The UK car industry has been assured that the deal offered to Nissan - which would eliminate any tariffs imposed on the companies' exports to Europe - will be offered to all car manufacturers, according to business secretary Greg Clark.
Talking on the BBC’s Andrew Marr Show, Clark said: “It is my job to provide the assurances to Nissan and others that Britain is going to continue to be a great place to invest. I was able to do that and this [Nissan’s continuing investment] was the result that we saw.
“One of the assurances I was able to give is that our intention, our negotiating remit when it comes to the discussions with our European partners is to have a constructive and civilised dialogue to look for the common interest here.
The government’s promises, which were made earlier this month to the UK’s largest producer of cars, Nissan, prompted the firm to continue investment in its Sunderland plant. Nissan boss Carlos Ghosn had previously warned at the Paris motor show that a so-called ‘hard Brexit’ could cause the car giant to reconsider its future investment in Sunderland, saying "If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government."
“Our objective would be to ensure that we have a continued access to the markets in Europe and vice versa, without tariffs and without bureaucratic impediments. That is how we will approach the negotiations. It is important to manufacturing they get the minimum or no tariffs and no impediments,” Clark added.
In the wake of the UK’s vote to leave the European Union, there were fears that large automotive businesses, such as Nissan and Vauxhall, would pull out of the UK. Several manufacturers have already raised their prices since the vote because the value of the pound has fluctuated.
Both car production and car registrations have yet to be affected by the vote, according to statistics from the SMMT, but industry figureheads are still warning that the damage may not yet have come into play. A smaller UK manufacturer, MG, has already ceased assembly in the UK for this reason, although it represents a very small percentage of overall production.
Mike Hawes, SMMT CEO, said: “We’re greatly encouraged by the Secretary of State's comments and those made by the Prime Minister last week. It is important that the Government makes it a priority to safeguard the competitiveness of this important and globally successful sector as we leave the EU. This means maintaining a competitive business environment, ensuring talent can be recruited from abroad and securing the benefits we currently enjoy in the single market - including tariff free trade unhindered by any customs bureaucracy."
After Nissan boss Ghosn’s talk with Theresa May, which he described as "positive and productive", Ghosn said the government "will continue to ensure the UK remains a competitive place to do business", but did not clarify exactly what was said.
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most people do not understand the tariffs
It is straight forward in that the Uk imports way more than exports so if there is any backstabbing from the Eu simply put massive 30% tariff on importers and utilize some of this to subsidise the exporters whom likewise would have to pay large tariffs to the Eu on exports.So the whole thing would be a fools errand with the Eu on the losing side i.m.h.o.
Ski Kid, you are correct in
Tariffs
I think Ms May has simply assured Mr Ghosn that there will be no tariffs placed on the imports of these component parts, thereby keeping them at the same price for Nissan to buy as they are now. This will mean that Nissan will be able to produce a car for the same price (taking fluctuations in currency and costs of production out of the equation) as they do now. As others have observed she has no way of assuring Nissan or anyone else about what tariffs might be imposed on cars being exported as these are to be decided when the negotiations begin.
I think even the assurances that have been given are risky though, because trade and tariff deals are generally reciprocal. Therefore, if the UK decide that Nissan can import its component parts tariff free, they are making the assumption that the EU and non-EU states are not going to impose tariffs on component parts made in Britain and exported for use in their vehicles. The boys and girls in Brussels might take this as another affront by the UK govt and harden their stance further.
Tariffs
Good point as well about the messaging this sends to other EU states. What would be nice would be to get all of the trade agreements sorted, and then let parliament make a decision... ;)
The Remainer still crying.
Re: The remainder still crying
My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.
The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.
If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.
Re: The remainder still crying
My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.
The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.
If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.
Re: The remainder still crying
My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.
The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.
If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.
Re: The remainder still crying
My comment is just regarding the government statement which seems to be irrelevant, as I can't think of a scenario where a government would want to impose export tariffs? All that achieves is making your own exports less competitive, which is obviously not desirable.
The fact is that if we leave the EU the UK government has no control over any import tariffs that another country may decide to impose, other than we impose our own tariffs on imports of their goods. However, tariff wars like this are generally a bad thing and to be avoided as they just end up distorting the market and hurting industry.
If countries in Europe decide to start imposing import tariffs on UK car exports, making them less competitive in their main market, then the manufacturers are either going to want subsidies/grants to stay (so effectively UK taxpayers are subsidising the car industries of other countries) or they'll move manufacturing to mainland Europe to remain competitive.