CEO Update

Fresh momentum needed to unlock the UK-EU trade negotiations

17 July 2020 #CEO Update

Parliament heads into recess next week with the UK-EU trade negotiations ongoing and the clock ticking down towards 31 December and the end of the transition period. While uncertainty generated by the coronavirus pandemic continues to be a major challenge for the sector, there is a distinct lack of clarity on the UK’s future economic relationship with its closest and biggest trading partner, the EU.

Securing a comprehensive trade deal that delivers zero tariffs and quotas from day one and creates a new framework for regulatory cooperation and dialogue is imperative for this critical sector’s future competitiveness and success. We recognise we will be leaving the Single Market and Customs Union and this will change the trading relationship and customs requirements fundamentally. The publication this week of 200+ page Government guidance on this, as well as the beginnings of a business information campaign, is helpful but we still hope to see the agreement of deep and comprehensive cooperation on customs to minimise disruption at the border.

The automotive industry has seen its resources severely depleted, first by no-deal Brexit contingency planning last year and now by the coronavirus crisis – it cannot afford any further damage caused by the UK and EU not concluding a Free Trade Agreement before the end of 2020. We need to see some progress in the negotiations and a clear and accommodating timeframe for business to implement the details.

Meanwhile, SMMT continues to call for government to take sector-specific action to help the sector restart and recover from the crisis at hand, supporting employers and jobs whilst driving the UK towards economic recovery. While some measures such as the Coronavirus Job Retention Scheme have provided welcome help for many automotive businesses, access to liquidity remains a huge challenge. That’s why a package of measures such as business rate holidays, tax cuts and policies to boost consumer confidence will be fundamental to helping automotive businesses get back on their feet and delivering for the economy once again.

The effect of the pandemic on the sector will be the focus of our next SMMT Covid-19 support webinar. Taking place on Thursday 30 July at 15:00, we will provide both production and market outlooks for 2020. You can sign up for your free place here.