SA-made cars exported to the UK will not be affected by the proposed 10% tariff announced by the government there on Tuesday, local motor industry executives said.
A zero-tariff deal signed last year by trade & industry minister Ebrahim Patel will still apply.
The UK department for international trade announced the duty on Tuesday as part of a wide-ranging review of post-Brexit tariffs that could affect up to 6,000 products from January 2021.
The main effect of the car change will be felt by EU-based car plants whose vehicles now enter the UK duty-free through EU-wide trade agreements.
SA’s current duty-free access to the UK is through the EU. In September, however, Patel negotiated an economic partnership agreement (EPA) with the UK that guarantees continuation of that deal irrespective of the outcome of UK-EU trade negotiations.
UK international trade secretary Liz Truss said at the time that the agreement was “a major milestone as the UK prepares to become an independent trading nation once again”.
The UK is a vital market for SA’s motor industry. Of 387,125 vehicles exported about the world, 101,401, over 25%, went to the UK in 2019. The second-biggest export market was Germany, which took 37,152.
Tuesday’s UK tariff announcement said all car imports would be affected by the 10% duty. However, Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA (Naamsa), said any change to the EPA would have to be negotiated. “It cannot be done unilaterally,” he said.
BMW SA MD Tim Abbott, whose Rosslyn vehicle assembly plant exports many of its X3 cars to the UK, said executives at the German parent company confirmed SA was unaffected by the announcement and would pay no duties.
“It looks like an opening salvo in post-Brexit trade discussions,” he said.
UK analysts said the announcement of tariff changes was intended to hasten the EU’s return to the negotiating table now that countries have begun to ease Covid-19 lockdowns.
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