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Brexit: So Long and Thanks for all the Fish?

Brexit: So Long and Thanks for all the Fish?

Fishing is a symbol of the sovereignty that will now be regained, according to supporters of Brexit. The UK’s position is that British fishing grounds are first and foremost for British boats so any post Brexit free trade agreement must be based on that understanding. UK fishing communities, strong supporters of Brexit, are insisting on annual talks with the EU on access to UK waters and on quotas (as independent coastal states such as Norway currently do).

However, the EU has already announced that it regards an agreement on fisheries as a pre-condition for a tariff and quota-free trade deal. Indeed it has produced a slide deck to inform all Member States of its negotiating position in this regard. As UK waters are so important and bountiful, the EU is under pressure from its fishing communities to maintain the status quo to “avoid economic dislocation for EU fishermen that have traditionally fished in the UK waters”.

According to the UK Office for National Statistics, fishing was worth £784m to the UK economy in 2018. By comparison, the financial services industry was worth £132bn.

So while the UK has the (physical) upper hand in terms of control of the fishing grounds, the EU has the economic upper hand in terms of access to markets. Aside from potential losses in obvious areas such as (financial) services, the EU could refuse to agree to tariff and quota free trade on fish without access to UK waters. As 75% of the actual fish caught by UK fishermen is sold to the EU, some parts of the industry (such as shellfish) would collapse if suddenly faced with tariffs or quotas on sales.

The outcome from this element of the negotiation could have far-reaching consequences for the rest of the deal, without some form of compromise… Watch this plaice!

About Andrew Donald

About Andrew Donald

Andrew Donald is vatglobal’s Brexit specialist who is available to assist all companies with indirect tax compliance issues arising from Brexit. Andrew believes that the tight timescales will make it difficult for all businesses, but particularly SME businesses, to deal with indirect tax compliance changes Brexit may bring and is ready to assist your business in finding quick and cost-effective solutions to problems.

Andrew was working as a Senior VAT Specialist for HMRC when the UK voted to leave the EU and he was a Member of the first HMRC Brexit Challenge Panel set up to critically analyse the proposed solutions put forward for dealing with it.

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