• Michalis Papachristodoulou

Go Fish: How the Fishing industry shaped Brexit

The UK and the EU played a dangerous game throughout 2020, but on Christmas Eve the two sides finally announced they had reached an agreement on the UK’s future relationship with the EU. For much of the year, the deal seemed to hinge on two main issues, state subsidies and fishing. This article is concerned with the latter, as we look at the importance of the UK’s fishing industry, the impact the EU had on this industry, and how the EU–UK Trade Deal has changed things.


The UK and EU fishing industries


In the past, the UK’s fishing industry was a significant part of the country’s economy. After all, the UK is an island nation which had ruled the waves for centuries through its naval superiority. Yet, as the economy of the UK developed and its mastery of the seas declined, fishing increasingly became a marginal industry. Declining stocks in the UK’s water exacerbated the prospects of British fishermen and the country became a net importer of fish in the second half of the 20th century.


The UK’s fishing industry is currently worth less than £0.5bn and only represents about 0.02% of the UK’s economy, making this historically important industry a relic of the past. By comparison, the UK's financial services industry is worth a massive £126bn, yet financial services were not dealt with under the trade deal. This hugely significant part of the UK’s economy will have to rely on the WTO’s rules to trade with the EU or hope for some kind of future agreement.


Fishing is a minor economic activity within the EU as well, making up less than 0.1% of the EU’s GDP. It is estimated that around 150.000 people are employed as fishermen throughout the EU, with many of these being located in Spain, Italy, Portugal, and Greece who operate far away from UK waters. The nations whose fishermen will be most affected by Brexit are those of France and the Netherlands. For many fishermen in northern France, access to UK waters is their sole lifeline, making the UK’s wish to completely ban EU fishermen from British waters a point of contention for the EU.


The legal situation pre-Brexit


To understand how the UK’s position in the EU harmed the British fishing industry, the legal framework governing the exploitation of the sea’s resources must be understood. Firstly, along with sovereignty over a state’s own land, each state also has complete sovereignty over its territorial sea. The territorial sea of a coastal state may extend up to 12 nautical miles from the state’s shores, but no more than that. A state’s territorial sea is treated in the same way as the state’s own land and the laws of that state apply within these waters. This means that any resources beneath the sea’s surface, including fish, in the territorial sea of a state may only be exploited by that state or with that state’s consent.


In 1982, the United Nations prescribed that each recognised sovereign coastal state may assume jurisdiction over the exploration and commercial exploitation of the resources in the sea surrounding it. This is called an Exclusive Economic Zone (EEZ). It extends up to 200 nautical miles from the coast of each state. Where the EEZ of one state meets the EEZ of another state within that 200 nautical mile distance, such as in the strait of Dover between the UK and France, the EEZ of each state extends up to the halfway point between the two states.


The designation of EEZs around the world has caused various international disputes, most prominently in the South China Sea and in the Eastern Mediterranean. This is due to the potential value of the marine resources that may be found within EEZs. The right to the oil and natural gas below the sea and the right to engage in offshore energy generation from the waves, currents, and wind are all reserved to the rightful owner of the EEZ in which these rights are to be exercised. Fishing usually forms only a small part of an EEZ’s value, but it remains a valuable right of the EEZ’s owner and, under international law, the UK had the exclusive right to exploit the fish within its territorial sea and its EEZ.


However, the UK’s membership in the EU meant that the UK’s ability to exclude the fishermen of other EU states was removed. Instead, the EU Common Fisheries Policy regulated the fishing industry. This policy sets quotas for which member states are allowed to catch each type of fish and from which EEZ. These quotas have two objectives. The first is to conserve fish stocks by preventing overfishing. The second is to manage this resource in a fair way and ensuring fishermen from all EU states have equal access to EU waters.


Under this policy, fishermen from other EU member states were allowed to fish 760.000 tonnes of fish from British waters per year, valued at almost £530m annually. On the other side, UK ships only fished £110m worth of fish each year from the waters of other EU member states, creating an imbalance between the costs and benefits of the Common Fisheries Policy for the UK that contributed to the Brexit debate.


New arrangements


Brexit has brought about the UK’s withdrawal from the EU’s Common Fisheries Policy. Instead, the EU–UK Trade and Cooperation Agreement will now regulate the fishing rights of the two parties. During the parliamentary debate on the trade deal in late December, Prime Minister Boris Johnson proudly declared that the UK had taken back control of its waters. An examination of the trade deal’s terms illustrates that this may have been a slight exaggeration, at least with regards to the near future.


The EU is set to retain a significant part of its fishing rights within the UK’s EEZ for at least the next 5 and a half years. During this period, the EU’s fishing quotas within the UK’s waters will be reduced to 75% of their pre-Brexit levels. At the expiry of this 5-and-a-half-year period, the UK and the EU will then have to negotiate their fishing rights anew each year.


The UK will, theoretically, have the right to exclude all EU fishermen from its waters after 2026, though its willingness to exercise such a right will be dependent on the status of the EU-UK relationship. The two are almost certain to remain close trading partners and any unilateral exclusion of EU fishermen from British waters would lead to retaliation from the EU. Such retaliation could take the form of an exclusion of British fishermen from EU waters, tariffs on fish exports from the UK to the EU, or even tariffs on other goods, depending on the economic impact of the exclusion. These make it unlikely that any UK government would decide to fully exclude EU fishermen from British waters, preserving the EU's influence in this industry.


Looking Forward


An examination of the UK’s fishing industry and its importance in the wider UK economy reveals that the UK government’s insistence on this issue during the negotiations may have been for more symbolic reasons, rather than economic. Fishing villages throughout Britain’s coast have long felt abandoned by the government in London and hegemony over the seas remains a source of national pride for many Britons.


Hence, a win on the fishing question gained additional significance for the UK and significant political goodwill was expended in the quest for an amicable solution. The UK’s tough negotiating stance on such a minor issue may have put off some of the EU’s negotiators, but whether and how this will influence the future of the EU-UK relationship will only be discovered in due course.


[Read More]: Brexit means VAT: Imported Goods and E-Commerce


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