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O&G logistics expert says draft EU withdrawal agreement ticks key boxes for sector's businesses

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Oilfield Technology,

A leading oil and gas sector logistics expert has said the industry’s businesses trading with the EU welcome some vital provisions in the draft UK withdrawal agreement.

Adam Johnson, director of Tudor International Freight, based in Horsforth, Leeds, said one reason for the positivity was full approval of the document, agreed between the EU and UK negotiating teams, would provide much-needed certainty about future trading arrangements after over two years of considerable doubt.

He said ratification would also confirm goods could continue being shipped between the UK and EU without tariffs being imposed or burdensome and time-consuming border checks taking place.

Mr Johnson added approval would additionally mean employees from EU countries being able to come here easily for some time yet and avoid what he called “the horrors” of the UK crashing out of the EU without a deal.

He explained: “The current largely economical, quick and simple shipping of goods between the UK and EU takes place mainly because we’re members of the bloc’s Customs Union. If the draft withdrawal agreement takes effect, we’ll enter a 20 month transition period after leaving on 29 March next year, during which our relationship with the EU will essentially remain unchanged.

“Moreover, the draft says if a long-term free trade agreement isn’t concluded between the UK and EU by July 2020, the parties can agree to extend this transition period indefinitely and that, in the absence of such an accord, the ‘backstop’ will take effect. This measure - designed to guarantee a continued open border in Ireland – would mean the UK and EU remaining in a single customs territory ‘unless and until…a subsequent agreement becomes applicable.’”

Turning to his second reason for the draft’s general welcome by oil and gas sector EU traders, Mr Johnson said: “Another benefit of the transition period for many companies and their freight forwarders like ourselves is it would guarantee continued free movement of labour between the UK and EU.

“Many of our customers depend on foreign workers to facilitate their international trade and numerous freight forwarders similarly rely on employees from abroad to drive lorries and run warehouses, for example.”

He added although free movement would almost certainly end when our transition period did, maintaining it until then would at least provide valuable time for oil and gas industry companies to plan for its cessation.

Mr Johnson said: “Another corollary of the draft withdrawal agreement being ratified and the transition period taking effect would be the horrors of the UK departing the EU without a deal being avoided.

“It’s no secret the UK government has done little preparation for such an outcome and all the facilities, staff and often-complex processes needed to handle such an eventuality will simply not be in place by next March. The recently highlighted dangers of 20-mile queues of lorries trying to reach Dover and shortages of imported foods and medicines, for example, after such a Brexit, are therefore very real.”

Mr Johnson said many more than four months were needed to address problems a no-deal departure would throw up, such as the UK currently being able to issue permits likely to be needed for entering the EU to only about five per cent of its lorries needing to go there. He added such a Brexit would also mean the agreements currently allowing planes to fly between Britain and the bloc lapsing.

He said: “Oil and gas industry businesses understand the draft withdrawal agreement still has to be fully ratified by the UK and EU, and approval by the Westminster Parliament in particular, when it debates the agreement next month, currently seems far from a formality.

“However, achieving certainty, retaining Customs Union membership and free movement of labour into the future plus avoiding the chaos a ‘no deal’ Brexit would bring to companies and their supply chains are vital priorities for the sector’s EU traders. Whatever we think as individuals of the draft agreement’s other provisions, there’s no doubt it ticks these boxes.”

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