The automotive sector is a key driver of growth and prosperity across the UK, and a thriving and diverse sector will help propel the country towards a successful post-Brexit future based on international trade, productivity, research, development, digital innovation, and a rebalanced economy across all regions.
Given the integrated nature of UK automotive manufacturing and the critical importance of preferential access to the EU market to investment in the sector and its competitiveness, it is essential that government successfully negotiate an ambitious and comprehensive trade deal with the EU. This is the sector’s foremost priority and it stands ready to assist government in achieving this.
UK automotive has the following priorities for the UK/EU trade agreement:
Tariffs and rules of origin – The UK and the EU should agree a deal that guarantees tariff free trade in automotive. The UK and EU should negotiate a standalone rules of origin chapter and protocol that takes into account the uniquely integrated nature of UK/EU trade and goes beyond existing precedent. A phase-in period of up to nine years should be agreed to provide all manufacturers and suppliers with sufficient time to adapt systems, process and contracts to the new trading relationship, and complete their current model cycles. During this period, exceptionally simple rules of origin should apply.
Regulatory Provisions – The UK and EU should agree a new framework for regulatory cooperation and dialogue in relation to automotive. This should start from a position of complete alignment, recognising that the UK and EU currently share the same rules, and be supported by a robust governance framework. In addition, the significant cost of additional testing should be avoided by the UK choosing to align with EU technical regulations and seeking mutual recognition for its type approval framework.
Customs – The UK and EU should agree to the most comprehensive and deepest level of cooperation in relation to customs, with the objective of minimising delays and disruption on both sides of the border.
People – The UK and EU should agree provisions that ensure that vehicle manufacturers and suppliers can move staff between sites in the UK and the EU without any unnecessary restriction, delay or cost.
Third Country Trade – The UK should ensure that preferential trade with third countries continues without any disruption after a deal with the EU is agreed. Priority should be given to securing trade deals with Turkey and Japan, alongside those with Mexico, Canada, and other major preferential automotive partners.