Boris Johnson looking to 'protect' UK-based car manufacturers from Brexit
UK-based carmakers, including Nissan and Jaguar Land Rover, won’t face a regulatory cliff-edge that damages their competitiveness in European markets at the end of 2020, according to British Prime Minister Boris Johnson’s government.
Nadhim Zahawi, a business minister, said he’s "confident" British negotiators will be able to broker a deal with the EU which ensures no tariffs or quotas on car parts and keeps just-in-time supply chains running when the 11-month Brexit transition period is due to expire at the end of the year.
Opposition politicians have warned Britain faces a no-deal divorce on December 31, disrupting trade and damaging the economy, if Mr Johnson fails to negotiate a free trade deal by then.
EU leaders have said there isn’t time to broker a full agreement under the prime minister’s schedule for ending the transition, during which trading rules will largely be unchanged.
"Those who are fighting the old battles of Leave/Remain still have this binary view of the world of 'oh my goodness, if we can’t get a deal there is going to be a cliff-edge' - I don’t believe that is true," Mr Zahawi said.
"The heads of terms agreed by the UK and the EU say there are no tariffs, no quotas, and that is what we are going to strive for. And that, I believe, we will be able to deliver."
The UK motor industry suffered a series of setbacks in 2019 as production slumped and manufacturers idled plants to cope with three Brexit deadlines that came and went.
Jaguar Land Rover announced thousands of job cuts; Honda said it will close its only British factory in 2021 and Nissan scrapped plans to build the X-Trail sports utility vehicle in Sunderland. Meanwhile PSA Group has suggested its Vauxhall factory in England’s Ellesmere Port is in jeopardy if Brexit affects profitability.
Ruling out tariffs and quotas will eliminate the bulk of paperwork, according to Mr Zahawi. "The rest then becomes about the actual quality of the product and that already works for manufacturers around the world that are selling into the EU," he said.
Components have to be made so that they satisfy British standards in the future as well as satisfying European standards. It is not incompatible.
UK Chancellor of the Exchequer Sajid Javid warned business leaders, in an interview last weekend, they’ll need to adjust to new rules after Brexit because the UK won’t align with European regulations.
But, Mr Zahawi suggested the UK is unlikely to diverge too much.
