EU trade deal “essential” for UK automotive industry

The UK’s £72bn-a-year car industry is at risk if the UK does not agree a trade deal similar to that being negotiated between Japan and the EU, a leading trade lawyer has warned.

Former diplomat and trade lawyer Hosuk Lee-Makiyama, who represented the EU at the World Trade Organisation, co-authored the European Commission’s Trade Sustainability Assessment on the in-coming Japan trade deal.

He said that without a similar agreement, which will give Japanese firms tariff-free access to the single market in return for similar access to Japan’s food market for European farmers, the UK’s automotive sector will suffer.

Lee-Makiyama told the Telegraph: “In the case of a hard Brexit, there could be a tariff between the UK and the single market, whereas there will be none between Japan and the EU.

“That has considerable consequences for the car plants at Sunderland and Swindon, because if you look at the supply chains of those plants they source a lot of parts from the single market, as well as Japan.

“The cost of (UK) manufacturing goes up – the parts, technology and the people. The Japanese car industry flies a lot of experts and engineers back and forth and if all that is facilitated by the EU-Japan free trade agreement, it seems much easier just to move the manufacturing capacity currently based in the UK to the single market in the case of a hard Brexit.”