Has Nissan been sold an EU nonsense?

The prospect of shiny new Nissan X-Trails and Qashqais built in Sunderland roaring up the ramps of ships bound for EU ports without tariffs after Brexit came closer this week.

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Has Nissan been sold a false promise? These workers should know.

Business Secretary Greg Clark told Andrew Marr and the House of Commons that the Government’s approach was to secure tariff-free access to the EU for UK-made cars and effectively adopt a sectoral approach for others.

Britain’s car exporters may have taken some comfort from this. They have most to lose if such an agreement is not made. According to a House of Commons Committee, the average 9.7% tariff under WTO rules on cars would amount to an annual cost of £991bn for such EU exports.

The automotive sector would top the tariff league table – costing it six times as much as second-placed aircraft parts (£156m), oil (£155m), clothing and food if no pact is made.

So whilst the carmakers seem reassured, what about the many others sectors whose EU export prospects are threatened?

Stand by for campaigns from trade bodies representing the clothing industry, who face the prospect of 12% tariffs, or even our small but proud wine producers with an intoxicating 32% tariff.

They will be highlighting their importance to the local economy, the employment effect and their reliance on such trade for their overall business.

Others representing pharmaceuticals, agriculture and electronics will insist their plight is as deserving as Nissan’s.

With the sector-by-sector approach now signalled the scramble for sympathy is reinforced by the UK banking sector urging rules that will replicate or maintain the “passporting” arrangements allowing them to operate freely across Europe.

Similarly, bodies representing the construction, care and tourism industries will feel encouraged to press their case for allowing people from the EU free access to work in their sector where seasonal and other shortages frequently arise.

So the Government’s piecemeal approach will now galvanize trade associations. They will be jostling for attention with politicians and the media.

Their task is a tough one. The sector approach is based on a hope that the remaining 27 EU countries will be content to allow a series of exemptions to allow British businesses to operate pretty much as they did whilst in the bloc.

It could be wishful thinking. The incentives for the 27 to do this are not that great. Why would they allow club rules to apply when Britain is no longer a member and not paying its dues?

So that means trade organisations making representations to their EU counterparts to urge them to advocate to their Governments sectoral carve-outs for their industries.

Even for carmakers, including Nissan, the outlook is not especially good. Germany’s car industry federation boss Matthias Wissman told the FT last month that “The UK is an important market for the German car industry, but the cohesion of the EU27 and with it the single market is more important for this industry.”

Pro-Leave campaigners claimed during the referendum campaign the German carmakers need our market as much as we need theirs. But it now looks like they have much wider concerns.

So whilst we celebrate Nissan’s renewed commitment to Sunderland, let’s hope it has not been based purely on a pledge of EU sectoral favour. At the moment, it looks like optimism rather than practical politics.

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