A cross-party committee of lawmakers in Britain has urged the UK government to adopt a ‘pragmatic’ approach in its negotiations with the EU over the terms of Brexit and warned that there are ‘no advantages to be gained from Brexit for the auto industry for the foreseeable future’. It also said the negotiations are an ‘exercise in damage limitation’.
The Business, Energy and Industrial Strategy (BEIS) Committee called for the UK government to keep the closest possible relationship with the existing EU regulatory and trading framework to give UK volume car manufacturing a ‘realistic chance of survival’ post-Brexit.
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In a report published on ‘The impact of Brexit on the automotive sector’, the BEIS Committee said a no-deal puts hundreds of thousands of UK jobs at risk and threatens hundreds of millions of pounds of inward investment. The Society of Motor Manufacturers and Traders (SMMT) has estimated the introduction of trade barriers would result in a GBP4.5bn drop in exports.
The report finds that non-tariff barriers, in the form of border delays and increased bureaucracy, would also impact on UK competitiveness and it recommends the UK government places a high premium in its Brexit negotiations on securing ‘frictionless trade’ for the automotive sector.
Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee, said: “The car industry is one of the UK’s great manufacturing successes. Innovative and efficient car plants across the country provide thousands of jobs and the automotive sector is a major contributor to our economic growth. There is no credible argument to suggest there are advantages to be gained from Brexit for the UK car industry.
“Regulatory consistency and friction-free trade benefits car companies, consumers and car workers. The Prime Minister now needs to ensure commonsense pragmatism prevails and spell out the government’s intention to seek continued regulatory and trading alignment with the EU in the automotive sector.”
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By GlobalDataThe report takes a look at potential opportunities arising from Brexit but finds it ‘unrealistic to expect an expansion of trade overseas to outweigh the loss of trade to Europe arising from a hard Brexit’.
The report also states that any new bilateral trade deals secured by the UK government are unlikely to lead directly to a significant increase in investment and jobs in the UK automotive sector. The committee finds that retaining good access to the single market is more important than securing the freedom to secure new trade deals with third countries.
On the issue of the future regulatory regime, the report does not identify any potential benefits from divergence from the EU, only costs. The report recommends the UK government seeks in the negotiations to preserve existing arrangements for the certification of vehicles throughout the EU, either as part of a ‘Mutual Recognition Agreement’ or an alternative arrangement. To maximise trade opportunities with the EU – the UK’s biggest trading partner – and to provide certainty to global manufacturers, the UK government should also aim to retain regulatory alignment with the EU regulatory framework for the short to medium term, the report says.
See also:
UK to ‘align auto regs with EU’ after Brexit – minister
UK car manufacturing stable in January
Toyota confirms next gen Auris for UK plant
