Europe threat over British components
● EU rules could hit hard ● 82,000 jobs under threat
Bad Brexit deal could see EU warn against using Uk-built parts
THE UK’S car industry is facing further post-brexit uncertainty, following warnings from Europe against using British-built parts.
The Dutch Government’s newly announced Brexit Impact Scan service asks businesses: “Do you want to be less dependent on the British market? Consider focusing your activities on other countries.”
Dutch authorities advise that “after Brexit, parts made in the UK will no longer count towards minimum production in the European Union”.
Goods made in the European Union can pass across EU countries without facing tariffs, as long as a proportion of their components – typically around 55 per cent – have been made within the EU. If the UK leaves without favourable trading arrangements, EU car companies using UK parts could push their products under that 55 per cent, removing their ability to trade them freely within the EU.
The European Commission has previously said that businesses should “treat any United Kingdom inputs as ‘non-originating’ when determining the EU preferential origin of their goods” after Brexit. At present, the UK employs 82,000 people in the automotive supply chain sector, with 65 per cent of all British-built components shipped to the EU. The sector itself is worth around £4.9billion, according to the Society of Motor Manufacturers and Traders (SMMT).
The SMMT has already warned that if the UK were to fall under World Trade Organisation trade rules, where imports and exports are hurt by tariffs, prices of cars imported from the EU could go up on average by £1,500. SMMT chief executive Mike Hawes has long voiced support for the automotive industry to maintain free access to the Single Market.
Hawes has previously said that Europe is “fundamental to the current and future success of the UK automotive industry”.
“EU car companies could stop using UK parts to avoid tariffs, if the UK doesn’t get a favourable trade deal”