Rural and Environment

“Tariff-free trade only viable option for Scottish seafood” – Rural Economy Secretary Fergus Ewing

December 10, 2018 by Alan Bannon No Comments | Category Agriculture, food and drink, Marine, Uncategorized

“As the deadline to Brexit ‘D-day’ approaches, we’re gradually beginning to get a clearer picture on what the various scenarios could mean for Scottish industry.

“Some of those arguing the case for leaving the European Union have been keen to reassure UK business that the inevitable downturn or loss in trade to the European market could be seamlessly balanced by out by opportunities to exploit other potentially more lucrative markets, after Brexit.

“However, in every scenario – even those presented by the UK Government itself – the experts are forecasting a major downturn in fortunes and, in my opinion, the speculation on alternative markets is hopeful in the extreme.

“More importantly that view often fails to take into account the impact that the loss of tariff-free trade, which we currently enjoy with our European neighbours, will have on some of Scotland’s most important industries – such as sea fisheries, aquaculture and seafood processing.

“To put into context, 2017 was another record year for Scottish Food and Drink exports, with overall turnover worth around £14 billion annually, supporting 111,000 jobs, via 17,000 businesses.

“Scottish seafood was a big part of that success, with exports of our marine produce amounting to a total of £946m worldwide, around 80% of which (£725m) was sent to our European neighbours. Of the worldwide total, our farmed salmon alone amounted to over £600m in value.

“And despite Scotland having only a tenth of the total UK population, Scottish landings account for 67% of the value of total UK landings, and our farmed salmon accounts to 94% of the total value of aquaculture production.

“Fisheries and aquaculture then are of massive importance to Scotland, and are proportionately more important to Scotland than other parts of the UK. They are sectors that have gone from strength to strength in recent years.

“Earlier this year, Marine Scotland researchers published their findings on the potential impact on UK output and trade, in the event of different Brexit trade scenarios that may unfold over the next few months.

“Scenario One was for free trade with the EU and the rest of the world. Scenario Two was for an EU-Norway European Economic Area type agreement (popularly known as the ‘Norway solution’). Scenario Three was for no preferential trade agreement with the EU, and Scenario Four was for no preferential trade agreements with the EU and the rest of the world.

“The findings make for stark reading.

“Under the first scenario – free trade with the EU and the rest of the world – the projection is that output and exports would increase by nearly 1% and 2% respectively, relative to baseline without Brexit.

“Under Scenario Two – the Norway Solution, we would expect to see a slight dip in output and exports (-1% and -3% respectively).

“However, it’s when we get to scenarios three and four that we see a major fall across the board with -6% for exports, and -2.5% in total UK output, with the direct output of Scotland’s seafood sectors potentially lower by up to £50 million* in Scenario Four. Accounting for knock-on impacts across the supply chain, that means that the value of Scotland’s seafood sector could be lower by up to £85 million in total under scenario 4.

“The research also illustrates the impact that Non-Tariff Measures could have on output and exports, and on Scotland’s economy – by leading to increases in UK prices, which would ultimately cost Scottish and UK consumers.

“Put simply, the results show that increased trade restrictions from tariffs and Non-Tariff Measures (NTMs) could have a major negative impact on Scotland’s economy.

“I’m particularly concerned by the potential impact of NTMs on a sector which absolutely relies on the seamless exporting of its fresh products so that they can hit dinner tables around the world in the minimum of time.

“In real terms that could be associated with up to 429 fewer jobs and £20 million less in gross value added (GVA) across the economy.

“As Scotland’s Fisheries Secretary it’s my job to ensure that doesn’t happen, and to secure the best possible outcome for communities reliant on seafood production – whether that be inshore fishing, offshore fishing or aquaculture.

“On the flip side, the research clearly shows that for any level of catching opportunity for the UK fishing fleet. If we were to keep Scotland in the EU or the European Single Market, as set out in the Scottish Government’s strategy, Scotland’s Place in Europe, then the outcome would be much more positive for wild caught sea fish and farmed salmon products, which is not just good for our fishermen but good for consumers and the wider rural economy.

I’m sure that, whatever the outcome, our fishing and aquaculture industries will demonstrate their usual resolve, and get on with making the best of a bad situation; but it’s entirely within the gift of the UK Government to ensure that they shouldn’t have to.

*Data is calculated relative to 2015 output, export and import figures.

Tags: aquaculture, brexit, economic case, fisheries, tariffs

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