Scottish salmon a likely target as trade war with EU looms

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“If the EU wants to apply proportionate sanctions, or proportionate tariffs, it would be good from the EU’s point of view to pick, for example, Scottish smoked salmon”.

With talks underway on the renegotiation of the Northern Ireland Protocol that governs trade  along the border between Northern Ireland (in the UK) and the Republic of Ireland (in the EU), key EU member states say they’ve asked the European Commission to prepare “targeted retaliation” against the UK.

According to Katya Adler, the BBC’s Europe Editor, one possibility is that the EU could start new legal proceedings against the UK and/or suspend parts of its post-Brexit “zero tariff zero quota” trade agreement with the UK. The idea would be to target strategic UK markets like whisky or cars “to send a clear message to London”.

Cross-sector retaliation
Muddying the waters, is the fact that France and ten other EU nations have called for a common front against Britain over post-Brexit fishing licences. The statement by the 11 EU nations came after a meeting of EU agriculture and fisheries ministers in Luxembourg.

Under the terms of the Withdrawal Agreement, parties can engage in cross-sector retaliation in case of violations. This cross-sector retaliation applies to all areas of the economic partnership. This cross-retaliation mechanism allowing trade penalties for breaches of the withdrawal agreement was agreed by both sides.

SalmonBusiness spoke to Catherine Barnard, professor of EU law at the University of Cambridge to see if this is a realistic possibility.

Barnard said, “The bottom line is, if the EU thinks the UK has breached provisions of the withdrawal agreement, that’s the divorce text. And there’s been an arbitration panel that finds the UK has been in breach. And if we don’t comply with whatever the arbitration panel tells us, then it’s then possible Under the trade and cooperation agreement (TCA).”

Catherine Barnard, professor of EU law at the University of Cambridge

Internal strife
“It’s possible for sanctions to be applied, not just under the Withdrawal Agreement, but also Under the TCA, which would include fisheries. So it is quite a long way down the line. And it may be that the politics get in the way first, but if the EU wants to apply proportionate sanctions, or proportionate tariffs, it would be good from the EU’s point of view to pick, for example, Scottish smoked salmon as one which will be subject to tariffs, because, one, it is still a small sector, so it would be proportionate.”

“And secondly, of course, it would upset both fishermen who’ve struggled, quite a lot of post Brexit. And also it would hit Scotland as well, which would cause internal strife.”

Elaborating on the rationale behind this choice, Barnard said, “The EU is pretty good at picking sectors, which are discrete, but high profile. And so often, you might note that the EU will stick tariffs on luxury goods, for example. Because they’re high profile, but actually don’t affect that many people. So if you’re going to go down the tariff route, then you go for something like a Scottish whiskey or Scottish smoked salmon, because it’s high profile, but small.”

Could take months
“This whole process could take months. But it may be that the politics completely overtake this and it may be that the UK decides to literally blow up everything and say, well, we’re not going to comply with any of the TCA or we give notice to terminate the whole of the TCA. Which would be a No Deal. Take us back to No Deal Brexit now that is possible to terminate the TCA. But it will take 12 months to do so.”

“At the moment, we’ve got a 00 trade deal. So zero tariffs, zero quotas, if we traded on WTO terms, and it must be said that the TCA is not a whole lot better than WTO terms. It would mean that tarrifs would be levied on products going into the EU and also into the UK. Which again would hit products like salmon.”