British business allowed itself a moment of hope as Prime Minister Boris Johnson and the European Union reached an agreement to ward off a no-deal Brexit.
The agreement envisages an ambitious, wide-ranging and balanced economic partnership through a Free Trade Agreement that ensures no tariffs, fees, charges or quantitative restrictions across all sectors with appropriate and modern accompanying rules of origin.
Shares of Tata Motors, owner of the Jaguar and Land Rover brands, jumped the most in a decade after the deal was announced, although Jaguar Land Rover was hesitant to declare an end to the Brexit struggles of Britain’s car industry.
“We welcome the latest developments and await the next steps, but we cannot comment further until we have considered the detail of the deal and know whether it is supported by Parliament,” the company said in a statement.
One possible sticking point for the auto industry revolves around “appropriate and modern” rules-of-origin provisions that would potentially add cost and complexity to manufacturing in the U.K., as automakers would have to certify where parts came from. Under the plan put forward by former Prime Minister Theresa May, these checks wouldn’t be needed.
Johnson now has to succeed where May failed three times and win approval for the deal from the U.K. parliament. With Northern Ireland’s Democratic Unionist Party again withholding its support, the optimism is tinged with apprehension.
“We have been here before,” the chairman of the Federation of Small Businesses, Mike Cherry, said Thursday.
U.K. businesses see avoiding a no-deal rupture with the country’s most important trading bloc as the overriding priority as it could bog down supply chains with customs checks and tariffs and upend arrangements that allow data to move freely across borders.