BREXIT AND FISHERIES

Situation

The exit of the United Kingdom from the EU will affect Union fisheries in UK waters in the North Sea, West of Scotland, Channel, Celtic Sea, Irish Sea and Falklands Islands. It would also have an impact on access of UK fish products to the Union market and vice versa. Reciprocal restrictions to waters and markets would have meaningful socio- economic consequences for the two actors.

The UK is an important fishing ground for eight Member States i.e. Denmark, the Netherlands, France, Ireland, Germany, Belgium, Sweden and Spain . The Union fleet operates mainly in International Council for the Exploration of the Seas (ICES) areas 5 to 8, within the geographical limits of  North Atlantic Fishing Commission (NEAFC) and North Sea. This fleet lands fish in both UK and Union ports. In addition, there are UK flagged vessels belonging to companies owned by Union operators which land their catches in UK and Union ports.

In the 2012-2016 period, landings of fish caught in the UK’s Exclusive Economic Zone (EEZ) averaged 1 285 million tons of fish. Of these landings 739 000 tons (57%) were caught by the non-UK Union fleet and were worth approximately EUR 426 million. In turn, UK fleet landings sourced from these waters amounted to around 546 000 tons, valued at EUR 542 million. In the same period, the UK fleet landings sourced from other Member States’ waters averaged 94 000 tons, valued at EUR 87 million. In the 2010 to 2016 period, UK catches represented 43% of landings from the UK EEZ, while Denmark, the Netherlands and France represented 18%, 14% and 9% respectively. Other countries such as Sweden, Belgium and Spain represented only 4% of landings. Landings from the UK EEZ represent 15% of the global landings by the Union in the period 2012- 2014. The most dependent Member State in terms of landings is Belgium with 45% of its total landings harvested in UK waters. This EEZ also represents a high proportion of the total landings from the Dutch (39%), Irish (35%), Danish (34%) and German (31%) fleets. These proportions are an average and vary depending on the stocks. Thus, in some cases the landings for certain stocks harvested in the UK EEZ can be very high.

The most important species in terms of value landed from UK waters by the EU-27 vessels are mackerel (17%), herring (13%), sole (10%), nephrops (6%) and hake (6%), amongst others. The most important species for UK fleets in terms of value are nephrops (18%), mackerel (17%), king scallops (10%), haddock (7%) and crab (6%). Herring is the most important species in terms of value for Denmark, the Netherlands and Germany. In turn, mackerel is the most important species for Ireland and the second for Denmark and Germany . Concerning trade, 70% of UK fish exports were sent to the EU market in 2017. The value of exports to the Union market reached EUR 1 091 million. In contrast, UK imports from the Union represented 34% of its total fish imports, amounting to EUR 889 million

Access to resources

A ban of the Union fleet’s access to UK waters would have a meaningful impact on income and employment in the Union fishing sector. Brexit may cause a reduction of the Union fishing fleet of 500-600 boats and a loss of around 6 100 jobs. In terms of catches, the Union seems more dependent on the UK EEZ than the converse. The UK, in turn, seems more dependent on the Union market. Trade would play a key role in negotiating fishing possibilities. It appears, however, that both actors have different perceptions about the role of trade in these negotiations.

At the end of the transition period, the UK will become an independent coastal State. Thus, bilateral agreements will be needed to allow Member States to fish in UK waters and vice versa . The Union membership allowed access to UK fleets not only to Member States EEZs, but also to fishing resources in third country waters such as Norway’s.

Under the UN Convention for the Law of the Sea ( UNCLOS), UK will have sovereignty over the fishing resources occurring in its EEZ . The Union in turn will no longer have any rights to fish in UK waters. However, UNCLOS establishes the duty to cooperate which shall prevail in this case to contribute to sustainable exploitation of fishing resources. In fact, most stocks exploited by UK are also shared with the Union, Norway and Faeroe Islands. The UK, as a sovereign coastal state, has the obligation to establish its own fisheries management system and access mechanisms. Thus, UK can grant or deny access to its resources to other fishing nations. This will be a matter of negotiations. UNCLOS (Article 62) introduces the concept of the surplus, for which states should determine its harvesting capacity and, if the coastal State in question is unable to fully exploit the fishing resources, admit third countries to harvest the surplus. Prioritized access to nations which have historically fished in the zone shall be granted. This latter point implies, for some specialists, that Member States could claim historical rights for fishing in the UK EEZ. For other specialists, instead, Member States would not be able to claim historical rights since the Common Fishery Policy (CFP) will no longer be in force for the UK (House of the Lords, 2016). In any case, the fact that the UK has the right to administrate the resources in its EEZ is regarded by many in the UK as a strength to lever fishing opportunities when it comes to negotiate fishing opportunities.

At the end of the transition period , the UK will be required to manage the fishing resources occurring in its EEZ. This implies the establishment of a policy framework and the determination of conservation and management measures. Cooperation in scientific and fisheries management matters with other coastal states seems sorely required for a sustainable exploitation of transboundary stocks. UK engagement in scientific matters within the framework of ICES is expected to continue. Management to achieve the Maximum Sustainable Yield (MSY) is described in the UK’s White Paper of Brexit in fisheries (DEFRA, 2018) as an objective that is likely to be maintained after this process. Achieving this objective would require coordination and consistency between the conservation and management measures to be established by the UK and those established by the Union and other nations sharing the resources. In particular, there is a need to set Total Allowable Catches (TACs), or other means for non-quota species, in cooperation with Member States and other neighboring countries, based on sound scientific advice. The concept of relative stability is the principle pursuant to which allocation of fishing possibilities is carried out. This principle was established in the early 1980s, as laid down in the Hague preferences, and was based on historical catches in the period 1973–1978. The relative stability is considered by many as disadvantageous for the UK fishing communities. Thus, Brexit is perceived as a great opportunity to improve the competitiveness of their fishing industry and the livelihood of fishing communities. It also offers an opportunity to develop a fit for purpose UK fisheries policy . Revision and reformulation of this principle can be one of the outcomes of a soft Brexit. The relative stability is also considered unable to adapt to a resource too sensible to exploitation patterns and climate change . The so-called “mackerel dispute” is relevant for Brexit as it exemplifies how unilateral establishment of management measures, particularly of quotas, may lead to overfishing of transboundary stocks. The robust European research apparatus and the role of ICES as an independent scientific organization brings advantages to future cooperation in determining levels of exploitation which are based on the best scientific advice. Beyond TACs, exploitation patterns shall be based on zonal attachment of the stocks at stake, determining where the different stages of their life cycles occur to safeguard sustainability and better economic benefits. Many stocks spend part of their life in non-UK EZZs where spawning and nursery grounds are found . Thus, scientific cooperation would be a key factor to determine where the fishing activity should take place and back it up with decision making on reciprocal access mechanisms. Concerning fisheries governance, UK is not a contracting party to Regional Fisheries Management Organizations (RFMOs). As an independent coastal State, the UK’s membership to these organizations is necessary to have fishing access to straddling and highly migratory stocks, as highlighted by the UK’s Brexit White Paper (DEFRA, 2016). The UK will need to apply for membership to the North Atlantic Fisheries Commission( NEAFC), Northwest Atlantic Fisheries Organization (NAFO), International Commission for the Conservation of Atlantic Tunas(ICCAT) or other Regional Fisheries Management Organizations (RFMOs). In a similar way, the UK will no longer have access to fishing opportunities under the so-called Northern Agreements between the Union and Norway and the Faroe Islands. Access to fishing resources in Norwegian waters has been of particular relevance for British fleets. UK fishing possibilities for cod in areas 1 and 2 of Norwegian waters amounted to10 784 tons in 2018.

Freedoms of the Single Market

The Brexit implies the end of the freedoms of the Single Market for UK. The end of free labor mobility may imply a shortage on worker availability to the UK fleet and processing sector. This may become an issue of concern for the UK fishing industry. In Scotland, for example, a quarter of crew members are European and non-European migrants . In the processing industry, a survey on labor in the Scottish processing industry found out that around 58% of the workers were sourced from Union countries, notably from the Baltic States. The right of establishment of companies would also be affected by Brexit . Although this is an issue not strictly related to fisheries it would have effects on investments in the sector. This may affect Union operators wishing to acquire or establish companies in the UK, and their vessels and quotas aka quota hopping. Currently, around 20% of the UK quotas belong to companies which are owned by parent companies in other Union countries . The UK and EU fishing industries are mutually dependent on each other’s EEZs. From the quantitative evidence presented previously the Union fleet appears more dependent on the UK EEZ than the converse . For decades, a process of specialization has taken place based upon the fishing opportunities established by the system of TACs and quotas (House of Lords, 2017). Further changes in access to resources will not only result in changes in fishing patterns, but also on processing and markets. Changes in the status quo and reduction of quotas for the Union fleet would be resisted by the Union fishing sector. As an example, evidence indicates that the pelagic fleet would be more exposed to economic dislocation . Beyond the TAC and quota systems, the Spanish cephalopod fleet fishing in the Falkland Islands is highly dependent on squid, which is shipped to Spain free of tariff. The economy of this archipelago, in turn, is also highly dependent on the activity of this Union operator, as fishing is one of the few economic sectors in place. Regulation (EU) No 2019/497 has been put in place to provide for contingency measures to soften economic distress on the Union fishing sector after Brexit. This measure will consist of public support for temporary cessation of fishing activities under the (European Maritime and Fisheries Fund (EMFF). Concerning trade, one of the most relevant issues for the UK fishing industry will be the end of the Single Market for the UK and of the no tariff regime. Once outside the Union, UK fish would face tariffs between 0 to 24% to access the Union market, as any other third country. As a Member State, UK enjoys preferential tariffs concerning third country markets. Considering that the Union market absorbs 66% of the UK fish exports, producers would need to look for new markets or delocalize companies and processing facilities to Member States. Since UK exports 80% of its landings it seems that some of these species may have no particular appeal for the domestic consumer and would not be easily re-channeled to the domestic market. Negotiation of preferential tariffs or zero tariffs between the parties seems the most reasonable alternative. Within the European Economic Area, for example, the Union has tariff agreements with Norway which vary depending on the species and product type.

As the most important export markets for UK are those of the Union, British exporters might be negatively affected by Brexit . In contrast, UK sources fish from a diversity of markets, particularly from Iceland and China. Thus, the UK market might not suffer a major distress after Brexit . The Union exporter sector, in particular those of Germany, Sweden and Denmark will be more affected by Brexit.

Forthcoming scenarios

The end of the CFP for the UK and the emergence of a large and rich maritime area entirely under British sovereignty will impose a challenge for international cooperation on fishing matters. It is evident that the North East Atlantic and North Sea are maritime areas where the diverse coastal states exploit resources which are to a large extent transboundary. The country’s sovereignty over its EEZ might lead to unilateral setting of TACs and other technical measures that might negatively affect the resources. The experience with the “mackerel dispute” provides a clear example of the problems produced by non-cooperation. Wide cooperation amongst the parties shall consider the zonal attachment of the diverse stocks as a basis for the establishment of quotas and other technical measures such as the landing obligations which seems acceptable for the UK (DEFRA, 2018). The adoption of zonal attachment would likely change the distribution of quotas amongst the fleets. Participation of the UK in bilateral agreements, similar to the Northern Agreements, or even multilateral agreements represent an opportunity for cooperation in scientific matters and management, but also brings a new player to the negotiation table. Thus, the decision-making process, particularly decisions on allocation of fishing opportunities and technical measures, could become more complex. The possibility of a no-deal Brexit may be detrimental for the interests of the Union and the UK. There is a mutual dependency on access to fishing grounds, markets and even conservation and management measures of mutual interest for sustainability, Monitoring, Control and Surveillance (MCS) in particular. There would be a strong impact on the Union fleet and especially for some Member States which heavily rely on the UK EEZ such as Belgium, Denmark and other fleets. The fishing sectors have evolved in the framework of the fishing possibilities available through the CFP. Actors in the fish value chain would be challenged to quickly adapt to the new political situation. The UK coastal communities benefit from the so-called economic link by favoring local crew being hired and landings being made in UK ports by vessels having a fishing license to operate in UK waters. Should Brexit impede Union-derived capital investments to establish companies in the UK and have access to quotas that would have negative impacts on UK coastal communities?

It appears that the UK cannot carry out the sustainable exploitation and management of transboundary stocks in isolation. Cooperation in scientific matters is assumed to be continued at least under the umbrella of ICES. The scientific framework in place seems robust enough to continue informing management and to pursue the goal of the Maximum Sustainable Yield (MSY), which is high in both the UK and Union agenda. The definition of allocation keys amongst the two parties, and even with third parties, is a critical aspect to be addressed. Unilateral decisions on quotas may only lead to overfishing. Many elements of the well- established CFP framework such as the control regulation and conservation and management measures would still be beneficial for the UK and Union shared fisheries

Identification of gaps

The Brexit will trigger many changes in productive sectors and resource management in the UK and the Union. The management system and the scientific apparatus require the UK data and scientific inputs to attempt to carry out a sustainable exploitation of shared resources by the diverse national fleets. Thus, the gap emerging in the short run would require a transitional period under which the rules of the CFP and fisheries opportunities would continue in place. This would counteract the expected economic disruption for the UK and the Union fishing sectors. The transitional period may facilitate negotiating a bilateral or multilateral agreement and arrive to an allocation key based on the so-called stocks zonal attachment and setting up of compatible technical measures across the EEZ. Cooperation is needed to attempt conciliation of positions between the parties concerned. A multilateral approach instead of a bilateral agreement would better address these needs since it will incorporate all parties at stake and thus lower the risk of unilateral decisions. Additionally, the multilateral approach would be more coherent with the nature of transboundary stocks. Further studies are required to have a deeper understanding of the extent of zonal attachment, especially under a scenario of environmental climate change, as a basis for decisions on management and distribution of fishing possibilities amongst the parties concerned. An allocation key and operational mechanisms to distribute fishing opportunities seem required to define criteria for allocation, considering not only the historical catches, but mainly zonal attachment, ecosystem considerations and socioeconomic dependence. International examples can provide some lessons about this complex task. Although the process of establishing allocation criteria in tuna RFMOs are very different from a geographical and resource perspective, it may shed some light on allocation processes where states with very different objectives are concerned . The sudden restriction on fishing opportunities would require Union fleets establishing bilateral agreements with third countries to compensate the lack of fishing opportunities. In the meantime, a framework for cooperation in MCS seems urgently needed to prevent an escalation of Illegal, Unreported and Unregulated  (IUU) fishing in the UK EEZ. Since fisheries are only a part of the deal and subject to other policies such as trade and labour mobility, effective coordination is required at the highest level of decision making between the two parties concerned. Thus, a transitional period seems required until agreement on allocation of fishing possibilities is reached. It appears that such an agreement would need to address the difficult decision to link (or not) access to fishing possibilities with trade, a fact that faces much resistance especially from the UK side.

Conclusions

Efforts made by the EU in the framework of RFMOs, Sea-Fisheries Protection Authority (SFPA) and other fora, have not fully achieved the intended objectives of sustainable fishing exploitation. Factors such as IUU fishing, high levels of fishing capacity, lack of institutional capacities, unsustainable fishing practices and poor compliance in other regions stand amongst the problems to be solved in the near future. The EU is well placed to lead an international effort to improve fisheries governance in coordination with other major international parties. Cooperation and coordination of activities such as identification of priorities and coordinated use of funds amongst governments, private actors and other parties is necessary to build better international fisheries governance. New solutions to old and emerging issues require reinforced cooperation in capacity building in terms of technical and scientific matters, employment of new technologies to combat IUU fishing, coherence in the use of Union funds and coordination with other international donors, development of allocation criteria based also on socioeconomic and environmental factors, creation of international regulatory frameworks and organizations for non-regulated marine areas, and level playing field for all fleets operating in the high seas and EEZs. In the EU, Brexit raises many fears about the end of access of EU fleets to the UK EEZ. Non-cooperation by the parties might lead to the unilateral setting of quotas and thus negative impacts on stocks and fishing sectors. Brexit may offer an opportunity to revisit old allocation keys. The possibility of a no-deal Brexit might also have an impact on the well-established and sound institutional cooperation between the parties, which is in place in a variety of fields including research and management

Brexit is a challenge for the future of fisheries management in the region. The lack of a common management framework for the fleets concerned is a threat that requires cooperation and revision of quota distribution amongst the fleets concerned. Allocation should be primarily based on stocks zonal attachment. In the meantime, it seems critical to consider a provisional period to maintain the well-established scientific and management frameworks.

What the EU says: Besides the cooperation on conservation, management and regulation, the objective of the provisions on fisheries should be to uphold Union fishing activities. In particular, it should aim to avoid economic dislocation for Union fishermen that have traditionally fished in the United Kingdom waters. To reach this objective, the provisions on fisheries should build on existing reciprocal access conditions, quota shares and the traditional activity of the Union fleet.

What the UK says: The UK will become an independent coastal state at the end of 2020 and any agreement must reflect this reality. The UK will, like Norway, Iceland and the Faroe Islands, have annual negotiations with the EU on access to waters and fishing opportunities, and will consider a mechanism for cooperation on fisheries matters.

The EU has made fisheries a key part of the talks and has tied the issue into wider negotiations, meaning if an agreement on fishing is not reached the whole deal could be jeopardized. The fishing sector accounts for about 0.1% of the UK’s economy as a whole and fears have been raised that fishermen could end up being thrown overboard if it means securing a wider deal.

Fishing Fleet Stakeholders

Around 6600 vessels from nine nations operate in the Greater North Sea, with the largest numbers coming from UK, Norway, Denmark, the Netherlands, and France.  The proportion caught by each country of the total annual landings has varied over time . Profitability of many of the commercial fleets has increased in recent years due to the improved status of many fish stocks, reduced fleet sizes, lower fuel prices, and more efficient fishing gears.

Belgium

The Belgian fishing fleet is composed of about 75 vessels, primarily beam trawlers both above and below 24 m in length. Few vessels are smaller than 12 m. Most of the catch is demersal species; sole is the dominant species in value, and plaice the dominant species in volume. Other important species include lemon sole, turbot, anglerfish, rays, cod, shrimp, and scallops.

Denmark

The Danish fleet comprises 1400 vessels, of which 600 vessels operate in the Greater North Sea demersal fisheries. Smaller vessels (< 12 m) constitute the greatest proportion of the fleet, but account for less than 5% of the Danish fisheries catch value. The most important demersal fisheries target cod, plaice, saithe, northern shrimp, and Nephrops using bottom trawls and seines. The most important industrial and pelagic fisheries are prosecuted by around 30 large vessels ( >40 m) and around 200 smaller (12–40 m) vessels; these fisheries target herring and mackerel for human consumption, and sandeel, sprat, and Norway pout for reduction purposes (i.e. fish meal and oils).

France

The French fleet in the North Sea is composed of more than 600 vessels. The demersal fisheries operate mainly in the eastern English Channel and southern North Sea and catch a variety of finfish and shellfish species. The largest fleet segments are gill- and trammel netters (10–18 m) targeting sole, demersal trawlers (12–24 m) catching a great diversity of fish and cephalopod species, and dredgers catching scallops. Smaller boats operate different gears throughout the year and target different species assemblages. There is also a fleet of six large demersal trawlers ( >40 m) that target saithe in the northern North Sea and to the west of Scotland. The pelagic fishery is prosecuted by three active vessels catching herring, mackerel, and horse-mackerel.

Germany

The German North Sea fishing fleet comprises more than 200 vessels. Beam trawlers constitute the largest fleet component (around 180 vessels, 12–24 m) and target brown shrimp in the southern North Sea. Six large demersal trawlers (>40 m) target saithe in the northern North Sea (and in waters to the north of the North Sea). Several mid-sized otter trawlers and beam trawlers (24-40 m) target saithe, cod, sole, and plaice. Less than 10 vessels (mainly >40 m) operate in the North Sea pelagic and industrial fisheries that primarily target herring, but also catch horse mackerel, mackerel, sprat, and sandeel.

Netherlands

The Dutch fleet in the Greater North Sea consists of about 500 vessels. The main demersal fleet is the beam-trawl fleet (275 vessels, of which 85 are >24 m and 190 are < 24 m) that operates in the southern and central North Sea, targeting sole (dominant in value) and plaice (dominant in volume) as well as other flatfish species. Many of these beam trawlers now use pulse trawls. Most of the smaller beam trawlers (“Eurocutters”) seasonally target shrimp or flatfish. Pelagic freezer trawlers (7 vessels, >60 m) target pelagic species, mainly herring, mackerel, and horse mackerel.

Norway

The Norwegian North Sea fleet is composed of about 1585 vessels. 85% of these catch demersal species, including fish, crustaceans, cephalopods, and elasmobranchs, and 30% catch pelagic species, including herring, blue whiting, mackerel, and sprat. Approximately 60% of the fleet targeting demersal species are small vessels (< 10 m) that operate near the Norwegian coast using traps, pots, and gillnets, catching crabs, squid, and several fish species. Medium-sized vessels (10– 24 m) mainly target Nephrops and crabs using pots and traps, shrimp using trawls, and cod, saithe, ling, and monkfish using gillnets. The industrial fleet (5 vessels of 24–40 m; 25 vessels >40 m) target Norway pout and sandeel for reduction purposes. The offshore fleet ( >40 m) is predominantly otter trawlers, but also includes seiners and longliners. Larger vessels ( >24 m) account for most of the landings of saithe, ling, cod, tusk, hake, haddock, herring, blue whiting, mackerel, and sprat.

Sweden

The Swedish fleet in the Greater North Sea comprises more than 500 vessels. The demersal fleet is highly diversified, catching several species in the Kattegat and Skagerrak, mainly Nephrops, northern shrimp, cod, witch, flounder, and saithe. The passive gear fleet is composed of around 400 vessels, of which 100 vessels (30 vessels of 10–18 m, 70 vessels < 10 m) target Nephrops. The 16 vessels in the pelagic fleet target sprat, herring, and sandeel.

UK (England)

The English fleet in the Greater North Sea has more than 1120 vessels. Medium-size demersal trawlers (80 vessels, 18– 24 m and 24–40 m) primarily target Nephrops, cod, and whiting. The small vessel (< 10 m) fleet (around 1000 active vessels) operates in the eastern English Channel and coastal North Sea and catches a diversity of fish and shellfish species. Medium and large beam trawlers (about 40 vessels) account for the major share of the plaice landings. Three vessels ( >50 m) operate in the pelagic fishery targeting mackerel, herring, and horse mackerel.

UK (Scotland)

The Scottish North Sea fleet comprises around 1000 vessels. More than 120 demersal trawlers (almost all >10 m) fish for mixed gadoids (cod, haddock, whiting, saithe, and hake,) and for groundfish such as anglerfish and megrim. A fleet of 116 trawlers fish mainly for Nephrops in the North Sea: 37 of these vessels (< 10 m) operate on the inshore grounds, while 79 ( >10 m) operate over various offshore grounds. Pot or creel fishing is prosecuted by over 500 vessels (mostly < 10 m) targeting lobsters and various crab species on harder inshore grounds. Scallop fishing is carried out by around 70 dredgers (mostly >10 m). Limited amounts of longlining and gill netting are also conducted by Scottish vessels. Significant catches of pelagic species are harvested by 20 large vessels, primarily using pelagic trawls.

The Faroe Islands also fish in the Greater North Sea, but ICES does not have information on this fleet.