Industry unites behind ‘no-deal’ warning

The European automotive industry has jointly urged the UK and EU to agree a free trade agreement or risk about €110bn in lost trade in the next five years.

Industry leaders from across the continent, including the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), along with 21 national associations such as the Society of Motor Manufacturers and Traders (SMMT) and the German Association of the Automotive Industry (VDA), have urged negotiators to agree a deal or risk devastating losses in profits, production and jobs on both sides of the channel.

Eric-Mark Huitema, ACEA director general, said: “The stakes are high for the EU auto industry – we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”

Sigrid de Vries, CLEPA secretary general, said: “A ‘no deal’ Brexit would disrupt the integrated automotive supply chain and hit industry at a critical moment. The impact will be felt far beyond the bilateral trade streams alone, translating into a loss of jobs and investment capacity. The automotive sector is the EU’s largest private R&D investor with €60bn invested each year. We need a deal that maintains the sector’s global competitiveness.”

Mike Hawes, SMMT chief executive, said, ”These figures paint a bleak picture of the devastation that would follow a ‘no deal’ Brexit. The shock of tariffs and other trade barriers would compound the damage already dealt by a global pandemic and recession, putting businesses and livelihoods at risk. Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late.”

Hildegard Müller, president of VDA, said: “The automotive industry needs stable and reliable framework conditions. It would be to the great disadvantage of both sides if the UK withdrawal were to end with the application of tariffs in mutual trade. This would jeopardise closely linked value chains and possibly make them unprofitable. Our member companies have more than 100 production sites in the United Kingdom. We hope that the EU and the UK will continue their close partnership – with a comprehensive free trade agreement.”

Thierry COGNET, president of CCFA, said: “A ‘no deal’ situation on 1 January 2021 would be particularly challenging for manufacturers. What we need from negotiators, in an economic context already very affected by the COVID crisis, is a substantial deal protecting us from tariffs, quotas and regulatory divergence.”