The European Commission has advised EU businesses against using components and parts made in Britain, because of a decision by Prime Minister Theresa May to take the UK out of the EU customs union as part of Brexit.
Britain’s automative industry may suffer because car manufacturers for instance now have to look elsewhere for parts if they want to continue benefiting from EU free trade agreements because anything made in Britain will no longer count as being made in the EU customs area.
“Economic operators are reminded of the legal repercussions concerning rules of origin for preferential treatment of goods, which need to be considered when the United Kingdom becomes a third country,” the note from the European Commission says.
“In particular, as of the withdrawal date, the EU preferential trade agreements with third countries in the field of the common commercial policy and customs no longer apply to the United Kingdom.”
It continues: “EU-27 exporters and producers intending to claim preferential tariff treatment in an EU FTA partner country as from the withdrawal date, are advised to treat any United Kingdom inputs as ‘non-originating’ when determining the EU preferential origin of their goods and take appropriate steps to be able to prove the EU preferential origin of their goods, in case of subsequent verification, without taking account of any United Kingdom inputs as ‘EU content’.”
Independent UK reports that UK supplies have already started losing orders for cars to export to countries like South Korea, Canada, and South Africa which have free trade agreements with the EU.