Scotland’s most influential fishing lobby on Friday denounced Boris Johnson’s trade agreement with the EU as “desperately poor” and accused the UK prime minister of making deceptive claims about the post-Brexit deal that it said leaves the sector worse off in half its key whitefish stocks.
The strongly worded open letter from the Scottish Fishermen’s Federation — previously a vocal supporter of leaving the EU — will fuel accusations that Mr Johnson betrayed the industry’s interests to seal the deal.
But it could also seriously damage the Conservative party’s prospects in Scottish coastal constituencies just four months before the country’s parliamentary elections. The governing Scottish National party is well ahead in the polls and hopes a decisive win will pave the way for another independence referendum.
The Brexiters that predominantly make up the UK government since Mr Johnson led the Conservatives to a resounding win in the 2019 election, have long cited fishing as a sector that would benefit from leaving the EU. The issue helped Tory candidates win and defend seats in Scottish fishing communities in the 2017 and 2019 general elections.
The Scottish sector dominates the UK fishing industry, accounting for more than 70 per cent of landings of quota species.
Asked about the letter, Downing Street said the EU deal would bring “immediate gains” for fishermen and women across the UK.
“We have now taken back control of our waters and the agreement we have reached with the EU secures a 25 per cent transfer of quota from EU to UK vessels over five years,” it said.
The SFF specifically criticised the quota claim in its letter to the prime minister. “You and your government have spun a line about a 25 per cent uplift in quota for the UK, but you know this is not true, and your deal does not deliver that,” wrote Elspeth Macdonald, SFF chief executive.
“Your deal actually leaves the Scottish industry in a worse position on more than half of the key [whitefish] stocks and now facing acute problems with North Sea cod and saithe in particular,” Ms Macdonald wrote.
The federation, which previously hailed Brexit as offering a “sea of opportunity”, said the EU deal presented long-term problems. It accused Mr Johnson of failing to live up to his promise of post-Brexit annual negotiations on access to UK waters for EU boats. It also criticised him for agreeing to allow the EU to restrict access to its market for UK seafood if future restrictions for EU boats were put in place.
The SNP seized on the SFF letter to Mr Johnson as an “utterly devastating verdict on Brexit”. Deidre Brock, the SNP shadow environment secretary at Westminster, said: “Scotland’s fishing industry is right to be angry about all the Tory lies and broken promises on Brexit.”
The first two weeks of post-Brexit transition trade in seafood products have been marred by widespread IT and paperwork problems that the SFF said had left many fishing vessels tied up in harbour and others forced to make 72-hour round trips to Denmark to land fish.
The Scottish government has said its analysis showed the industry in Scotland would have access to fewer fish of species including cod, haddock and whiting after the Brexit deal, while much of the quota being surrendered by the EU had not actually been used in recent years.
Public policy editor Peter Foster probes the gap between ministerial rhetoric and a new reality for business and industry, as Britain enters the final, critical stages of negotiations with the EU. Get Brexit Briefing in your in-box every Thursday. Sign up here.
Anger in the fishing sector has been fuelled by the disruption and delay to shipments of live and fresh seafood to the EU, problems that industry groups said threatens the survival of smaller exporters.
The SFF demanded Mr Johnson urgently provide compensation for fishing businesses, insisting he ensured it was “new money” and was not taken from the £100m the UK government had already promised to invest in the sector.
Downing Street said it recognised that the Scottish fishing industry was facing “some temporary issues following the end of the transition period”. “We are looking at the additional financial support we can provide,” it said.
‘After a year we’re back to square one’: Milan locked in Covid’s grasp
This time last year, chef Andrea Berton thought customers “might be overreacting” when they began cancelling tables at his Michelin-starred Milan restaurant amid a rise in cases of the concerning new coronavirus.
“It was a strange atmosphere,” he recalled this week. “The restaurant was suddenly empty at lunchtime and international customers kept calling to cancel bookings and events around the Salone del Mobile,” he added, referring to Milan’s annual furniture fair.
Neither he nor anyone else could have foreseen what would happen next. Days later, on March 8, Italy’s government ordered the immediate lockdown of the wealthy Lombardy region that includes Milan in an effort to stem the spread of Covid-19. The unheard-of restrictions were extended across the whole country the following day, confining 60m people to their homes.
It was the moment that Europe finally woke up to the threat from a virus that had emerged in China around the turn of the year. Within weeks, the entire continent — and soon the whole world — had been brought to heel by the pandemic.
“We were confronted with a virus we knew nothing about,” said Francesco Passerini, mayor of the small town of Codogno, an hour from Milan, where one of Italy’s earliest confirmed Covid-19 cases had been discovered in late February. “We didn’t know how to protect our community and we had people who were very ill. It felt like an impossible fight.”
A year on, an end to Europe’s coronavirus crisis still seems some way off despite the hope offered by vaccines. Most of the continent’s 750m citizens continue to endure curbs on their daily lives and the economic and social toll has been enormous.
In Italy — as in some other EU countries such as nearby Greece and the Czech Republic — the number of new infections is rising as concerns intensify over the threat from new variants. Lombardy, still Italy’s worst-affected region, is grappling with thousands of new cases daily and hundreds of deaths each week.
On Friday, a new two-week partial lockdown came into force across the region, with offices closed and employees told to work from home. Schools and playgrounds are shut and hospitality and travel are banned, although shops remain open — for now.
Yet as cases tick higher, experts fear it is only a matter of time before the curbs are extended.
“It won’t be long before the whole country goes back into the ‘red zone’,” said Guido Bertolaso, Lombardy’s vaccine adviser, this week, referring to the most stringent level in Italy’s coloured tier system.
“Unfortunately it’s not over,” said Passerini, the Codogno mayor. “But it’s not comparable with last year because we’ve learned to live with the virus and now we have a vaccine. So we have something to look forward to.”
Looking back evokes painful memories. The most vivid was the day he and other volunteers had to empty a church to make room for dozens of coffins. “I remember watching the dead bodies being brought in and the church, a place of hope, suddenly turn into a morgue. I couldn’t believe it was happening,” he said.
In the weeks and months that followed, Carla Sozzani, founder of 10 Corso Como, a cultural, shopping and dining destination in Milan’s nightlife district, could not get used to the silence in a city known as a teeming hub for industry, banking and fashion.
“The only noises you could hear, day and night, were the ambulances and the drones they used to check nobody was leaving their homes,” she said. “It was unsettling.”
Mired in a series of lockdowns, Milan has welcomed only a fraction of the 10m tourists who came in 2019, a shortfall that has put immense strain on its economy.
There is hope that the new government of Mario Draghi, an experienced crisis manager who formerly ran the European Central Bank, can bring improvements by speeding up the vaccine rollout and leading an economic recovery.
Sozzani, a self-confessed optimist by nature, was certain that Milan would regain its vigour in time for the rescheduled Salone del Mobile in September, once more people had been inoculated. “The fair is a symbol of Milan and it will represent its rebirth,” she said.
In a sign of his frustration at the slow rollout, Draghi has moved to block the export of 250,000 Oxford/AstraZeneca doses destined for Australia so they could be used in Italy. As of this week, however, under 6 per cent of Italians had received a first vaccine dose.
One Milan-based anaesthesiologist, who did not wish to be named, also warned that intensive care units in hospitals across the region were rapidly filling up again.
“It reminds me of last spring,” she said. “The vaccine makes us hope for the best but we need to plan for the worst, because the rollout is too slow and people are dying.”
Berton was this week forced to close his restaurant again, a “stop-go approach” that he said would be the death of his and other businesses in the city.
“I would never have imagined it would last this long,” he added. “After a year we’re back to square one.”
EU and US agree to suspend tariffs in Airbus-Boeing dispute
The EU and US have agreed to suspend punitive tariffs related to their longstanding feud over aircraft subsidies, in the first breakthrough in trade relations since President Joe Biden took office.
The two sides reached a deal after intensive talks, according to people familiar with the discussions, in a sign that the 16-year-old transatlantic trade battle over state aid to Airbus and Boeing could be coming to an end.
The accord, announced by Ursula von der Leyen, European Commission president, means both sides will suspend tariffs linked to the dispute for four months. The duties have hit products ranging far beyond aircraft, encompassing an eclectic array of goods such as US self-propelled shovel loaders, French wine and even US ornamental fish.
In a statement issued after a call with Biden, von der Leyen said: “President Biden and I agreed to suspend all our tariffs imposed in the context of the Airbus-Boeing disputes, both on aircraft and non-aircraft products, for an initial period of four months.
“We both committed to focus on resolving our aircraft disputes, based on the work of our respective trade representatives,” she said.
The goodwill gesture is intended to prepare the ground for negotiations on a permanent solution to the dispute by setting joint rules on permissible aircraft subsidies.
The US trade representative’s office said that a settlement was needed to address challenges posed by new entrants to the aircraft sector from China. Beijing has made it a priority to break the global duopoly that has dominated for decades.
It added that limits on future subsidies and monitoring and enforcement mechanisms would be part of a deal between the EU and US.
A European official said the announcement came “earlier than expected”, given that Biden’s nominated trade representative Katherine Tai has yet to be confirmed. Countering China and setting transatlantic standards for the aircraft industry were keys goal, the official said.
One European diplomat said that four months would be “enough time to focus minds while still being very do-able”.
The deal came a day after the UK and US came to their own arrangement whereby Washington also agreed to suspend punitive tariffs linked to the dispute for four months.
The UK had already unilaterally stopped imposing its own tariffs at the start of this year. EU officials and other trade experts have questioned whether the UK would have had the right to continue to impose them anyway, given its exit from the bloc’s customs union.
Brussels imposed extra tariffs on $4bn of US goods in November, covering a wide range of products including sugarcane molasses, casino tables and fitness machines.
By then the US had already imposed extra duties on $7.5bn of European exports — the result of Washington’s own World Trade Organization victory against aid to Airbus.
Brussels sees today’s step as a breakthrough that can pave the way for broader co-operation on trade after the tensions of the Trump era — tensions that at times threatened to boil over into a full-scale trade war.
The US-EU aircraft subsidies dispute is one of the longest-running cases in WTO history. Both sides have been found over the years to have failed to properly implement WTO panel rulings on illegal subsides.
The battle dates back to 2004, the year after Airbus overtook its US rival in terms of deliveries for the first time. Having earlier brokered an agreement with the EU on state aid in 1992, the US launched a case against subsidies for the European group that dated back to the 1970s. Initially the US claimed that $22bn in illegal funding had been given to Airbus.
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The EU followed up a few months later with a challenge of its own, originally claiming $23bn in illegal aid was offered to Boeing.
The two sides have long remained far apart on the terms of any agreement on how to fund new aircraft development. But with both Airbus and Boeing focused on recovering after the coronavirus pandemic and a hiatus in new commercial aircraft development, industry experts said the timing was right.
The deal will come as a relief to aircraft manufacturers and other businesses on both sides of the Atlantic. French wine producers and Italian cheesemakers have been among those in the vanguard of calls for an end to the dispute. The spirits industry has also been among the US sectors strongly urging a solution.
Airbus welcomed the decision to suspend tariffs. The company said it supports “all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs”.
Boeing said it hopes the deal would allow for talks to “bring a level playing field to this industry”.
US suspends tariffs on UK exports in Airbus-Boeing trade dispute
The US will temporarily lift punitive tariffs on £550m worth of UK exports such as Scotch whisky and Stilton cheese, imposed as part of a row with the EU over subsidies to Boeing and Airbus, in an attempt to de-escalate one of the longest trade disputes in modern history.
The move follows the UK’s unilateral decision to suspend tariffs against the US from January 1, which took both Brussels and Airbus by surprise. Brussels has disputed that the UK had the right to act unilaterally in a trade dispute between the EU and the US when it has left the bloc.
Liz Truss, UK international trade secretary, said she was delighted that US president Joe Biden had agreed to suspend tariffs on UK goods for four months. The move would help to improve transatlantic relations, she said.
The US trade representative’s office confirmed that it would temporarily suspend the tariffs, to allow time to negotiate on settling the aircraft dispute.
The Johnson government has come under heavy fire over the tariffs in particular from the Scotch whisky industry, whose exports to the US plunged 30 per cent last year.
“The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenmorangie, the more money those producers will have to invest in their businesses, their staff and futures,” Truss said. “Trade equals jobs.”
The US-EU aircraft subsidies dispute is one of the longest-running cases in the World Trade Organization’s history, reflecting the importance of the industry to each side and the intense competition between Boeing and Airbus.
The battle dates back to 2004, the year after Airbus first overtook its US rival in terms of deliveries. Both sides have been found guilty of providing billions in illegal subsidies to their aircraft makers.
Brussels was last year given the green light by the WTO to impose tariffs of up to 25 per cent on $4bn worth of US products, after Washington announced duties on $7.5bn worth of European imports.
Both Boeing and Airbus welcomed any move that could help to bring the two sides together. “We welcome USTR’s (US Trade Representative) decision to suspend tariffs for allowing negotiations to take place,” Airbus said in a statement. “Airbus supports all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs.”
Boeing said: “We commend this action by the US and UK governments creating an opportunity for serious negotiations to resolve the WTO aircraft dispute. A negotiated settlement will allow the industry to move forward with a genuinely global level playing field for aviation.”
However, Britain’s departure from the EU has raised questions about how effective any UK-US suspension can be. With no precedent to follow, trade lawyers have said it is unclear whether the UK still had a right to impose or suspend tariffs that were granted to the EU.
Whitehall officials insisted the UK had the right to revoke retaliatory tariffs. One individual close to the process said: “This whole issue shows the benefit of being an independent trading nation . . . if we can get this done, it paves the way to a deeper trading relationship with the US and will help free trade deal negotiations.”
Despite this, there appear to be very few signs of progress in the trade talks between the US and UK. In January, White House press secretary Jen Psaki indicated that securing a deal would not be a priority for the Biden administration.
Last month, Biden’s nominated top trade adviser Katherine Tai told senators that she would “review the progress” of the talks that had taken place between the two sides over the previous two and a half years.
Both the EU and the US have long argued for a resolution to the dispute, but have remained far apart on the terms of any agreement on how to fund new aircraft development.
After Biden’s election as US president, there was a feeling in Europe that a deal could be within reach. There has been growing speculation that talks were progressing.
However, in late December, the US further raised tariffs on European goods, specifically targeting French and German products.
The EU has said it is in intensive talks with the US in a bid to quickly secure a deal to remove punitive tariffs.
“We have proposed that both sides agree to suspend tariffs for six months,” a European Commission spokesperson said. “This will help restore confidence and trust, and thus give us the space to come to a comprehensive and durable negotiated solution.”
A US administration official said that while he could not indicate whether there were plans to imminently remove the EU tariffs, the Biden team was continuing to review the dispute. “The goal is to resolve the dispute and create a level playing field,” the official said.
Both Brussels and Washington are keenly aware that the rules need to be set before China becomes a significant competitor to Boeing and Airbus.
China is expected to be the fastest-growing market for commercial aircraft over the coming decades and Beijing has made it a strategic priority to break the global duopoly in an attempt to claim some of that market for Chinese industry. Later this year, China’s Comac is expected to have fully certified its first major commercial aircraft, the C919 single aisle.
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