The European Union is moving towards sending a joint naval mission to the Red Sea to keep trade links open as attacks by Houthi rebels force vessels to divert around Africa, driving up shipping costs.
EU countries have agreed “in principle” to the mission, which the Irish Government has declared support for while saying Irish forces will not take part. The 27 countries now have to agree the mission’s mandate, structure, command and starting date.
The knock-on impacts of the diversion of ships away from the Suez Canal route, a major supply route between Asia and Europe for consumer goods and basic commodities, was high on the agenda as EU trade ministers met in Brussels on Tuesday.
“The Red Sea and Suez Canal is one of the main shipping corridors of the world, so clearly there’s effects coming from disruptions to freedom of navigation in the Red Sea,” EU trade commissioner Valdis Dombrovskis told reporters. “We are not seeing immediate effects on commodity prices coming from this disruption right now, but certainly it’s a risk factor.”
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He said the EU naval mission would “complement the international efforts already ongoing to ensure freedom of navigation in the Red Sea”.
The US has launched a naval mission in the Red Sea, and French naval forces are accompanying ships with French commercial interests in the area. The Netherlands is in the group of countries that support air strikes by the US and Britain aimed at reducing the militants’ abilities to launch attacks.
“It’s crucial that we stop the Houthis,” Dutch trade minister Geoffrey Van Leeuwen told reporters on the sidelines of the trade talks. “We see the impact on shipping, we see the impact soon to be on inflation. The Netherlands together with UK and US is joining that mission but we are also looking at the EU mission, because every mission to stop the Houthis is important. We can’t allow this to continue.”
The impact of forcing ships to divert around Africa, a far longer route that cutting through the Suez Canal, was evident in rising transport costs, Mr Van Leeuwen added. “We see a tremendous increase in shipment costs, from Shanghai to Rotterdam we’ve seen sometimes a 200 per cent increase in costs. That obviously will feed into inflation...coming out of inflation that’s the last thing we need.”
Taoiseach Micheál Martin said this week that the Irish Government “would support” the EU mission but would not be part of it.
On arrival at the trade talks on Tuesday, Ireland’s Minister for Enterprise, Trade and Employment Simon Coveney said it was “understandable” for the US to respond to protect its assets but that the situation in the region was delicate. “We need to be cautious as a European Union in terms of provoking and making the situation worse, but of course we have to secure international trade. I think doing nothing isn’t an option.”
The Houthi militants, who control much of Yemen, have attacked a series of ships in what they describe as an act of solidarity with Palestinians as they endure bombardment by Israel.
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