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With the new government acknowledging opposition to unrestricted immigration into the U.K. from the EU was a key to Brexit’s approval, the U.K. may have to limit immigration if a new trade deal with the EU is to avoid duties on U.K. exports.
Tariffs could burden Nissan, which exports 75% of U.K. production to EU.
OTTAWA – Automakers based in the U.K. may see tariffs levied on their exports to the European Union now that government has confirmed it will push ahead with leaving the EU following the June 23 Brexit referendum.
The duties could be imposed after the two years of mandated talks on a future relationship with the EU following the U.K.’s decision to trigger Article 50 under the Treaty on European Union, which establishes the procedure for leaving the single market.
If the U.K. refuses to allow free movement of workers from EU member countries into its economy while negotiating a future relationship with the EU, it almost certainly will be barred from the European Economic Area.
A sort of downsized EU whose members include Norway and Iceland, the EEA maintains duty-free trade with the EU in industrial goods, such as automobiles, parts and materials.
But with the new government of Prime Minister Theresa May acknowledging a key factor in Brexit’s approval was opposition to unrestricted immigration from the EU, the U.K. probably will have to forge a new bilateral trade deal with the EU that may involve additional duties being charged on U.K. exports.
Such an agreement could resemble Switzerland’s relationship with the EU. That country remains outside the EU and the EEA but has extensive free trade with the EU for industrial goods, including automobiles and parts