TTIP Open For Business Series - Automotive

Open for Business What a transatlantic trade and investment agreement means to the UK automotive sector

Barry Moor Managing Director

“E

stablished in 1960 and based in Birmingham, Cameron-Price is a highly successful and well respected designer and manufacturer of high precision plastic injection moulded parts and assemblies for a ‘blue chip’ customer base, predominantly into the automotive sector.

The company has a built in philosophy of continuous improvement. As such we are open to mutually supportive transatlantic trade and investment partnership agreement.

We have facilities and capacity that could see joint ventures with specialist niche providers from the US setting up in the UK. Cameron Price are a strategic supplier to several UK Tier one businesses, with strong relationships directly to original equipment manufacturers (OEMs), including Jaguar Land Rover. Like many companies throughout the supply chain we could stand to benefit from increased exports to the US market.” continued on page 3

Open for Business What a transatlantic trade and investment agreement means to the UK automotive sector

T

his leaflet was published following the event ‘What a transatlantic trade and

investment agreement means to the UK

automotive sector’, organised on 5th November 2015 at the Heritage Motor Centre, Gaydon.

The event explored the UK-US trade and

The automotive sector is of particular importance to the Midlands region. Across the Midlands, 58,000 people are employed in the sector5. Greater Birmingham accounts for 25% of the UK’s automotive production and 60% of the UK automotive industry’s research and development is carried out here.

investment dimension in the automotive sector

The UK/US trade and investment dimension

and the changes and benefits a transatlantic

Of the vehicles produced in the UK, 78% are exported6.

trade and investment partnership (TTIP)

As sales in Europe fall, it is more important than ever

agreement could bring to business in the region.

to have access to non-EU markets, including the US.

The event was kindly hosted in collaboration with

Currently the US is the second largest non-EU market,

Jaguar Land Rover, the British American Business

being the destination for 8.8% of UK automotive

Council – Midlands and Europe Direct Birmingham.

exports. In total automotive trade accounts for 10% of

Panellists: Paul Griffiths, Deputy Head of

EU-US trade7.

Transatlantic and International Unit, Department of Business, Innovation & Skills, Chris Scott,

Barriers to trade and investment

Senior Manager, Global Automotive Safety,

Regulatory procedures in the EU and US produce

Regulations, Compliance & Homologation, Jaguar

broadly similar outcomes, but as regulation has

Land Rover, Rachel Eade MBE, Automotive Lead,

developed in parallel, companies need to comply with

Business Growth Service (BGS) and Joseph

different processes. The costs of adhering to both sets

Burke, Trade, Investment and Energy Officer,

of regulation are estimated to add 26% to the cost of

Economic Section, US Embassy in London.

transatlantic trade8.

Steve Allen of Mills & Reeve LLP, President of

For example, when a car brakes a red symbol with

British American Business Council opened the

brackets and an exclamation mark appears. For every

event and the panel was chaired by Jeffries

other country around the world that’s accepted as a

Briginshaw, CEO BritishAmerican Business.

park brake warning light. However, in the United States regulation dictates that the word park must appear in an oblong box with red font. So vehicles for the United States have to be differentiated from all other vehicles.

The UK automotive sector Every 20 seconds a car rolls off the production line1.

With over 1.5 million vehicles and 2.5 million engines produced each year, the UK is the fourth largest car producer in the EU2.

The challenge for automotive companies is to design a product that meets regulations in as many markets as possible. Currently, having to adapt cars for the US market results in increased complexity. This complexity is driven down the supply chain and extends to the final assembly process.

The sector is key to the UK economy. In 2014 it added £15.5billion in value and accounted for 11.8% of all exports3. Among the 788,000 people employed in UK automotive 78,000 are employed in the supply chain.

Another 140,000 are employed in car and commercial vehicle manufacturing4.

1

6

2

7

Automotive Council: (2014) Core Briefing Congressional Research Unit: U.S and EU Motor Vehicle Standards: Issues for Transatlantic Trade Negotiations (2014) 3 SMMT (2015): Facts Guide 4 SMMT (2015): Facts Guide 5 House of Commons (2015): The Motor Industry: Statistics & Policy

SMMT: Facts Guide 2015 SMMT: Facts Guide 2015 8 All Party Parliamentary Group on EU-US Trade and Investment (2014): Automotive sector and TTIP 9 EurActive (2015): European Automakers set to win lion’s share of TTIP gains 10 SMMT (2015): Facts Guide

Open for Business What a transatlantic trade and investment agreement means to the UK automotive sector

What a transatlantic trade & investment partnership means to the UK automotive sector A transatlantic trade and investment partnership (TTIP) agreement is likely to have a noticeable impact on the automotive sector, helping to open up the US market. Studies suggest an agreement will help European automakers to win the lion’s share of TTIP gains9. Further sector analysis indicates that automotive output could increase by 7% and exports by 25%10.

Areas that could be addressed by an agreement include: • Regulatory divergences – TTIP could help to reduce unnecessary duplication and create harmonized processes. A joint EU-US approach could lead the way in forming internationally recognised motor vehicle regulations.

• Tariffs – By eliminating tariffs significant cost saving and efficiency gains could be delivered, increasing business opportunity and consumer choice.

By streamlining the process on both sides of the Atlantic, an agreement could increase efficiency throughout the supply chain. Rather than spending time and money adhering to both sets of regulation, manufacturers will be able to increase production and lower costs. The predicated growth in car sales to the United States as a result will create job opportunities throughout the sector.

Heritage Motor Centre

The assembled products part of the business has grown significantly in recent years. The two key drivers of this growth have been the supply of Fuel Delivery Modules which are fitted inside the vehicle fuel tanks, and the supply of assembled fluid spray systems for windscreen and headlamp cleaning jets on motor vehicles. Many of the new contracts secured are via recommendations from existing customers, word of mouth and contacts that are a consequence of having over 50 years of experience in the industry.

In 2015 the business underwent a management buyout and as part of the ambitious plans for the business we want to build on our understanding and experience of the automotive supply chain dynamics to expand into the US. Currently we supply a large percentage of our product into the EU market but our links with the US are less developed. We are hopeful that a successful agreement will increase our involvement in the US market and contribute to our ongoing growth.”

Barry Moor continued

“As we see more OEM’s setting up production plants in Brazil, Russia, India and China we need to be developing our own links and networks to ensure the visibility of the Cameron-Price brand.

Most organisations are very lean now, so our future depends on taking advantage of international opportunities to ensure the Cameron-Price business is a recognised world class supply partner.

The UK government is keen for industry to provide further evidence of the barriers it faces when trading and investing with the US. Please get in touch at ttip.team@bis.gsi.gov.uk.

For any further information, please contact our partners represented on the back cover and click on links provided in box (on soft copy)

BritishAmerican Business is the leading transatlantic business organisation, dedicated to helping companies build their business on both sides of the Atlantic. It incorporates the American Chamber of Commerce (UK) and the British-American Chamber of Commerce (USA), which merged in 2000 to create a single, pre-eminent transatlantic organisation under the BAB brand. We represent a pragmatic, creative and conscientious British-American business community and we are a driving force for a pro-growth transatlantic economic zone.

Open for Business is a series of industry specific events with the objective to explore the changes and opportunities that a successful and comprehensive trade and investment partnership ( TTIP) agreement can bring to UK sectors, in particular in regards to the scope and sector-specific content of the agreement. This initiative aims to build a nation-wide sector case for TTIP and UK-US trade and investment in general that will contribute to the debate in the UK and beyond.

Co-organised with

ba bc

UK Government: TTIP European Commission: Position on Motor Vehicle European Commission: Fact Sheet Vehicles in TTIP European Commission: Test case example Lighting and vision standards Atlantic Council/Bertelsmann Foundation/British Embassy Washington: Motor Vehicles and TTIP All Party Parliamentary Group on EU-US Trade and Investment: Automotive sector and TTIP

Event partner

MIDLANDS NORTH WEST

BRITISH-AMERICAN BUSINESS COUNCIL

Supported by

Series sponsors

Contact: Mairi Maclennan Project Manager, Trade & Policy Email: mmaclennan@babinc.org Tel: +44 (0)20 7290 9884 Join the debate at #Op4Biz