UK Automotive calls for interim Brexit arrangements

The UK automotive industry has 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” the automotive industry association the Society of Motor Manufacturers and Traders (SMMT)  wrote in a statement published 20 June 2017.

The news comes in parallel with the industry’s annual performance figures, the 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.

Mike Hawes, SMMT chief executive, said: “We accept that we are leaving the European Union and we share the desire for that departure to be a success. But our biggest fear is that, in two years’ time, we fall off a cliff edge – no deal, outside the single market and customs union and trading on inferior WTO terms. This would undermine our competitiveness and our ability to attract the investment that is critical to future growth.”

“That’s why we have to be honest with ourselves. If the UK cannot secure – and implement – a bespoke and comprehensive new relationship with the EU in two years’ time, we need a back-up plan. Having looked at all the alternatives, we need government to seek an interim arrangement whereby we stay within the single market and customs union until that new relationship is implemented.”

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