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New Trade Agreement with Iceland, Norway and Liechtenstein could benefit UK fish processing industry

Monday 11 October 2021

The House of Lords European Affairs Committee has today (Monday 11 October) published a report on the Free Trade Agreement between Iceland, The Principality of Liechtenstein and the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland.

This Free Trade Agreement (FTA) replaces the temporary arrangements agreed with Norway and Iceland at the end of the transition period. The Committee’s report argues that the agreement should be seen as the UK’s first new post-Brexit FTA. At the same time, however, the report highlights that a key objective of the FTA was to preserve the trading relationship that arose from the UK’s former membership of the European Economic Area (EEA). As such, the Committee concludes that the FTA is in part an exercise in damage limitation: seeking to avoid new barriers to trade, rather than to remove existing barriers.

As well as maintain the arrangements in place before Brexit, the report highlights extra potential benefits in the new deal to the fisheries sector with the removal of tariffs on the import of shrimps and prawns to the UK, which could deliver savings of between £1 million and £2.7 million annually. This would not only benefit businesses in Norway, but would also reduce costs for the UK fish processing industry, which employs around 18,000 people across the UK, almost three quarters based in Scotland, East Yorkshire and northern Lincolnshire. There are also welcome provisions for trade in services, where the provisions on the movement of people go further, in some respects, than those the UK agreed with the EU.

While welcoming the deal, the Committee noted a letter it received from the Scottish Government criticising the UK Government’s level of engagement with the devolved administrations, with no consultation on the negotiation process, nor on the crucial detail relating to tariffs and the goods market access.

Similarly, the Committee say it is not clear how Northern Ireland will benefit from the trade deal under the Protocol on Ireland/Northern Ireland, and expresses surprise that no reference was made to this in any of the materials that the Government published alongside the Agreement. The Committee was also critical of these materials more generally, as they “appear to have been produced in haste” and do little to facilitate effective parliamentary scrutiny.

The Committee welcomed the prominence given to women’s economic empowerment in the agreement, which could lead to improved outcomes for women in trade over time, and the shared commitment of all Parties to the Agreement to deepen their cooperation on these issues.

The Committee further welcomed undertakings to develop further cooperation across a range of environmental issues, including to develop the cost-effective deployment of renewable energy, including offshore wind generation in the North Sea.

Lord Kinnoull, Chair of the Committee, said:

“We welcome the Government’s successful conclusions of negotiations on a Free Trade Agreement with Norway, Iceland and Liechtenstein and the speed with which agreement was reached.

“While the agreement is in part an exercise in restoring the position and seeking to avoid the imposition of new barriers to trade, rather than in removing existing barriers, its impact upon trade in goods and services could be significant particularly in the long term.

“We do however continue to have concerns about the timing and level of scrutiny and engagement for the free trade agreements that are being struck, especially in a deal involving two of the UK’s immediate neighbours in Iceland and Norway. It is of vital importance that Parliament at Westminster and the devolved legislatures have the opportunity to examine these agreements and feed into the negotiation process before it concludes.”

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