UK needs deal with SA — Ford
Britain needs to strike post-Brexit trade deals with countries such as Turkey and SA as well as the EU, car maker Ford says.
Britain needs to strike post Brexit trade deals with countries such as Turkey and SA as well as the EU, car maker Ford says, underlining the scale of the challenge facing UK Prime Minister Theresa May.
Ford, Britain’s biggest maker of automotive engines, operates two manufacturing sites in Britain and, like other companies, has warned that any trade restrictions after the country left the EU could add to costs and endanger British production.
All Ford’s Ranger pick-up trucks sold in Britain are made in SA, reflecting the interconnected supply and sales chain made easy by EU trade deals with other countries, which Britain will now need to renegotiate as it leaves the bloc.
Ford sends UK-built engines to Turkey, where it assembles its range of Transit vans and then exports many completed vehicles to Britain, benefiting from the barrier-free trade guaranteed by the EU’s customs deal with Turkey.
“For Ford, it’s not only important for the UK’s agreement with the 27 [remaining EU] countries but equally important are countries like Turkey and SA, which hasn’t really been talked about,” Ford of Europe CEO Jim Farley told a conference in London on Wednesday.
The company’s British-built engines face tariffs of up to 2.7%, while vehicle imports could be hit by tariffs of up to 10% if Britain has to fall back on World Trade Organisation rules.
Farley suggested it would be hard for politicians to complete a full Brexit deal by March 2019, the end of a two-year period set out in EU legislation, and there needed to be time to adjust to the new terms. “There should be a transition period. That transition period is really critical for the future of our investments in the UK,” he said.
May has singled out the resurgent car industry as a key sector she wishes to back.
The government promised Nissan extra support to counter any Brexit-induced loss of competitiveness, according to a source, and the firm discussed with Britain’s business minister how to boost the uptake of electric cars, according to documents seen by Reuters.
Ford suggested it could also seek government support to maintain the benefits of tarifffree trade.
“We are spending a lot of time thinking and talking about how we need to change our operations and what support we need from the government and other entities — not only in the UK — to make sure [trade] friction doesn’t get created,” Farley said.