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UPDATE 2-British car sector risks some tariffs in EU trade deal- source

Wed, 30th Sep 2020 12:12

(Adds government quote)

By Costas Pitas

LONDON, Sept 30 (Reuters) - Britain's car industry risks
some tariffs being imposed after Brexit as Brussels will not
allow components from countries such as Turkey and Japan to
count towards a content threshold in a trade deal, an industry
source said on Wednesday.

In ongoing talks to strike a post-Brexit trade agreement,
the EU will not accept non-EU parts being combined with EU and
British ones to meet a roughly 55% level for local content, the
source, who spoke on condition of anonymity, told Reuters.

The details were outlined in a letter from Britain's chief
Brexit negotiator David Frost to the sector, the country's
biggest exporter of goods, and were first reported by the BBC.

While such a move would not lead to tariffs on manufacturers
with high domestic and European sourcing, it could affect
Japanese companies such as Nissan, which brings in more content
from elsewhere than some of its peers.

"We want our UK team of 7,000 people to have the best
possible chance of future success," Nissan, which operates
Britain's biggest car factory, said in a statement.

"We continue to urge UK and EU negotiators to work
collaboratively towards an orderly balanced Brexit that will
continue to encourage mutually beneficial trade."

There is a particular risk around electric cars with key
elements, such as batteries, sourced from outside the bloc.

A spokesman for Prime Minister Boris Johnson said the
government would keep working with the sector, which employs
some 800,000 people in Britain and has continually lobbied for
free and unfettered trade with its biggest market to be kept.

"Rules of origin commitments exist in all free-trade
agreements and as negotiations progress we remain committed to
working with the automotive industry to try to ensure an outcome
that reflects business interests across the UK." he said.
(Additional reporting by Elizabeth Piper; editing by Kate
Holton and Stephen Addison)

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