Brexit’s troubles aren’t all teething problems

For anyone who thought Brexit was done in 2020, the early signs are that it will, once virus woes settle, become Boris Johnson’s biggest headache. Again.
It’s not a great sign when a formerly pro-Brexit lobby is suddenly furious about a part of the deal that was billed as a triumph. “The key is we’ve got our fish back and they’re now British fish and they are better and happier for it,” arch-Brexiter Jacob Rees-Mogg told a near-empty Parliament last week. Whether or not the fish are happier is unproven, but fishers, as the largely family-owned businesses that catch them are called, surely are not.
Scottish and some English fishing businesses staged a dramatic show of anger over the increased costs of doing business. The problem isn’t so much the complex terms of the new quota sharing arrangements, but the red tape that threatens to ruin businesses that have been in operation for generations. Exporters of animals and animal products must submit Export Health Certificates (EHCs) and also Catch Certificates, which are issued by vets and environmental health officials. Demand for EHCs has outstripped supply and many businesses are struggling with confusing
paperwork or IT problems.
Some fishermen have lost tens of thousands of pounds as live catch perished before reaching its destination across the Channel. Larger fishing vessels have begun landing their catches in Denmark to avoid the delays, but that means less work for Scottish processors. Some will have to sell frozen fish instead, at lower prices. Fishing businesses have been the most visibly unhappy, but they aren’t alone.
Owners of hair salons said they were having difficulty securing supplies of hair dyes (largely French) needed when hairdressers reopen. Shoppers in Northern Ireland found some supermarket shelves empty.
Meanwhile, businesses’ aversion to the Irish Sea border was so great that ferry operator Stena Line diverted a large ship that was intended to route passengers from Belfast and Liverpool to an Ireland-France route.
Johnson’s government has two words for those who are complaining: “teething problems.” Or rather, be patient. The issue isn’t Brexit per se, the argument goes, but the inevitable and temporary costs of a major adjustment. The flaws in implementation will be fixed. The fishing industry has been promised compensation.
Of course, some of the problems will resolve themselves in time. The trade deal was cut at the last minute and many businesses weren’t fully prepared because they couldn’t be. As trade experts had warned all along, non-tariff barriers will become permanent features of the post-Brexit landscape, even once the form-filling and customs declarations become more routine. These hurdles include so-called rules of origin, which require businesses to prove in which country their goods were produced. Value added tax requirements also become much more complicated. The trade agreement didn’t include the mutual recognition of conformity assessment, which would have allowed UK-based testing labs to certify that British products meet EU requirement. Consumers are increasingly finding these things out too.
Brexit is now irreversible — at least for a generation. But the relationship with the EU will never be static; it is one of perpetual negotiation. Johnson could look to mitigate some of these frictions in the trade agreement by working within one of the 19 specialised committees covering the various areas to reduce some of the hassles. But just as there’s a way to have a little less of the Brexit pain, there is also plenty of scope for old tensions to be reopened and escalate. Given the past few decades of British politics, it would be foolish to bet against that happening. Either the UK or EU could terminate the agreement after a 12-month notice period.
—Bloomberg