Trade experts are hailing a major shipping breakthrough as a Chinese cargo ship completed its maiden voyage from China to Europe via the Arctic Circle.
Further concerns about the impact of new EU’s industrial policies have been raised by UK businesses, while Canadian prime minister Mark Carney calls for closer cross-Atlantic ties.
‘Ice Silk Road’ success
A Chinese cargo ship has successfully completed its journey from China to the UK via the Article Circle – dubbed the ‘Ice Silk Road’ – the first of what could be a regular new service on the transit route.
The Dubai Tower travelled from Ningbo to the British port of Felixstowe in 20 days, half the time of the traditional shipping route through the Indian Ocean and the Red Sea, via the Bab-al-Mandab Strait and Suez Canal.
Reporting by CGTN describes the transit as game-changing, stating that it could “shape the shipping industry for decades to come”.
Speaking to the outlet, Chartered Institute of Export & International Trade director general Marco Forgione said that the passage “provide[s] alternatives and safety valves to those constrained shipping routes”.
His comments follow Iran-backed Houthi rebels recent capture of the Yemeni port city Mokha, part of an alleged campaign to restrict commercial shipping through the Bab-al-Mandab Strait.
“In time, I think that we will see much more use of, and heavier investment to support the opening up of, the Arctic Sea route,” Forgione added.
The Arctic Circle route has become feasible with the window of time during which sea ice melts becoming larger due to global warming.
‘Made in Europe’ concerns
Current drafts of the EU’s Industrial Accelerator Act (IAA), through which it aims to promote domestic manufacturing, could leave UK industry struggling to access European supply chains.
The FT reports that European Parliament negotiators have shared proposals that would grant ‘Made in Europe’ status to only the 27 EU members, with the European Commission given the right to add additional members.
“Leaving UK access to be decided later, sector by sector, would create exactly the kind of uncertainty and complexity that deters investment and makes European supply chains less competitive”, Confederation of British Industry international director Sean McGuire warned.
The report highlights several UK industries where leading figures have sounded the alarm over the damage the scheme could cause.
Car manufacturing sector was highlighted as being at particularly high risk, with Society of Motor Manufacturers and Traders chief executive Mike Hawes claiming ‘Made in Europe’ proposals would “result in UK-made vehicles and components being uncompetitive in the EU market”.
Concerns about the UK’s participation in nuclear power projects, as well as its chemical sector, which supplies several European industries including healthcare and defence, were also raised.
These concerns follow the issue being voiced by UK prime minister Andy Burnham in a meeting with French president Emmanuel Macron earlier this month. While the meeting was cordial, reports have repeatedly suggested that France has been one of the most forceful objectors to UK participation in EU defence and manufacturing schemes since Brexit.
Carney calls for closer EU ties
As momentum builds towards tighter EU-Canada trade ties, Carney has urged all EU member states to seal the parties’ trade deal.
Speaking to the FT, Carney said of the 10 member states – Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia – yet to ratify the 2017 Canada-EU Trade Agreement (CETA):
“I would like to use this opportunity to encourage them to do so.”
He added that even in nations yet to ratify the deal, CETA is “defacto in operation”.
“You have 90%, 95% of trade we’re operating tariff-free”.
He also said that he saw opportunities to “deepen our cooperation” with the EU in key strategic areas including energy, space and critical minerals, as well as in research, defence and industry.
The primary impediment to many countries ratifying is concerns from their farmers about competition from Canadian agricultural exports.
He spoke amid an escalating trade war with the US – it’s biggest trade partner – in which Canadian exports now face a 50% tariff rate when entering the US.
Asked whether deepening EU ties is an “anti-US stance”, he rejected the idea, stating that his government is “about what we’re for, not what we’re against”.
Carney has been invited to speak in European Parliament on Thursday (17 September), where he’s expected to position Canada as a reliable trade partner.
Elsewhere in trade
· Resources are available to support businesses to access the Department for Business, Innovation, Science and Trade’s scheme to lower electricity costs for manufacturers
· Amid ongoing discourse about the probability of an AI apocalypse, European Central Bank president Christine Lagarde has argued that Europe must develop its own technology and build more datacentres, or become vulnerable to China and the US
Yesterday in Trade
· We previewed the annual WTO Public Forum, beginning this morning in Geneva, with this year’s event focusing on technology, institutional reform and trade in services
· A UK-US summit began place a year on from the signing of the Tech Prosperity Deal, addressing supercomputing and nuclear cooperation
· Carney hosted his first international investment summit, as global business leaders including 10 British CEOs descended on Toronto
