/Brexit: Fish-y Business

Brexit: Fish-y Business

I had wanted to write a more comprehensive post on the Brexit state of play, but (sorry for whinging) I have a sprained thumb, which is making everything hard, particularly typing.

So we’ll just stick to a couple of observations and hope our Brexit mavens pile on.

Neither side is acting much like it wants a deal. Perhaps this is just a weird posturing phase resulting from the EU trying to figure out how to contend with the theatrical and deliberately provocative Boris Johnson. Or it may be the EU taking the gloves off now that the UK is no longer in its club.

“Die in a ditch” Johnson maintains he won’t ask for an extension and won’t take EU rules. Wellie, in contrast to what the British press would have you believe, even Canada, which Johnson insists is his current model for the UK-EU trade deal, did in fact agree to treaty provisions that are functionally equivalent to the “level playing field” that Michel Barnier featured prominently in his draft negotiating guidelines and he reiterated were required for a no-tariffs, no-quotas treaty.

Oh, and the UK also signed up for them in the Political Directive. Yes, that document is legally non-binding, but as we’ve pointed out, in negotiations, retrading parts of a non-binding letter of intent usually comes at a cost, including potentially cratering an agreement

There is also a lot of consternation on the UK side about Barnier in many (but not all) respects taking what has been seen as a maximalist position, particularly in putting forth a negotiating process of seeking an overall deal, so that various issues could be traded off against each other. The UK wants much more of an “each issue its own deal” approach, as Switzerland has. The EU has indicated for some time its not amenable to having a ton of bilateral agreements.

Taking a very high level view, what Barnier appears to be doing as his default is working forward from the Political Declaration. If you were dealing with a rational counterparty, it would be entirely logical to say, “We agreed to these general ideas, all I’m doing is following them.” And the Political Declaration envisaged the soft Brexit that Theresa May wanted to achieve. It goes on about having a close relationship and also mentions that the trade agreement could be negotiated under Article 217, which is also referred to as an Association Agreement (the other avenue for negotiating a trade pact with a third country is under Article 207, under which the EU has reached both simple free trade agreements and “comprehensive economic trade agreements” as it did with Canada.

The wee problem is that that very Political Declaration set forth a very different sort of relationship than Johnson campaigned for, both when he became PM and in the later general election. And the EU is very rule and procedure driven. Even if Barnier were to want to accommodate Johnson now insisting on a very different agreement than the UK signed up for, he’s likely have to go back to his principals and get them on the same page. The signs for the last year if not two is that EU leaders are sick of how much time Brexit has consumed and they think they have more important things to do. So I’d hesitate to attribute the seeming maximalist position of the negotiating guidelines as some sort of Barnier scheme as much as him seeing his options with EU leaders limited by the Political Declaration.

And remember, this text is a draft and past Barnier drafts have wound up getting important edits, so we’ll have a much better reading of where his principals are soon.

Having said that, Barnier has been more testy, not in his tone of voice but with the speed and pointedness with which he has slapped down the Government of late. For instance, from the Guardian in late January:

The EU has rejected Boris Johnson’s claims that there will be no checks on goods going from Great Britain to Northern Ireland after Brexit, with Michel Barnier warning such checks are not dispensable.

Days after the prime minister said there would “emphatically” be no checks on trade across the Irish Sea, the EU’s chief negotiator told an audience in Belfast that the UK had agreed to them as part of a “creative and flexible” solution to the Irish border question.

There was no provision for ignoring them in the legal test of the withdrawal agreement, Barnier said in a speech at Queen’s University. “In agreeing the [Northern Ireland] protocol, the UK has agreed to a system of reinforced checks and controls for goods entering Northern Ireland from Great Britain.”

“The text is very precise. I always tell the truth,” Barnier said…

Calling Johnson a liar, while accurate, isn’t the sort of jibe the Barnier of recent years would normally allow himself. This may reflect the general antipathy among EU leaders for Johnson, who they (not incorrectly) regard as significantly responsible for Brexit, as well as an unprincipled opportunist.

The UK also seems very unhappy that Barnier is insisting on the CJEU as being the arbiter of EU law:

Should a dispute raise a question of interpretation of Union law, which may also be indicated by either Party, the arbitration pane l should refer the question to the CJEU as the sole arbiter of Union law, for a binding ruling. The arbitration panel should decide the dispute in accordance with the ruling given by the CJEU

I find it hard to fathom how Brexiteers talking themselves into thinking this would come down any other way.

Needless to say, the gap between the two sides now is so large that as Clive put it:

Not even worth having a discussion on the shape of the table, given how far the EU and the UK apart are. At the moment, there ain’t no table.

Fish fight. Someone has to clue me in. The UK and EU are making fish a do or die issue, each putting it on a short list of must haves when the fishing industry is a trivial part of both economies.

The bone of contention is that the UK’s territorial water have most of the fish that both UK and EU land. But most of the fish the UK consumes (about 80%) is from Norway, mainly the cod for fish and chips. By contrast, most of the fish pulled from UK waters (as well as shellfish like scallops and langoustine) go to the EU.

And in the first round of the spat, which took place outside the negotiating table, the UK fishermen lost:

Now here is the even nuttier part. The EU is willing to trade getting access to the UK’s fish for making concessions on the vastly bigger and far profitable financial services industry, which per the Financial Times accounted for 7.1% of the UK economy in 2018. I am not making this up. Not only is the EU dumb enough to make this offer, but the UK, which really needs those services exports, is saying it’s going to die on its hill of fish instead.

The Financial Times points out that fishing is the mainstay of many coastal towns, and I can see knock-on effects (loss of summer tourist business if these towns start having boarded-up sections) but this still seems blown way out of proportion. Here is the theory of the case, again from the Financial Times:

A dragged out fight over fish would be in neither side’s interests. But it may be extremely difficult to avoid: the UK and the EU have opposing positions, little room for manoeuvre and even less time. Britain and Brussels will have only 11 months after Brexit day to negotiate a new relationship and avoid a hard exit when the country’s transition arrangements expire at the end of 2020. 

Emmanuel Macron, the French president, has vowed that fishing will be treated “as an essential economic interest for our country that must be defended” in the talks. It is a position that has been adopted by the entire EU, which insists that “existing reciprocal access to fishing waters and resources” should be maintained.

Brussels insists that any move by Britain to reduce access to its fishing waters will be met with an overwhelming response: the loss of much needed market access rights for UK fishermen, and potentially even the breakdown of trade negotiations, creating the risk of a no-deal Brexit at the end of 2020. 

For the EU, “everything in the future relationship negotiations is linked”, says one senior European diplomat. “It’s not just the French, there are seven or eight member states highly interested in this. The UK is going to have to compromise [on access for EU fishing fleets].”

This sounds all well and good until you come to grips with significance. As Wikipedia puts it:

Fishing is a relatively unimportant economic activity within the EU. It contributes generally less than 1% to gross national product.

The European Commission website shows the fishing industry employed 180,000 people in 2017. Roughly 218 million people were employed in the EU in 2018. Let’s say roughly 215 million were employed in 2017. That means the fishing industry provided 0.08% of EU jobs.

Could someone please make sense of this for me? Or per the last tweet above, is this fishy business all posturing and really no issue?

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