News Brexit: Businesses warned to not use British made car parts

Discussion in 'Business News & Resources' started by Cody, Jun 6, 2018.

  1. Cody

    Cody

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    Businesses across Europe are being warned to not use British made car parts and components, due to a decision taken by Prime Minister Theresa May, which has been declared by many online as a "threat to the British car industry".

    The Dutch government has issued a warning to exporters that if a large proportion of their products contain British made parts, then they may end up losing free trade access under existing deals.

    The advice given said: "Brexit will have consequences for exports outside the EU.

    "After Brexit, parts made in the UK no longer count towards this minimum production in the European Union."

    In order to qualify for any EU free trade deals - in reference to what is known as 'rules of origin' and 'local content' - at least 55% of a product's components must come from an EU country, and although the UK is part of Europe, once we leave the European Customs Union, this will no longer be applicable.

    What puts this into a deeper perspective is the actual figures being much less, compared to what the UK government are saying.

    Mike Hawes, chief of the Society of Motor Manufacturers, spoke to Sky News, stating the real figures: "to be able to take advantage of a free trade deal generally you need to say that the majority of the components that go into your products come from that country.

    "So if you look at automotive you'd have to say that at least 55% of a UK car comes from UK products but we're totally integrated into a European industry.

    "That real figure in the UK is really more like 25% because whilst we buy just under half our components from a UK supplier they in turn buy it from a range of suppliers in the UK and beyond so the actual figure is more like 25%.

    In order to come to this conclusion of 25%, Mike Hawes said we need to take into account 'originating content' which focuses on where a particular good actually originates from and or produced entirely, meaning in the UK's instance, the actual number is 20-25%.
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