With just 15 weeks before the Brexit transition period expires, trade organisations representing automotive firms across Europe have joined forces to call on the EU and UK to urgently secure a free trade agreement (FTA).

According to the group of 23 different associations – which includes the European Automobile Manufacturers Association (ACEA) and the UK industry’s trade body the Society of Motor Manufacturers and Traders (SMMT) – failure to secure a free trade deal would cost the pan-European automotive sector some €110 billion in lost trade over the next five years, putting jobs at risk in a sector that supports 14.6 million livelihoods.
Without a deal in place by 31 December, both sides would be forced to trade under so-called World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks.
“The stakes are high for the EU auto industry,” said ACEA director general Eric-Mark Huitema, “we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”
Before the coronavirus crisis hit, EU and UK production of motor vehicles was running at 18.5 million units a year. This year some 3.6 million units have already been lost across the sector due to the pandemic. New calculations suggest that, for cars and vans alone, a reduction in demand resulting from a 10% WTO tariff could wipe some three million units from EU and UK factory output over the next five years, with losses worth €52.8 billion to UK plants and €57.7 billion to those based across the EU. Suppliers would also suffer from these changes.
The group argues that any deal should include zero tariffs and quotas, appropriate rules of origin for both internal combustion engine and alternatively fuelled vehicles, plus components and powertrains, and a framework to avoid regulatory divergence.
It also stresses the need for detailed information about the agreed trading conditions organisations will face from 1 January 2021. This, it claims, combined with targeted support and an appropriate a phase-in period that allows for greater use of foreign materials for a limited period of time, will ensure businesses are able to cope with the end of the transition period.
Mike Hawes, chief executive of the SMMT said, ” The shock of tariffs and other trade barriers would compound the damage already dealt by a global pandemic and recession, putting businesses and livelihoods at risk. Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late.”
Whether you agree with Brexit or not, the fact is that there is no way that the UK can have a ‘free trade deal’ without signing up/agreeing to the EUs trade rules. This would almost certainly imply ‘freedom of movement’, environmental standards and overarching control of the European courts. For the EU to agree to anything else would negatively impact other member states.
I can see no way out of this impasse – Theresa May’s ‘agreement’ indicated exactly what the EU was prepared to agree.
In three months time we will be crashing out with no deal and subject to WTO rules, regardless of what Bozo and his clowns at Westminster would like us to believe. (Hope I’m wrong !)
Another Steve, you could well be wrong. His way out of an impasse is to do a U-turn. Expect this once the realization that the EU are not going to respond to the bluff-calling sets in. (Hope I’m right!)
You are not wrong. The populace was sold on an Oven Ready Deal with a free meal heated by the popular press. The truth is that the chickens come home to roost in mid November 2020. Have a look at “Labour Costs in Manfacturing” from Institut der Deutschen Wirtschaft
I think that he is using the Donald Trump methods of just saying no. I believe that previously one was told that “No-deal is better than a bad deal”. The EU were screwing the UK when the governments had no majority: this has now altered and hopefully the deal will be better than was possible during last year’s shambolic parliamentary sessions.