In the absence of a trade agreement, UK fish feed exports to Norway and Iceland would have faced very high tariffs.
On Monday it was announced that the UK House of Lords European Affairs Committee has published a report on the Free Trade Agreement (FTA) between the UK, Iceland, Liechtenstein and Norway.
The countries involved are the three non-EU members of the European Economic Area, which allows them to be part of the EU’s single market.
This FTA, signed at the end of July, replaces the temporary arrangements agreed with Norway and Iceland at the end of the Brexit transition period. The agreement was heralded as a major boost for trade between the four non-EU nations, which is already worth £21.6bn. Britain is Norway’s top trading partner outside the European Union.
The committee’s report, coming ahead of the deal’s ratification, argues that the agreement should be seen as the UK’s first new post-Brexit FTA, while highlighting that a key objective of the FTA was to preserve the trading relationship that arose from the UK’s former membership of the European Economic Area (EEA).
Removal of feed tariffs
The aquaculture industry, is of particular concern in any deal with EEA EFTA states. Scottish salmon farming is closely interconnected with Norway and Iceland. Speaking to SalmonBusiness, Lord Kinnoull, chair of the committee, said:
“The real win (the one area where the new agreement goes beyond where we were before and the old agreements), is reflected in Paragraph 35 of our report. The UK will now be able to export certain things to these states on a tariff free basis. And we will also be importing prawns and shrimps and other things on a tariff free basis. So that to that extent, those are things which will benefit the fisheries industry.”
According to a letter to Lord Kinnoull from Ivan McKee, the Scottish Government’s Minister for Business, Trade, Tourism and Enterprise, the biggest market for Scottish fish feed is Norway and Iceland, and 90 per cent of salmon ova imports come from Norway; with imports from Iceland as well. In the absence of a trade agreement, UK fish feed exports to Norway and Iceland would have faced very high tariffs. Scotland alone exports £57 million of animal feed, including fish feed, to Norway and Iceland.
As part of the deal, Norway has agreed to cut certain tariffs for imports of UK fish feed from 10.5% to zero, thereby achieving annual savings of some £4.1 million.
New more flexible structure
Kinnoul continued, “The other thing that it does is create a governance structure which is focused on actually trying to improve things between the UK and the three countries involved. The previous governance structure for the EEA is complex, so that little change really ever happens.”
“This is a much leaner thing. And it is actually specifically charged with getting on trying to remove more barriers and improve the situation with what – after all – are our immediate neighbours. So I have high hopes for this leaner, meaner governance structure being a much more efficient way of discussing things as life develops – as it inevitably will. The fisheries sector of course is one of the key sectors involved, certainly with trade with Norway.”
“I hope we have made enough in our report of this fresh governance structure, which is very, very focused. An issue within the EU is getting agreement of all the member states is so difficult, that often nothing happens.”