What will be the trade impact of a Brexit?
Rob Shelley discusses the impact of the EU referendum on the shipping industry.
If you listen to our government, you will vote Remain in the June referendum. Being part of the EU offers meat producers access to 500 million consumers and accounts for 60% of UK farm exports. The EU is our largest market for beef and lamb, with beef exports worth £316m, and lamb/mutton worth £291M (2015). If we vote Remain, we continue to access this tariff-free meat market which brings the benefit of free movement of workers, yet the highest proportion of regulations - covering food hygiene, labelling and compositional laws - of any trading industry.
If we vote Leave, new global trade deals beckon, however prohibitive tariffs loom: the Government predicts that new tariffs could be as high as 40% on lamb and 70% on beef products. If true, these are scary numbers.
According to the Office for National Statistics, our top six trading partners are the US, Germany, Netherlands, France, Ireland and China. If our nutrient-rich grass means British beef exports are considered premium products worldwide, focussing further afield could pay dividends. But which conduit is best? As part of the EU, negotiations with the Transatlantic Trade & Investment Partnership (TTIP) to introduce a free trade deal between EU and the US, could open up the US beef import market (worth £60 million) to UK producers. If UK meat plants receive US approval, it would open up rich potential for meat shippers. Yet during Obama's UK visit last month, his words were that if we wanted to re-start UK-US negotiations, we would have to 'get to the back of the queue'.
The shipping sector could face years of disruption as trade agreements are reworked, while currency turmoil would hit port operators - over 40% of shipping traffic passing through our ports is with EU countries. As a meat shipper, make sure you are working with a freight forwarding partner who can guide you, whichever way you vote.
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