End of transition and Scotland’s trade

With about five weeks before the end of the transition period, the negotiating teams have reportedly found common ground on 95% of the legal text which could comprise a longer-term UK-EU deal, writes Vanessa Glynn.

However, the EU and UK are reportedly “still miles apart” on the trickiest – political – issues: level playing field provisions, governance and fisheries. Further, some of the text within the 95% is linked to gaining agreement on the level playing field (e.g.in relation to energy, haulage, aviation and rules of origin). 

Time available for agreement and ratification of any deal is now extremely short so it is not impossible that the UK may crash out without a deal in place. 

Over the last three weeks, the Scottish Parliament’s Culture, Tourism, Europe and External Affairs Committee has taken evidence on the negotiations from a Scotland’s perspective. The evidence from stakeholder businesses across the Scottish economy emphasised the continuing uncertainty, with the transition period quickly coming to an end. Witnesses were clear it was difficult to prepare for the end of transition when it still was not clear what would be replacing it. 

So alarmed was the Committee that the Convener, with support from the majority of members,k wrote to the UK Government (UKG) on 13 November calling for a period of around six months to be included as part of any UK-EU deal to allow business to prepare. “ …Given the limited time that is left to negotiate the future relationship with the European Union and for businesses to prepare for the outcome of the negotiations, the Committee has heard calls from a range of sectors for a ‘grace period’ of six months to be built into any agreement with the European Union, to allow for businesses to transition to this new relationship.” The Conservative members of the Committee, Dean Lockhart MSP and Oliver Mundell MSP, were not signatories to the letter.

No good news

The Committee also took evidence from the Scottish Government (SG) Cabinet Secretary for the Constitution, Europe and External Affairs, Michael Russell. He told the Committee that even if the UK and EU were able to reach a deal, it was likely to be a very thin deal. “The end of the transition is very near, and it is extraordinary that the outcome of the negotiations is still unknown. However, whatever the outcome is and whatever takes place, it will not be a good-news deal for Scotland. We have to be under no illusion: we are faced with considerable and imminent damage that will disrupt Scotland’s economy and society.”

The Cabinet Secretary set out some of the new import/export procedures likely to be required following the end of the transition period and what the SG is doing to mitigate the effects of the end of transition:

  • Taking back UK control appears to involve taking on significant bureaucracy and chaos at our borders.
  • Third-country status will mean that full sanitary and phytosanitary — SPS — procedures must apply in exporting agricultural, plant and seafood goods to the EU. Along with other demands, businesses face export health or phytosanitary certification, pre-notification of arrival, presentation at border control points, documentary and identification checks, and risk-based physical checks and sampling. There will be fees for certifier time and a fee for clearance and checks at border control posts, including between Scotland and Northern Ireland. 
  • Efforts to plan and mitigate are hampered by ambiguities and confusion about the UK Government’s actions or lack of actions. SG is working with banks, through the banking and economy forum, to encourage cash-flow support to business. The multi-agency prepareforbrexit.scot website, which is hosted by Scottish Enterprise, provides advice, access to sources of financial support and online self-assessment tools. During November, an additional 500 companies assessed as being vulnerable to Brexit impacts will be contacted and offered support. That number will grow to 1,200 ahead of 31 December…
  • The Cabinet Secretary suggested that the SG relationship with the UKG continues to be poor when it comes to Brexit-related matters, Whilst there had been meetings, none of the devolved administrations believed that teir concerns, including the impact on devolution of the Internal Market Bill, were being listened to by UKG. 

The Fisheries Act determining how the UK will operate post-transition arrangements over fishing in British waters has now become law. While Scottish Fisheries Secretary Fergus Ewing acknowledged that the act will provide a necessary framework to manage fisheries from 1 January 2021, he maintained:

“Nothing in this legislation can compensate for the loss of our biggest seafood markets in the E.U. and the wider damage that it will cause to our coastal communities…With just over five weeks until the end of the transition period, the U.K. government must urgently clarify how it will provide us with the multi-year funding which was available from the E.U. and support the new powers.”

Fergus Ewing

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