Despite all the current uncertainty about how Britain and the EU will part ways, the UK’s seafood sector should still seek pathways to future market growth, writes Jason Holland.
These are unprecedented times for the UK seafood economy. On the catching side, it’s widely anticipated the country’s departure from the EU and the prospect of landing larger volumes into fishing ports could lead to significant opportunities, while for those businesses importing and exporting seafood, the convoluted parting is expected to present multiple short-term challenges. But once the Brexit dust has settled, lucrative new prospects should surface for the broader industry, delegates heard at the recent first Scottish Seafood Summit, organised by trade body Seafish in Aberdeen.
Assuming that in the longer term, the UK has an independent trade policy, opportunities will emerge for the seafood sector, said Colin Faulkner, deputy director of external fisheries negotiations and trade policy at Defra.
To ensure it is best-placed to capitalise over the coming years, Colin Faulkner explained that the seafood industry will require three key infrastructure components: a stable macro-economic environment, a framework for international trade, including the infrastructure for longer-term free trade agreements (FTAs), and multi-level support from governments to help businesses progress trading opportunities and market access.
Government is working hard to put these elements in place, he said, emphasising that the interests of the seafood sector are being taken into account and prioritised where possible. This is evidenced by the amount of political airtime given to seafood and fisheries at Westminster far outweighing its contribution of 0.01% to the economy’s GVA (gross value added).
“Fisheries and seafood punch way above their weight in political terms. We all know that and also the reasons why. So have no fear that seafood sectors won’t be taken into account in the future negotiations of free trade and international trade.”
With regards to the macro-economic framework, Faulkner highlighted that in a “broad sense”, UK public finances are continuing to improve, while deficit reduction targets are being met earlier than expected – all despite the current political backdrop.
“Economic growth is holding up remarkably well, and growth forecasts are continuing to hold up better than expected,” he said.
In volume and value terms, Scotland’s seafood sector accounts for the lion’s share of the UK wild-catch, almost all of its aquaculture production and close to half of all fish processing. And with seven out of 10 of Scotland’s top export markets being EU states, collectively accounting for 77% of the export value, it’s particularly exposed to all Brexit scenarios.
Delivering the summit’s keynote address, Fergus Ewing, Scottish cabinet secretary for the rural economy, acknowledged there would inevitably be consequences arising from leaving the EU, but added that there would also be opportunities to grow an industry that was already worth £3 billion and which had grown its overseas sales by 111% in the last 10 years.
He told those stakeholders present, “In England, seafood only accounts for around 6% of food exports. That figure in Scotland is 60% – making it 10 times more important to Scotland than in England. Hence our interest, enthusiasm and desire to do everything we can to assist in your success. And of course, what you do is absolutely vital to sustain our coastal and fragile communities, and as long as I’m the cabinet secretary that will be an absolute priority; trying to do my best to further the interests of the fishermen and fishing interests in those communities.
Ewing said that “despite the uncertainties of Brexit”, his department was working closely with industry to map out a future framework to support the catching and processing sectors. He also remains confident that if it grabs opportunities as they arise, the industry can repeat its export feat as part of the broader Food and Drink Strategy 2030 to double the component sectors’ overall value to £30 billion by 2030.
“We will continue to invest in exports, we will continue to seek market opportunities, and we will continue to work with you to find out how to do that most effectively,” he said.
Jimmy Buchan, vessel and seafood supply company owner and Seafish board member, confirmed that while Brexit gives the “huge opportunity” to land more fish into Scotland, the real challenge is making sure the sector has the necessary infrastructure and capacity in place to maximise the benefits.
“I am certain that this can only happen if industry and government work in partnership on the challenges. It’s difficult, but working together and building bridges is the way to do it. Putting walls up is not the way forward.
“Business needs to be prepared and ready to adapt to a changing [trade] landscape and I think that we are all aware of that.”
Paving the initial way forward post-Brexit, an increasing number of trade agreements have been agreed with third-countries, including important seafood partners like Iceland and Norway. Essentially, these are rollover, continuity arrangements that the UK already has as part of its EU membership and are expected to suffice as stop gap measures.
In the longer term, the government is particularly interested in putting in place a variety of FTAs with several countries around the world, said Colin Faulkner.
“This will affect a lot of industries, including fisheries and seafood,” he said. “There will always be a bias towards free trade. You should assume that government will want to reduce barriers to trade – whether they are tariff barriers or non-tariff barriers – and that will be the starting point for all long-term FTAs.”
Faulkner added that FTAs are also the means to achieve multiple objectives, including labour and environmental protection, upholding human rights, fighting corruption and safeguarding animal welfare.
“It’s about avoiding a race to the bottom and ensuring that the highest possible standards are upheld and the highest quality produce is available to be exported.
“Scottish seafood products are incredibly well placed to capitalise in that type of environment and with the policy drivers behind FTAs. Similarly, they’re well placed on the increased global demand for seafood. In the early 1960s, Europe and the US accounted for nearly 50% of the world’s total fish consumption. In 2015, that was down to 20%, with the Asian market becoming more significant in terms of the world fish consumption perspective.
“Another thing about FTAs is they are fairly new to the UK; they are not something we have had to negotiate in our own right for many years. That will be a new set of processes for us. We will need [industry’s] input and market insight into that process, to ensure that we negotiate FTAs that meet the needs of all parts of the UK.
“Ultimately the whole purpose of this is to help you export more – we want you to export even more of your great products.”
The sector should also tap into the Foreign and Commonwealth Office (FCO) resources, advised Faulkner.
With only a few exceptions, he said it can be assumed exporters will find a UK embassy or Foreign Office Department of Trade team already present in those target countries with a significant amount of local market knowledge and a little black book of contacts that could prove helpful. In Shanghai, for example, the UK embassy has eight people working on food and drink alone. There has also been the recent appointment of nine trade commissioners in key locations around the world.
“I think the seafood sector in Scotland is incredibly well placed to capitalise on global markets and on their expansion,” he said.
LATEST PRESS RELEASES
The product range, which was specially compiled and newly developed for aquaculture applications, wa... Read more
Tersan Shipyard Inc. (Tersan Tersanecilik Sanayi ve Ticaret A.S.) announces the contract of their 100th New Building Vessel
Tersan Shipyard Inc. (Tersan Tersanecilik Sanayi ve Ticaret A.S.) announces the contract of their 10... Read more
Fibras Industriales S.A., commercially known as FISA has taken another leap in its international gro... Read more
Thordon Bearings has successfully completed the commissioning of a set of water-lubricated SXL prope... Read more
This clever infographic shows why maritime companies should now start smart with their data for exam... Read more