The Guardian reports that the Prime Minister has given assurances to Nissan over the issue of tariff-free access to Europe. Is this the way our exit from Europe is really going to be negotiated, unaccountable secret deals until the shit really starts hitting the fan?
May could be playing a very risky game here? It appears that sweeteners and inducements may not have been offered to Nissan after all, but an assurance that tariff-free access to the European market will continue for car makers.
Unless she already knows something, she is taking a huge risk. Her gamble is based on the belief that the European car manufacturers need Britain as customers, the same way as Nissan needs European customers. We Brits do buy a lot of European cars after all and they wouldn’t want to hurt their market?
There is a very big ‘but’ here though. If tariffs should be imposed, it will push up the price of vehicles imported to Britain to the point where they become uncompetative, but by the same token, cars exported from the UK to Europe will become uncompetative as well, which will boost the sales of a manufacturers cars within their domestic market or trading bloc to compensate.
Just because Fritz in Frankfurt can’t afford to buy a Nissan, doesn’t mean he’s going to take the bus, he’ll buy a European car instead, and if it’s German, then all the better. If he’s going to pay the same price for a base model Nissan as he’d pay for a VW or BMW with all the toys, I think we all know which option he’s going to plump for.
This could be disastrous for Britain’s balance of payments. A Japanese company selling British made cars to the British brings no foreign money into the country, but Mercedes selling a car to a driver in Italy does.
If May has misjudged the mood of Europe, and Europe does decide to play hardball over tariffs, (which they can afford to for the reasons above), then she’s going to have totally blown her credibility for any future inward investment and will probably end up having to make up the difference between the price Nissan will have to dump their cars in Europe to remain competitive before the tariff is added.
And what about Honda, or Jaguar/Landrover, (owned by Indian company Tata), or Mini, (owned by German BMW), for example? What happens when they come to make decisions about future investment in Britain or even the viability of remaining here if it turns out May is just bluffing and playing for time? What’s to stop them just upping sticks and moving production to the EU? There’s nothing to stop that icon of Britishness, the Mini, (for example), being made in Ulan Bator or by the Uruguayn descendants of Josef Mengele if BMW really wanted to get weird about it. Protected geographical name status only applies to agricultural and food produce.
I hope that May is not just stalling for time and she does actually know something that we don’t, as the consequences for Britain if Europe gets pissed off with her presumptuousness are potentially disastrous.
If May’s got it wrong, we might all be driving Nissan’s in 10 years time, which I really don’t look forward too. They are so fucking ugly!!