Fish, the Final Stumbling block
The Financial Times reports Britain and EU Poised to Announce Christmas Eve Brexit Deal.
Fish remained the final stumbling block yet the total amount of harvested fish amounts to only €650 million ($790 million) annually.
Christmas Eve Announcement Expected
Bloomberg reports U.K., EU Set to Announce Brexit Trade Deal After Compromise.
One EU diplomat said the U.K. had made concessions on fisheries in recent hours that had unlocked the deal. According to two people familiar with the matter, Johnson has accepted that the bloc’s share of the catch in U.K. waters should fall by 25% over a period of five-and-a-half years. Britain had initially sought an 80% reduction over just three years, but in recent days had offered a cut of 30%.
The bloc had refused to accept a reduction of more than 25% in the value of fish caught, saying even that was hard for countries like France and Denmark to accept, according to officials with knowledge of the discussions.
This would be phased in over five and a half years. The U.K. previously offered three years while the EU were pushing for 10.
The EU also wants to be able to impose tariffs on the U.K. if, after the fisheries transition period, the government restricts access to its waters. In its latest compromise offer, the U.K. said it would accept tariffs on fisheries but not in other areas, such as on energy, as demanded by the bloc.
Fish Are Cheering
The fish are cheering. The EU will catch 25% less of them phased in over 5.5 years.
Hooray!
Unfair Competition
The other major stumbling block was a huge dispute over alleged “unfair competition”.
There is no word yet on how that was solved but I expect Johnson did not sell the farm. By that I mean the UK will not be at the mercy of the European Court of Justice.
There will of course be some other arbitration mechanism. As long as Johnson avoided the ECJ trap, the deal will be very minimal but also fair.
Win-Win Setup
The deal also includes tariff-free electric car manufacturing.
That component seems to benefit the UK the most, as the deal allows parts to come from outside EU.
In the final analysis, all trade deals are a win-win setup. If they aren’t perceived that way, there is no deal.
Rush is On
Johnson will have to hold an emergency session of Parliament and the EU will have to bend some rules as there is no time for it to vote this year.
This final outcome was easily predictable as was the length of time it took to reach it.
As I said way back in January, then again in June, October, and November: Everything in the EU happens at the last minute if not much later.
December 9 Flashback
A Post-Brexit Trade Deal Now Looks Likely
The New York Times reports Boris Johnson Fails to Break Brexit Deadlock in Brussels Talks
The above story is mostly rear view silliness. A key breakthrough happened yesterday when out of the blue Boris Johnson dropped a threat to break the Withdrawal Agreement.
Bluffs Cancelled
Earlier this year, the EU demanded complete fishing rights and for the UK to agree to a level playing field as decided by the European Court of Justice.
Boris Johnson responded with a bluff of his own, to break the Withdrawal Agreement in regards to Ireland.
What I Expect
- Johnson will offer some fish tails.
- The EU will demand the whole fish.
- Johnson will offer fish heads and tails and if necessary, fish livers.
- Nigel Farage will complain no matter what part of the fish the EU gets.
Since a deal makes sense for both sides, it is far more likely than not there will be a deal. But please note that it’s only December 9.
There is plenty of time for more threats and more bluffs before a deal is reached.
Even then it will not be the “final deal”. It will be a bare bones WTO agreement of some sort with provisions to haggle for years to come.
Will Anyone Be happy?
- The hard Brexiteers will not want to give France a single fish.
- Nigel Farage is certain to howl.
- The Remainers would gladly give France two-thirds of the fish and subject themselves to the ECJ as well just for the privilege of being back in the EU’s clutches.
- In the EU, France fell way short of what it wanted and Spain did not get Gibraltar.
Few will be happy with this. Relieved yes, happy no. And that will make this a fair deal.
Pending a review of the arbitration mechanism, Boris Johnson did as well as he could have.
Yes the EU got more fish than the UK wanted to give, but look at the massive concession the UK got on cars. That was worth how many times more?
Deal Comparison
Final Thoughts
A good trade deal could fit on a napkin. Both sides would abolish all tariffs, fees, duties, etc.
But this was the best that could realistically be expected.
Mish
In my opinion we will see the end of the British Union over the next 5 to 10 years. The Scots will leave because they can make the same argument that Brexiters made which is ‘take back control’. If Westminster can make that argument against the EU then Holyrood can also make the same argument against London.
With the difficulty of negotiations over 4 years for withdrawal from EU membership of 46 years all playing out to common scottish people it will become a much more hard sell for Scots Nationalist party to win the referendum. 300+ years union shared currency, foreign policy and a whole host of things that were not shared between UK and EU during membership. In 50 years time may be, in 10 years time no chance
It doesn’t seem very likely to me either. Just sorting out the currency would be a mammoth task. I don’t think many Scottish people would want the Euro and retaining the Pound might not be easy for an independent Scotland. A Scottish Pound? Also Nicola Sturgeon doesn’t put forward Scotland’s viewpoint, only the SNP’s. A UK trade deal, even if not perfect, will also take some of the heat out of the SNP’s arguments. As time passes and everyone gets used to it, going through the whole process again for Scottish independence will seem like more unwanted disruption. I think most people have had enough of it for now.
On the one hand England is going to have to find a way to reforge its own identity, even if that is just to shed a lot of dross and hype, and be a bit more normal. On the other hand is europe, and I think that will be a lot more “interesting” over the next decade. At some point the EU political bureaucracy is going to have to step out and show its own face, because for now it really is just a shadow of influence running through whatever is or can be corrupted while hiding behind some completely unrealistic ideal. Society in various countries expects something real from its native governance, and now that it is becoming increasingly apparent they will not provide that (because of a comfortable and careless subsidiarity to EU) , eventually someone will have to take responsibility for the chaos that is. Less and less people are in a position to command respect either nationally or at european level, which therefore points in the direction of eventual misuse of force and its resulting open conflicts. In short, few will accept direct visible EU dictate, even if their own governments are participating in it. It’s all quite unpleasant to witness.
I agree it not happening right now or in 2021 but it will happen. Right now the polls give 58% for Scottish independence.
Polls are what they are, What matters is the vote on the day. Polls predicted a hung parliament/small Conservative majority in 2019 elections and Conservatives scooped it with 80 seat majority! Until they share the pound rely on Barnett formula to top up their spending from UK government nothing will change.
Mish, you could find details of Dispute resolution and cross retaliation details in the high level summary published here ‘https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948093/TCA_SUMMARY_PDF.pdf‘
The UK remains a trusted partner. We will stand shoulder to shoulder to deliver on our common global goals. https://twitter.com/vonderleyen/status/1342159983006412804
We will have to see what concessions are made in terms of arbitrage. It’s a sham anyway, because of being a big government package that cross matches different issues into a single answer. If you want to talk fish, talk fish but if you cannot then just leave it off the table and agree on what is possible to. Same NI, same Gibraltar, same customs. Trading fish for any other is corrupt, not that I have any preference on whether to trade access, or any choice of amount ceded.
“EU will have to bend some rules as there is no time for it to vote this year. “
They don’t have any rules.
So we will have to wait for the details, they will probably just show a bunch of bureaucrats trying to justify their position by faux demonstration of how much they could possibly interfere in everyone else’s business, and using that apparency to have others celebrate their say while following whatever “solution” of lesser interference by them is installed.
Cross retaliation is gone from dispute resolutions as far as I can see. Even for State aid and Level playing field if there is divergence from any party, punitive measures by means of tariffs will only apply to that specific industry. All decided through a panel of joint committee(like the one established for Northern Ireland protocol) and independent arbitration. More importantly both the parties can retaliate. Quite remarkably balanced.
In theory that would be good, but then as independent either UK or EU could retaliate indirectly under different pretext. The idea of a joint resolution committee might be no more than a parallel offshoot designed to co-govern UK/EU as part of EU, providing a political theater schedule to both UK and EU politicians.
I’m cynical, obviously.
If the US government fails its constituents in their time of gravest need, it is time to call a Constitutional Convention.
Pelosi and AOC now agree with Trump on the $2000. Out of the $36 Trillion in bailouts the past 12 years, citizens has received so far $300 billion. This next stimulus will be $900 billion and citizens gets $100 billion. That would means $400 billion out of $37 trillion or 1.1%.
Up this to $2000.
Much more than that went to individuals. For example, Billions went to PPT, of which a max of 10% could be used by the Business, and the remaining 90% had to flow to the employees. 100% of the PPT funds I received went to employees, and I’m sure that is true of most other small businesses. In this most recent $900 Billion, most of it would flow to individuals.
…Democratic House leadership said Thursday that they would bring the $2,000 question to a vote Monday, forcing Republicans to go on-record opposing what their party leader has called for.
“Today, on Christmas Eve morning, House Republicans cruelly deprived the American people of the $2,000 that the President agreed to support,” House Speaker Nancy Pelosi (D-CA.) said in a statement. “If the President is serious about the $2,000 direct payments, he must call on House Republicans to end their obstruction.”
“To vote against this bill is to deny the financial hardship that families face and to deny them the relief they need,” Pelosi added….
…El Pais newspaper said earlier Spain and Gibraltar were nearing such an agreement that would mean that from Jan. 1 there would be border controls for British citizens travelling to Gibraltar, but Spaniards and Gibraltarians could freely cross the land border….
NI solution?
Gibraltar will become part of Schengen area. UK citizens travelling into Gibraltar crossing the border at Spain will have to flash their British Passport
“To vote against this bill is to deny the financial hardship that families face and to deny them the relief they need,” Pelosi added….
How long has Pelosi been blocking relief, now, for her political purposes?
Burning down the house…
…House Republicans on Thursday blocked a Democratic attempt to pass $2,000 direct payments to Americans, as the fate of the massive coronavirus relief package passed by Congress earlier in the week hangs in the balance….
I don’t think Trump really is really trying to get the $2000 passed. I think his goal is to stir the pot, and increase agitation and division, setting the stage for massive riots in January, allowing him to declare martial law.
Has anyone outside the negotiations seen the terms yet?
2000 + pages, to be reviewed by respective parliaments and signed by both–December 31?
The following is from a blog post…”the end of the beginning”–which is where it is at now.
From an OG Brexiteer…
….therein lies the importance of having a deal. The only reason a thin deal is important is that it shaves a year or two off the process of repairing the damage of needlessly quitting the single market. In the interim it does very little for British exporters.
Much of this now rests on the the ratification and implementation process, and whatever contingency measures both sides employ, but I’m still working on the premise that third country means third country, this official controls will apply, for the most part, from the very beginning. There is, therefore, every reason to expect difficulties at the ports and problems with supply chains. UK authorities may pre-empt this and deter traffic from even setting off, thereby avoiding a repeat of this week’s chaos, but still leading to substantially reduced volumes of freight.
As to whether it’s a good deal or not is a more complicated question. It entirely depends on what you you hoped to accomplish. If your expectations are unrealistic you’re likely to be very disappointed. In any case, the deal cannot be viewed in isolation of the withdrawal agreement. One has to evaluate the whole package, which largely indicates it’s a dog’s dinner. It’s a spaghetti bowl of red tape and bureaucracy that is both dysfunctional and unsustainable, and will inevitably see us going cap in hand to Brussels to try and repair the damage.
This is ultimately the consequence of failing to plan, failing to set out coherent objectives and not having any real idea of what to do with Brexit once they’d got it. We’ve been winging it from day one….
As Mayor Daley I said, “there is nothing as wholesome as a fish”.
Make light of the fish and the value as much as you like, but farmers and fish are outsize lobbies and symbols for the center right Christian social democrats that have huge (disproportional) pull in all European coalition governments as well as the EU itself.
Incidentally, eating is at the base of Maslow’s pyramid.
This is a political battle, and in political battles, appearances and symbols often garner more attention and focus than any realities. Politicians and managers have to convince core constituencies at least of the appearance of doing battle for them in order to introduce changes. (Just think of Floyd)
Food is a touchy issue everywhere. Wars have been fought over fishing rights. Wars have been fought to conquer and defend agricultural land. Food sovereignty is the most basic human issue and it is something not to take lightly. I see it as being more than just a symbol. These last few months shows us the importance of having a grocery store full of food.
The agreement on fishing seems like a real gift to the EU to me. Almost a capitulation.
On balance having followed this whole saga since 2016, the agreement is balanced with compromises on both ends. UK asked for Canada but got a lot more than Canada but gave way on Fish.
Johnson did a pretty good job, especially in view of the recent dramatic developments at the borders because of the allegedly more contagious, politically exploited C19 variant….
I think credit is due to both sides. Yes Johnson did well not to extend, Frost Johnson’s right hand man did astonishingly well, by ensuring it does not follow EU’s sequencing of talks. Giving into EU Sequencing was the biggest error in judgement of Theresa May’s negotiations.