Most oil and gas sector EU traders will have concerns following referendum verdict, says leading logistics expert
Friday, Jun 24, 2016
Most UK oil and gas businesses trading with EU countries will have concerns following the referendum verdict, a leading logistics supplier to the sector has said.
David Johnson, managing director of Tudor International Freight, based in Leeds, said the decision to leave the union could lead initially to a period of political instability, including potentially a change of Prime Minister. It may then take several years to clarify the exact nature of the UK’s future trading relationship with its former EU partners.
He said: “Whatever new system results, however, administration, time or cost increases for oil and gas sector companies trading with EU-based organisations are certain.”
Mr Johnson said that when Tudor currently imported goods from the EU on a client’s behalf, for example, the only documentation it needed was a copy of the packing list or commercial invoice and the travel document. For air freight this was a waybill, for sea consignments it was a bill of lading and for road haulage it was known as a CMR note, based on its French name.
He said: “No customs clearance process or duties apply and you don’t have to pay any VAT before the goods can be moved from the receiving port or airport.”
Mr Johnson said the Brexit vote had made possible three broad alternative scenarios: a Norwegian-style free trade agreement with the union; a series of bilateral trade treaties with it on the Swiss model; and the UK and EU nations charging each other the import duties they apply to other countries in the World Trade Organisation with which they lack free trade agreements.
He said Tudor had stressed throughout the referendum campaign that it was politically neutral and therefore avoided taking sides on the EU membership issue. The company recognised the advantages the vote to leave could bring, such as a greater theoretical freedom for the UK to make trade deals with other countries.
He added, however: “A high proportion of the oil and gas sector’s exports currently go to EU countries and many jobs in the industry depend on trading with other organisations in the Single Market. Given these facts and that, after a long period of uncertainty, trading with the EU is now sure to become less easy, speedy or cheap, we quite understand why many oil and gas sector businesses will have concerns about their futures today.”