Global trade conflict? Ask the Puffin

As with lots of the deals we do, the devil is often in the detail. Not for the first time, the Brexit deal appears to be subject to more unforeseen consequences. Who would have thought that the humble British puffin could potentially be responsible for major trade sanctions levied by the European Union against the United Kingdom?

This threat escalated last week - the UK recently banned fishing in the North Sea for the bird's favourite food - the sand eel. As a result, the EU triggered the dispute mechanism of the UK's breakup deal - the Trade and Cooperation Agreement. If both parties don’t reach an agreement shortly, this will go to arbitration. If this fails, then sanctions might start, and if this escalates then parties have reason to search for better deals with other trading blocks, which, in turn, affects the balance of global trade.

Emotions are currently running high on both sides - EU fishing boats, particularly from Denmark, are affected by the sand eel ban, the Danes catch around 250,000 tonnes of sand eels in UK waters every year – several billion individual fish.

On the other side, an unlikely alliance of interest groups is championing the continuation of the sand eel fishing ban. Wildlife campaigners across Europe have reacted with fury at the EU’s demand, with 38 conservation groups pledging their support for the UK ban, including the RSPB, ClientEarth, Oceana UK, Birdlife International, and the Marine Conservation Society. Supporters of Brexit say that the ban would have been near impossible when the UK was part of the EU because of its laborious bureaucracy and the opposition of other EU members.

It's easy to see how parties can become entrenched in these positions, but how do we resolve conflicts like this, when tempers flare?

Firstly, ensure that the original agreement covers all the details everyone feels are important. The area that often causes most problems is time – start, finish, milestones etc can be subject to the vagaries of lack of detail and precision. However, as in this situation, it’s not always easy to predict the consequences of our actions.

If, as it looks likely, the EU and the UK can settle their differences both parties go to a dispute resolution panel - arbitration by another name. The upside of arbitration is that, depending on the referee, the outcome could be deemed as ‘fair’. The downside is the lack of control for either party – the decision may still go against you.

Remember that not all conflict gets resolved through negotiation – especially when there are principles and deeply held beliefs at play.

Looking at the situation objectively, nobody really knows what the impact of banning the fishing of sand eels is likely to be. A problem-solving approach might be to agree to a small catch quota of sand eels – with close monitoring of the Puffin population. If the number of birds drop, the quota drops, if the number of birds increases, the quota could increase etc. We wait with baited breath to see what happens next.

Sam Macbeth, 23rd May 2024

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