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UK promises Nissan tariff-free EU deal post-Brexit

October 30, 2016

Britain has promised the carmaker it will seek a tariff-free trade deal with the EU for the motor industry post-Brexit. Nissan had announced it will build the next generations of its models at its Sunderland plant.

England Nissan Werkstatt in Sunderland
Image: Getty Images/AFP/O. Scarff

The UK Business Secretary Greg Clark said on Sunday that the government had promised the Japanese carmaker that it would secure a tariff-free trade deal with the EU for its motor industry during the Brexit negotiations.

Clark had been under pressure to reveal what kind of deal the government had promised Nissan that persuaded the Japanese carmaker to invest in its Sunderland plant.

"Our objective would be to ensure that we would have continued access to the markets in Europe - and vice versa - without tariffs and without bureaucratic impediments and that is how we will approach those negotiations," Clark told the BBC on Sunday.

Nissan CEO Carlos Ghosn had said last month that he would need a compensation guarantee to offset any potential tariffs imposed by Britain's departure from the EU, ahead of deciding whether to build new models at the Sunderland factory.

On Thursday, Nissan announced it would manufacture next generations of its Qashqai and X-Trail models at the plant. The factory directly employs 7,000 people and tens of thousands more through its supply chain. It exports of 55 percent of its cars to Europe.

Nissan's investment proved the carmaker had confidence in the government's position, Clark said. He also gave assurances that the promise of money as compensation was not part of the agreement.

UK Prime Minister Theresa May made previously made comments indicating that the country was headed towards a so-called "hard Brexit." However, Clark's pledge indicates that Britain would either seek to remain in the EU customs union or negotiate special free trade deals for the industry.

The Business Secretary told the BBC that he was asking industry leaders what they needed from the upcoming Brexit negotiation, and that the government had not made a decision on "what that crystallizes into in terms of what we want to achieve".

While details of the agreement have not been made public, other car makers and a host of other leading industries will likely want similar assurances that their interests will be shielded from post-Brexit tariffs.

Business spokesperson for the opposition Labout Party, Clive Lewis said: "All businesses and workers across all regions deserve the Nissan treatment and a clear answer from government about whether they are aiming for full single market access, a customs union, or some other set of arrangements."

Clarke said that the Brexit talks needed to be "considered and sober" to ensure that all sectors, including the Britain's crucial financial sector, were considered. A customs union agreement, however, would not allow Britain's services sector, including the City of London's financial services industry, to retain access to European markets.

dm/rc (Reuters, AFP)

Nissan opts for Sunderland