UK and EU Agree on Historic Trade, Defence, and Fisheries Deals

Strategic Insights -

The UK and EU have announced a range of historic agreements on trade, defence, and fisheries, which have significant implications for the economy, industry, and global relations. Since the 2016 Brexit vote, the global economic landscape has changed dramatically due to COVID and conflict, making the time ripe for a "reset" of relations between the UK and its largest trading partner. The agreements cover a wide range of areas, including security, energy, and agricultural trade, with some measures aimed at facilitating trade with the EU's largest market.

Key Takeaways:

  • The UK and EU have agreed on a 12-year fisheries deal, which settles access to fisheries for the next decade and removes a significant hurdle on the path towards a wider "reset" of relations.
  • The agreement has major implications for the Scottish salmon industry, a vital part of Scotland's economy, with exports expected to benefit from reduced customs checks and paperwork.
  • The deal extends EU fishing rights in UK waters until 2038, which may disrupt marine ecosystems essential to salmon farming.
  • The agreement also remains politically sensitive, with future UK-EU disputes or changes potentially bringing revisions, creating uncertainty for long-term planning and investment.
  • The deal on fish settles 25% of the EU's catch share in British waters, as agreed in the 2021 Trade and Cooperation Agreement (TCA), and includes permits to fish species subject to fishing quotas.
  • A separate agreement waives the requirement to submit safety declarations, agreement on sanitary and phytosanitary (SPS) measures, and proposes measures to facilitate agricultural trade.
  • The agreement on security and defence "paves the way" for the participation of UK firms in the EU's €150 billion (£126 billion) defence spending programme.
  • The UK's defence industry stands to benefit from the deal, particularly in areas such as cybersecurity and related sector growth.
  • The news that British steel exports will be protected from new EU rules and tariffs is also welcome, particularly for a sector facing an uncertain future.

Statistics:

  • The EU represented 48% of UK goods exports, 36% of services exports, and 51% of goods imports in 2024.
  • Fisheries represent 0.3% of UK agriculture, fisheries, and forestry exports, and 0.03% of the UK economy.
  • Salmon exports hit a record in 2024, with France accounting for 55% of the total.
  • The industry has faced export delays, higher costs, and an estimated loss of £100m in EU sales due to new regulatory hurdles since Brexit.
  • UK borrowing is currently above what the Office for Budget Responsibility was projecting only a year ago.
  • The UK's defence industry has seen growth in recent years, with exporters benefiting from recent US trade policies.

Sources:

  • Maria Garcia, Senior Lecturer in International Relations, University of Bath
  • Mausam Budhathoki, PhD Researcher, Institute of Aquaculture, University of Stirling
  • Conor O'Kane, Senior Lecturer in Economics, Bournemouth University
  • Phil Tomlinson, Professor of Industrial Strategy, University of Bath
  • EATFISH project, funded by the European Union's Horizon 2020 Research and Innovation Programme (Grant 956697)
  • Innovation and Research Caucus (IRC)
  • The Conversation Trust (UK) Limited