Brexit and the waning days of the United Kingdom

[Zanza]

Chief Brexit negotiator says Brussels not willing to be flexible on zero-tariff access to bloc

The British car industry will face new barriers exporting to Europe even if a UK-EU trade agreement is agreed later this year, the UK's chief Brexit negotiator has admitted.

In a letter to the auto industry, David Frost conceded that he had failed to convince Brussels to take a more flexible approach when it came to assessing how cars manufactured using non-EU parts could qualify for zero-tariff access to the bloc under a trade deal.

The UK has been pushing during trade negotiations for manufacturers to be able to count, or "cumulate" Turkish, Japanese or other non-EU inputs as "local" for the purposes of exporting under the agreement but Brussels has rejected the request.

Under standard EU trade rules, a vehicle must typically be 55 per cent "locally made" in order to qualify for zero-tariff access to the bloc.

The letter raises fears in the industry that a lopsided trade deal will allow European cars from Germany or France to be imported to the UK without tariffs, but that British-built models will be penalised for not meeting the rules — pressuring manufacturers to raise prices or shift production to the continent to remain competitive.

In the letter, first reported by the BBC but seen by the Financial Times, Lord Frost said that UK negotiators had argued that so-called "cumulation" would have "significant benefits for business and consumers" and that the UK had put forward detailed proposals.

"But once again the [European] Commission has made clear that it will not agree third country cumulation in any circumstances, which we regret, but obviously cannot insist upon," he wrote.

The letter, dated September 7, said that the UK had lobbied Brussels' negotiators for more flexible arrangements on so-called "rules of origin" — in line with requests from the auto industry — but without success.

"We have shared details of this approach with the commission but I am sorry to say that so far they have neither been willing to discuss these nor to share any proposed text with us," he wrote.

Four out of five of cars made in the UK are exported, with the majority going to Europe. Plants owned by Toyota, PSA and Honda are all dependent on EU sales for most of their business.

While many of Britain's car plants rely on parts from Europe some, such as Nissan and Toyota, also import a significant proportion of their components, such as hybrid systems, from Japan.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said in response to the letter that the industry needed a trade deal that "safeguards the global competitiveness of the sector and consumer choice in the market".

"Given its importance to the economy and livelihoods and the damaging consequences of tariffs, we need the sector prioritised in negotiations, not traded off against other industries," he added

During last December's general election campaign, Prime Minister Boris Johnson said on a visit to Nissan's Sunderland plant that it was "absolutely vital we protect supply chains, we protect Nissan Motors, we make sure people continue to want to invest in our country".

"As we come out, it's all protected from the point of view of big motor manufacturing investors in our country," he added.

The commission's decision has not come as a surprise to British industry, according to one industry executive, who said there was "deep frustration" that the UK government's current approach had "prioritised defending sovereignty over maintaining trade flows".

Michel Barnier, the EU's chief negotiator, has been clear that the EU's longer term strategic economic interests will not be served by allowing the UK privileged access to the EU single market after Brexit.

International trade experts have described the UK's proposals for "cross cumulation", which have been seen by the FT, as highly ambitious and unique in scale and scope compared with other EU trade agreements.

EU negotiators are clear that they will only offer so-called "bilateral cumulation" in which EU and UK industries can count each other's inputs as "local" for the purposes of obtaining zero-tariff access to the other's markets.

Earlier this month, the FT revealed that the commission was poised to reject a British request for a more generous approach on electric vehicles, a category where neither EU or UK manufacturers can hit the 55 per cent "local content" requirement.

This will be a big problem for the Japanese car plants in the UK. Without the proposed, unique cross cumulation, they will not have sufficient local content for tariff free imports into the EU. Not so much for JLR or BMW, which have deeper European supply chains, so exports to Europe will still be possible tariff free. 
However British exports to non-EU countries will face huge issues with RoO.

I don't think the last paragraph is true. There are currently huge battery cell factories being built in Germany (Tesla, CATL) and in Sweden (Northvolt). That will allow high enough local content for electric cars.

[Sheilbh]

Obviously this could be totally wrong and may turn out to happen. But I can't help but think about Brexit whenever I look at the sports pages and see yet another tedious article about Jaden Sancho.

Man United want a player. Dortmund  say they'll sell him if they receive a bid of x million by a certain date, if not then the player's happy and has a contract so they'll keep him and maybe sell him in the future.

Man United, assume this is all spin and bluster and planting stories like 90% of the English transfer window nonsense (which has been fanned by the media who've discovered people don't actually like football so much as they like football adjacent things like transfers and report even the merest whiff of a rumour breathlessly) don't make an offer that matches Dortmund's price and don't make an offer on time.

To this day, a month later, every reporter I know who works in the Bundesliga saying Dortmund now have no intention of selling (as above: players happy, they set a price and a deadline - United met neither). Despite that so many podcasts I listen to still talk to Man United who are apparently still fairly confident they can get him and are talking to intermediaries. Every time I see the sports news there's some reporter in Dortmund saying "there's still no movement here, but United think they can get a deal done".

As I say it could happen. Maybe it all is smoke and mirrors and the parties are just haggling over a deal. But it just feels absurdly recognisable

[The Brain]

Relax. Still plenty of time to get the sunny uplands in place.

[celedhring]

Don't worry, #10 knows how to tackle negotiations with the Germans. 

https://www.youtube.com/watch?v=iWIUp19bBoA&feature=emb_logo&ab_channel=Ellisaacson

[The Larch]

Brexit: EU launches legal action against UK for breaching withdrawal agreement
UK put on formal notice over internal market bill, which ministers admit breaks international law

The EU has launched legal action against Boris Johnson's government over breaching the terms of the withdrawal agreement.

Ursula von der Leyen, the European commission president, announced that the UK had been put on formal notice over the internal market bill, which ministers admit breaks international law.

Brussels had given the prime minister until the end to September to drop the contentious clauses in the draft legislation.

By seeking to unilaterally change the terms of the agreement signed last year with Brussels, Von der Leyen said the UK had failed to live up to its obligations to act in "good faith".

Von der Leyen said the UK had a month to respond to the commission's formal letter of notice, which marked the beginning of a formal infringement process.

The commission president said that by its "very nature" the internal market bill – in seeking change the terms of the Northern Ireland protocol in the agreement – was a breach.

[Sheilbh]

In further British political class not thinking rules apply to them, Corbyn's had to apologise for hosting an (indoor) dinner party with 8 guests.

[Duque de Bragança]

How bourgeois of him. 

[Tamas]

Solidarity with the working class is only a good idea when it gives him more power, not when it means a slight inconvenience.

[Josquius]

In further British political class not thinking rules apply to them, Corbyn's had to apologise for hosting an (indoor) dinner party with 8 guests.

Have to say I'm genuinely surprised here. Unless Corbyn is in the same mental place as most people and not really giving a toss about the constantly changing rules.

[Tamas]

In further British political class not thinking rules apply to them, Corbyn's had to apologise for hosting an (indoor) dinner party with 8 guests.

Have to say I'm genuinely surprised here. Unless Corbyn is in the same mental place as most people and not really giving a toss about the constantly changing rules.

He quite clearly always has been quite dim. It seems perfectly plausible he just couldn't grasp that he was supposed to change his routine with the pandemic and all.

[garbon]

In further British political class not thinking rules apply to them, Corbyn's had to apologise for hosting an (indoor) dinner party with 8 guests.

Have to say I'm genuinely surprised here. Unless Corbyn is in the same mental place as most people and not really giving a toss about the constantly changing rules.

He quite clearly always has been quite dim. It seems perfectly plausible he just couldn't grasp that he was supposed to change his routine with the pandemic and all.

[Sheilbh]

In further British political class not thinking rules apply to them, Corbyn's had to apologise for hosting an (indoor) dinner party with 8 guests.

Have to say I'm genuinely surprised here. Unless Corbyn is in the same mental place as most people and not really giving a toss about the constantly changing rules.

He quite clearly always has been quite dim. It seems perfectly plausible he just couldn't grasp that he was supposed to change his routine with the pandemic and all.

I found it weird that he kept going into the Commons even when it was fully virtual because of lockdown given that he is in his 70s and there were about three other people there. I don't know what it is, but I think most of the British political class have pretty strong "rules are for other people" attitudes.

[Richard Hakluyt]

Much jollity over at the Daily Mail with people suggesting that Diane Abbott was in charge of counting the number of guests.

[Sheilbh]

Typical.

[Maladict]

Much jollity over at the Daily Mail with people suggesting that Diane Abbott was in charge of counting the number of guests.

That is pretty funny.