The latest round of negotiations over the terms of Britain’s departure from the EU began in earnest this week. Europe’s leaders have been clear that sufficient headway must be made on exit terms before talks on future trade can begin, so UK business will hope for swift and sure progress.
To that end, it is pleasing to see both the Prime Minister and the Chancellor meeting with industry groups this week. Commentators are beginning to see business as increasingly influential in any future agreement – as well they should. Business operations are often determined by EU rules and many firms are also well versed in the minutiae of trading within the EU and without.
Yesterday Theresa May’s new business advisory group met for the first time to discuss concerns around the UK’s withdrawal. Meanwhile, Phillip Hammond, speaking to the CBI on Monday, noted that Brexit is just one in a series of issues facing Europe and the Eurozone and called on businesses to stress the need for agreement on key issues to their continental colleagues and partners.
The truth is that those operating within global and European supply chains see the necessity of a deal most clearly. Therein much of the trouble could lie – the flow of goods across Britain and Europe will need to be maintained while clarity over regulation and continued participation in existing EU trade deals with key international markets must be assured. Yet more reason automotive must be considered a priority sector throughout the Brexit process.
SMMT continues to reiterate its priorities for Brexit and to advise government on the complex rules and regulations with which the motor industry must comply. More information on the industry position is available on our website at www.smmt.co.uk/brexit.
Britain’s trade with Europe will not cease. It’s competitveness, however, will be threatened. UK companies’ expertise and quality products will continue to attract global customers but the cost of those products and services is harder to forecast.
Soure: Mike Hawes, SMMT Chief Executive
The government must secure a transitional Brexit deal to protect the future of the UK car industry, a trade group has said.
The Society of Motor Manufacturers and Traders (SMMT) said Britain was highly unlikely to reach a final agreement with the EU by the March 2019 deadline.
That meant carmakers could face a “cliff edge”, whereby tariff-free trade was sharply pulled away.
It warned the industry would suffer without a back-up plan in place.
The EU is by far the UK’s biggest automotive export market, buying more than half of its finished vehicles – four times as many as the next biggest market.
UK car plants also depend heavily on the free movement of components to and from the continent.
The SMMT said any new relationship with the EU would need to address tariff and non-tariff barriers, regulatory and labour issues, “all of which will take time to negotiate”.
“We accept that we are leaving the European Union,” said chief executive Mike Hawes.
“But our biggest fear is that, in two years’ time, we fall off a cliff edge – no deal, outside the single market and customs union and trading on inferior World Trade Organization terms.
“This would undermine our competitiveness and our ability to attract the investment that is critical to future growth.”
He called on the government to seek an interim arrangement, whereby the UK stayed in the single market and customs union until a new relationship was brokered.
UK car manufacturing generated £77.5bn of turnover last year and accounted for 12% of all goods exports, according to the trade group.
It added that almost a million people were employed across the wider automotive industry.
Source: BBC News
SMMT has released a statement today, Tuesday 17 January 2017, in response to Prime Minister Theresa May’s speech on Brexit.
Mike Hawes, SMMT Chief Executive, said,
The recognition by the Prime Minister of the importance of single market arrangements for the automotive sector is critical. We need government to deliver a deal which includes participation in the customs union to help safeguard EU trade, trade that is tariff-free and avoids the non-tariff and regulatory barriers that would jeopardise investment, growth and consumer choice. Achieving this will not be easy and we must, at all costs, avoid a cliff-edge and reversion to WTO tariffs, which would threaten the viability of the industry.
In December 2016 SMMT hosted a roundtable discussion chaired by David Davis, Secretary of State for Exiting the European Union, on the future for the UK automotive sector following Brexit. The event took place at SMMT’s headquarters in London and was also attended by John Hayes, Minster of State, Department for Transport and Nick Hurd, Minister of State, Department for Business, Energy and Industrial Strategy. You can read more about the discussion here.