Britain and America have begun implementing parts of their automotive trade agreement

The Society of Motor Manufacturers and Traders (SMMT) in the UK has welcomed the implementation of a significant trade deal with the United States and Canada's announcement to ratify the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Mike Hawes, the chief executive of the SMMT, described the deal as a notable achievement, emphasizing the importance of diversifying export markets for the automotive industry. He called for more open rules of origin at the SMMT summit, and urged the government to turn its strategy into action to ensure the UK remains competitive.

Under the terms of the US trade deal, reached in May, vehicle import tariffs from the UK have been reduced from 25% to 10%, with a 100,000-vehicle annual cap. However, there is still confusion over rules of origin for vehicles and parts, particularly with the tariffs of 25% still on steel and aluminium.

The CPTPP, a free trade agreement with 11 other countries including Canada, Mexico, Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam, will safeguard jobs and economic growth and provide a platform for future growth based on "an unequivocal commitment to free and fair trade, the avoidance of tariffs on all automotive products, enhanced customs cooperation, and regulatory partnership".

Canada has announced its intention to ratify the UK's accession to the CPTPP, which, once ratified, will allow the UK to trade with Canada and Mexico under the agreement. Hawes awaits details on how the deal will be administered.

Hawes also emphasized the need for renewed investment in battery production, localisation, and shared supply chains. He called for the government to avoid tariffs and build a closer relationship and deeper understanding of what makes the UK competitive.

The reduction of US tariffs on steel and aluminium imports from the UK is a positive step, but with the current tariff on these imports still at 50%, there is a need to further reduce these tariffs to ensure a level playing field.

In conclusion, the UK automotive industry welcomes the trade deals with the US and CPTPP, and looks forward to the opportunities they will bring, while continuing to advocate for open rules of origin, reduced tariffs, and increased investment in the sector.