On behalf of the UK fashion and textile industry, UKFT has been urging the government to join the Pan-Euro-Mediterranean Convention (PEM) since Brexit. We have consistently highlighted the benefits of PEM membership to every Secretary of State at the Department for Business and Trade (DBT) and every Prime Minister since the UK’s departure from the EU. Our industry stands to gain significantly from the harmonised rules of origin that PEM offers and now is the time to act.

What is the PEM Convention?

The PEM agreement harmonises rules of origin across 25 countries in Europe, North Africa and the Mediterranean, including Turkey and Morocco. Established in 2012, its core purpose is to enable goods containing components from multiple member countries to be treated as a single product for export, often without tariffs.

If the UK joined PEM, it could count imports from these countries under rules of origin requirements when exporting to the EU. This would make it easier for UK exports to enter the EU market tariff-free, providing a much-needed boost to the UK fashion and textile industry.

The impact on the UK fashion and textile industry

The benefits of PEM membership extend across the industry. For UK textile manufacturers, access to PEM would enhance competitiveness by making it viable for manufacturers in PEM countries, such as Morocco, to source fabric from the UK. Currently, UK textile and fabric producers are losing out because EU and PEM manufacturers prefer to buy from within PEM, where goods can move freely without additional charges.

A clear example of this is the UK-Morocco supply chain. If the UK were part of the PEM agreement, garments made in Morocco using UK fabric could enter the EU without tariffs. However, because the UK is not in PEM, the EU does not recognise UK-Morocco supply chains under the same preferential conditions. As a result, tariffs of up to 12% are added when goods reach the EU, making UK products less competitive.

Benefits for UK textiles

One UK textile manufacturer estimated that joining PEM could save them £12 million annually. However, the increased cost of using near-shore manufacturing post-Brexit has led to significant offshoring of their production, reducing their UK capacity by nearly 50%.

Benefits for UK retailers

For UK retailers, PEM membership would mean access to near-shore manufacturing at the same competitive rates as EU rivals. Joining PEM would provide better access to the garment manufacturing capabilities of Morocco and Tunisia, countries whose production capacity has expanded significantly in recent years due to large European retailers using North Africa as a key manufacturing hub. Many of these retailers already take advantage of PEM for their EU operations and they would welcome a reduction in the current divergence of trading arrangements.

A simple yet impactful solution

Joining PEM would be a straightforward process for the UK, requiring no alignment of rules and regulations. This move would deliver a substantial boost to the UK fashion and textile industry, which is currently grappling with a range of post-Brexit challenges. We are urging the government to take this golden opportunity to enhance the competitiveness of UK businesses, support local manufacturing and create a more level playing field for exporters.

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