Car makers push TTIP forward

Posted on 16 May 2014 by The Manufacturer

A report from the House of Lords has recognised the contribution of Britain’s automotive manufacturers to advancing Europe’s trade negotiations with the US.

A report published this week by the House of Lords has recognised the influence of UK car makers in driving negotiations for a Transatlantic Trade and Investment Partnership forward.

The report highlighted how other industries could learn from the way the motor industry is making its voice heard, but warned that negotiations are losing momentum and must be revived.

This message was echoed at Aston Business School’s Spring Servitization Conference in Birmingham on Tuesday when Conservative MEP Malcolm Harbour urged delegates, who came from industry and academia across Europe, to engage in the upcoming European Parliamentary elections and to “vote for someone who will work for you, not for someone who does nothing for Europe,” referring to UKIP leader Nigel Farage.

Mr Harbour has been closely involved in the TTIP negotiations and hailed it as a great impending benefit for EU members.

The TTIP represents a significant opportunity to increase trade between Europe and the US and the UK automotive industry has been singled out as the sector that could gain the most from this agreement.

UK vehicle exports to the US could increase by 15% under a TTIP agreement. This would translate into a 7.3% rise in UK vehicle manufacturing, according to government research.

The greatest hurdle for an auotomotive TTIP agreement will be settling mutual safety and environmental standards for parties on both sides of The Pond.

Consistent standards should lead cost reductions for manufacturers through less bureaucracy. The move would be of particular help to low volume, niche vehicle manufacturers, a segment where the UK has strength.

Such SMEs will find particular support from TTIP in the removal of non-tariff related trade barriers according the the House of Lords TTIP Committee. Such barriers currently place an undue administrative burden on SMEs who cannot afford the cost or time of the required bureaucracy.

McLaren Automtive gave specific input on this point and was recognised in the Lords report for its contributions.

The luxury car maker told the Lords that their efforts to develop common technical specifications for its vehicles across global markets was often thwarted in trading with the US. Speaking up for manufacturers with fewer resources, McLaren told the Lords that this difficulty could bar smaller companies accessing the market at all.

With the EU and US accounting for almost half of global GDP, the potential gains from TTIP could be substantial – as much as £100bn a year to the EU and £80bn to the US according some estimates.

The House of Lords committee reviewing TTIP’s progress this week acknowledged that these figures should be treated with caution but agreed that a deal between the EU and US should have mutual benefits in terms of employment, widen choice for consumers and potentially lower prices due to increased competition.


The Lords Committee made a number of recommendations in its report which it hopes will consolidate and accelerate progress on TTIP.

These recommendations include:

  • The UK and the EU should not allow the opportunity to pass and with it the potential increases in employment and prosperity, the revitalisation of the transatlantic relationship and the chance to re-set the terms of world trade for the 21st century.
  • In a negotiation between equals it is not acceptable for one party to exclude a sector central to both economies as the US is doing with regulation of financial services. But the UK and the Commission need to build a more compelling case for why TTIP is the right vehicle for securing progress in this sector.
  • Disagreements around agricultural issues such as genetically modified organisms (GMO) and geographical indications will have to be resolved if an overall agreement is to be reached, owing to the political salience of those issues in some countries.
  • The government should formulate a communications strategy around the promotion of TTIP that involves ministers with sectoral responsibilities, not just trade ministers.
  • Other EU governments should do more to explain the issues at stake, to address concerns, and to mobilise support for an agreement.
  • The UK should continue to press all parties to ensure that that any deal is designed so that third parties can benefit.
  • Other industries can learn from the way the motor industry is pressing its case on both sides of the Atlantic.

Read the report in full here.