Tuesday, March 2, 2021

European Policy on Free Trade Sounds Fine but UK Logistics Interests Will Raise an Eyebrow

Promises to Encourage Freight Movement Looked Upon Dubiously
Shipping News Feature

EUROPE – There will be many among the logistics and freight forwarding community in the UK who will have strong reactions to the latest statements from Brussels and beyond with regard to future EU trade policy.

Very few of the comments forthcoming are likely to be appreciative, the industry having had to suffer the tortuous exit from the Community, something commonly viewed in Britain as a process which was subject to deliberately obstructive tactics by elements within the Community hierarchy.

Now we have the publication of the EU trade policy review, drawn up in June 2020 and now published in full. The policy claims to ‘reflect the EU’s fundamental belief that addressing today’s challenges requires more rather than less global cooperation’. The policy also aspires to adopt an 'open strategic autonomy' concept. This means keeping trade free and open while ensuring a level playing field for EU businesses and people.

The phrase was explained precisely by Commissioner Phil Hogan at the Second G20 Extraordinary Trade and Investment Ministers Meeting on Covid-19, when he said:

”Strategic autonomy does not mean self-sufficiency. Distortive state interventions or unjustified export restrictions across most economic sectors do not offer the right solutions. While we welcome these steps, we could be taking many more. The benchmark, in my view, is the decisive G20 reaction to the financial crisis in 2008, when there was a strong consensus on open markets, anti-protectionism and support for the multilateral system.”

The International Chamber of Shipping (ICS) has just published a report, ‘Protectionism in Maritime Economies’, co-authored with Professor Craig Van Grasstek of the Harvard Kennedy School of Government. The findings demonstrate how restriction of trade is damaging to GDP and states:

”Following decades of progress towards open shipping markets, the principal direction of travel in recent years points towards trade restrictions being imposed for deliberate protectionist purposes. Such restrictions, often used as ‘weapons’ in trade disputes, are proliferating and damaging to those national economies which introduce them.”

All of which says the UK logistics lobby begs the question why it was fine for Britain to sign up for a free trade agreement with the Common Market in 1973, yet after that organisation morphed into the European Union such a simple deal became an anathema?

The new European Commission’s Trade Policy Review emphasises the importance of reforming the World Trade Organisation (WTO) to ensure it remains the core forum to negotiate further trade liberalisation and resolve disputes and goes on to say shipping companies, which presumably includes road freight operators, need to ‘freely and commercially contract and carry goods around the world without local discrimination or restrictions’, news to British road hauliers facing permit issues.

Whilst this latest ratification of a policy by the EU to adopt a forward thinking, cooperative agenda on shipping, incorporating as it does elements of environmental and fiscal responsibility, many across the English Channel will simply raise their eyebrows at what will be seen as just more hot air from the ‘professional politicians’ over the water as the steady stream of meaningless, mandatory customs entries continues unabated.

In 1973 UK-EU trade was not automatically made as simple as in recent years’ pre-Brexit. There were still T forms to complete, albeit they were a welcome change from endless pages of TIR Carnets then in vogue with the authorities. In a short time however it seemingly dawned on those in officialdom that free trade meant exactly that and the extraneous paperwork vanished into the night, except for proscribed goods of course.

With the new open trade policy requirements expressed now by the EU in their latest pronouncements could one be tempted to see a brighter future for UK-EU trade relations? Unfortunately the general view from Dover and beyond says no. The UK is on the naughty step and liable to remain there for some time, ‘pour encourager les autres’ (apologies to Voltaire and indeed Admiral Byng).

Photo: For all the talk of cooperation it appears the EU states cannot even agree on their approach to border Covid testing of HGV drivers, many of whom have been getting stranded prior to entry into Germany.