Impact of BREXIT on key stakeholders of the maritime industry in EU

• Main Author: Lieu, Whai Theng
• Other Authors: Lum Kit Meng
• Format: Final Year Project
• Language: English
• Published: 2018
• Subjects: DRNTU::Engineering::Maritime studies
• Online Access: http://hdl.handle.net/10356/74294
• Institution: Nanyang Technological University

UK’s position in the global maritime industry is anchored and well recognised given its success in establishing tradelanes and large sustainable shipping volume to Continental Europe. The ports of UK also boast of competitive sea advantage and connectivity to the rest of the world. In addition, with London being the leading centre for maritime arbitration and dispute resolution, it is evident that the UK is a prominent and established maritime hub with a significant global position legally and commercially. Given the extensive ties in trade volume and regulatory policies the UK shares with the EU, the impacts of BREXIT on the UK’s maritime industry will undoubtedly have a direct impact on the EU as well. In the context of shipping regulations, a precedent has already been set and adopted in both the UK and EU legislations. The extent by which UK’s maritime industry are still being subjected to EU legislation will very much be dependent on the post-BREXIT negotiations and resulting relationship with the EU. With EU-specific maritime regulations known for being of a higher gold-plating standard than minimum IMO regulations, UK may be able to abolish or steer away from ratifying certain aspects of EU-specific maritime regulations. Several parameters to be taken into consideration will include the competitiveness of UK as a maritime centre, conservation of the marine environment and the fact that UK fleet will not be able to escape EU regulations if trading in EU waters are still preserved. This still stands very much uncertain today. This research paper will aid in identifying shipping issues that will arise post BREXIT in relation to UK and EU. These shipping issues are particularly in the aspects of social, environmental and legal factors. Thereafter, the impacts of these issues on the potential stakeholders involved in the EU maritime industry will be weighed and its severity be evaluated. Analysis of these impacts will help in the understanding of how such changes and their respective magnitude may affect future EU shipping operations in trade routes, custom duties procedures, contractual administration or port operations. Based on primary and secondary research collected in the process of this study, one of the more significant impacts of BREXIT on EU will be the return of border controls and customs barriers effected on UK. This factor has a great influence not only to EU and UK regionally but also its sectors, which includes the maritime industry. Supply chains embedded in EU and its resultant downstream operations in manufacturing, warehouse operations, shipping, trucking and port activities will be impacted as well. It will also have the influence on labour mobility, migration laws and commercial regulations on the flow of goods, services, products and people. Ultimately, the direct cost of trade between the two blocs will be hurt. The extent of the impact of BREXIT on EU’s maritime sector will be critically dependent on the exact deal negotiated, time scale over which it is implemented and the eventual existence of a FTA with renewed trade terms with UK. EU has scorned UK’s “pick and mix approach” to trade, where UK is seen negotiating on terms where she picks sectors of the EU single market that she prefers and suits her interest. Though currently the outcome of this exact deal is unknown, sources have reported that Theresa May, the UK Prime Minister, is adamant about UK leaving the EU customs unions and European single market. This will mean that a hard BREXIT outcome is likely to follow suit. While a soft BREXIT scenario will likely warrant minimal changes in many aspects due to UK’s continued membership of the European Economic Area (EEA), opportunities and threats for identified stakeholders that may emerge post BREXIT will also be addressed. Hopefully, elimination of these threats and exploitation of opportunities will allow respective stakeholders to be well positioned in the dynamic nature of shipping in a post BREXIT environment.