At the SMMT’s International Summit held on Tuesday 20th June, the UK automotive industry called on government to seek an interim arrangement with the EU that would maintain membership of the single market and customs union until a final agreement on a new relationship with the EU is negotiated and implemented.
The sector accepts that the UK will leave the EU and fully supports a bespoke and comprehensive agreement on a new relationship with the EU. However, a final agreement would be hugely complex and it does not believe such a comprehensive agreement can be reached by March 2019 – just over 20 months’ time. Without agreed interim arrangements, businesses would be faced with the ‘cliff edge’ and forced to trade under the World Trade Organisation rules – the worst foreseeable outcome for the sector, its employees and the British economy.
Speaking as the sector announced its annual performance figures, SMMT said it was time to be pragmatic about what can be achieved in the time available and what the consequences would be if the UK left without a deal. The UK and EU automotive sectors are highly integrated and any new relationship will need to address tariff and non-tariff barriers, regulatory and labour issues, all of which will take time to negotiate.
The UK automotive industry has always maintained the importance of the EU to its prosperity. The EU is by far the UK’s biggest automotive export market, taking over half our finished vehicles, four times as many as our next biggest market. The sector already exports to over 160 different global markets and has a consistent approach to free trade. It needs that trade to be tariff-free, as frictionless as possible to support the ‘just in time’ manufacturing process and with consistent regulation.