The effects on industry part 3
Those of you who have been following this series will be aware that the last few parts have focused upon the effects industries may face in the event of a possible British exit from the European Union. Previously we have touched upon industry professional opinions and the effects it may have upon the beautiful game but what about the other industries? Today we will be looking at the potential problems faced by these industries in the event of a Brexit.
Let’s start by talking about Tariff, or the lack of. Currently the United Kingdom is part of the free trade agreement within the EU, a market made up of over 500 million people. In the event of leaving the European Union some industries could end up having to charge over 20% VAT on their products. The table below shows the potential barriers various sectors may face.
|Exported to the EU|
|Food, Beverages & Tobacco||60.5%||20%+ Tariff|
As the table above suggests the cost of a possible Brexit could be pretty high, particularly in the food, beverages and tobacco sector where the potential barrier is 20% and higher. Obviously this may cause a problem for the industries listed but as the table below shows the initial disruption will not last for ever.
|Sector||Risk of disruption||Chances of similar EU trade access|
|Chemicals||High||Medium to High|
|Food, Beverages & Tobacco||High||Medium to High|
As you can clearly see the initial impact of exiting the European Union will be quite substantial for all good sectors. That said the chances of exporting to the European Union in a similar fashion to the current agreement are very high. So why would we want to leave when there is a potential for such disruption? In the event of leaving the European Union, the goods sector will still be able to thrive while at the same time reinstating the decisive power of trade agreements to the United Kingdom. As shown by a number of countries currently involved in other trade agreements, there is a strong chance of benefiting from a different Trade Agreement.
Not only would we have a chance to replicate the successes of countries like Switzerland in our Trade agreements with the European Union but we would also open the possibility to bigger opportunities and trade agreements that were previously impossible. Examples of this are the possibilities of a trade agreement with China which benefit the UK Car industry and a trade agreement with India for the scotch whiskey industry that currently accounts for 25% of all UK food and drink exports. All in all, the actual outcome be it positive or negative, would ultimately be decided by the decisions made when striking these international deals.
What do you think? Should we try and strike up our own trade agreements or should we stick with what we know?
Tony & The Espace Team
Belgium Kilometre Charge – April 1st 2016
From the 1st April 2016 all heavy good vehicles weighing more than 3.5 tonnes registered in Belgium or Europe that carry goods will be introduced to the new Kilometre Charge and will be required to equip an OBU (on board unit). The charge will apply to each road where Eurovignette is necessary in Belgium and aims to reduce road usage by heavy goods vehicles in order to improve road usage and help reduce costs. Although use of the OBU is free, non compliance with the system can result in recieving a minimum fine of £800.The tariffs have been set in cooperation with regional governments and takes in to consideration the varying factors and tolls present by these differing regions.
Be sure to check out the official Satellic website for updates, information and registration:https://www.satellic.be/en-UK/abouttoll/kmcharging
Tony & The Espace Team
The Effects upon Industry – Part Two
As many of us were enjoying the start of our Easter break last Friday we decided to let you enjoy your time off, free from Referendum commentary and discussion. With that said during the time that has passed since “The Effects upon Industry – Part one” many media publications have realised that one industry could face a big disruption… Football.
Love it or hate it, the beautiful game might not be as pretty in future seasons with the possibility that more than 400 players may lose their right to play in the U.K. The situation surrounding football and the referendum acts as a brilliant metaphor for many other industries. To use this as an effective example we ideally need to focus on one of the richer clubs found in the Premier League. Using Manchester City as the “Britain figure” in this metaphor we see ourselves positioned as one of the better teams throughout the world. (Not the best but definitely up there…)
Football fans are probably aware that the oil rich club has been able to finance the transfers of some of the most talented players in the world and in similar fashion Britain has been able to finance the import of goods from across the globe. In the event of Britain leaving the E.U. Manchester City and many other clubs face the risk of losing players who are currently allowed to play in the U.K. with an E.U. Passport. Similarly leaving the E.U. could create a loss of trade or at least make the process of importing/exporting a lot more complicated and expensive.
However another way in which Manchester City and Britain are alike is their use of home grown talent. With all the money to throw about neither have pushed their own home grown talent to its potential, preferring to spend and import rather than develop and export. In the case of leaving the European Union both would have no choice but to build internally and further improve British produce. Many may argue that this would be devastating as the time requirements would be a detrimental factor which has the ability to cripple both world rankings and future growth, however many also argue that this will expand the talent pool and further strengthen the country over time.
In short, we as a nation are rather like these clubs investing so much in international talent that we have neglected our own. What are your opinions? Please comment below and let us know you opinions!
Tony & The Espace Team
The effects upon industry – Part one
Unless you’ve been locked inside a container for the last how many months, you probably already know the way we import and export goods in Europe could change very dramatically, very soon! The elephant in a lot of logistics rooms right now is the looming vote to decide the status of Britain’s European Union Membership.
Although this will have a knock on effect to all industries inside and outside of Britain, one industry we can guarantee will be effected quickly and directly as a freight forwarder is… you guessed it freight forwarding! In today’s referendum blog article we will look at a few industry professionals and compare the opinions surrounding the changes which could be implemented upon leaving the European Union.
Within the logistics and import/export industry the entire process of transporting goods would have to change were Britain to leave the European Union. Two brilliant contrasting views can be taken from industry leading professionals Ian and Andrew Baxter’s Commercial Motor article. Within this article the two brothers take into account key facts and their own experiences in order to develop individual opinions, which unexpectedly pits them on opposite sides of the referendum.
This might be considered more unusual than a City fan living among die hard United fans but this is brilliant in terms of generating an opinion which takes in to account both ends of the scale. Supporting an exit from the EU, Andrew Baxter, MD of Europa Worldwide Group argues that an exit from the European Union would help both the UK and EU’s economy to succeed. The customs clearance procedure in the distribution of goods between the EU and the UK would be more complex he admits, but if this is coming from an industry professional whose company distributes 75% of its goods between the UK and Europe then this is obviously reason to sit up and listen. In short Andrew believes we should regain our own control of governance and leave the EU.
On the other side of the fence Ian Baxter, chairman of Baxter Freight argues that staying in the EU is the best course of action. Previously campaigning to keep the pound and strongly opposing the prospect of a federal Europe, Ian has been persuaded to vote to stay after the renegotiation by David Cameron. Ian states that although working with the EU is difficult at times the pros outweigh the cons. His supporting arguments focus around the fact that the EU is a free market of 500 million people (the largest in the world!) and while we could leave the EU, the increasing costs and impact of customs clearance would have a detrimental effect on the industry and the economy.
Some very interesting arguments from each party, but what do you think? Next week we will continue looking at specific industries that may be effected by the referendum and how they plan to combat any negative possibilities. As mentioned previously we LOVE to hear you opinions and feedback so please comment below and let us know which side of the fence you’re sat on!
Tony & The Espace Team
Brexit: In or out, we do both!
As a long standing member of the European Union there are many arguments for and against the future of Britain’s membership. Regardless of which side of the fence you sit on, we can all agree that the steps we take need to be well informed and seriously well thought about before being acted upon. The “Brexit” issue effects all of us differently but as freight forwarding companies we really need to be on the ball, as the changes to international trade carry the risk of engulfing ill-informed third party logistics providers. One of the initial responsibilities of the E.U. was to create more trade between E.U. countries and to better the inequality between the member countries. As an Island nation we are always going to be involved with importing and exporting goods, this is simple geography. Were we better geographically located within the centre of the E.U. then perhaps this would be different but as it currently stands we aren’t and that shows no sign of changing anytime soon. Acting as a freight forwarding company we are heavily impacted by trade agreements both inside and outside of E.U. jurisdiction, we have no choice but to debate whether or not these responsibilities are a benefit or hindrance to the country’s importing and exporting industry. In order to really grasp the current situation, we need to start by looking at the rate of growth of Britain’s trading industry before we joined the E.U.
Prior to joining the European Union, the growth in export Britain had been producing was falling behind various other countries around the world. These countries included; Australia, Japan, U.S.A. and four others. During the ten years before Britain joined the E.U., we may not have had the highest growth rate but we were not far behind these competing countries.
In 1973, Britain joined the E.U. hoping to help build a stronger, more united Europe. After trying previously and failing Britain was finally allowed to join. Hoping to give as good as we got, the next twenty years were relatively good for export growth within Britain, with the E.U. helping Britain to achieve a much higher rate of growth than the previously mentioned non E.U. countries.
The issues for Britain surfaced after these twenty years in which recent world events or decisions have caused the growth rate to stutter and digress lower than previous years. With this information in mind we have to consider the next step taking into account both the positives and negatives of a possible exit from the European Union.
Regardless of which side of the fence you find yourself on it is evident that the effects of Britain leaving the EU will be more damaging to some industries than others. Throughout the rest of this series, various industries will be discussed with the hope of pinpointing some of the effects either outcome may cause. Once this has been investigated it is then possible to form an industry specific opinion based on real facts that we are then able to contrast with media views and political input.
We LOVE to hear your opinions and we would LOVE it if you let us know them in order to create a more varied spectrum of ideas.
Tony & The Espace Team
A wise man once said that a strong offence is the best form of defence. With that said, be prepared for any delays that may be caused by this month’s European Road Freight Bans by using Espace’s European Road Freight Ban Calendar. Stay tuned for more information relating to EU road bans.