Brexit

Brexit blow to car industry as EU rejects crucial UK plan to avoid export tariffs

The EU wants to prevent the UK being an offshore assembly hub – as it seeks to woo manufacturers across the Channel (PA)
The EU wants to prevent the UK being an offshore assembly hub – as it seeks to woo manufacturers across the Channel (PA)

Brexit has delivered another blow to the struggling UK car industry after the EU rejected a crucial UK plan to avoid tariffs on exports.

Ministers had asked for parts brought in from Japan, South Korea or Turkey to be treated as British, to qualify under strict rules-of-origin if a trade agreement is struck.

But, in a letter to car bosses, Britain’s chief Brexit negotiator has admitted he has failed to persuade the EU to accept the proposal – and “obviously cannot insist on it”.

It means exports now face tariffs unless the majority of their value originates from the UK or EU. Typically, the figure is only 44 per cent for a car assembled in this country.

The EU rejected the idea because it saw the UK

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No-deal Brexit and Covid threaten ‘double whammy’ for car industry

UK and European carmakers have warned a no-deal Brexit could put a £100bn dent in the region’s car industry in the next five years, adding to heavy losses already caused by Covid-19.

A letter signed by 23 trade groups across Europe urges the government to make a deal rather than default to World Trade Organization (WTO) rules.

It says without one, there will be a “catastrophic” rise in tariffs.

A government spokesperson said it was “working hard” to reach an agreement.

The industry has already taken a £90bn hit this year because of Covid-19, the SMMT added.

The UK left the European Union on 31 January, but will enjoy tariff-free trade with the bloc until the end of the year as part of the transition period.

But fears are growing that both sides will be unable to strike a longer-term trade deal by then.

The European Automobile Manufacturers Association (ACEA),

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