it doesn’t. It is not a customs union.”

In its general election manifesto, Labour pledged to “reset” the UK-EU relationship, with Sir Keir Starmer promising to put the relationship on a “more solid, stable footing”.

The Tories, meanwhile, have accused Labour of bending the knee to the EU”.