UK AU­TO­MO­TIVE CALLS FOR ‘BUSI­NESS AS USUAL’

IN­TERIM AR­RANGE­MENTS TO AVOID THE CLIFF EDGE

The Oban Times - - Motors -

UK GOV­ERN­MENT must se­cure in­terim ar­range­ments to safe­guard fu­ture of UK mo­tor in­dus­try and avoid a cliff edge. In­dus­try body be­lieves a fi­nal agree­ment on a new re­la­tion­ship with the EU that ben­e­fits the UK au­to­mo­tive in­dus­try will not be achieved by March 2019. UK must main­tain sin­gle mar­ket and cus­toms union mem­ber­ship un­til a fi­nal agree­ment on a new re­la­tion­ship with the EU has been agreed and im­ple­mented.

Tues­day June 20: The UK au­to­mo­tive in­dus­try has to­day called on the gov­ern­ment to seek an in­terim ar­range­ment with the EU that would main­tain mem­ber­ship of the sin­gle mar­ket and cus­toms union un­til a fi­nal agree­ment on a new re­la­tion­ship with the EU is ne­go­ti­ated and im­ple­mented.

The sec­tor ac­cepts that the UK will leave the EU and fully sup­ports a be­spoke and com­pre­hen­sive agree­ment on a new re­la­tion­ship with the EU. How­ever, a fi­nal agree­ment would be hugely com­plex and it does not be­lieve such a com­pre­hen­sive agree­ment can be reached by March 2019 – just over 20 months away. With­out agreed in­terim ar­range­ments, busi­nesses would be faced with the ‘cliff edge’ and forced to trade un­der the World Trade Or­gan­i­sa­tion rules – the worst fore­see­able out­come for the sec­tor, its em­ploy­ees and the Bri­tish econ­omy.

Speak­ing to­day as the sec­tor an­nounced its an­nual per­for­mance fig­ures, the So­ci­ety of Mo­tor Man­u­fac­tur­ers and Traders (SMMT) said it was time to be prag­matic about what can be achieved in the time avail­able and what the con­se­quences would be if the UK left with­out a deal. The UK and EU au­to­mo­tive sec­tors are highly in­te­grated and any new re­la­tion­ship will need to ad­dress tar­iff and non-tar­iff bar­ri­ers, reg­u­la­tory and labour is­sues, all of which will take time to ne­go­ti­ate.

Mike Hawes, SMMT chief ex­ec­u­tive, said: ‘ We ac­cept that we are leav­ing the Euro­pean Union and we share the de­sire for that de­par­ture to be a suc­cess. But our big­gest fear is that, in two years, we fall off a cliff edge – no deal, out­side the sin­gle mar­ket and cus­toms union, and trad­ing on in­fe­rior WTO terms. This would un­der­mine our com­pet­i­tive­ness and our abil­ity to at­tract the in­vest­ment that is crit­i­cal to fu­ture growth.

‘That’s why we have to be hon­est with our­selves. If the UK can­not se­cure – and im­ple­ment – a be­spoke and com­pre­hen­sive new re­la­tion­ship with the EU in two years, we need a back-up plan. Hav­ing looked at all the al­ter­na­tives, we need gov­ern­ment to seek an in­terim ar­range­ment whereby we stay within the sin­gle mar­ket and cus­toms union un­til that new re­la­tion­ship is im­ple­mented.’

The UK au­to­mo­tive in­dus­try has al­ways main­tained the im­por­tance of the EU to its pros­per­ity. The EU is by far the UK’s big­gest au­to­mo­tive ex­port mar­ket, tak­ing over half our fin­ished ve­hi­cles, four times as many as our next big­gest mar­ket. The sec­tor al­ready ex­ports to more than 160 dif­fer­ent global mar­kets and has a con­sis­tent ap­proach to free trade. It needs that trade to be tar­iff­free, as fric­tion­less as pos­si­ble to sup­port the ‘just in time’ man­u­fac­tur­ing process and with con­sis­tent reg­u­la­tion.

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