Motor Sector: Export Markets

Viscount Trenchard Excerpts

Monday 14th September 2020 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, the UK-Japan agreement contains standard FTA provisions on subsidies. Motor manufacturers, including those in the north-east, and their representative organisation have strongly welcomed the UK-Japan deal. These subsidy chapters in trade agreements help ensure that fair and open competition exists for both parties by working to limit the effects of trade-distortive industrial subsidies. The subsidies chapter in this UK-Japan FTA rolls over the provisions from the EU-Japan EPA.

[Viscount Trenchard (Con) [V]]

My Lords, can my noble friend the Minister tell the House what opportunities there are for UK motor manufacturers to diversify their supply chains so as to widen their sources of parts production to third countries which may be able to supply equivalent high-quality parts at competitive prices? Can he also say whether such opportunities will be only with countries with which we will have entered into FTAs by 31 December 2020, or whether they also include countries with which we expect to trade on WTO terms?

[Lord Grimstone of Boscobel (Con)]

My Lords, my noble friend makes an excellent point. Of course, these supply chains cannot be turned off and on overnight, but I have no doubt that our FTA programme in general is already helping auto manufacturers in this area, and our new Japan EPA has already demonstrated this utility. Our automotive sector deal supports the industry’s ambition to increase the level of UK content by value in domestically built vehicles to 50% by 2022, so we do not have to see these supply chains only located overseas. It is of course a huge benefit to the United Kingdom if they can be located in our country as well.