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Industry leaders call on governments to recognise impact of increasing protectionism globally at leading Summit in Montreal

The International Chamber of Shipping (ICS) and the Chamber of Marine Commerce, Canada (CMC), convened over 120 industry leaders from 90 organisations and nearly 30 different countries to the flagship Shaping the Future of Shipping Summit on Thursday 13 June. The Summit focused on the challenges and risks to global trade, and to find pragmatic solutions to ensure a robust and resilient maritime sector.

Prime Minister of Canada Justin Trudeau opened the Summit with a video message stating:

“I’m incredibly proud that Canada is known to be a reliable trading partner to the world, and that reputation depends on the stable sustainable operation of our supply chains...We’ve also invested over 750 million dollars into our Clean Fuels Fund which will help industries across the country do the same. When it comes to moving cargo in a country as big as ours, we can’t afford to follow others, we have to lead, we have to be constantly finding better more sustainable ways to get goods from coast to coast to coast.”

During the closed-door Summit industry leaders discussed the emerging concern of increased protectionism across the world.

Emanuele Grimaldi, International Chamber of Shipping Chairman said:

“We are at a critical time in shipping...we are experiencing an unprecedented threat to free trade. The number of unilateral barriers to trade being imposed by countries is increasing exponentially. Now I understand that the intentions of such barriers may be well meaning, but the reality is that trade is increasingly being weaponised as nations seek to obtain greater economic advantage or achieve political aims.

Shipping is responsible for transporting over fourteen trillion dollars’ worth of goods each year. And each trade barrier that is placed on shipping has a magnifying effect that will negatively impact global trade and ultimately reduce growth for all. The failure of global institutions like the World Trade Organization further exacerbate this issue as we need strong institutions to facilitate efficient and cost-effective trade between nations.”

The Summit centred on the unique challenges that the maritime sector is facing including the aftermath of the pandemic, strikes, global geopolitical conflicts, decarbonisation, the human element and the impact of climate change, all having a significant impact. The negative impact of increased protectionism was highlighted as one of the biggest emerging threats to global shipping.

Emanuele Grimaldi, ICS Chairman stated:

“ICS commissioned the Harvard Kennedy School of Government to look at this issue [protectionism] back in 2021 and they found that cutting restrictive trade policies could boost the global economy by over 3% points. The report also found that high-income countries could see an average increase of 4.5% percent in their goods exports if they were to loosen tariff and non-tariff restrictions on trade. Developing economies would experience an even greater increase, of seven percent if they reduced their restrictions in a ‘modest and equal’ way. Over two trillion dollars of world imports are being affected by constraints like these, that is equivalent to the annual GDP of Canada.

Since this report was published, we have seen the introduction of new unilateral regulations and taxes that negatively impact trade. The EU ETS and the CBAM proposals in Europe have created systems that impact free trade. Europe and the United States are also proposing to place massive tariffs on electric vehicles made in China, all at a time when we are asking the world to move to electric cars. Some in the United States are even considering placing a tariff on ships calling at US ports just because they are built in China. And of course, our members in the tanker sector are having to manage the imposition of sanctions on behalf of governments in response to the dreadful attack on the Ukraine by Russia.

This rising tide of protectionism creates more complexity for our industry and cost for our customers. The last thing we need at this time is a trade war, but protectionism is on the rise.”

“From our perspective, unilateral, protectionist actions of one country, such as tariffs, not only fail to disincentivize the acts, policies and practices of other countries, but also damage national import and export market competitiveness, and increase costs for consumers,”

noted Bruce Burrows, President and CEO of the Chamber of Marine Commerce.

“At a time when the world already faces significant challenges including the race to net zero and labour availability, protectionism just results in self-inflected wounds.”

Another significant challenge highlighted during the Summit was seafarer recruitment and retention. ICS put seafarers centre stage during the Summit and launched the ICS seafarer video titled ‘Life after Sea’. It is the second instalment, following the successful ‘An Adventurous Spirit’ launched last year. This new video was produced in collaboration with ICS members to showcase the industry and what an interesting career maritime has to offer.

Emanuele Grimaldi, ICS Chairman, concluded the Summit saying:

“This summit is the start of an important piece of work...As shipowners we cannot find all the answers on our own but through this collaborative forum, with our friends and competitors in the maritime value chain we can find solutions...It is clear that there is much to do, and this issue is not going away. We must help provide solutions to ensure the global economy remains strong and vibrant. We will gather under the Shaping the Future of Shipping banner in November in Hong Kong during Hong Kong Maritime week for the next round of these discussions.”