Brexit update: French fishing industry, Israel and India trade links

Brexit and the French Fishing Industry

It is not only the UK which has had to adopt many domestic measures to counter any perceived adverse effects or constitutional, legal or economic gaps arising from Brexit.

The French fishing industry has been adversely affected by Brexit and on 23rd April 2021 the EU Commission announced that it had approved, under EU State Aid rules, three French Government schemes, worth €100 million in total, to support the French fisheries sector in the light of the fishing quota reductions envisaged by the UK-EU Trade and Cooperation Agreement of December 2020 (TCA). The EU Treaty provision relied upon by the EU Commission to grant this approval is Article 107 (3) (c) of the EU Treaty on the Functioning of the European Union (TFEU) which states that the following state aid (amongst others) may be considered to be compatible with the EU internal market  – “… aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”.

The three French Government schemes, for which EU State Aid approval has been obtained, relate to partially compensating the French fishing fleet (1) (up to €80 million) for the fixed cost of the vessels forced to stay at berth as a result of Brexit, and (2) (up to €12 million) for their loss of revenues suffered as a result of Brexit during the three months’ period commencing on 1st January 2021 and to partially compensating French fishmongers (3) (up to €8 million) for their loss of revenues suffered as a result of Brexit during the same three months’ period commencing 1st January 2021.

There are a number of conditions attached to the EU Commission approval and it is also unclear from what the EU Commission announcement on 23rd April 2021 itself states as to whether or not or to what extent the three French Government schemes will eventually qualify for funding under the EU’s Brexit Adjustment Reserve (BAR), the proposed €5 billion Brexit relief support fund announced by the EU Commission on 25th December 2020 in the light of the TCA. This is clearly a matter that will be under discussion because apparently these three French Government schemes are the first support schemes to be considered as possibly qualifying for EU support under the BAR.

The perceived adverse effects of Brexit on the fishing industry have led to frictions not only between the UK and France but also between the Channel Islands (which are Crown dependencies rather than part of the UK) and France – as can be seen by reported difficulties experienced by owners of small French fishing boats in obtaining the requisite authorities from the British side to continue fishing in British waters and by reported threats from the French side to cut off electricity supplies to Jersey in retaliation.

Brexit has produced a lot of economic uncertainties on both sides of the Channel in the context of fishing, which hopefully can be resolved sooner rather than later.

Brexit and Israel

The UK and Israel have both enjoyed success in their Covid–19 vaccination programmes and, whilst complacency on any level about the long-term effects of the Covid-19 pandemic would be a huge mistake, there would seem to be scope for the UK and Israel to come closer together, at least economically, as a result of the success of these vaccination programmes.

The UK and Israel have in place a trade and partnership agreement, which in many ways was rolled over from the existing EU-Israel trade agreements (to which the UK was effectively a party when it was a member of the EU), and the UK Government has produced Guidance (updated to 5th March 2021 at the time of this blog) on “Trade with Israel”, which deals with the main principles and provisions underlying the UK-Israel trade and partnership agreement (UK-Israel TPA).  The Guidance confirms in particular that the UK-Israel TPA contains provisions on:-

  • Trade in goods – including provisions on preferential tariffs, tariff rate quotas, rules of origin and conformity assessment;
  • Intellectual property; and
  • Government procurement.

An article in the Sunday Times business news supplement of 2nd May 2021 comments on the success of the vaccine passports programme in Israel and that recently Michael Gove MP, the UK Cabinet Secretary, led a delegation to Israel to see whether or to what extent that programme might be introduced into the UK.

The prospects, therefore, of closer trade between the UK and Israel, two countries in some ways with similar political, legal and economic profiles (including, in the economic context, a strong interest in high–tech industries and a potential for closer tourism links), would seem to be positive.

According to a UK Department of International Trade report in February 2019, entitled “Continuing the United Kingdom’s trade relationship with Israel”, Israel was the UK’s 46th largest trading partner in 2017, accounting for 0.3% of total UK trade with third countries in goods and services at £3.9 billion.

It will be interesting to see how UK-Israel trade develops following Brexit.

Brexit and India

Despite the long shadow that Covid-19 has cast over the world and in particular India in recent times, there is huge enthusiasm both in the UK and in the EU to strike trade and investments deals with India in the post-Brexit era. In the UK’s case, this enthusiasm may be linked with Brexit in the sense that the UK Government has expressed a clear wish to go out into the world and strengthen its relations with other markets. In the EU’s case, the EU has long seen India as a country with which it wishes to strengthen economic ties.

On 4th May 2021, UK Prime Minister, Boris Johnson, and India Prime Minister, Narendra Modi, spoke online and were reported to have agreed an Enhanced Trade Partnership between the two countries, which would hopefully lead to a future UK-India Free Trade Agreement, and, at the same time, announced nearly £1 billion of new trade and investment deals between the two countries. The announced trade and investment deals include £533 million of new Indian investment into the UK, focusing in particular on the healthcare and technology sectors and hopefully leading to the creation of more than 6500 new jobs around the UK, and £446 million of UK exports to India.

Whilst the details remain to be fleshed out, the UK Government press release of 4th May 2021 on the online talks that day between the UK and India talks of the trade barriers to be brought down by the Enhanced Trade Partnership as including:-

  • Lifting restrictions to enable fruit producers across the UK to export British apples, pears and quince to India for the first time;
  • Securing improved access for medical devices through the acceptance of UK Certificates of Free Sale in India, thereby removing the requirement for additional accreditation of UK medical devices when exporting to the Indian market before they can be sold;
  • A commitment to deepening co-operation in educational services and concluding work on the recognition of UK higher education qualifications, which would encourage an increase in student flows, skills transfer and knowledge sharing between the UK and India; and
  • A commitment to work to remove barriers in the Indian legal services preventing UK lawyers from practising international and foreign law in India, a step that could significantly increase UK legal services exports and imports to and from India.

The EU has also been active in strengthening its economic ties with India, as evidenced by a call on 3rd May 2021 between European Commission President, Ursula von der Leyen, and Mr Modi, in which plans to revive long-stalled talks between the EU and India were apparently discussed. After the call, Mme von der Leyen was reported to have tweeted: “There is clear momentum to strengthen our strategic relations [with India] on trade, digital, climate change and multilateralism….I’m encouraged by the prospect of intensifying our trade and investment relations.”. The automotive industry in particular is thought to be one of the likely beneficiaries of any opening up of trade links between the EU and India.

The opportunities for deeper trade relations between the UK and India, as well as between the EU and India, in the future seem enormous.

Photo credit: CatherineLProd / Shutterstock.com
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Disclaimer: Nothing in the Legal Insights section and this blog is intended to provide legal or other professional advice and, if readers are interested, they should consider taking separate legal or other professional advice accordingly.

David Glass

Specialist in Business & Corporate, Commercial Contracts
& Insolvency & Corporate Recovery

E: [email protected]
T: +44 (0)845 257 9449