Interview with Liam Campling, Professor of International Business and Development, Programme Director International Business and Politics MSc, Director of the Centre on Labour and Global Production at Queen Mary University London.
London - Though fisheries sector only accounts for 0.1% of British economy, there's much at stake, not just job losses, but the balance and maybe even peace, on our seas.
While the negotiations talks are going on, fisheries are one of the major stumbling blocks in the Brexit negotiations.
Why is that? What’s the core of the issue?
"There are different layers - explains Campling - the first question regards the longstanding access of European fishing fleets into UK's waters and ever since the UK joined the EU in 1975 and gave over its fishing sovereignty to its EEZ (Exclusive Economic zone) so EU after the common fishery policy forced together all the fishing interests across the European Union, so after the long history of generations of Danish, French, Dutch, Spanish and Irish fishing interests using British waters, to stop that happening is a big political hit to those continental European fishing interests. This is a big political question."
The EU has always had a protectionist policy over its domestic fishing interests, the EU especially France, Spain and increasingly Poland they have quite big processing industry and so they protect these industries with tariffs, this would mean the UK would not be able access the EU markets at normal competitive price, when now it’s paying nothing because of the custom union. So the core issue is that EU commission in its negotiation tactics is trying to tie together this longstanding access to the resource to UK fishing interests (like processing interests) their access to the EU market, but British they do not want to be a link, they think that the tariff negotiations should be separate from the fishing activities.
So that the main issue. Politically it is important because in the EU commission the fishing punches above its economic waight because it is so politically important especially to Spain and France and other countries. Fisheries trade will always be a stumbling block.
Fishing and fish processing industries employ a total of 24K people and makes up only 0.1% of the UK economy. Why is such a relatively small sector blocking negotiations?
Firstly it is still 24.000 people, which aren’t comparable to the car industry sector which they might be sacrificing, but 24K people in vulnerable areas, regions in the UK who voted for Brexit and regions that the Conservative government wants to keep on side. The political weight of fisheries is punching above its economic weight.
The other thing to think about is that even though it represents only the 0.1% of the economy, this is just the fishing aspect, there’s also the on shore staff, the economic activity it creates there, the fish processing, the export. so the number does not properly reflect the broader contribution that fishing brings to the UK economy. For example finance has a massive contribution to the British economy in monetary value terms, but if you start looking at job creation at how the more real economy is affected by finance this is not as big as the numbers make it look, so the numbers are always quite confusing when it comes to fishing because there’are a sort of hidden industries and this is the case around the world.
But the main reason for the blockage on the UK side is the nationalism of ‘taking back control’ and on the EU the nationalism of the Spanish the French side ‘it’s our fish’ and that’s an inevitable clash"
Once Britain left the EU, which law will regulate its access to stocks in its Exclusive Economic Zone?
The UN convention on the Law of the Sea, so since 1982, it has basically given all coastal countries sovereign rights for 200 nautical miles from it coastline, so all of the fish, seabed, marine resources in its area belongs to the country. So this is different from normal sovereignty; sovereign rights means nobody else can extract those resources without paying or agreeing with the coastal state to do so.
So UK wants end up selling its access rights to the French, Danish and the Dutch and it wants to do that on annual basis, with access agreement negotiations and they would charge a certain amount per year or per volume of fish using its sovereign rights.
If an agreement is not reached, which law will be in place?
The UK is developing a new fisheries act, so it would be a new domestic law that would take over. The problem would arise in the case of a shared stock or struggling stock, for instance cod that move between the waters of UK’s EEZ and the EU’s. There would have to be a new institutional set up where they can govern that cooperatively. This happens already between EU and Norway, it happens in the Pacific islands exclusive economic zone where tuna flows between EEZs and they just cooperate. Either the law will be governed by the UK fisheries act, or it would have to be mutually governed by UK EU and maybe Norway as well.
Would it be a temporary agreement?
There is a risk that would be temporary, but the proper fishery management should be more medium term in planning. The UK has some experience because it also has a lot of overseas territories, like the French, and has a lot of understanding of this kind of situation, so they might be good at that.
The question is who is gonna really benefit from that. For the moment the quotas of the fishing in the UK system tends to benefit the big business, and the small scale fisheries who are the ones that politically voted to take back control, probably won’t benefit. If the British managed to negotiate control over their EEZ probably what they allocate the fish within those waters what they will do is end up benefiting the big business."
Which is the big business?
I think is the big industrial boats on the coast of the North of Scotland.
The British fishing industry sees Brexit as a way to catch more fish freely and exclusively in the British waters, but as the UK exports over 70% of its fish to the EU, in case of no agreement the EU will impose tariffs?
"The first thing to do is to think about species, so if the UK says ‘don’t worry we have a market in China or Japan’, but they aren’t always the big species from the Spanish or the French ones, so there is a problem of the culture of consumption. There is a big question around whether the UK fishing interests the businesses would have markets outside the EU.
The second question is even if they have this there probably be high tariffs. If you look to the EU tariff structure they are on processed fish so if the UK would manage to negotiate and reduce tariffs, maybe not 20% maybe 5%, they still have to meet rules of origin, sanitary measures, comply with EU regulation on Illegal Unreported Unregulated Fishing, there is massive bureaucracy you have to go through to export fish to EU and even if you have duty free access and no tariff barriers, they can’t sell their fish there because they can’t get past these barriers; I know this because I work with African and Pacific countries who want to sell their fish to the EU and even if some of them have a no tariff agreement they can’t export to the EU because they can’t get passed these other non-tariff barriers. So the tariffs are important, but non-tariffs are important as well, and the UK is simply not ready to deal with that."
Is it rational thinking the UK could then divert 70% of its fish exports to other countries or economic areas? Where is UK going to export in the future?
"Who knows; EU and Japan are two major markets in the world all other countries are looking to access, and there reason is that there there are rich consumers and a wide variety of fish. The UK could possible export the US to China. But they might have to be specialist, it can’t be the the kind of mass market.
The other problem is that fish deteriorate really quickly, so the geographical closeness is really important. As soon as you start putting fish on a plane and air freight for instance to Japan, the cost is skyrocketing and you enter in competition with companies that get around this many years ago. Britain does not have the capacity for that.
If your are selling frozen, fish is much cheaper so the cost structure of the UK which is high, means there is not capacity, this means UK will be at loss for a significant percentage of its exports.
One idea is that UK consumers might start buying seafood and fish that goes to Spain but they might have to change culture of consumption. British consumers are very conservatives: salmon, tuna, cod, mackerel, prawns. I don’t think the British consumer is going to buy all the fish that it’s caught in the UK’s waters, so the UK fishers will have to find a market in the EU again, but there will be non competitive and hit by the tariffs ."
What it would be a possible way out from this riddle of laws in terms of agreement?
"I think what might happen is that the UK would engage in a trade off; the EU will not allow the historical access rights of the Danish, French, Spanish to be lost, because it would set a precedent in international law. And the Law of the Sea gives for instance the Danish some legal rights even though UK has legal rights on its EEZ, the international law has special kind of consideration of long term access rights before the Law of the sea: for example the Danish have been fishing in UK waters for hundreds of years, so the EU would very reluctant to do that.
So there would be a kind of a fudge, a mess, where the European boats still have access to some species and in return UK fishers (if there’s a free trade agreement) will have some liberalisation of tariffs into the EU market. There would be one way around it, because the interests are entrenched on both parts, there really isn’t sufficient understanding of each other’s problems..
A question all people non familiar with these matters, are asking themselves is whether the situation it is better now or after Brexit...
I think that different segments of the UK industry would be better off and others would be worse off. The big business catching products sold in domestically would be fine, whereas the small scale fishers those they sell fish and the small scale sold to the EU will suffer. I don’t think there’s such a thing one big fishing industry in the UK, it is fragmented business."
And if an agreement is not reached what is going to happen?
"Have you ever heard of the ‘cod wars’ in the 70s, the British and Island ..it was quite aggressive. I expect there will be significant diplomatic incident around fishing in the medium to long term if EU and UK can’t reach some kind of agreement on this, then French fishers, for instance, will go and fish anyway. because they would play long term historic access rights which they have, and the same for the the Danish and the the same the British.
This is an ambiguous area, and because of this ambiguity there will be space for conflict."
Diving into the sea of Brexit troubles: "we risk new 'cod wars'"
Prof Liam Campling (Queen Mary): explains EU-UK fisheries battle while negotiations are drowning