Uncomfortable news for the shipping industry today as the UK’s EU ambassador, Sir Ivan Rogers, has claimed that it may take till 2020 before a UK-EU trade can be finalised.
Sir Ivan, who chosen as ambassador by former Prime Minister David Cameron, believes the European consensus is that no firm deal will be able to be established until at least 2020. He has also warned that there is no guarantee that a final agreement may even be accepted by the other EU members' national parliaments. These details were revealed privately to ministers in October, in which Sir Ivan advised that the possible free-trade agreement option could take up to a decade.
Sir Ivan has cast shadows on any steady negotiations by saying that even if an arrangement is made, the deal might not survive the approval process because every single country will have to individually approve the pact in parliament. That means 27 other countries will have to green light and potential trade deals the UK manages to negotiate with the EU.
Until now, it has been thought that after evoking Article 50, arrangements would have to be made in two years. This new information directly contrasts what many believed was a formal and contractual obligation.
More information from Sir Ivan’s private advice suggests that the expectation from European leaders suggest a free trade deal looks to be the most likely outcome following the UK’s decision to leave the European Union.
Despite these concerns raised, the UK government has expressed assurance and confidence that a suitable agreement will ultimately be made.
The Brexit vote looks set to have a profound impact on the whole maritime industry, with doubts around tariffs, trade, policy and particular sectors such as bulk freight. According to the IMO “…more negative outcomes are a distinct possibility,” as a result of Brexit, with the organisation giving two likely scenarios in the aftermath of Britain’s exit: the first is that financial conditions will be tighter, with much weaker consumer confidence until H1, 2017.
The second scenario pertains to the more serious side of the spectrum, which will include intensified financial stress and trade arrangements returning back to WTO norms between the UK and the WTO.
Read our special feature on the Implications of Brexit here.
