Industry experts have hailed a new UK trade deal that could be worth £300m, saying it has helped the car sector avoid a major brink.
The UK agreed to a trade deal with Mexico that was due to expire on 1 January 2024, under an extension of the “rules of origin”.
Under the new agreement, British manufacturers will receive lower or zero tariffs when selling products to Mexico.
This is particularly important for the auto industry, where road vehicles account for nearly 300 million pounds of exports to Mexico, nearly 20 percent of all goods exported.
NOW WATCH: Labour’s Steve Reed discusses changes to electric vehicle law
This arrangement will come into effect from 1 January 2024, and will remain in place until a new UK-Mexico free trade agreement is introduced.
SMMT CEO Mike Hawes praised the tariff extension, highlighting the importance of the UK-Mexico relationship in the automotive industry.
He added: “We welcome this practical decision as it avoids tariff obligations from June 2024 which, given the long-standing and productive relationship between the UK and Mexican automotive industries, would have undermined our two-way trade.”
“Mexico is among the top 10 global markets for UK car exports, so we now need to quickly agree a modern trade deal as this would provide further benefits to both sides, boosting bilateral trade in hybrid and ICE technologies as well as zero emissions.” “Vehicles.”
Mexico is 14y Brazil is the largest economy in the world and the second largest in Latin America, with demand for imports expected to grow by 42 percent between 2001 and 2035.
SMMT said agreements with countries such as Mexico, Canada and South Korea could provide “enhanced market access and commercially meaningful opportunities.”
Electric vehicle prices could rise by a staggering £3,400 if a rules of origin agreement is not concluded before January 1, making it almost impossible for UK manufacturers to remain competitive.
Electric cars that do not meet the new thresholds will be subject to a 10 percent tariff when traded through the canal if negotiations fail or stall further.
If no deal is reached, electric cars made in the UK and EU are likely to see prices rise with Chinese manufacturers able to undercut all other brands thanks to production costs and cheaper vehicles.
At the end of 2020, trade was worth £7.4 billion, with a significant rise seen in the past 12 months, reaching £15.3 billion last year.
The latest developments:
The agreement between the United Kingdom and Mexico is scheduled to enter into force on January 1 next year
Palestinian Authority
Speaking previously, Mike Hawes said: “A three-year delay is a simple and logical solution that must be agreed urgently.”