Brexit talks enter the penultimate fortnight period, fishing rights still the key issue

  • December 20, 2020 05:54 AM AEDT
  • Kunal Sawhney
    CEO Kunal Sawhney
    2273 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Brexit talks enter the penultimate fortnight period, fishing rights still the key issue

Summary

  • Leaders on both the sides have claimed that substantial progress has been achieved in the last few days with some key issues still needing some discussion
  • Fishing rights is one major issue where both sides haven’t arrived at a consensus
  • The EU Common Economic Area Regulation would cease to apply over the UK from 31 December and both sides would have deals under WTO regulations

 

Negotiations between the UK and the EU have entered the final phase to clinch a favourable post-Brexit trade deal before 31 December, where fishing rights in British waters for EU members remains the most important issue. UK Prime Minister Boris Johnson has asked that the EU has to make a feasible offer in terms of fishing rights so that they can break the Brexit deadlock.

Earlier, EU chief negotiator Michel Barnier told the European parliament that the discussions had reached a “moment of truth” ahead of the final hours of negotiations.

The Brexit deal was scheduled to be sealed before the end of this year but was severely truncated due to the pandemic and disagreements between the two blocs.

(Image source: ©Kalkine Group 2020)

 

Fishing affair

Fishing is a thorny issue that has now emerged as the main point of tussle, where the EU has been demanding fishing access into the UK’s territorial waters, which the UK does not want to part with.

When the UK left the EU on 31 January, it still had to follow the EU's rules, including its Common Fisheries Policy (CFP), till 31 December, under which all the EU members have full access to each other's waters. The national quotas are based on historical data set in the 1970s. The UK has always said that it had got a bad deal.

As the UK waters are strategically important and bountiful, the EU members want to have little change in the fishing rights, whereas the fishing communities in the UK have been insisting that the UK should have more access to its waters.

Experts feel the matter is complex as the UK will soon have more access to its waters. They are concerned that the UK will also dominate the market where fish can be sold.

So, the EU has been arguing to restrict the UK from accessing its markets. On the one hand, the UK is saying that the fishing rights should not come in the way of the trade deal, the EU has cleared that without a favourable deal on fish, there will be no special access to the EU single market.  

 

The Brexit talks

It would be extremely disadvantageous to businesses on both sides if a trade deal is not agreed upon without a comparable tariff structure taking place. In the past 47 years, both were part of the same economic bloc and had deep trade relations.

When the EU common area regulation ceases to exist and new tariffs will be imposed as per WTO terms, which will be in an expensive and time-consuming affair for existing businesses. Businesses would lose their competitive advantage leading a fall in their share in the global trade.

 

Economic impact

When the UK decided to leave the EU, there was a massive economic fallout whose magnitude was difficult to comprehend that time. There are many key sectors in both blocs whose growth was primarily driven by business relations across the border when the EU and the UK were members, which will now face manifold challenges.

Thus, after the pullout referendum in 2016, both Britain and the EU members lobbied with their respective governments to negotiate a good deal so that the ongoing tariff concessions remained intact and there was no or minimum disruption in business activities.

The negotiation process, however, took too long and until PM Johnson promised to withdraw with or without a deal. The formal Brexit process culminated on 31 January, but additional time was assigned to complete the deal. Experts are not very clear on the outcome of the negotiations now with time running out and leaders from both sides playing down the expectations of reaching a deal.

 


Disclaimer
The website https://kalkinemedia.com/uk is a service of Kalkine Media Ltd (Kalkine Media), Company Number 12643132. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK