The Society of Motor Manufacturers and Traders (SMMT) has warned that with time running out for a trade deal with Europe ‘the only deadline that matters is 31 December 2020’.
In an update posted on its website this weekend, CEO Mike Hawes wrote a candid piece about his ‘grave concern’ but hopes that a trade deal will be struck before the deadline.
He wrote: ‘The increasingly bleak signals emanating from the UK-EU trade negotiations, with talks now extending into the weekend, are of grave concern.
‘Time has nearly run out but, even at this eleventh hour, we remain hopeful that a trade deal will be struck between the two parties. Ultimately, the only deadline that matters is 31 December 2020.’
His message to businesses is to be prepared for whatever outcome.
He warned: ‘Make no mistake, these are extremely worrying times.
‘As the end of 2020 draws ever nearer, and with it a new trading reality for all of us irrespective of a deal or not, business preparedness is more important than ever.’
The SMMT and its members have been lobbying for a favourable trade deal since the split from Europe was first announced ⎼ one that would allow automotive businesses to continue to import and export freely.
However, as the deadline approaches fast it seems the industry could be hit hard and the SMMT have said they will be on hand for business preparing for either outcome over the festive period.
Hawes said: ‘A ‘no deal’ scenario reached despite all the assurances, the warnings, the rhetoric and negotiations running for more than four years, would be damning.
‘The resulting tariffs would put our manufacturers at a disadvantage when exporting to our biggest and closest markets, raising prices for consumers and making the UK less competitive, both as a market and producer.’
He praised the government for deals already done with Switzerland, Singapore and Vietnam but warned that ‘vital gaps remain’.
With no trade deal with Turkey or Mexico yet, he said: ‘We currently enjoy reciprocal tariff-free trade in finished vehicles, engines and parts, worth hundreds of millions of pounds every year.
‘From 1 January 2021, that tariff exemption will be lost with the cost of trade increasing to uncompetitive levels.’
The UK and EU negotiations continue this weekend, with hopes some movement will be made before the weekend deadline, although the government has warned a deal now seems unlikely.