Brexit to make EU trade with UK more expensive, affect shipping industry

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By Stelios Orphandies

Shipowner Eugen Henning Adami said that he expects that the decision of British voters to leave the European Union will impact the European shipping industry and make bilateral trade more expensive.

Eugen Adami (2)“The English withdrawal will have an impact on shipping and in particular on EU shipping, because of the extensive trade between the two entities,” Adami, former chairman of the Cyprus Shipping Council and owner of the Limassol-based Mastermind Group said in a telephone interview on Saturday, a day after the results of Thursday’s referendum showed that almost 52 per cent of British voters decided to leave the EU.

The decision sparked turmoil in global financial markets and an unprecedented depreciation of the sterling to a 31-years low. It also prompted British premier David Cameron to announce his departure from Number 10, Downing Street in October so that his successor can initiate the divorce talks with the EU. The chairman of the European Commission, the Luxembourgian Jean-Claude Juncker said on Friday that he favours an immediate exit of the UK.
“At the moment nobody really knows how fast the changes will come and what the changes will be because the EU has no procedures for countries to exit; they have them for those that wish to entry,” Adami said. “We at the shipping industry do not know which chapters will be touched first, whether it will be transportation or transfer of payments”.

But he warned that one thing was clear for the shipping industry.

“Trade to and from the UK will become more expensive,” the shipowner said. “There will be more administration, more checks and the cost of the transport service will increase”.

Ship management accounts roughly for 5 per cent of Cyprus’s gross domestic product.

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