After investing hundreds of millions of GBP into the UK economy by constructing car plants both Toyota and Nissan have confirmed they will continue to build cars in the UK despite being betrayed by the very people who work for them. The Brexiteers and that includes the current UK government headed by Theresa May.
May’s Brexit plan is to leave the EU, a trading partner that generates over £230Bn in exports for the UK economy.
The back up plan is to develop trading partnerships with other countries across the globe but even if May did strike deals today it still couldn’t match the true value of being in the EU.
The EU is the largest economy in the world, 500 million consumers with a GDP per head of €25,000.
What Brexit UK proposes is to leave the worlds largest trader of manufactured goods and services and re-negotiate a deal that will ultimately be a lot worse.
A deal that will require more red tape, bureaucracy, and tariffs all of which barely existed within the free trade zone of the EU.
The EU is stronger when it is united, it isn’t perfect, but as a trading entity, it will make the UK look benign if a hard Brexit is finally navigated.
The Far East will one day develop into a powerful trading entity with China at its head. If the UK does go it alone for a hard Brexit then it could be exploited by trading blocks or countries when it goes looking for a good deal.
In recent trade talks with Australia, the UK wanted better access to the Australian economy. In return Australia wanted relaxed immigration rules for its citizens to enter the UK.
In effect, Australia wants the free movement of its people in return for a reasonably good trade deal. The free movement of EU citizens is one of the reasons why the UK voted for Brexit.
You don’t need to debate the irony on display and the possibility of the UK being exploited. The whole situation seems like total madness, the UK within the EU was already a good deal.
However, Toyota and Nissan are looking through the fog of economic uncertainty with Nissan confirming that Brexit will not alter its long-term production plant in Sunderland.
Nissan will continue its goal of manufacturing new versions of the Qashqai and X-Trail SUVs in the UK. Its production facility is one of the most efficient in the world. Why abandon that?
Toyota will also continue to build cars and engines in the UK and Honda also remains committed. These Japanese companies have been instrumental in reviving UK manufacturing.
EU membership has been at the very heart of Toyota, Honda and Nissan’s decision to set up UK manufacturing hubs to export cars into a huge trading bloc without any tariffs.
If the UK were to quit EU membership these tariffs would surely be lost and while the big three Japanese companies are offering reassurances at the end of the day economic stability will always rule over sentiment.
Should a Brexit happen the UK Government will probably cover the costs of export tariffs into the EU on behalf of auto manufacturers, that cost would be shouldered by raising taxes.
Either way, the UK leaving the biggest trading bloc in the world would be an expensive mistake for short-term revival in nationalism.
