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Gasgoo News According to foreign media reports, on December 24, a few days before the end of the Brexit transition period, the UK and the EU reached a Brexit trade deal, with automakers welcoming the trade deal.
(Image Source: SMMT)
The deal will help the UK achieve a true Brexit and avoid the embarrassing situation of a no-deal Brexit at the end of the Brexit transition period.
The European Automobile Manufacturers Association (ACEA) said the deal will allow the auto industry to avoid the “catastrophic effects” of a disorderly Brexit. ACEA CEO Eric-Mark Huitem said in a statement: “A no-deal Brexit will have a devastating impact on the EU auto industry.”
The agreement stipulates that after December 31, there will be no tariffs or quotas for trade in goods between the UK and the EU, but this does not apply to the service industry (80% of the UK economy) or to the financial industry.
After the 2016 Brexit referendum, car manufacturers’ operations in the UK have faced uncertainty and the agreement between the two parties will put an end to this situation. Car companies such as Nissan, Toyota and Honda have warned that they will pull out of the UK if post-Brexit trade barriers make the UK business unprofitable, and these car companies account for about half of total car production. from United Kingdom.
“Rules of origin”
To achieve duty-free trade between the UK and the EU, companies will need to provide documents to prove the origin of their products. Products are only eligible for zero tariff treatment if they contain a sufficient quantity of ingredients or parts manufactured in the UK or the EU.
According to the British Guardian, the British side persuaded the EU that if EU raw materials and processed products are produced in the UK, they should be counted as British products when exported to the EU market. Therefore, according to the agreement, the duties will only apply if more than 40% of the value of the pre-finished products is not produced in the UK or other EU countries. However, for countries like Japan and Turkey where the UK and the EU have trade agreements, the UK has failed to classify parts and components from these countries as British goods.
ACEA stated that it cannot fully evaluate the deal until all the details are announced. “Only then will it be clear whether this agreement fully respects the interests of the EU automakers and the supply chain.”
But the agency also said that there are still big challenges ahead, because new customs procedures will be implemented on January 1 next year and trade barriers will seriously affect merchandise trade. The United Kingdom and the European Union have an annual import and export trade worth 54 billion euros, around 3 million cars and almost 14 billion euros in the auto parts trade.
Ford of Europe President Stuart Rowley said this agreement provides stability to the automotive industry that is transitioning to new technologies. Rowley said in an emailed statement: “It is now important to understand the specific rules of origin that will be adopted and maximize flexibility as the company adapts to the new business environment and strive to create a smooth transition period.”
The British Automobile Manufacturers and Dealers Association (SMMT) has called for a readiness phase to allow companies to adapt to the new regulations. SMMT CEO Mike Hawes said in a statement: “We are awaiting the details of the deal to ensure the deal is beneficial to all automotive products and technologies, including details of rules of origin and oversight of future cooperation. “.
The European Parts Suppliers Association (CLEPA) stated that this agreement allows parts manufacturers to avoid the worst, but added that this still represents many trade barriers in the future. Sigrid de Vries, CLEPA secretary general, said that with only one week left before the deal is implemented, trade and customs authorities will need to prepare day and night for the new business environment.Return to Sohu to see more
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