Marine Industries Global Market Analysis - Marine Institute

MARINE INDUSTRIES GLOBAL MARKET ANALYSIS
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5 Long-Term Factors
5.1 ECONOMIC AND POLITICAL CHANGE
Economic stability and growth is particularly relevant when considering the
continuing reaction to the ‘war on terrorism’.The US response to 9/11 may have
marked the start of a new type of low-intensity war with occasional flare-ups in
different parts of the world.
Regional wars and prolonged domestic or ethnic violence create some of the most
pronounced shocks to the world economy, due to the substantial costs faced by the
countries or regions involved. Increasingly, disputes may involve using the control of a
vital commodity, such as oil.
Accordingly, security of energy supply is also an issue. Most of the world’s oil reserves
are located in countries with the potential for serious political upheaval in the
coming years.
In the world today there is a heightened degree of interdependence between countries,
which means disruption in one part of the world could have a knock-on effect in
unforeseen locations.As well as ties spanning long distances, such as the UK/US
relationship, closer to home the EU community has recently expanded considerably.
EU ENLARGEMENT
In 2004 ten more countries joined the EU, taking the total number of member states
from 15 to 25.This enlargement has brought trade and investment opportunities and
increases the EU population by 20%.This larger internal market means that firms can
expand production and take advantage of economies of scale.The additional members
will increase the EU’s authority and influence in international trade talks.The
potential for existing members to expand into new markets is also great.
Although to a great extent enlargement took place in the 1990s, with European
agreements liberalising trade.The EU’s export trade has risen 73% since 1995 and
imports by 81%.
Alongside the increased number of member states, other EU measures are likely to
affect the marine sector. One of the most significant is likely to be European
maritime transport policy:
• Revision of Community State Aid guidelines – stricter monitoring of state aid and
strengthening of the flag-link to continue the benefit from tonnage tax.
• Liberalisation of port services.