Shipping business would be ‘exposed’ if UK left EU, government says
23 May 2016. By Lewis Crofts.
The UK’s maritime sector would be “heavily exposed” if Britain were to leave the EU, creating a “strong incentive” for shipping companies to relocate to other countries inside the bloc, says a new government study.
The UK Treasury today released a report on the short-term impact of a “leave” vote in a June 23 referendum on EU membership. The study says that a “no” vote would cause a “profound economic shock creating instability and uncertainty.”
The scenario includes a swift downturn in economic conditions as well as uncertainty about how Britain would negotiate a new trading relationship with the remaining EU members. In addition, there would be uncertainty over the status of UK and European laws, the report says.
“Leaving the EU would create uncertainty over the extent to which EU rules would apply to UK shipping,” the study on short-term impacts concludes.
“The nature of the sector means it would be heavily exposed to the negative impact on trade that leaving the EU would imply,” it says.
Currency risk, tariffs
The most profound risks facing the industry are likely to come from volatile currency markets affecting the price of goods, and uncertainty about trading terms such as tariffs, according to leading industry figures.
Further complications could come over jurisdiction clauses in shipping contracts, lawyers say.
An EU regulation grants the freedom to provide maritime services across the bloc. After a “Brexit,” the status of such a law would depend on the UK’s future trading relationship with the remaining members of the EU.
“Leave” campaigners argue that European countries won’t want to harm their possibilities to trade with UK companies by erecting further obstacles.
But the “remain” camp says there is a risk of retaliation against Britain and the imposition of tougher trade and regulatory terms.
British shipping companies would likely have to continue applying EU norms if they wanted to trade with countries remaining in the union.
Even so, UK trade with other non-EU countries should avoid any direct impact from “Brexit.”
“Leave” campaigners maintain that trading relationships beyond the EU are significant for UK interests and have the potential to grow, once rid of Brussels regulation.