Access to EU single market crucial for UK auto industry: report

LONDON, March 1 (Xinhua) -- Hundreds of thousands of jobs in the auto sector would be at risk in a no-deal Brexit, a House of Commons committee warned Thursday.

Lawmakers on the business committee also warned that inward investment worth hundreds of millions of dollars would also be threatened if Britain and the European Union failed to agree a future post-Brexit trade deal.

The report found that even non-tariff barriers, in the form of border delays and increased bureaucracy, will also impact on Britain's competitiveness after it leaves the EU.

The committee said retaining good access to the European single market was more important than securing the freedom to secure new trade deals with third countries.

The report calls on Theresa May's government to place a high premium in its Brexit negotiations on securing frictionless trade for the automotive sector.

The committee's report comes just 24 hours before May makes what is being billed as one of the most important speeches in the Brexit saga.

Ahead of her keynote speech, May is scheduled to hold a private meeting Thursday with Donald Tusk, president of the EU Council.

The EU's chief Brexit negotiator Michel Barnier released a draft treaty Wednesday which proposed a common regulatory area after Brexit on the island of Ireland.

The proposal, which would have the effect of keeping Northern Ireland in an EU customs, was immediately rejected by May who said no British prime minister would ever accept such an idea.

In the new business report Thursday, the Society of Motor Manufacturers and Traders (SMMT) estimated the introduction of EU trade barriers would result in a drop of 6.2 billion U.S. dollars in exports. Other studies warned the decline could be even greater.

MP Rachel Reeves, chair of the business committee, said: "The car industry is one of the UK's great manufacturing successes. Innovative and efficient car plants across the country provide thousands of jobs and the automotive sector is a major contributor to our economic growth.

"There is no credible argument to suggest there are advantages to be gained from Brexit for the UK car industry. The Prime Minister now needs to ensure common-sense pragmatism prevails and spell out the government's intention to seek continued regulatory and trading alignment with the EU in the automotive sector."

The success of Britain's automotive sector, says the report, is built on complex supply chains that stretch throughout Europe.

The report states that any new bilateral trade deals secured by the government are unlikely to lead directly to a significant increase in investment and jobs in the UK automotive sector. Enditem