How might the potential of WTO trade tariffs affect worldwide shipping?
05 October 2020
As trade and commerce continue as normal during the Brexit transition period, many companies who regularly import and export goods with Europe are becoming increasingly concerned about the threat of a ‘no deal’ Brexit.
There is plenty of speculation that a free trade agreement between the UK and Europe could yet be achieved. But with discussions still ongoing it’s looking increasingly likely that the UK will revert to WTO trade tariffs from January 2021.
It’s reported that approximately 40% of the UK’s average annual exports are Europe-bound, and around 50% of imports into the UK arrive from Europe. With these high statistics, the consequence of leaving the single market could have an effect on many UK businesses. As a freight forwarder helping clients move many categories of products to and from Europe, we’re often asked how WTO will affect shipping and the movement of goods.
The well-published phrase of ‘Keep calm & carry on’ has been widely used and adopted in recent times, and I believe this sentiment is equally appropriate when it comes to the shipping industry. Because whilst the media often like to sensationalise a state of chaos at the ports and huge import duty increases, the reality is likely to be more straightforward.
When you dig deeper into the statistics, reports show that approximately 47% of imported goods will have zero tariffs under WTO, compared with 27% under current EU tariffs. And when it comes to the reported lengthy ques of trucks at the ports and extensive delays of moving freight between the UK and EU – again, this doesn’t need to be the case.
Away from the news headlines, UK business, the shipping industry and the authorities have been preparing for years. Freight-forwarders like ourselves have undertaken new customs training programs to ensure we’re fully ready and prepared for the change, whichever tariff route that takes. And whilst there will be the inevitable early challenges you get with any change of protocol, I strongly believe these will be short lived. It’s in all parties interests to keep trade moving and shipping lanes bustling.
Freight-forwarders like ourselves exist to take the burden away from shipping and transporting goods from and to the UK. This includes advice and support on customs entries, tariffs and documentation, so businesses can rest assured that the freight industry is ready to support you.
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