Written submission from The Society of Motor Manufacturers and Traders (EUT0053)

 

The Society of Motor Manufacturers and Traders’ (SMMT) Written Submission to the House of Commons Business and Trade Committee Inquiry on UK Trade with the EU

Written evidence submission dated 22 May 2026

Introduction

  1. The Society of Motor Manufacturers and Traders (SMMT) is one of the largest trade associations in the UK, representing the full UK automotive industry at home and globally. SMMT members cover the journey of almost every type of vehicle from cradle to grave, from component design and manufacture, through to vehicle production, maintenance and end-of life. 
  2. The automotive industry is a vital part of the UK economy, integral to growth, the delivery of net zero and the UK as a global trade hub. It contributes £92 billion turnover and £25 billion value added to the UK economy and invested £5 billion in R&D, with 183,000 people employed directly in manufacturing and some 796,000 in total across the wider automotive industry. Many of these automotive manufacturing jobs are outside London and the South-East, with wages that are 8% higher than the UK average. The sector accounts for 13.4% of total UK exports of goods with more than 140 countries importing UK produced vehicles, generating £108 billion of trade in total automotive imports and exports. 
  3. The UK manufactures almost every type of vehicle – cars, vans, taxis, trucks, buses and coaches, as well as specialist and off-highway vehicles – and is supported by more than 2,500 component providers and some of the world's most skilled engineers. In addition, the sector has vibrant aftermarket and remanufacturing industries. The automotive industry also supports jobs in other key sectors, including advertising, chemicals, finance, logistics and steel.

UK-EU Automotive Trading Relationship

  1. More than five years after the entry into force of the UK-EU Trade and Cooperation Agreement (TCA) and ten years after the UK’s EU membership referendum, the UK and EU automotive sectors remain deeply interdependent and mutually beneficial.
  2. Europe’s automotive future depends on open, resilient supply chains — and the EU-UK partnership remains one of the strongest and most integrated in the world. EU-UK automotive trade is worth around £70bn a year – trade that underpins investment decisions across plants and suppliers. Keeping this trade flowing supports growth, productivity and the transition to zero-emission mobility in this nationally significant strategic sector, as identified by both the UK’s Modern Industrial Strategy and the EU’s equivalent frameworks.
  3. The EU is by far the UK’s largest export market for cars, accounting for 56.7% of exports in 2025 (2nd USA, 15%; 3rd China, 6.3%). Likewise, the UK is the EU’s number one automotive trading partner and the largest export market for EU-built vehicles. UK demand directly supports production volume and jobs across the EU. Last year, the UK imported over 1.2 million new passenger cars from the EU, representing 61.6% of all new car registrations, almost eight times the number of new car registrations of UK origin.
  4. UK consumers are already helping drive Europe’s electric vehicle (EV) transition: EU brands captured 61.6% of the UK electric car market in 2025. That demand is critical for EU-made EVs, batteries, and the wider European supply base.
  5. The UK is the EU’s largest importer of automotive components in the world, ahead of the US and China. In 2025, imports of EU-made typical parts into the UK were worth over £6.9 billion, with Germany (£2.4 billion), the Netherlands (£760 million) and Italy (£704 million) the lead markets. On the other hand, exports of UK typical parts to the EU were worth more than £2.4 billion. This helps support resilient and diverse supply chains and builds the necessary economies of scale and competitiveness across European advanced manufacturing to support volume automotive production.
  6. Despite the unequivocal interdependence of our respective automotive industries, the UK-EU automotive partnership is facing the most significant threats since the end of Brexit negotiations. The sector is undergoing a complex transformation to meet the twin challenge of the green and digital transition amid fierce competition from new entrants, the rapid rise of lower cost markets, and ever-growing international trade and geopolitical tensions. A joint response to these challenges would be the most obvious solution. Instead, the sector runs a tangible risk of seeing market distortive measures and highly disruptive tariffs introduced in a few months (from 1 January 2027), with our thriving automotive partnership at stake.
  7. Against this background, potential discussions on enhanced regulatory cooperation remain of significant importance for the industry. However, these should be grounded on the need to safeguard reciprocal benefits and a level playing field, as set out in the TCA. 
  8. In view of the importance of the UK-EU relationship to automotive and the unprecedented scale of upcoming policy challenges, the SMMT sets out its response to the committee’s questions below.

Q.1 - Wider Context & the UK-EU Reset (so far)

  1. The first EU-UK Summit in May 2025 set an ambitious negotiating agenda and rebuilt a positive dialogue. The UK automotive industry has warmly welcomed this initiative as an important pillar in enhancing bilateral relations. In particular, one of the key merits of holding a summit per year is the political incentive to deliver and implement visible outcomes to better our bilateral cooperation and set future ambition.
  2. Following last year’s agreement on a “Common Understanding”, areas of interest for automotive in ongoing negotiations include linking emission trading schemes (ETS), waiving carbon border adjustment mechanism (CBAM) formalities, reducing potential delays at the border due to sanitary and phytosanitary checks (SPS), and reducing costs through collaboration on energy. However, key areas of interest for automotive remain outside the current scope of the Summit’s negotiating agenda and require urgent attention.
  3. The future course of the automotive sector in Europe largely depends on how the EU and UK decision makers will address major time critical bilateral challenges in the coming months. Specifically, the potential introduction of local content requirements through the implementation of the EU Automotive Package[1] and of the Industrial Accelerator Act (IAA)[2], as well as the looming threat of tariffs on bilateral trade of plug-in hybrid (PHEVs) and pure battery electric vehicles (BEVs) can lead to potentially devastating impacts on both sides of the Channel.
  4. These issues must be addressed at the most senior political level as a top priority in bilateral discussions. A credible bilateral consensus on the future development of EU-UK automotive trade and industrial relations is more urgent than ever, as existing structures do not provide much needed long-term certainty to investors, domestic manufacturers, and importers alike.
  5. Such consensus must be based on the shared objective of building a strong regional supply chain for electrified vehicles and the need to safeguard a level playing field. The parties must ensure that EU and UK automotive operators can continue to compete on the same footing in our respective markets, avoid unreasonable tariffs and safeguard an orderly automotive market in Northern Ireland.
  6. The upcoming Summit could be a unique – possibly, the last – opportunity to finally inject legal certainty on the future development of the most significant automotive relationship of the whole European continent at this pivotal moment in the transition to future mobility. For this opportunity to materialise and for both parties to reap the economic and social benefits, significant political capital must be spent now to address ‘Made in Europe’ and TCA rules of origin issues.

Addressing ‘Made in Europe’

  1. In response to growing industrial and geopolitical challenges, the European Commission proposed a package of measures to support the EU automotive sector in December 2025. All the key measures of the Automotive Package included European preference or local content requirements, notably:
    1. for flexibility to meet CO2 emissions targets through a “CO2 Super credit” for small EU-made electric cars.
    2. for public financing support for EU-made zero or low emission vehicles for corporate car and van fleets.
    3. for EU battery and component production.
    4. the creation of a new vehicle type to promote a small affordable EU electric car.
  2. These proposals are currently being discussed by the European Parliament and Council and so are subject to change. For example, some argue that “CO2 Super credits” should apply to all EU-made battery electric vehicles, not just small EU-made affordable electric cars. Others would like to extend to plug-in hybrids as well.
  3. The European Commission articulated its proposal on local content requirements through the publication of its “Industrial Accelerator Act” (IAA) on 4 March 2026, adding public procurement to the list of automotive-related areas covered by EU-preference provisions.
  4. While seeking to shield EU manufacturers from unfair competition, the IAA risks making the thriving EU-UK automotive trading relationship its primary victim. UK-based manufacturers would be seriously impacted, with over half of all UK car exports and almost the entirety of UK van exports directed to the other side of the Channel. The measures would result in major damages to EU manufacturers too – in particular, EU suppliers servicing British car manufacturers would expect to see a dramatic decline in exports should UK production volumes suffer a significant impact due to their exclusion from ‘Made in Europe’ policies.
  5. Overall, the IAA introduces a mechanism for the inclusion of EU preferential trading partners under certain conditions of reciprocity in public procurement and public subsidy schemes for many critical sectors. If applied to automotive, this element of reciprocity would perfectly suit our industry, as no country in the world better meets these criteria than the UK, with more than 60% of new car registrations of EU origin and almost 90% of the UK’s electric car grants awarded to EU-assembled BEVs. However, the IAA has a specific regime for the automotive sector which is far more restrictive compared to the one applied to other critical sectors.
  6. For automotive, the Commission proposal creates an uneven playing field, with UK automotive products put at a systemic disadvantage in the EU automotive market. The Commission’s drafting is open to interpretation and no legal clarification of certain key passages necessary to understand the measures proposed by the regulation has been made available to date.

 

  1. In particular, the proposal sets an additional requirement to assemble low and zero carbon vehicles “within the Union” in order to qualify as ‘Made in Europe’. If approved without modifications, the SMMT’s interpretation is that all UK-assembled PHEVs and BEVs will be put at a systemic disadvantage for the purposes of all types of EU incentives (corporate fleets and other public support schemes), CO2 “super credits” for small zero emission vehicles and for public procurement purposes. In principle, this could affect access to the entire EU market in the future by rendering UK vehicles uncompetitive in our largest export market.

 

  1. While, in principle, UK-assembled PHEVs and BEVs will not be barred from entering the EU market, UK-built vehicles will be systematically denied incentives when offered to private consumers, lease companies and other corporate clients, artificially eroding any competitive advantage against EU-equivalent products. In addition, UK-assembled vehicles would be effectively banned from all EU public procurement processes.

 

  1. A less stringent interpretation would still result in the exclusion of UK-assembled cars and vans for the purposes of subsidies linked to the greening of corporate fleets (potentially, 60% of the future EU new car market and 90% of the future new van market) and from CO2 “super credits”. In either case, the measure would represent a serious threat to the very business case for exports to the EU and to the viability of the UK automotive sector as a whole, with potentially devastating impacts on the UK economy and on EU suppliers servicing UK vehicle manufacturers.

 

  1. In addition to local assembly requirements, stringent local content criteria will apply to EU-assembled vehicles to qualify as ‘Made in Europe’, such as requirements to incorporate at least 70% of vehicle components originating in the Union (excluding the battery) and progressively more demanding content requirements for battery parts, electric powertrains and electronic systems. Furthermore, at least 25% of aluminium used in the production of PHEVs and BEVs must be low-carbon aluminium of strict EU origin for any EU-assembled vehicle to qualify.
  2. If approved without modifications, the SMMT’s interpretation is that UK automotive parts could be deemed equivalent to EU originating components exclusively when incorporated into EU-assembled PHEVs and BEVs benefitting from public incentives for private buyers and for public procurement purposes (potentially, 40% of the future EU car market). This is conditional on the EU not excluding the UK from the list of FTA trading partners whose content is deemed equivalent to EU content for the purposes of this regulation.
  3. In any case, UK automotive parts will not be deemed equivalent to EU parts incorporated into EU-assembled cars and vans benefitting from incentives for the greening of corporate fleets (potentially, 60% of the future EU car market) and for CO2 “super credit” purposes. Under all circumstances, UK low-carbon aluminium will not be considered equivalent to EU aluminium.
  4. As it stands, the IAA represents the greatest threat to a successful reset in EU-UK relations. Engagement at the highest political level is urgently needed to clarify the legal interpretation of IAA proposals to unequivocally state the intention to include the UK across all automotive-related provisions of the regulation, thereby ensuring all UK automotive content (finished vehicles, parts and raw materials) is considered equivalent to EU content. This matter needs to be addressed by the EU-UK reset at political and technical levels.

 

  1. While the legislative process to agree on a definitive version of the IAA might extend well beyond the end of the year, continued uncertainty on future treatment of UK vehicles and components directly affects the UK as an investment destination. In addition, a long legislative process to approve the IAA clashes with a more imminent cliff edge to resolve future Rules of Origin on electrified vehicles and could represent a major obstacle to avoiding tariffs being charged on EU and UK BEVs and PHEVs from January 2027.

Addressing EV Rules of Origin

  1. Although Brexit              has largely been an exercise in              adaptation and damage limitation for the highly integrated Anglo-European automotive industry based on just-in-time, just-in-sequence manufacturing, trade in electrified vehicles has represented a bright spot in bilateral trade relations. Exchanges of self-charging hybrids (HEV), PHEVs and BEVs have become the main contributor to bilateral automotive trade for both exports and imports after the implementation of the TCA. However, the terms agreed under the TCA in 2020 have repeatedly put trade in electrified vehicles under a systemic, looming threat of tariffs.  
  2. To date, the TCA has not represented an insurmountable obstacle to trade in electrified vehicles thanks              to the adoption of business-friendly origin requirements and efforts by manufacturers to drive industrial transformation. However, by the end of 2026, much more demanding origin rules are set to come into effect. Failing to comply with rules of origin under the TCA would mean that tariffs apply as if the agreement was not in place at all, as tariff benefits can only be unblocked on cars that meet such requirements.
  3.               Current TCA rules of origin allow electrified vehicles incorporating at least 40% of EU-UK content              to qualify for zero-tariff treatment. Sourcing originating batteries is crucial to meet this threshold, as the value of a battery can represent 30-50% of the entire value of an electrified vehicle. To consider the whole value of a battery as “originating”, the battery must meet its own origin requirements. The current rules applied to finished electric accumulators are particularly accommodating, allowing batteries to be considered as originating when assembled from imported modules and cells or when incorporating as low as 30% of EU-UK content.
  4.               Far more stringent rules              were set to apply in January 2024. However, a three-year              extension was agreed in December 2023, avoiding an additional              tariff liability of £4.3 billion between 2023-2026. While the extension was warmly welcomed by the European              automotive industry, the parties agreed that the most demanding rules ever agreed by the EU and the UK on EVs, batteries and battery parts should enter into force from January 2027. The parties also agreed not to make further changes to the rules until 2032.             
  5. According to the forthcoming origin requirements, a battery qualifies as originating if the production of finished accumulators, modules, cells, battery parts and cathode active materials (CAM) are fully localised. A value-added rule is offered as a potential alternative, but the percentage of combined UK-EU value added will increase from today’s 30% to 70%. For PHEVs and BEVs, the incorporation of a battery meeting one of these very demanding requirements is a pre-requisite to avoid tariffs, regardless of the proportion of UK-EU content incorporated in non-battery parts of the vehicle.
  6. Regional production of originating CAM – the most valuable component of a battery supply chain – is pivotal to ensure compliance. Yet, localisation of CAM production in the whole European region has faced major challenges and delays, with manufacturers struggling to source originating CAM in the necessary quantity and of the necessary quality to support Europe’s largest automotive trade relation, and is largely out of the direct control of automotive manufacturers yet they are entirely exposed to the consequences.
  7.               In this regard, uncertainty on the definition of what constitutes originating CAM under the upcoming TCA rules is frustrating compliance efforts and upending investment in this crucial segment of the battery supply chains. Notably, although the EU and the UK committed to developing shared guidance on a CAM definition since 2022, the parties are yet to agree on a joint interpretation with less than eight months before the new rules take effect. Accordingly, the full implementation of the TCA’s EV and battery rules in 2027 bears significant risks of unintended consequences even for those businesses that have sought to comply as early as possible with these requirements.
  8. If battery rules of origin are phased in as planned, the SMMT expects the vast majority of PHEVs and BEVs to face tariffs in 2027 with unnecessary added costs ultimately borne by both industry and consumers, with partial estimates predicting a combined compliance rate for imports and exports of less than 30% next year.  Additional tariff liabilities on imports and exports of PHEVs and BEVs are expected to amount to billions of pounds over the next three years. This therefore is likely to add extra cost to zero or low emission vehicles produced in Europe at a time when governments on both sides of the Channel seek to meet ambitious targets for the decarbonisation of road transport.
  9. Pragmatic solutions are urgently needed to avoid this scenario and we strongly believe it should be in the economic and socio-economic interest of both parties to do so. However, we recognise these solutions must protect existing investment and compliance efforts. Any changes to the TCA should offer a systemic path to future compliance and safeguard mutual benefits within the boundaries of the TCA’s level playing field provisions. Compared with the rules of origin discussion in 2023, it is self-evident that these results are far more challenging to achieve on the predicament of an exclusion of the UK automotive sector from the IAA and which sets new obligations and timelines on battery localisation misaligned with those laid out in the TCA.

Q.2 - Other Models of UK-EU Alignment and Cooperation

  1. Improving the trade relationship with the EU is essential for UK domestic manufacturers of finished vehicles, for the whole UK automotive supply chain underpinning them, for British consumers, and for the overall competitiveness of the UK automotive industry. A strong UK automotive section delivers stronger European manufacturing capability and economic growth opportunities.
  2. As a basic principle, since the time of Brexit negotiations, the SMMT has called on the UK and the EU to agree on an enhanced partnership on automotive regulations. The ultimate objective of such partnership would be to allow the vast majority – possibly, the entirety – of vehicles, parts and subsystems developed in accordance with our respective regulations to be sold in both markets without being subject to additional requirements and testing.
  3. We welcomed the establishment of the UK-EU Working Group on Motor Vehicles and Parts, as constituted under the TCA. However, co-operation in this forum has not delivered on our most ambitious objective and passive divergence has created two distinct regulatory frameworks following the UK’s withdrawal from the EU. This has created regulatory challenges, particularly evident in the development of a national GB whole-vehicle type approval. Accordingly, we recognise the merits of a discussion on new regulatory cooperation options.
  4. Notably, the SMMT has not discussed in detail different regulatory models or frameworks since the end of Brexit negotiations and, at present, the industry has no singular defined position on preferred solutions.
  5. In principle, for vehicles produced in large volumes (unlimited series in the type approval concept) by large organisations selling either globally or, at least, in the EU and UK markets, international harmonisation or alignment with EU rules is likely to be the preferred option when adopting product design regulations. These include, but are not limited to, whole vehicle, system and component type approval, and regulations on chemicals.
  6. Automotive-related product-design regulations used in the UK are typically developed at UN (75% to 80% of all subject areas for passenger vehicles) and EU levels.
  7. Both the EU and the UK are parties to the two main automotive-relevant conventions (known as the 1958 (UN regulations) and 1998 (Global Technical Regulations) Agreements) of the UN Economic Commission for Europe (UNECE) and share a long history of joint contributions to the works of the World Forum for the harmonisation of vehicle regulations (WP.29) and the World Forum for Road Traffic Safety (WP.1).
  8. UNECE regulations are developed with transitional provisions to guide their implementation in the regions that use them. However, Contracting Parties to those regulations can choose when to implement the latest regulation and hence, implementation dates may be different across different regions. In this sense, dynamic alignment with the international regulations would automatically apply the earliest transitional provisions in the UNECE regulation, which may be earlier than their implementation in the EU. In principle, and given the interdependency of the EU and UK discussed earlier in this submission, alignment with the EU on the implementation timing of UNECE regulations would be beneficial for both EU and UK larger manufacturers.
  9. For the areas of the vehicle not covered by UNECE regulations, SMMT members producing vehicles in large volumes are likely to want the UK to implement the EU regulation or equivalent regulatory requirements. This would also mean regulatory harmonisation across the UK’s internal market, preserving a single market approach and maintaining greater choice for the consumer.  However, dynamic alignment, while providing future certainty, could also cause unintended difficulties depending on how it is implemented, particularly for Small Volume Manufacturers (SVM), Multi-Stage manufacturers such as vehicle converters and bodybuilders, and any UK manufacturers not producing for the EU market.
  10. For regulations on environmental sustainability or fleet requirements applied to the UK market, large organisations are likely to support alignment with the EU on the methodologies, including on areas such as fleet CO2 regulations and battery regulation. However, a simple transposition of EU rules in UK law may have unintended consequences in certain cases. For example, separate consideration needs to be given to UK emission targets, limits and thresholds, as the UK is different from the EU in terms of market make-up, size, skillsets and business landscape. Accordingly, these regulations should be modified to ensure these are “proportionate” and “appropriate” for the UK.
  11. Finally, the SMMT is yet to open a formal discussion with members on wider business regulations, an area much more complex in spread and variety and goes beyond the sector itself.
  12. While these considerations are valid for vehicles produced in large volumes, smaller producers are likely to have specific regulatory requirements. For vehicles produced in small series or by SVMs, regulations should be based on international and EU regulations, but with specific harmonised provisions. For vehicles produced in small series sold exclusively in only GB, specific provisions and derogations from international and EU regulations should be provided when appropriate.
  13. This contribution does not address what role the UK should play in developing regulations in the EU or the potential mutual recognition of our respective test reports and certificates. The SMMT will develop a position in due course should the UK and the EU open a discussion on enhanced regulatory cooperation.
  14. Notwithstanding the point above, SMMT fully supports the Department for Transport’s (DfT) commitment to work through the UN to achieve international harmonisation of vehicle regulations wherever possible.

Q.3 - Future Cooperation Frameworks and Free Trade Agreement Compatibility

  1. The automotive industry has not discussed in depth these options since the UK government decided to negotiate an free trade agreement (FTA) as the basis of our new relationship with our closest trading partner. Should the UK and the EU be open to discuss a foundational change in our bilateral economic and regulatory relations, the UK automotive industry would certainly contribute its view to maximise bilateral benefits and limit potential shortcomings of known precedents.

 

  1. In principle, for the automotive sector, a customs union could ease some of the friction created by post‑Brexit trade barriers. A customs union should ensure tariff-free treatment of bilateral exchanges by default and remove the burdensome need to comply with rules of origin across the board, including for electrified vehicles.

 

  1. However, while favouring deeper integration, on its own, a customs union would not remove the regulatory and administrative barriers that still affect cross‑border supply chains – for example, customs declarations would still be needed, and different regulatory requirements would likely apply.

 

  1. On balance, the benefits of a customs union with the industry’s largest trading partner are likely to compensate any potential negatives - but any change has its costs. 

 

  1. Similar to an FTA negotiation, there is no off-the-shelf solution that we can apply overnight to establish a customs union with the EU, unless the UK is willing to adopt the EU-Türkiye customs union model which has shown significant need for reform. If not, while the basic principles of a “customs union” are known – a common external tariff and tariff-free movements within the union, the details would need to be ironed out through intensive negotiations between the parties, and with industry.

 

  1. For example, the parties would need to discuss whether the UK could retain and conclude trade agreements with new trading partners or whether the UK would need to undergo an adjustment of its international trade policy to align with the EU. The wider impact on other UK trade agreements would also need to be factored into the equation for a global sector like automotive. Likewise, the UK’s role in shaping the EU’s trade policy would be a key issue to address.

 

  1. In the same vein, the potential options of rejoining the European Free Trade Association (EFTA) or the European Economic Area (EEA) or creating sectoral EU-UK single markets could present distinct advantages to address regulatory barriers. However, as for a customs union, adjustments would not be cost-free.

 

  1. In principle, each of these options is compatible with an independent UK trade policy. For example, EFTA countries do not form a customs union, which would allow the UK to maintain its own tariff schedule and conclude its own bilateral free trade agreements. However, EFTA parties traditionally coordinate their external trade policy and have negotiated a large number of trade agreements as a bloc. Many of these EFTA agreements are with UK’s preferential trading partners outside of the EU, while joining the EEA would likely require replacing several chapters of the TCA with the EEA Agreement.

 

  1. Likewise, existing UK FTAs would likely need to be revised to ensure regulatory commitments are compatible with potential single market obligations that would apply after rejoining the EEA or through sectoral agreements in line with the Swiss model. 

 

  1. By default, none of these options would shield the UK and EU automotive sectors from trade restrictive measures such as trade defence remedies (e.g. safeguards) or market-distortive initiatives such as local content requirements set by the IAA.

 

Q.4 - Defence and Economic Security

  1. With respect to the automotive sector’s interest, a broad and ambitious UK-EU security pact could incorporate strengthened cooperation on the security of access to critical raw materials and affordable energy. Both are essential ingredients to the European automotive sector as it transitions towards net zero. Access to critical raw materials is essential for the establishment and proper functioning of the European electric vehicle battery value chain. Affordable energy is necessary for the UK and EU’s industrial competitiveness, in a highly globally competitive market.
  2. Legally binding commitments not to restrict exports of critical materials and essential commodities in response to international economic shocks and shortages could help the EU and the UK scaling-up production capabilities in times of crisis and avoid unreasonable export control measures that have proven to be counter-productive when facing supply shocks.
  3. In principle, a commitment to safeguarding the competitiveness of the EU and the UK automotive sectors is an investment in each other’s economic security and defence, given the interplay between automotive and defence supply chains, the automotive industry’s contribution to European research and development of new technologies and, in the worst case-scenario, the potential contribution of the sector in the conversion to a war economy. 
  4. Defence partnerships can also include a trade facilitation dimension. In particular, additional facilitations for trusted traders and the waiving of safety and security declarations could greatly support bilateral trade. A stable UK-EU relationship can be a catalyst for growth and resilience in an unstable world.

Q.5 - . Business and Stakeholder Engagement

  1. While the “Common Understanding” has set an ambitious negotiating agenda, the UK automotive sector is not the primary target of ongoing talks, yet faces time critical issues. The industry has been involved in discussions on issues potentially affecting its supply chains, such as the development of a UK CBAM, the link between the UK and EU Emission Trading Schemes and the potential waiver of our respective CBAM formalities. However, our engagement has been mostly unrelated to the Summit process and eminently linked to public calls for inputs and consultations. As a leading trade good for both parties, automotive should be a priority sector for shared discussions to protect and grow automotive trade and investment in Europe.
  2. The SMMT has been an active member of the UK Domestic Advisory Group (DAG), serving as a long-time co-chair of the Trade and Customs sub-group and participating to the works of the joint DAG and of the Civil Society Forum. In this context, the SMMT has captured views from many industry stakeholders actively involved in some of the most significant negotiations which followed last year’s Summit. The DAG has offered an opportunity to maintain regular contacts with the Cabinet Office and the UK Minister for the Constitution and European Union Relations on these and other issues.
  3. However, the UK DAG’s potential to help set the agenda of future Summits around emerging issues or opportunities that support enhanced trade has not yet been fully exploited. In parallel, the group should not be repurposed to feed into existing negotiations without the possibility of indicating the areas of concerns in the TCA implementation or to set out priorities to be addressed outside the existing TCA structures, as appropriate.

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[1] https://transport.ec.europa.eu/transport-themes/action-plan-future-automotive-sector/automotive-package_en

[2] https://single-market-economy.ec.europa.eu/publications/industrial-accelerator-act_en