Scottish Salmon, Brexit and International Trade

An Interview with Scott Landsburgh

It is not my job to be politically partisan. Engaging in one-sided controversial debate on emotive constitutional affairs, meanwhile, won’t do me any favours. Who and what I or my colleagues vote for are also a private matter. What I will say, however, is that I believe that now is the time to move on from the arguments of the past about Brexit and recognise that, by a narrow majority, the British people gave their answer on the question of the UK’s membership of the EU. The result, whether I like it or not, is clear and definitive, and should be final in my opinion; otherwise, why hold the vote in the first place?!

Many, of course, will indeed argue the merits and demerits of holding the referendum at all but the fact is that MPs – elected representatives of the people – voted to sanction the holding of a referendum and, by majority, have since voted to approve the triggering of Article 50. We are leaving and the people who represent us have pretty much made sure of that. The 2017 General Election, with the two main parties including commitments to leaving the EU in their manifestos, reinforced the message that the British people are not looking to stop the Brexit process at this present time. We live in a democracy and I baulk at the idea of people being asked the same question repeatedly so that they eventually give the perceived ‘right answer’.

If Brexit is scuppered or if there is to be another referendum, I firmly believe it should be because the country has shown itself overwhelmingly to have changed its collective mind. We haven’t witnessed this shift in mood yet. Another referendum (a ‘neverendum’ if you will) with another narrow result, but this time for Remain, wouldn’t put the issue to bed. Would there be a best of three?! Why wouldn’t ardent Brexiteers push for that? They would be as justified as ardent Remainers would be in pushing for another referendum to reverse the result of the first one. Interminable debate over the issue fills me with dread. I suspect many others feel the same way. Better to get on with making the best of it. The decision to Leave is one thing; how we all react to it is another, and this will be just as important to how Britain fares outside the EU.

To be clear, I’m not arguing that the referendum gave us a clear indication on the type of Brexit we pursue. This is very much a choice guided by political and economic realities and despite the fact we are one year into negotiations to leave, with another year to go, the matter does not look likely to settle down completely. Furthermore, the narrowness of the result is an important thing to consider, as, to my mind, the decision to leave the EU does not give a mandate for a wholesale cutting of ties with the remainder of the bloc. And nor, in my opinion, would that be in any way a desirable outcome, particularly for business. British industry has adapted to our being in the EU and its earlier incarnations for over 40 years. Our economy has pivoted towards the European Union in that time in many ways. Our respective economies are closely intertwined by commercial supply chains and over 40% of UK exports go to the EU – a huge amount.

Coincidentally or not, a similar proportion of exports from the Scottish salmon industry also go to the EU. We are perhaps a good bellwether for UK exports in that sense, though, of course, many sectors are more integrated in to intra-EU trade and, equally, some sectors have little in the way of trade with the EU. With such a large amount of our exported produce going in the direction of the Continent, we in the salmon farming sector are desperate to see continued frictionless trade with our European partners after we leave. This is certainly not a given and the decisions we take now as a country, and the outcome of the negotiations between the EU and UK over the next year, will determine the health of our domestic economy way into the future.

Specific to the Scottish salmon sector are concerns about speed of delivery to market as potential new customs barriers and cross-border trade ‘friction’ loom as possibilities. Tariffs too, are a major concern if a tariff-free comprehensive free trade agreement between the UK and EU is not agreed. Then there are the key issues of EU workers in our industry. We wish to ensure their long-term status (and continued desire to remain the UK post-Brexit) and to ensure we are able to recruit the staff we need, from all over the world, to continue to grow our industry sustainably. Continued funding at a UK level from current EU initiatives like the EMFF and ERDF are very important to us and the communities we operate in, and issues surrounding protected food names within the EU also have to be addressed swiftly.

However, whilst we could spend all of our time worrying about these issues, I think it would actually be sensible, whilst we continue to lobby hard and consult widely on them, to view the economic outlook in a different context and timeframe occasionally. We should give some thought to how we turn Brexit in to a long-term success if we can. The way I see it, we can try to ‘protect the downside’ at the same time as looking for long-term opportunities from change.

In 10 years’ time, British businesses will have adapted to the changes. They will have to. New markets will no doubt have opened up and aggregate global economic growth, which is forecast by the European Commission itself to take place mainly outside the EU in the next two decades at least, will ensure that so long as we have goods and services that people want to buy, UK-based businesses will continue to thrive.

Scottish salmon is one such good that people around the world increasingly want to buy. We are seeing fantastic levels of export growth in Taiwan, China, the USA and parts of the Middle East. This is despite not having free or preferential trade agreements with these markets. I, for one, would be keen to see such agreements put in place, removing tariffs and ideally a number of non-tariff barriers in the process. Meanwhile, re-engaging with our friends in the Commonwealth is another unmissable opportunity. Not only are these countries longstanding allies with strong historical ties and many areas of common interest, they are in many instances, high growth economies. We should discuss trade opportunities with them with great enthusiasm.

Putting aside people’s emotional attachments to either the EU on one hand, or the notion of an ‘independent’ or ‘sovereign’ UK on the other, for a second – and I fully understand and accept this part of the debate – there also needs to be a greater understanding of what EU institutions entail (on both sides of the debate). And why it need not be the end of the world to leave the institutions, even if doing this presents significant challenges. Sometimes I think panic sets in because people don’t take enough time to grasp the technical realities involved and instead rely on basic soundbites and news headlines.

The Single Market and Customs Union are essentially underpinned by a set of rules to meet a certain set of objectives. These rules were and are made by grown up human beings coming to agreement. It is, therefore, surely not beyond the wit of this current crop of negotiators to come to an agreement (based on sensible objectives) on an appropriate set of rules, mechanisms and institutions to make a new agreement between the UK and EU function satisfactorily into the future, enabling people and businesses to continue to trade reasonably easily with one another.

For those concerned about free movement of people ending and the potential harm it could do to business, regaining ‘control’ of immigration does not of itself mean that the UK will ‘pull up the drawbridge’; it will be able to set any immigration rules it likes outside the EU and attract talent from all over the world with business-friendly immigration policies. Perhaps it is time to lobby for that type of outcome instead of fighting old battles.

There will have to be trade-offs with Brexit but as long as the negotiating parties act in good faith and continue to adhere to their avowed principles of rules-based free and fair trade, the whole process, whilst undoubtedly full of complexity, is far from an impossible task!

None of these things are ‘easy’ for me to say, I hasten to add. Such monumental change creates major concerns and uncertainties and I have never been one to believe that things just fall into place without hard work. I simply believe that business must approach change with a ‘can do’ attitude. So whilst I am the first to push Government to address the immediate challenges of Brexit and to ensure continued free and frictionless trade with our European friends and trading partners, I want to engender a sense of optimism in the future. Whether you voted Leave or Remain, whether you were ecstatic or crestfallen about the result, whether you loved the idea of the EU, and the UK’s place in it or not, life goes on and the commercial world will find ways of adapting and succeeding in a new trading environment. As it has done before amid greater and graver challenges.

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