From the Cod Wars with Iceland half a century ago to scallop skirmishes off Normandy in 2018, Britain’s fishing industry has long exerted a political weight out of proportion to its economic size. The same is only slightly less true in the EU — or at least in some powerful members such as France, where Emmanuel Macron is keen to play the defender of coastal communities ahead of presidential elections in 2022. The political sensitivities, however, make it no less absurd that a post-Brexit trade deal risks being derailed over an industry that is a tiny part of the UK and EU economies.
Fisheries are, for Brexiters, a totemic issue. If leaving the EU is about regaining sovereignty, what more potent symbol can there be than retaking control of UK territorial waters, and who gets to fish in them — currently negotiated jointly with the EU as part of the Common Fisheries Policy? Restricting access by EU fleets leaves more for British boats. Fishing communities voted strongly pro-Brexit in 2016 — including those in Scotland, though Scotland overall voted 62 per cent for Remain.
For prime minister Boris Johnson, folding on fishing rights risks being seen as failing to deliver the promised fruits of Brexit and his pledge to “level up” left-behind regions. The UK is pushing for annual negotiations with the EU on mutual access to fishing waters, quotas, and catch sizes. It wants to allocate quotas using a method based on whose waters fish inhabit instead of EU measures reflecting historical catch levels for species going back to the origins of the CFP in the 1970s, when Britain believes it got a bad deal. The EU wants to maintain the status quo — arguing that the UK, opting out unilaterally, cannot dictate terms.
Yet allowing a trade deal to be taken hostage by cod quotas would be a sign — as Berenberg economists put it this week — that “Brexit logic, like fish, rots from the head down”. Any political cost of not being seen to stand up for Scottish coastal communities, among others, is eclipsed by the damage a no-deal Brexit would do to relations with Scotland more broadly, months before elections that could lead to demands for a new independence referendum.
The economic cost is also too high. The Office for Budget Responsibility warned last week a hard Brexit would knock 2 per cent off already Covid-battered growth next year, and push peak unemployment to 8.3 per cent, against 7.5 per cent with a deal. All that to protect the rights of a fishing industry that contributes 0.03 per cent of UK gross value added, or just under 0.2 per cent including fish processing; by comparison, financial services, badly neglected in the negotiations, contribute 6.8 per cent. Even British fishing communities — which export a large proportion of their catch to the EU — are nervous about the tariffs they would suffer in the event of no deal.
A “landing zone” for a compromise is, meanwhile, coming into view. The EU privately accepts the UK will repatriate fishing rights, though it is trying to minimise damage to its own fleets. Britain has already offered a transition period to annual negotiations on access; slightly less frequent talks would still give it sovereignty. A phased transition on quota allocations, shifting an increasing portion to UK control at each round of negotiations, would give both sides’ sectors time to adapt. Losers could be given compensation.
Any accord on fishing would also be part of trade-offs on other issues such as state aid rules. Progress is hampered by lack of EU trust that the UK will stick to commitments. But failing to reach a deal would do great damage to both sides; doing so because of fishing would be a monumental folly.
Source: Economy - ft.com
