Car manufacturers in the UK are facing the threat of higher export tariffs whether or not there’s a Brexit deal.
The European Commission has thrown out proposals that components from Japan and Turkey that are used on vehicle production lines here should be considered British.
Lord Frost – Britain’s chief Brexit negotiator – has sent a letter to the car industry telling it of the EC’s decision.
The BBC, which has seen the letter, says it also has a separate draft legal text in which the UK asked for the manufacturing of goods such as electric cars and batteries to count as British, even if most of the components were imported.
Both documents are said to refer to the need for UK manufacturers, even if there is a deal, to ensure that goods sent from the UK are British-made and have a certain amount of British parts, believed to be about half.
An anticipated deal is expected to allow any components obtained from EU countries to count as British, which is known as ‘cumulation’.
But it’s reported that the letter from Lord Frost says the EU has denied the request to extend cumulation to include other partners of the UK and EU, including Turkey and Japan.
According to the BBC, the letter said: ‘The commission has made clear that it will not agree third-country cumulation in any circumstances, which we regret, but obviously cannot insist upon.
‘I am sorry to say that so far they (EU negotiators) have neither been willing to discuss these nor share any proposed text with us.’