The Brexit Effect on Shipping from China to the UK

The auto industry is greatly dependant on the new globalised economy. As parts are sourced from all over the world, shipping and logisitcs has become an important part of keeping a smooth and steady supply chain. This is a look at how the upcoming Brexit may affect that.

Britain’s decision to leave the European Union has led to uncertainties affecting all forms of business ties to member states and nations that have business associations with Britain. It is yet to be seen how significant the impact will be on the shipping industry. Although EU officials have warned the UK not to make trade agreements outside the EU till after the break likely to occur by March 2019, it remains to be seen that the UK is striving to land huge trade deals with the World superpowers judging fromthe international tours carried by Theresa May’s government.

China, the world’s greatest economy after the US, is one country that the UK will want to bring to the table. While the UK was still part of the EU, China had invested approximately 14 billion pounds on trade in the UK and employed over 20,000 people in 2016 in Britain. Some of the trade deals may have been realized due to the UK enjoying apartnership with the EU hence access to the European markets. In the Shipping industry, the impact will greatly depend on the type of market whether it will be the European market and in this case the Asian market.

Trade Outside the EU

A hard Brexit forces the UK to lose the EU’s single market and in turn end free movement of EU citizens and goods through the UK borders. Although the UK abandons the EU market, it can be a blessing in disguise as they will have the opportunity to negotiate their trade deals with other markets like the Asian market. This can lead to astrengthening of the UK-China relationship as far as trade is concerned. It could also instead lead to increased business outside the EU and as China and other non-EU partners form the bulk of UK port container traffic volume; it could balance out the loss incurred by ending trade with EU member states.

Another approach is that there could be a likely decrease in the UK/China trade. China is the largest non-EU exporter to the UK and the second largest importer of UK goods after the US. This could all change depending on the new trade agreements with nations that also benefit from low labor costs like India and South American countries.

Container Services to the UK

British importers and exporters are also concerned that Brexit will lead to a decrease in the direct mainline container services calling at the UK ports. However maritime experts have expressed that they are not expecting significant changes to the high proportion of direct container vessels calling at the UK ports.

Although there might be changes in the volume of trade between some countries having trade agreements with the UK, the hope is that new trade deals will offset any decreases experienced hence an unlikely tangible impact on the shipping industry. The UK should take their time in coming up with trade agreements particularly with China as one of World’s greatest economy to have long-lasting partnership. With Brexit, it is inevitable that shipping from China to the UK will be affected, but the impact will muchbe determined by the future trade agreements between the two nations.

UAW Tuesday 10 October 2017 - 01:47 am | | Default
Used tags: