NEW: EU has rejected and UK “obviously can not insist upon” a key car industry priority on foreign parts in the post Brexit trade deal currently being negotiated, Lord David Frost has privately told the sector in a confidential letter seen by the BBC.. coming up on @BBCR4today

Full Story on Frost letter to car industry, seen by us, EU has rejected “in any circumstances” allowing 3rd country parts from eg Turkey/ Japan to count towards qualification thresholds for free trade deal, so tariffs risked on some exports even in a deal https://www.bbc.co.uk/news/business-54345882

Separate draft legal text, also seen by BBC, shows UK request for EVs, batteries, bikes to count as Brit, even if majority components initially non european. Frost says “sorry to say that so far they have neither been willing to discuss these nor share any proposed text with us”

Extract from letter, Frost says regrets EU rejection on foreign parts “cumulation” identified as key for UK car industry (critical for some factories) but “obviously cannot insist upon it” ... car execs privately say they have insisted on fishing industry priorities...

Government say they have asked, that they have asked in line with precedents from previous EU free trade areas (Singapore is one example) and point out that EU car makers have backed call for such treatment, and for EV cars especially there’s a shared interest...

In Brussels they say that this approach is an inevitable consequence of UK leaving single market/ customs union, and have expressed a particular desire to prevent UK becoming an offshore assembly hub for the single market... also fits with new push on “self sufficiency”

important because:

1. It shows importance of focussing not just on no deal or deal, but on impact of what is being asked for in an actual deal.

2. A rare insight into what is being asked for, and what is being “insisted upon”, ie which sectors prioritised, behind closed doors.

Electric car element is v interesting (HT FT @petecampbell who got to it first) - as EU manufacturers also mindful their exports to existing FTA partners often don’t qualify - batteries bigger proportion of car value than engines & green agenda

might there be some movement here?