Downing Street has said that joining the EU's "Made in Europe" scheme would be "good news" for Britain's car industry, amid reports of a potential agreement for the sector.
France and Germany are said to have tabled a proposal that would allow the UK's automotive sector to be brought under the protectionist scheme, formally known as the Industrial Accelerator Act.
UK inclusion contingent on tariff alignment
However, according to the Guardian, any such inclusion would be contingent on Britain aligning itself with the EU's stance on tariffs for electric vehicles manufactured in China.
When pressed on the reports on Friday, a No 10 spokeswoman said the Government would "welcome the objective to have the UK included in the Industrial Accelerator Act".
She went on to say: "This would be good news for the British automotive industry and the jobs and investment it supports across the UK."
European process still to run
She declined to elaborate further, however, noting there was "still a European process to run".
Earlier this week, the Prime Minister warned that the Made in Europe scheme posed "risks to British manufacturing" and pledged to raise concerns over its potential impact on UK automotive firms with the bloc.
Scheme designed to shield against Chinese competition
The scheme is designed to shield clean technology companies and electric vehicle manufacturers from low-cost Chinese competition. The EU has already taken steps to restrict imports of Chinese electric vehicles, including through the imposition of tariffs, and adopting similar levies could well be the price of securing the UK's place within the Made in Europe framework.
Thus far, Britain has held firm against European pressure to introduce such tariffs, with Trade Secretary Jonathan Reynolds stating that any decisions on the matter would be "based on the UK interest". Introducing tariffs could also jeopardise the UK's electric vehicle targets by pushing up costs for consumers.
When asked whether the UK would be prepared to align itself with the EU on tariffs, the Downing Street spokeswoman said it would be "premature to speculate" on the terms of any potential agreement with the bloc.
She went on to say: "But more broadly, on the principle, the UK obviously has its own trade policy and it keeps all tariffs under review. And we work closely with the British automotive sector to make sure that that approach reflects their best interests."
