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UK motor industry needs interim EU deal to safeguard future

Tuesday 20 June 2017, By Autovolo

UK motor industry needs interim EU deal to safeguard future

UK motor industry needs interim EU deal to safeguard future

Today the UK automotive industry called on the government to make sure it seals an interim agreement with the EU to maintain the single market until a full agreement can be made.

Industry body the Society of Motor Manufacturers and Traders (SMMT) said that although it accepts the UK’s decision to leave the EU, a final agreement probably can’t be reached by March 2019. This could leave businesses with a potential ‘cliff edge’ if they’re forced to trade under World Trade Organisation (WTO) rules.

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.”

One manufacturer that has a large manufacturing force here is Honda, which builds the new Civic in Swindon. Speaking of the SMMT’s calls for government safeguarding, Ian Howells, senior vice president for Honda Motor Europe, said: “Honda remains committed over the long term to its sales and manufacturing activities in the UK and Europe.

“My request would be for the UK government to do all it can to seek a deal that will promote free and frictionless trade between the UK and the EU, while ensuring the continued competitiveness of the small and medium sized businesses that make up our supply chain.”