UK automotive sector urges EU to protect €80bn trade relationship
The Society of Motor Manufacturers (SMMT) has called on the EU to amend its proposed Industrial Accelerator Act (IAA) to “keep the UK automotive sector as a trusted partner that ‘makes in Europe’.” Giving equivalent treatment to British-made vehicles, parts, and batteries across all automotive-related provisions of the IAA will maintain a “long-nurtured, mutually beneficial trading relationship creating economic growth and jobs, supporting industrial transformation, and driving decarbonisation,” it said.
This comes as the trade body meets with representatives in Brussels to “highlight the strategic importance of UK automotive to the wider European industry and economy” during “intense global competition and geopolitical uncertainty.” Excluding British manufacturers from the ‘Made in Europe’ policy would harm both UK and EU auto manufacturing capability, the SMMT said, adding that it would disrupt supply chain resilience and undermine the objectives of the IAA.
According to the SMMT, the over 40-year-old EU-UK automotive partnership is valued €80 billion annually, with the UK being the EU’s largest export market for passenger cars and vice versa, worth €39.7 billion to EU manufacturers. The EU also sells €9.1 billion worth of automotive components annually, more than any other global market.
The ‘Made in Europe’ policy, as drafted, “threatens this valuable trade by excluding UK automotive products from incentives afforded to EU-based manufacturers,” the SMMT has warned, “notably incentives connected to the greening of corporate fleets, which account for around 60% of the EU new car market, and CO2 super credits.”
“Such a move would damage EV trade at a pivotal stage in the European transition to greener mobility, undermining investment and further compromising industry’s ability to meet regulatory requirements,” it said.
It is calling on the EU to include the UK under its ‘Made in Europe’ framework to ensure that UK-built vehicles and components “are considered equivalent to EU content across all aspects of the IAA,” adding that it should also consider applying similar treatment to other like-minded trade partners.”
“Rather than creating new trade barriers, both sides should build on last year’s Strategic Partnership to deepen industrial cooperation, increase supply chain resilience and strengthen trading relations,” the SMMT said.
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