Motor Vehicles: Manufacturing Industries

(asked on 22nd March 2019) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment the Government has made of the potential effect of a 10 percent tariff on UK-produced cars exported to the EU on the (a) automotive supply chain and (b) steel industry.


Answered by
 Portrait
Claire Perry
This question was answered on 27th March 2019

We expect that the EU’s most favoured nation (MFN) tariff regime would apply to UK exports to the EU in the event of the UK leaving the EU without a deal. There is no indication that the EU would modify its MFN regime as a result of our exit. Consistent with WTO rules, the EU must apply tariffs equally to imports from all countries where there is not a trade agreement or any other preferential arrangement in place. In the event of no deal, this includes the UK.

Both the UK and the EU share a strong commercial interest in preserving the integrated supply chains of the automotive and steel sectors. As set out in the Political Declaration, the UK and the EU have agreed on a free trade area for goods. This will combine deep regulatory and customs cooperation with no tariffs and no quotas, underpinned by provisions ensuring open and fair competition. We will need to agree the balance as part of the future negotiations. The Political Declaration is clear about the UK’s and the EU’s wish to be as ambitious as possible.

BEIS Ministers and officials regularly engage with the automotive industry, including bilaterals with manufacturers, interactions via trade associations, and through BEIS’s participation in the Automotive Council. This insight supports policy development within BEIS and work with other Departments. The automotive sector is a key consumer of UK steel therefore, any reduction in demand from the automotive sector would have an impact on UK steel producers. BEIS is working closely with steel producers to assess the impacts of EU Exit on their businesses, including their interaction with customers in the automotive industry. These conversations are commercially sensitive.

Reticulating Splines