Various European automotive industry leaders have urged the EU and UK governments to secure a free trade agreement before the Brexit transition period expires December 31. 

 

The German Association of the Automotive Industry (VDA) reported that leading organizations like the European Automobile Manufacturers Association, European Association of Automotive Suppliers and 21 others have warned of serious repercussions if the agreement isn’t finalized. Based on new calculations, these organizations anticipate close to €110bn ($131bn) in losses, with around 14.6mn jobs slashed on both sides. That would be in addition to a €100bn loss stemming from the COVID-19 pandemic that the industry has already incurred.

 

VDA suggested that if the agreement doesn’t go through before the end of the year, both sides will have to trade under the World Trade Organization, which would include a 10pc tariff on cars and around 22pc on vans and trucks. Consequently, production costs would rise and make vehicles more expensive for consumers on both sides. 

 

The EU and UK combined spend close to €61bn on automotive innovation every year and are responsible for 20pc of the world’s motor vehicle production. It is because of these reasons that the FTA stresses the importance zero tariffs and quotas. 

 

€1 = $1.19

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