15 weeks to save the industry from “€110 billion ‘no deal’ Brexit disaster” say industry organisations

Published:  14 September, 2020

There are just 15 weeks left to save the UK and EU automotive sectors from is being called a “€110 billion ‘no deal’ Brexit disaster” by the SMMT and 23 other European industry organisations.

The automotive industry organisations, have today (Monday 14 September) united to call for an urgent agreement of a free trade deal between the UK and the EU, with the end of the Brexit transition period now just 15 weeks away.

According to new calculations, a no deal outcome at the end of the year 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, representing one in 15 of EU and UK jobs.

Lead organisations representing parts vehicle and vehicle makers across the EU, including the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), along with 21 national associations, including the SMMT German Association of the Automotive Industry (VDA),  Comité des Constructeurs Français d'Automobiles (CCFA) and La Plateforme automobile (PFA), are warning that the sector could face this severe outcome without a deal.

Without a deal in place by 31 December, both sides would be required to trade under World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks. Automotive suppliers and their products will be affected by tariffs.

The industry is calling for negotiators to secure a deal urgently that delivers zero tariffs, modern rules of origin and avoids different regulations across the channel.   SMMT Chief Executive Mike Hawes said: "These figures paint a bleak picture of the devastation that would follow a 'no deal' Brexit. 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."

ACEA Director General Eric-Mark Huitema  observed: "The stakes are high for the EU auto industry – 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."   CLEPA Secretary General Sigrid de Vries  added: "A 'no deal' Brexit would disrupt the integrated automotive supply chain and hit industry at a critical moment. The impact will be felt far beyond the bilateral trade streams alone, translating into a loss of jobs and investment capacity. The automotive sector is the EU's largest private R&D investor with €60 billion invested each year. We need a deal that maintains the sector's global competitiveness."   VDA President Hildegard Müller concluded: "The automotive industry needs stable and reliable framework conditions. It would be to the great disadvantage of both sides if the UK withdrawal were to end with the application of tariffs in mutual trade. This would jeopardise closely linked value chains and possibly make them unprofitable. Our member companies have more than 100 production sites in the United Kingdom. We hope that the EU and the UK will continue their close partnership - with a comprehensive free trade agreement."

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