Economic impacts for Scottish and UK seafood industries post-Brexit: report

The report presents findings from research examining the possible impacts of EU exit on Scottish and UK seafood industries.

2 Scenarios

When the UK leaves the EU, a number of aspects of the policy framework will change, potentially radically. The scenarios for TAC or quota sharing and trade arrangements were developed by the Project Steering Group and consider:

  • Changes to arrangements for trade in fish and fishery products (tariffs and non-tariff measures ( NTMs)); and
  • Changes to the distribution of TACs or quotas between the UK and EU27 [3] , with a move away from Relative Stability [4] ( RS) and towards the zonal attachment ( ZA) principle.

Changes are likely to be most significant between the EU and the UK, but changes may also occur between the UK and third countries, either as a result of new trade agreements, or because effective UK membership of existing EU Free Trade Agreements ( FTAs) with (50+) third countries may lapse.

The baseline for the scenarios is 2015 in terms of the value of landings and the value and volume of trade flows. This was the latest year for which global fishery and aquaculture production data were available. The baseline is that UK and EU27 landings remain at status quo level (2015), the UK remains part of the Single Market and EU Customs Union for fish and fishery products. There are no tariffs and a low level of NTMs (5%) between the UK and EU for fish trade, and no trade defence with the EU. The model does not incorporate bio-economic modelling of fish stocks, and therefore does not account for potential changes to fish stock biomass or productivity in the future. Additionally, macroeconomic factors that may affect fish trade (e.g. exchange rates, economic growth, market demand) are held constant.

The scenarios range from more liberal trade and greater fishing opportunities (i.e. greater TAC or quota allocations, hereafter ‘quota allocations’ for brevity) for the UK, to more restrictive trade without growth in fishing opportunities for the UK. They are not predictions of the future and serve only to highlight the relative performance of the international drivers for the UK seafood industry – tariffs, non-tariff measures and quota allocations for shared stocks. The analysis does not reflect the relative likelihood of any of the scenarios and they are modelled for analytical purposes only. They are described below and summarised in Table 2.1 (further detail provided in Appendix C).

Scenario 1: this involves three elements: (i) no tariffs on UK exports nor imports with all countries in the world, hence this involves the removal of all tariffs on UK exports to all countries and the removal of UK tariffs on imports from all countries; (ii) a small reduction of non-tariff barriers between the UK and non- EU trading partners, for example arising from future free trade agreements the UK might sign (e.g. global mutual recognition of standards would mean standards and conformity testing would disappear); and (iii) a reallocation of fishing quotas in the UK’s favour based on the zonal attachment principle [5] . This involves increasing the UK’s quota allocations and decreasing the EU’s.

Scenario 2: This also involves three elements: (a) the UK signing an EU–Norway-style agreement on tariffs with regard to fisheries with the EU, hence there is some introduction of tariffs on UK- EU trade flows but below the level of EU Most Favoured Nation ( MFN) tariffs, and continuation of existing FTAs with third countries (‘grandfathering’) (Gasiorek & Holmes, 2017), such that applied tariffs on non- EU trade remains as currently; (b) a modest increase in non-tariff measures between the UK and the EU arising from the exit of the UK from the Single Market and the consequent increases in regulatory burden and customs procedures therein (e.g. mutual recognition of both standards and testing and certification, rules of origin, catch certificates); and (c) the reallocation of fishing quotas in the UK’s favour based on the zonal attachment principle.

Scenario 3: This scenario results in MFN tariffs being imposed on bilateral trade between the UK and the EU [6] , and a larger increase in non-tariff measures arising from the UK’s exit from the Single Market and the absence of a deal with the EU (e.g. full strength conformity assessment due to no mutual recognition of UK standards or testing and certification procedures, veterinary checks, catch certificates). However, this option retains the reallocation of the quotas under zonal attachment as in the earlier scenarios. In this scenario, the tariffs applied by the UK on imports from non- EU countries, and the tariffs faced by the UK in third country markets, have not been changed from the baseline. Of course, depending on what is negotiated by the UK there may well be tariff changes from a no-deal option with those non- EU countries that the EU has a free trade agreement with. [7] On leaving the EU, the UK will no longer be a party to these agreements and unless they have been rolled over (or ‘grandfathered’), MFN tariffs between the UK and these countries may well apply. This possibility is addressed in Scenario 4.

Scenario 4: in this scenario, MFN tariffs are applied between the UK and EU, and non- EU countries, and there is no reallocation of quotas. It suggests that quota allocations remain the same as currently, while the UK leaves the EU with no deal in place on tariffs. It is worth mentioning here that two alternative no-deal scenarios can be envisaged - one which is planned for and known in advance, and a second which involves a last-minute no-deal, which is sometimes referred to as ‘crashing out’. These differences have not been modelled here but the latter would clearly involve a bigger change in non-tariff measures and customs procedures. Finally, and as discussed in the context of Scenario 3, the tariff changes that may occur as a result of a no-deal scenario between the UK and the countries that the EU currently has a free trade agreement with are explicitly modelled. For the trade between the UK and these countries, each country’s MFN tariff rate is applied. [8]

Table 2.1. Summary of scenarios




Non-Tariff Measures*

Production (Quota) Changes


Current situation

Zero tariffs with EU

Existing tariffs with RoW

- EU: 5%
- RoW: 15%

Relative stability and in-year quota swaps


Global Free Trade Agreement and increased UK production

Zero tariffs with EU

Zero tariffs on UK imports from RoW

- EU: 5%
- RoW: 10%

UK and EU quotas based on zonal attachment


EU-Norway-type agreement with EU and increased UK production

EU-Norway tariffs with EU

Existing tariffs with RoW

- EU: 10%
- RoW: 15%

UK and EU quotas based on zonal attachment


MFN tariffs and increased UK production

MFN tariffs with EU

Existing tariffs with RoW

- EU: 15%
- RoW: 15%

UK and EU quotas based on zonal attachment


MFN Tariffs and no increase in UK production

MFN with EU

MFN with RoW

- EU: 15%
- RoW: 15%

No change

* NTM are modelled as ad valorem equivalent ( AVE) tariffs. The NTM levels used in the scenarios were developed based on an analysis of the types of NTM that will be in place in each scenario, and available information on their magnitude as a tariff equivalent. Further details are provided in Section 3.3.1 and Appendix B.2.


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