·The UK and the EU reached a transitional agreement for the Brexit transition. The three major difficulties in the auto industry are still pending.

On March 19, local time, at the EU headquarters in Brussels, Belgium, the EU and the UK announced an agreement on the transitional arrangements for the Brexit, saying that the two sides had reached an agreement on most of the terms. The transitional agreement gave the UK a 21-month transition from Brexit. From the official Brexit in March 2019 to December 31, 2020, the UK can continue to enjoy the benefits of the EU single market and customs union.
From March 22nd to 23rd, the EU spring summit was held in Brussels. EU member states approved the EU-UK transitional arrangements for the Brexit period, and issued guidelines for the next phase of the EU-UK relationship negotiations, emphasizing efforts Establish a “as close as possible” partnership with the UK. In terms of future economic and trade relations, the EU is willing to reach a wide-ranging free trade agreement with the United Kingdom.
Although the agreement was reached, some key areas, such as the Irish border issue, auto industry tariffs and regulations, still require further consultation. At present, the UK and other EU member states have a large number of transactions in parts and vehicles, and the uncertainty of the system has made car manufacturers always on the pin. The European Automobile Manufacturers Association (ACEA) recently held a press conference to require the UK and the EU to formulate relevant institutional rules as soon as possible, including vehicle approvals, emission standards, tariffs, etc., to prevent the Brexit from bringing potential disasters to the entire European automotive supply chain. Sexual influence.
â–  One difficulty: how to certify new cars on both sides
One of the concerns of automakers is whether the cars approved by the British authorities can still be sold in the EU after the Brexit, and vice versa. According to the regulations of the European Union, the car must pass the test of the technical service organization of any EU member state to verify whether it meets the requirements of the EU environment, safety and related standards, and then can be listed anywhere in the EU. Certification.
“Before March 30, 2019, automakers can get effective vehicle-type certification in the EU and UK.” ACEA Secretary General Eric Jonathan said, “We call on the European Commission to make an explanation about the existing vehicles. How the power of approval is transferred from the EU to the UK."
In addition, ACEA also requires the EU and the UK to accept each other's vehicle standards. "If the regulations are inconsistent, the market may be confused, and even the cross-strait export trade may be unhealthy," Jonathan said. Of course, this requirement is only possible if the relevant legislation in the UK and the EU remains fully consistent. If the EU and the UK are inconsistent in terms of certification, according to the ACEA estimates, the car companies will face an additional cost of 450,000 to 600,000 euros in the process of obtaining additional vehicle approval.
â–  Dilemma: Does the EU's carbon emissions include the UK?
Another important question is whether the EU will still take the UK into account when accounting for the 2021 CO2 emissions target. The EU requires that the average carbon dioxide emissions of new cars sold by the car companies in the EU in 2021 should reach 95 g/km. Currently, the EU is calculating the carbon emissions of cars based on new car registration data for all EU countries, including the UK. Once the UK leaves the EU, it will no longer be subject to carbon dioxide emissions targets. In theory, the UK's data is no longer included in the EU's overall carbon dioxide calculations.
"If the UK's data is excluded from carbon dioxide calculations, the automotive industry will meet the strict target of 2021, leaving only a limited amount of time to realign the compliance strategy." Jonathan said, "The first priority of ACEA is to ensure The system is functioning properly because the entire fleet's compliance is based on 27 EU member states plus UK CO2 data."
The guidelines issued at the EU Spring Summit stated that the UK and the EU are geographically close and have similar values. After the Brexit, the two sides can still cooperate in various fields such as climate change, sustainable development and environmental governance. From this point of view, the so-called "top priority" of ACEA is not the possibility of not achieving it.
â–  Three Difficulties: What to do with customs and customs procedures
For the automotive industry, potential tariff issues and customs clearance processes will also be an extremely heavy burden. From the Brexit Breeze, the departure of the Brexit is a foregone conclusion, and tariffs have always been one of the most concerned issues for car companies. If the UK and the EU cannot reach an effective trade agreement, then the cars produced in the UK will face a 10% tariff when they export to the EU, and parts and components may face a 2.5% tariff.
Currently in the UK, a number of automakers have built complete vehicle and parts factories to "based on the UK, radiating Europe", including Toyota, Honda, Nissan, Jaguar Land Rover, MINI, Rolls Royce, Bentley and so on. About 80% of Nissan's cars produced in the UK are exported, and 90% of Toyota's cars in the UK are exported. According to estimates by the British Automobile Manufacturers Association (SMMT), Brexit may result in a $100 billion auto export tariff.
Although in the next phase of negotiations between the UK and the EU, the EU agreed to negotiate a free trade agreement with the UK, including tariff reductions, the EU also pointed out that since the Brexit is no longer a member of the European Union, the FTA is unlikely to The UK offers the same treatment as EU member states, and since the UK insists on leaving the EU Customs Union and the single market after the Brexit, the future of European-UK economic and trade cooperation will be limited and trade frictions will be inevitable. This means that the export of British cars and parts is difficult to achieve zero tariffs as expected by car companies.
In addition, ACEA also recommends that the UK and the EU simplify the tariff process and ensure that the official review is completed as soon as possible, because even without customs duties, customs clearance will still add a new cost of 100 to 150 euros per vehicle. ACEA pointed out that considering that the business operations of the automotive industry are based on a smooth “JIT” and “JIS” system, any new customs inspection will increase costs and delay due to Brexit. Affecting production efficiency, and in the worst case, may even lead to production line downtime.
Ian Robertson, BMW's director of automotive sales, believes that even if the UK and the EU reach a free trade agreement, it will not solve many of the non-tariff issues affecting the auto industry, and the auto industry relies on unrestricted cross-border circulation of parts and cars. "Some people think that free trade agreements can solve many problems. I am worried about this kind of thinking." Robertson said, "There will be customs inspections, there will still be delays on the border, and there will be problems in supervision."

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