UK automotive sector welcomes post-Brexit trade deals

Published:  04 January, 2021

After years of anguish over the prospect of trade tariffs being imposed on car parts being imported from the EU once the UK’s reached the end of the post-Brexit transition period, the UK automotive sector was finally able to breathe a sigh of relief  at the end of 2020, as a post-Brexit trade deal with the EU was finally negotiated and struck just before Christmas.

In the long run-up to the 31 December deadline, the SMMT had issued a number of  stark warnings on the potential impact on the sector if the UK had ended up in a no-deal scenario on WTO terms. The organisation had recently estimated that tariffs could cost carmakers in the UK and Europe £96 billion, on top of an additional £87billion hit resulting from COVID-19.

Agreement was reached on Christmas Eve, with both sides signing the deal. This was then ratified by Parliament in the UK just before New Year’s Eve, with the majority of MPs backing the arrangement.

SMMT Chief Executive Mike Hawes observed: “We welcome the agreement of a new EU-UK trading agreement, which provides a platform for our future relationship. We await the details to ensure this deal works for all automotive goods and technologies, including specifics on rules of origin and future regulatory co-operation.

“A phase-in period is critical to help businesses on both sides adapt and efforts should now be sustained to ensure seamless implementation, with tariff-free trade fully accessible and effective for all from day one.

“We will continue to work closely with government to ensure all companies are as prepared as possible in the limited time left.”

Commenting on the deal Sue Robinson, Chief Executive of the NFDA said: “It is positive that the UK Government has reached a Brexit deal with the EU that avoids tariffs on vehicles and vehicle parts. As an industry, we now have further clarity, which will enable greater investment into the sector and support consumer confidence.”

She added: “Over the coming weeks, we will be looking at the details of the agreement to understand the full implications for our members.”

Meanwhile, the UK continued to secure international trade deals beyond Europe, including with Turkey, which is a major UK market for the vehicle sector. Ford sends UK-made Transit van components to the country, and is responsible for 10% of all trade between Turkey and Britain.

Commenting on this deal. Mike Hawes said:  We welcome the agreement between Turkey and the UK to extend preferential trading terms beyond 31 December. We now await the full text of the deal to assess the impact on our future relationship given the UK will now be outside of the customs union which has delivered trade benefits between the two countries.

“Imports and exports of vehicles, engines, parts and components between our two countries contribute hundreds of millions of pounds to the economy, so it is crucial that this deal provides continuity, preserving as much as possible our current relationship.”

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