Why securing trade deals is vital for automotive
As another week of trade talks between the UK and EU ended, the automotive industry is no nearer to knowing whether a comprehensive Free Trade Agreement will be in place by the end of the Transition Period on 31 December. Likewise, negotiations on a new trading relationship between the UK and US are still ongoing with media reporting a deal is now unlikely ahead of the presidential election this year.
Of course, the coronavirus pandemic has caused unprecedented damage across the world, and carrying out complex trade talks via video conference is no substitute for meeting face-to-face. However, free and fair trade has been a key pillar of the UK automotive sector’s success for decades. Any new tariff or non-tariff barriers when trading with our priority markets will represent a major threat to our future competitiveness.
More than 1 million, or 80%, of all the cars we made last year were shipped overseas, with the majority heading into the EU (54.8%), followed by the USA (18.9%) and China (5.3%). It’s a similar picture with the more than 2.5 million engines and 78,000 commercial vehicles produced in Britain in 2019, most being exported to global markets.
While the top priority is to secure an FTA with the EU, the UK has an ambitious trade agenda with a number of countries and the US and Japan are amongst the most important. In addition to new agreements it is critical that the existing preferential agreements from which the UK benefits as a result of its previous membership of the EU, are replicated, especially those with Canada, Mexico and Turkey.
Securing new overseas opportunities for UK businesses has been the theme for a series of recent SMMT international webinars, which have included, Korea, Morocco and South Africa. On Wednesday 29 July, at 10:00, SMMT will be carrying out the next in the series which will focus on India.
Hosted by SMMT and the Department for International Trade, guest speakers from the Automotive Component Manufacturers Association of India will provide an update on the Indian market, impact of Covid-19 and partnership opportunities. You are able to register for this event here.