Europe threat over Bri­tish com­po­nents

● EU rules could hit hard ● 82,000 jobs un­der threat

Auto Express - - CONTENTS - Hu­go_­grif­fiths@den­nis.co.uk @hu­go_­grif­fiths Hugo Grif­fiths

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”

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