Shellfish Sales: Brexit Hope 🌊🤝 Future Secured?

THE SHIFTING TRADE LANDSCAPE
The impending agriculture agreement between the UK and the EU represents a significant, though not complete, shift in the trade dynamics surrounding Scottish shellfish. While the deal aims to substantially reduce bureaucratic hurdles, it’s crucial to understand that it doesn’t eliminate all paperwork requirements for UK exporters. The negotiations are focused on a Sanitary and Phytosanitary (SPS) agreement, designed to minimize the impact of Brexit on trade, particularly for perishable goods. This agreement, if finalized, will eliminate physical checks on farm produce and the necessity for veterinary certificates, currently costing £200 each, offering a substantial simplification for businesses.

THE IMPACT ON SCOTTISH EXPORTS
The potential benefits for Scottish exports, specifically langoustines and oysters, are considerable. Pre-Brexit, these seafood products enjoyed rapid distribution, with Scottish catches reaching diners in Paris within a day. However, post-Brexit, border checks dramatically reduced shelf life, effectively halting much of the export trade. The SPS agreement, by removing these checks, opens the door for a revival of this market, restoring the ability to transport these delicacies efficiently. William Bain, head of trade policy at the British Chambers of Commerce, highlighted this as a “significant problem” for wholesalers and distributors previously burdened by the “Not for EU” labeling requirement.

DYNAMIC ALIGNMENT: A KEY NEGOTIATING TACTIC
A core element of the agreement involves “dynamic alignment,” requiring the UK to adopt future EU rules and regulations concerning farm produce. This approach, agreed upon by the UK government, acknowledges the divergence that has occurred since Brexit. Under this framework, the UK would align with 76 EU laws that have been passed or from which the UK has already departed in the agricultural sector. This strategy was chosen despite alternative options like “mutual recognition,” which New Zealand and Australia employ, allowing for trade without requiring dynamic alignment.

MUTUAL RECOGNITION: A LOST OPPORTUNITY?
Shanker Singham, chair of the Growth Commission, argued that the UK missed a crucial opportunity by pursuing dynamic alignment. He advocated for a “mutual recognition” system, where both the UK and the EU would recognize each other's food standards, mirroring the arrangements in place between New Zealand and the UK. This approach, he contended, would have avoided the need for dynamic alignment, safeguarding the UK's regulatory authority. Singham emphasized the UK’s significant commercial leverage – accounting for 23% of the EU’s global agrifood exports – as a key bargaining chip.

THE ROLE OF PHYSICAL INSPECTIONS
Sam Lowe, a trade and market access expert at Flint Global, underscored the critical difference between dynamic alignment and a mutual recognition model. He stated that dynamic alignment would essentially allow “physical inspections to pretty much disappear,” a feature absent in a New Zealand-Australian style deal. The agreement hinges on the EU recognizing the UK's dynamic alignment, effectively granting the UK an advantage. Lowe’s perspective highlighted the negotiation's focus on reciprocity, with the UK seeking to receive concessions from the EU given its existing recognition of EU rules.

UK’S ADVANTAGE IN TALKS
The UK’s position in trade negotiations is strengthened by the fact that the EU has been implementing all Brexit rules from Dover and beyond since the beginning of Brexit. This has resulted in approximately 20,000 British businesses ceasing exports to the EU. The UK’s approach of random inspections on fresh food, rather than full border controls, has created a trade imbalance, giving Keir Starmer a significant bargaining advantage.

CONCLUSION: A MODIFIED TRADE ROUTE
Ultimately, the new agreement represents a significant step forward for Scottish shellfish exports, primarily due to the removal of physical checks and the elimination of the “Not for EU” labeling. However, exporters will still need to fulfill customs, VAT, and safety and security declarations, signifying a modified, rather than entirely streamlined, trade route with the EU.