Auto parts suppliers warn hard Brexit may set UK back 25 years

BMW said only 10 percent of British automotive suppliers and 41 percent of EU suppliers considered they were well prepared for Brexit. (Supplied)
Updated 17 October 2018
0

Auto parts suppliers warn hard Brexit may set UK back 25 years

  • Europe’s carmakers’ lobby ACEA and suppliers’ association CLEPA, along with BMW and brakes maker Brembo, jointly warned that a no-deal exit would be catastrophic for the industry
  • Roberto Vavassori: The recovery of Britain’s auto sector in the 20 years since the decline of British Leyland and its successor Rover Group was based on investment from around the world

BRUSSELS: Failure to secure a trade deal for Britain when it exits the EU next year could set the UK auto sector back two decades, leading parts suppliers said on Wednesday as they urged leaders to reach agreement at a summit in Brussels.
Europe’s carmakers’ lobby ACEA and suppliers’ association CLEPA, along with BMW and brakes maker Brembo, jointly warned that a no-deal exit would be catastrophic for the industry.
The “just-in-time” industry model relied on frictionless trade between Britain and mainland Europe, they said.
“If we are continuing to be taken hostage by this situation, the flourishing UK auto industry could come back to the situation it was at 20-25 years ago,” said Roberto Vavassori, a management board member at Brembo and president of CLEPA.

 

The recovery of Britain’s auto sector in the 20 years since the decline of British Leyland and its successor Rover Group was based on investment from around the world, he said.
Vavassori said he felt “betrayed” that Brembo’s manufacturing in Coventry, UK, would be a different prospect post-Brexit from the time of its investment 15 years ago.
ACEA said contingency planning by its members included temporary production shutdowns and scouting for warehouse space to stockpile parts.
“No amount of contingency planning can realistically cover all the gaps left by the UK’s withdrawal from the EU on WTO terms,” ACEA said, referring to a no-deal scenario in which Britain would have no preferential access to EU markets.
Some 1,100 trucks arrive in Britain every day from elsewhere in the country with parts for the UK auto sector, and storage space to cover more than a day or two of production was not feasible.
The EU leaders’ meeting from Wednesday had hoped to reach a provisional Brexit deal before signing off on a withdrawal agreement at a special Brexit summit
in November.
The talks, stalled since Sunday, are stuck over the issue of how to avoid a hard border between the British province of Northern Ireland and the Irish Republic.
BMW said that its survey of
Brexit preparedness showed only 10 percent of British automotive suppliers and 41 percent of EU suppliers considered they were well prepared for Brexit, with many having little or no experience of customs clearing.
Stephan Freismuth, customs manager at BMW, said that at the Channel tunnel and ports such as Dover there was no customs
infrastructure and, in some cases, no space for trucks awaiting checks to park.

FASTFACTS

Some 1,100 trucks arrive in Britain every day from elsewhere in the country with parts for the UK auto sector.


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
0

Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.