British automakers are seeking clarification on the «Made in the EU» rule

The British automotive industry group SMMT is seeking clarification on whether the UK will be subject to the “Made in the EU” rule under the EU’s Industrial Accelerator Act (IAA) policy, according to Reuters.

The industry group notes that the ambiguity carries the risk of delaying investments.

According to SMMT Executive Director Michael Hawes, the aim of the EU regulation was to boost the competitiveness of European industry in the face of growing challenges from other countries with lower costs, rather than to impact trade between the bloc and the UK.

Under the EC’s proposal, countries with which the EU has trade agreements will be included in the “Made in the EU” category, and any exceptions will be published after the IAA is adopted, which could take at least a year.

However, Hows notes that the auto industry urgently needs a policy statement regarding the UK—ideally before the bilateral summit scheduled for June or July. The IAA annex specifically concerning automakers stipulates that vehicles must be assembled in the EU, which could exclude British industry players.

According to SMMT, the automotive partnership between the EU and the UK is valued at €80 billion annually, with a favorable trade balance for the bloc. The UK remains the EU’s largest export market for passenger cars. Additionally, the EU sells €9.1 billion worth of auto components to the British market each year.

“Excluding UK Automotive from the IAA’s ‘Made in Europe’ policy would inflict significant harm, not only on the UK but on EU auto manufacturing capability, disrupting supply chain resilience and undermining the objectives of the IAA,” the industry group stated.

As a reminder, in early March of this year, the European Commission presented a legislative proposal to increase demand for low-carbon technologies and European-made products—the Industrial Accelerator Act (IAA). Among other things, the document introduces targeted and proportional requirements for the “Made in the EU” program.