Brexit: A Great Opportunity for Cargo Companies

European Union (EU) is a political as well as economic union of 28 European countries. It provides a single market for all the member countries which means that goods, labor, services, and capital can move freely within these countries. The monetary system is also the same as Euro is used as a common currency.

There was a referendum conducted in the UK asking people whether Britain should pull out of EU or not. More than 51% of people voted in the favor of the exit. Therefore, Britain decided to leave EU. Britain’s decision to exit (Brexit) from European Union can have far-reaching consequences on world cargo trade.

Since Brexit is the talk of the town these days, it is imperative to calculate its possible effects so that they may be countered with efficiency and accuracy.

Brexit will affect every country to some extent. Since the economy of every country largely depends on trade, Brexit will have a profound influence on all trade relations and thus on economies of all the countries.

Effects of Brexit for Pakistan

UK helped Pakistan getting the GSP+ status in EU which meant the export of Pakistani products to the European markets without duty. This step had significantly increased the exports to Europe from Pakistan. Now with Brexit, there is a chance for Pakistan to lose its GSP+ status since Britain will no longer be there to advocate for Pakistan.

However, there is a silver lining, Britain is looking for alternatives to minimize the effects of Brexit on its economy. In pursuing its new policy, Britain is getting into Free Trade Agreements (FTAs) with many countries and Pakistan is one of them.

Effects of Brexit on Cargo to Pakistan

Brexit means more reliance of UK on the trade relations with EU and non-EU countries. The more trade means the more cargo activity across the countries. Both the countries are showing great interest in enhancing the trading activity.

Britain shares 8% of Pakistan’s exports and Pakistan is in 15^th position in British imports list. Brexit is surely going to have a positive impact on their bilateral trade.

Better port facilities

Enhanced Cargo to Pakistan will help it improving its ports to cater more and more ships. The Gwadar port is a big example. Similarly, more air cargo will generate more revenue for the airlines. Pakistan is already working on improving its cargo handling facilities and Brexit would help greatly in this regard.

The more the Trade, the more the Cargo

It can be pretty much anticipated that any boost in trade will boost the cargo to Pakistan. Pakistan is a big market of 22 million people. Britain cannot let this aspect go unattended.

The UK is planning to invest more in Pakistan which will have positive effects on the cargo to Pakistan. From small items to heavy machinery, the investment will attract a lot of companies to Pakistan and the cargo to Pakistan will grow a great deal.

Competition among cargo companies

When the Cargo to Pakistan business will surge, the more cargo companies will be established which will increase the competition among them.

This healthy competition will lower the cost of cargo to Pakistan since every company tries to provide its customers with best services at cheapest rates.

China Pakistan Economic Corridor (CEPC), Brexit & Pakistan

Under the banner of China Pakistan Economic Corridor, the infrastructure is becoming better and there is a network of roads laid across Pakistan.

Gwadar port is the deepest seaport of the world and owing to its geostrategic importance, Britain has shown great interest in joining CPEC. If Britain joins it, it is going to surge cargo to Pakistan manifolds as Pakistan provides the shortest route to China, Russia, and all the Middle Eastern countries.

The goods from Britain will first come to Pakistani ports from where it would be moved further.