New Brexit trade deal will ‘address immediate concerns’ for UK car industry

Brexit: President of AA explains post-Brexit driving rules

The Society for Motor Manufacturers and Traders (SMMT) said the new arrangement will ensure automotive companies benefit from tariff-free trade with the largest market. The SMMT said the deal delivers across several key areas for automotive companies which would limit the damage for firms.

They said the deal delivers on the “core ask” to avoid tariffs for completed vehicles, parts and components.

The SMMT has been vocal in its campaign for an arrangement between the two sides having previously warned a no-deal would be “catastrophic for the automotive sector”.

SMMT chief executive Mike Hawes said Brexit was a case of “damage limitation” but confirmed the Prime Minister’s EU treaty did deliver on a range of their key concerns.

He said: “For automotive, Brexit has always been about damage limitation, and the draft Trade Cooperation Agreement (TCA), while no substitute for the completely free and frictionless trade with Europe we formerly enjoyed, will address immediate concerns.

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

“The TCA provides the opportunity for tariff and quota-free trade, foundations on which the industry can build.

“Even with immediate ratification, however, there will be just hours to adjust to new trading rules, so a phase-in period is critical to help businesses adapt.”

In the event of a no-deal exit, trade between the UK and EU would have reverted to the World Trade Organisation (WTO) terms.

This would have seen 10 percent tariffs issued on vehicle trade with many firms previously suggesting this would be passed onto customers when they purchased their models.

DON’T MISS
Classic cars are ‘at risk’ of damage in second lockdown [COMMENT]
Future classic cars which could be worth thousands within years [PICS]
Classic car values rise by £20,000 in the last decade [ANALYSIS]

These charges are now likely to be avoided which the SMMT claimed will help protect jobs in the industry.

However, the SMMT warned the deal does not deliver on cumulation with trading partners such as Japan, South Korea and Turkey while still offering “technical barriers to trade”.

They said the arrangement will lead to “increased administration” and the possibility of friction at the border as the UK leaves the single market.

The SMMT warned the automotive industry was worth up to 10 percent of the country’s GDP with every £1 generated by the sector contributing £3 to the UK economy.

Data from the SMMT revealed more than 1.2 million cars were manufactured in the UK last year including almost 350,000 from Sunderland’s Nissan factory.

They have pushed the government to introduce additional “phase-ins” for administrative requirements with just one day left to adjust to the new rules.

The SMMT said developing future engagement with the EU was an essential next step for UK international trade.

Mr Hawes added: “Further ahead, we must pursue the wider trade opportunities that Brexit is supposed to deliver while accelerating the UK’s transition to electrified vehicle manufacturing.

“With the deal in place, government must double down on its commitment to a green industrial revolution, create an investment climate that delivers battery gigafactory capacity in the UK, supports supply chain transition and maintains free-flowing trade – all essential to the UK Automotive sector’s future success.”

The deal has also been backed by the Finance and Leasing Association who also plays a pivotal role in the UK automotive industry.

They said: “As always in trade talks, the devil is in the detail but we appear to have a deal that will enable UK goods to be sold without tariffs or quotas in the EU market.

“That bodes well for business confidence, leading to renewed investment and lending as we enter 2021 and begin the long economic recovery from the covid impact.”

Source: Read Full Article