EU car industry seeks UK exemption from new made-in-Europe rules

The European Automobile Manufacturers Association called on the European Commission to give the UK, Turkey, and Morocco justified, targeted exemptions from new rules that require cars and parts to be made within the EU to qualify for subsidies or public procurement.

The rules were drafted under the Industrial Accelerator Act to protect the EU industry from Chinese exports that industry leaders say are undercutting European products. The association stated that the European automotive industry operates a deeply integrated value chain with the UK, even post-Brexit, and that vehicles, components, and batteries made in the UK should hold the same status as those made in the EU27.

Background on the rules The association warned that excluding existing factories of its members would strand European investments and weaken competitiveness. More than half of UK car exports go to the EU, and several manufacturers also operate plants in Turkey and Morocco.

A UK lobby group said the rules would effectively shut out UK-assembled vehicles from most of the European market and described the outcome as one of the most spectacular own goals in history because many British plants are European-owned.

Trade talks and next steps Britain’s Europe affairs minister met the EU’s trade commissioner on Wednesday to discuss progress in UK-EU relations, with the Industrial Accelerator Act on the agenda. On Tuesday, the EU and China agreed to enter three months of diplomatic talks to try to avert a trade war.

The trade imbalance between the EU and China is running at €1bn a day and is forecast to approach €400bn in China’s favour by the end of the year.