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Trade associations representing the interests of the automotive
industry in Europe have joined forces to call for action to prevent
the UK leaving the European Union (EU) without a deal on 31
October. The statement was published on the website of the European
Automobile Manufacturers' Association (Association des
Constructeurs Européens d'Automobiles: ACEA), and has the backing
of the European Association of Automotive Suppliers (CLEPA) and 21
national associations, many of which have voiced their concerns
about the impact that it would have on the industry across the
region.
For the automotive industry in the EU - which ACEA points out
produces 19.1 million vehicles and employs 13.8 million people - a
no-deal Brexit would be highly disruptive. ACEA has again
underlined many of the issues that it would face due to the change
in trading conditions, with billions of euros of tariffs, which
could reach EUR5.7 billion for cars and light commercial vehicles
(LCVs) under World Trade Organization (WTO) rules to the trade bill
between the two markets. This would result in price increases if
OEMs cannot absorb costs. Furthermore, the additional border checks
will hit the just-in-time operating model, with the cost of one
minute of production stoppage in the UK alone said to amount to
EUR54,700. It also notes that production in the UK will no longer
benefit from being party to EU trade agreements and preferential
arrangements with some 30 countries, including Turkey, South
Africa, Canada, Japan and South Korea, while content from UK
suppliers would no longer contribute to EU originating content for
the purposes of rules of origin. This will potentially make it
harder for European manufacturers to access the preferential terms
of agreed EU trade deals. On a wider scale, the UK's departure also
highlights that it would immediately make the EU market smaller,
and potentially less attractive to international trade
partners.
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