The UK has failed to reach a post-Brexit agreement with Norway over the rights for UK vessels to access Norway’s sub-Arctic waters.
With the UK leaving the European Common Fisheries Policy at the start of the year and now dealing directly with Norway, an agreement couldn’t be reached after the UK government’s ‘fair offer’ was rejected.
Norway’s waters, known for cod catches worth some £32m in 2018, had been fair game for UK fleets for decades.
However, as Norway is itself not an EU member state, the trade agreement with the EU didn’t cover a continuation of these rights. And, despite last year both agreeing to a system of cooperation post-Brexit, a deal couldn’t be reached despite weeks of talks.
Jane Sandell, chief executive of UK Fisheries, said that the talks had failed to even maintain the current rights that have been in place for decades.
She said: “In consequence, there will be no British-caught Arctic cod sold through chippies for our national dish.
“It will all be imported from the Norwegians, who will continue to sell their fish products to the UK tariff-free, while we are excluded from these waters. Quite simply, this is a disgrace and a national embarrassment.”
Read more: Food and drink exports crippled by Brexit and lockdowns
A spokesperson from the Department for Environment, Food and Rural Affairs said that agreements would only be reached if they were in the interest of the UK fishing industry.
They said that: “We put forward a fair offer on access to UK waters and the exchange of fishing quotas, but we have concluded that our positions remain too far apart to reach an agreement this year,” they added.
“Norway is a key partner and we will continue to work with them over the course of the year.”
The European Parliament will this week vote on the post-Brexit trade agreement between the UK and EU and are expected to back the trade and cooperation agreement.
This final step in the trade deal’s approval is likely to be confirmed this Tuesday (27th April), close to its own end of April deadline to conclude the new relationship with the UK. Failure to vote through the deal could have left Britain and the European Union trading with tariffs and quotas.
This final step had been under some threat over the last few months as relations between the British government and EU lawmakers frayed over Covid vaccine supplies and the unilateral suspension of elements of the Northern Ireland protocol.
However, the EU’s foreign affairs and trade committees voted overwhelmingly in favour of the agreement last week, allowing for its expected ratification tomorrow.
Ratification should bring to a relative conclusion almost five years of political and business turmoil, starting with the referendum result in June 2016.
Key steps along the way, as provided by the Institute of Export & Internation Trade, shows the extent of the fallout from that day to this:
23 June 2016 – UK votes to leave the EU
29 March 2017 – Prime Minister Theresa May triggers Article 50 to begin two year countdown to leaving
2019
14 March – UK government seeks permission from the EU to extend Article 50 and agree a later Brexit date
20 March –PM Theresa May writes to European Council President Donald Tusk, asking to extend Article 50 until 30 June 2019
2 April – PM announced she will seek a further extension to the Article 50 process
10 April – UK and EU27 agree to extend Article 50 until 31 October 2019
24 May – Theresa May resigns as PM
24 July – Boris Johnson becomes Prime Minister after winning Conservative leadership contest
19 October – Johnson’s new Brexit deal is beaten in the Commons
28 October – EU Ambassadors agreed a further Brexit extension to 31 January 2020
12 December – Johnson wins UK General Election and says he will ‘get Brexit done’ by 31 January 2020
2020
23 January – the European Union (Withdrawal Agreement) Act 2020 receives Royal Assent
11pm, 31 January – the UK formally leaves the EU and enters a transition period
30 December – EU–UK Trade and Cooperation Agreement (TCA) is signed, with UK parliament ratifying it that day
11pm, 31 December – Transition period ends and the UK leaves the EU single market and customs union
2021
3 March – UK unilaterally extends grace period for supermarket agri-food from Great Britain to Northern Ireland from April 1 to October 1
EU says UK grace period extension breaches international law
9 March – UK exporters urge Lord Frost to cool trade tensions with Brussels
15 March – European Commission sends UK a formal notice of legal action for breach of its obligations under the NI Protocol
14 April – EU parliament again refuses to set date for ratifying Brexit trade deal amid concerns over UK conduct
27 April – European Parliament due to ratify TCA deal
Trade between the UK and the EU recovered in February after a big drop at the start of the year.
Following the end of the transition period and the start of ‘Brexit for real’ for companies on both sides of the Channel, exporting activity had slumped 42%.
But data from the ONS found that exports jumped almost 47% in February, but are still below last year’s activity.
February’s rebound was predominantly fueled by export increases of machinery, transport equipment and chemicals – particularly cards and pharma products. Interestingly, growth in exports from the UK to the EU was stronger than EU into the UK.
An ONS spokesperson said of the data that: “Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”
Read more: Food and drink exports crippled by Brexit and lockdowns
The rebound against January’s slump is still difficult to truly analyse to see how export markets are responding to Brexit. Many companies avoided sending goods across the border at the start of the year to avoid expected Brexit disruption, especially across machinery, parts and pharmaceutical products that were stockpiled towards the end of 2020.
The ongoing pandemic also continues to skew and disrupt demand.
UK steel exports into the EU have dropped significantly since Brexit, with volume in Q1 2021 down a third on previous years.
Trade body UK Steel shared the figures with the Mirror, showing how shipments from the UK into the EU fell from an average of 630,000 tonnes to just 420,000 tonnes in the first three months of the year.
The data suggests a Brexit-related slump in demand with British steel exporters using less than 60% of their quotas in the first quarter.
Director-general of UK Steel, Gareth Stace, said that: “This is a challenging time for the UK steel sector as it does its utmost to adapt to challenging new trading conditions and recover from the impacts of Covid-19.
“This first quarter of export data demonstrates quite how challenging market conditions are for the sector at this time and the new barriers now in place between us and our largest export market.
“We are confident that some of these export difficulties will lessen as time goes on, but unfortunately many will be a permanent feature of our new trading relationship with the EU.”
Read more: How to export post-Brexit (webinar)
The British steel industry has been fighting for survival for years, but a changed relationship with the EU and the pandemic is likely making the situation more challenging. Liberty Steel is the latest to face challenges, with 3,000 jobs and 11 UK plants at risk following the well-publicised collapse of Greensill Capital.
This week we joined Enterprise Nation for a Lunch and Learn session all about exporting following the end of the transition period at the start of the year.
In this webinar recording, learn the implications of Brexit with a guide and checklist on how to prepare for export in a post-Brexit world.
Watch the webinar recording in full on the Enterprise Nation website here.
UK food and drink exports have suffered a huge year-on-year trade reduction according to new data from HMRC.
Data compiled by the Food and Drink Federation shows showed a £42m fall in cheese exports – from £45m to just £7m – whilst whisky exports fell from £105m to just £40m. Chocolate exports also suffered, dropping almost 70% to £13m.
Whilst the biggest falls in export value, these were by no means the worst affected products. Salmon and beef dropped 98% and 92% respectively.
Causes of the drop in export demand include a combination of Brexit and weaker demand from a continent that still largely remains in lockdown with restaurants shut.
Read more: Trade between UK and EU nations falls
An ONS spokesperson added some context to the data, noting that: “A unique combination of factors, including stockpiling last year, Covid lockdowns across Europe and businesses adjusting to our new trading relationship, made it inevitable that exports to the EU would be lower this January than last.”
If your business has been impacted, we can help
Go Exporting has already helped a number of companies both prepare for Brexit, and now workaround new restrictions, regulations and challenges.
Our Brexit FastTrack service offers a detailed review of businesses post-Brexit to help resolve the issues they’re encountering – with a quick turnaround and at a fixed price.
Some firms may also be able to reclaim the cost of this service via the SME Brexit Support Fund.
A study released this month has found that London has maintained its status as Europe’s main financial hub – but global players are catching up.
That’s according to Z/Yen’s Global Financial Centres Index (GFCI) which reported that, although London had maintained second place globally, it has lost 23 index points since September 2020 with Shanghai, Hong Kong and Singapore closing in.
The news is significant as there had been real concern over the capital’s future status in both EU and global finance in the wake of Brexit, particularly with the lack of an equivalence deal maintaining its access to continental markets.
Yet despite holding on to EU dominance, the Bank of England has suggested over 7,000 jobs have been lost to rival centres in the EU following the end of the transition period. But a jobs exodus from London has yet to be realised within finance, and a report from Business Money even shows a 10-fold rise in businesses looking to open satellite offices in the UK.
There have been further reports this month that Chancellor Rishi Sunak is planning to set light to a range of EU rules in a bid to secure London’s position as a global financial centre.
Read more: Quarter of all full-time UK jobs supported by export activity
Chairman at PwC UK, Keven Ellis, commented that: “Not only has the UK grown in appeal to some of our newer trade targets, but it remains an important market among our European neighbours, with 15% of Germany’s CEOs saying the UK is a top 3 growth target, compared with 13% in 2019.
“These are encouraging signs but there’s more to do to enhance the UK’s position and investment attractiveness in what remains a very uncertain world.”
Export and import activity between the UK and France has dropped some 20% since the start of the year as businesses on both sides of The Channel continue to struggle against Brexit disruption.
According to the French customs office, exports from France into the UK fell 13% in January compared to the previous six-month average, whilst exports from the UK into France dropped 20%.
Whilst some pandemic-related ground has been recovered, especially as firms on both sides stockpiled critical components and goods, Brexit uncertainty and new friction-creating barriers has hampered that volume recovery. Meanwhile, French exports and imports with other nations increased.
And despite the trade deal, higher shipping costs, health certificate requirements, complex customs requirements and transportation delays have all contributed to increased commercial costs and reduced activity.
Activity isn’t only down between the UK and France either. A more marked 30% downturn can be seen in German exports to the UK – a continued decline that began after the Brexit referendum in 2016. The steepest declines have been in Italy, with a 38% fall in exports to the UK and a 70% drop in imports.
Read more: Half of UK exporters struggling to adapt to Brexit changes
Gullies Moec, chief economist at Axa commented that: “I have a hard time deciding what is the impact of Brexit and what is simply down to the impact of coronavirus.
“There were so many stories about companies that had trouble exporting or importing after Brexit and a lot of hauliers were reluctant to deal with the customs issues, so there must have been an impact.”
If your business has been impacted, we can help
Go Exporting has already helped a number of companies both prepare for Brexit, and now workaround new restrictions, regulations and challenges.
Our Brexit FastTrack service offers a detailed review of businesses post-Brexit to help resolve the issues they’re encountering – with a quick turnaround and at a fixed price.
Some firms may also be able to reclaim the cost of this service via the SME Brexit Support Fund.
The Government has launched a new initiative aiming to boost exports of food and drink internationally for UK farmers.
Called the ‘Open Doors’ campaign, the initiative will focus on growing middle-class markets including in Asia.
The scheme will be welcome news for UK producers, many of whom have struggled since January 1st exporting food products into the EU.
International trade secretary, Liz Truss, said of the launch of the scheme: “Our farmers need access to new markets around the world, but we need to get rid of the barriers holding them back. We will help you get out into the global market.
“Exporting supports higher wages, productivity, and high-quality jobs, but one in five of our food manufacturers export. We want to unleash the potential of many more businesses, which is why I am glad today to announce a new export campaign for British food and drink.”
She continued: “We are dubbing this our Open Doors campaign, reflecting the work we are doing to open new doors for farmers and food producers to unprecedented opportunities across the world. We need to look beyond our shores. By the end of this decade, 66% of the world’s middle-class consumers are expected to be found in Asia.
Read more: SMEs can now apply for grants to cover the cost of professional export consultancy
“They are hungry for top-quality food and drink, where they know – from farm to fork – that high standards have been at the heart.”
If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering.
This month we joined a fantastic line-up of speakers for Emerging Tech Fest 2021.
In this webinar, Go Exporting CEO Mike Wilson spome with Tony Hicks about exporting goods and services to the EU in the wake of Brexit. Key themes included what’s changed since 1st January, the trade agreement itself and its’ implications, how to identify challenges to your business and how to address the challenges whilst maintaining exports.
Watch the webinar in full below.
If you need support with your post-Brexit export strategy, we can help.
First, download this free Brexit Checklist to get you started.
For a professional service to assess your Brexit positioning, learn more about our Brexit consulting here.
