U.K., EU car makers call for ‘urgent agreement’ on free trade deal

BRUSSELS—A grouping of 24 European automotive associations have called for an “urgent agreement” on a free trade deal between the European Union and the United Kingdom, just 15 weeks before the end of a Brexit transition period.

The U.K. exited the EU in January, with a one-year transition period to work out a trade deal between the two sides.

Without a deal in place by Dec. 31, both sides will be forced to trade under so-called World Trade Organization non-preferential rules, including a 10 percent tariff on cars and up to 22 percent on vans and trucks.

In a Sept. 14 joint statement, the organizations said new calculations showed that enforcing WTO tariffs would impact the production of 3 million EU and U.K.-built vehicles over the next five years.

No deal Brexit, the statement said, would mean combined EU-U.K. trade losses worth up to $130 billion to 2025, with losses worth $62.6 billion to U.K. plants and $68.4 billion to those based across the EU.

Automotive suppliers will also be impacted by the charges, the statement added.

“Negotiators on both sides must now pull out all the stops to avoid ‘no deal’ at the end of the transition, which… (will put) jobs at risk in a sector that supports 14.6 million livelihoods,” the statement said.

A no-deal Brexit, the organizations warned, will be a “second devastating hit” on top of around $118.5 billion worth of production lost so far this year due to the coronavirus crisis.

Before the COVID-19 pandemic, production of motor vehicles in the EU and the U.K. was running at 18.5 million units a year.

This year, some 3.6 million units have been lost across the sector due to the pandemic.

Collectively, the EU27 and U.K. automotive sector is responsible for 20 percent of global motor vehicle production and spends some $72 billion on innovation per year, making it Europe’s largest R&D investor.

The European Automobile Manufacturers Association, the European Association of Automotive Suppliers , the U.K.’s Society of Motor Manufacturers and Traders and the German Association of the Automotive Industry were some of the leading signatories of the statement.

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