Brexit is an opportunity to re-appraise the UK shipping industry, but the sector needs concrete proposals, writes Brexit policy advisor Matthew Wright
The EU is now the world’s largest single market – an economic zone larger than the USA and Japan combined, with a total GDP of around £11 trillion and a population of some 500 million people. Over 50% of the UK’s international trade is conducted with other EU Member States and 40% of goods traded within the EU is moved by sea.
For the UK shipping industry and its customers, access to the European single market has undoubtedly been the single greatest benefit of Britain’s EU membership. The removal of customs duties and tariffs at internal EU borders has helped to improve supply chain efficiency and provided shipping companies with greater access to markets in all 28 member states and the wider European Economic Area (EEA). Likewise, the single market has provided consumers with a wider range of product choice and created benefits for ferry and cruise passengers in the form of reduced border controls and the removal of duties on goods bought abroad.
Our cross-border trading relationship with the EU has changed dramatically since 1992, the last year in which Customs controls were in place. The number of HGVs carried on high-volume short-sea ferry routes through Dover grew by 150% between 1992 and 2015 to reach 2.5 million. This now represents 17% of the UK’s total international trade in goods and is worth some £120 billion annually.
This intimate relationship between UK-EU trade and shipping makes the UK Chamber an authoritative voice that is among the best placed to comment and consult on any prospective changes to trade policy.
Ever since the results of the Brexit referendum were announced, the UK Chamber of Shipping has responded with pragmatism, not politics. All that matters to the Chamber is sealing a competitive deal for its members, and we have not faltered in this mission.
We began in late 2016 by publishing our Blueprint for Growth document, which identified three key requirements that remain the absolute priorities for the Government as the UK negotiates Brexit. These are:
- To preserve existing ease of doing business,
- To ensure business has access to the world’s brightest talent and
- To reform domestic maritime policy to put the UK on the best possible footing after Brexit.
Since 2016, talks have moved on and we now have a better idea of the specific challenges to which we must find solutions. In particular, the UK does not plan to stay within the Customs Union after Brexit, and therefore a new customs partnership will need to be developed.
The UK Chamber has published a series of 10 different position papers (and counting) that cover various different areas affected by Brexit. We have also been holding regular Brexit meetings, in which submissions to numerous Government consultations have been prepared. As Brexit continues, we have revised these positions, continuously evaluating their merit in respect of our three key criteria from the Blueprint for Growth
There has been much talk of the need for a transition period. The concept of a transition is supported by the Chamber as it provides business flexibility in preparing for future change. However, the terms and the final destination for this transition have been difficult to ascertain, with the Government indecisive and slow in their consideration. We can assure our members that this lack of vision will not extend to the UK’s maritime sector.
Our Blueprint for Growth priorities continue to shape our response. For example, the requirement for preserving the ease of doing business, have led to the Chamber calling repeatedly for the need of clear guidance from the Government on the new border regime. Our comments have been echoed by high-profile organisations such as the Confederation of British Industry (CBI); the British Chamber of Commerce and the manufacturers’ association EEF. We have already submitted responses to a Department for International Trade (DIT) consultation, which looks forward to active talks to redefine our trading relationship with the EU.
Access to talent must be addressed through employment visas. For the UK to remain a global maritime centre, where shipping businesses can prosper and grow, and that attracts inward investment from overseas companies, it needs to introduce a visa regime that is comparable with those in competitor jurisdictions. The regime needs to facilitate, rather than obstruct, the transfer of skilled marine personnel around global shipping companies’ network of offices; and it needs to assist UK-based companies in sourcing personnel on the basis of expertise and talent, rather than their nationality. The regime needs to be simple, straightforward, predictable and stable. Above all, the regime needs to inspire confidence among shipping companies that it is designed to support their business.
The Chamber sees UK maritime as being as the centre of any future trade deal – we are looking at how shipping can both contribute and benefit from such a deal. Withdrawal from the EU provides UK Plc an opportunity to capitalise on the freedom to engage in more trade with more countries. New trade policy should maximise the ease of doing business internationally and provides benefits across the maritime sector. For instance, when considering reforms to the UK flag, it should be considered how development of the registry can help shipping companies that fly the red duster build new trade links.
UK shipping is not just about what compatriot companies can carry, but is also about providing maritime services and helping UK-based businesses gain a larger share of the international market. Therefore, trade policy must take into account the export potential of the nation’s maritime services. This involves access for UK maritime lawyers to offer overseas legal advice; UK banks to provide credit and trade finance, UK marine insurers to provide more comprehensive and complex security, and UK maritime colleges to educate the seafarers of the future.
Brexit is an opportunity to re-appraise the UK shipping industry, but the sector needs concrete proposals, not academic theories. We don’t have much time to spare. The EU has said future partnerships must be agreed by the end of October this year, with a final agreement signed off by the European Parliament in December.
Here at the Chamber, we have a dedicated team to undertake this necessary work, which will be bolstered by our growing profile, influence and the wide range of stakeholders we are able to bring together.
The Chamber’s motto has long been to champion and protect the UK shipping industry. In our Brexit work, that cause rings true now more than ever.
Source: UK Chamber of Shipping