Since joining the European Economic Community (EEC) in 1973, the United Kingdom has played a leading role in the Common Fisheries Policy (CFP). This role is exemplified both by the country’s contributions to fisheries and aquaculture activities and by its participation in the design of the fisheries policy at all levels (conservation of marine resources, policy structure, markets, and external relations). The British EEC presence also involves sharing Europe’s marine territory; this, the coastal zone from 12 to 200 miles offshore, was integrated into the CFP (also known as “Blue Europe”) for the purposes of fishery management and access to resources. That integration involved country-based quota allocations under the CFP. Given these circumstances, Brexit will have substantial effects on fisheries’ activities and their management. Our aim in this paper is to examine the opinions of the different fisheries’ agents involved. For that purpose we focus on Galicia (northwest Spain), a region that—prior to Brexit—was strongly affected by fisheries’ relations with the United Kingdom because most of the Spanish fishing vessels that ply British waters have their home base in this region [1
In addition to the eventual effects on access to resources and to the immediate implications for other countries and their workers, Brexit could necessitate changes in the traffic of goods from the fisheries’ sector and a restructuring of international fishery agreements. It is likely that Brexit will also result in pressures to adjust the distribution of quotas or of European funding (viz., from the European Maritime and Fisheries Fund) among the remaining European Union (EU) members. The ultimate outcome will reflect not only this litany of changes but also any bilateral (EU–UK) agreements that relate to fisheries—agreements that are expected to be more diverse but not necessarily more restrictive than pre-Brexit arrangements.
Under the current CFP framework, the EU shares a considerable amount of the northeast Atlantic fishing stock with the United Kingdom. During the period 2005–2015, the United Kingdom accounted for nearly 10% of both the imports and exports of EU countries’ fish products; most of the commercial traffic in this sector was among members of the EU [2
]. Thus, Spain (our case study) as well as France, Germany, Ireland, and the Netherlands all play a large role in fishery relations with the United Kingdom: either they are the main importers (except for Ireland) of UK fish products, or they share fishing stocks.
In accepting the Brexit referendum’s results, the United Kingdom decided to leave the EU. This exit will naturally affect the economic activity of most companies and especially of those related to the seafood industry. For now, Spanish fishers’ associations have asked the EU to provide negotiating options that would prevent the loss of fishing opportunities and jobs in the wake of Brexit. They have also asked for Spanish fisheries’ structural funds to be respected and asked the EU to bear in mind that the United Kingdom’s withdrawal will bring an end to the circumstances that gave rise to the principle of relative stability. Following this principle was meant to correct for previous fishing quota allocations that Spanish fishers viewed as being non-proportional to their respective numbers and fishing capacity [1
]. We have situated our analysis of attitudes precisely within this particular context of conditions and affected agents.
Few of the studies just cited analyze the firms’ opinions about effects on the common fisheries policy. Yet, knowledge about the affected economic agents’ perceptions could help reduce or even prevent conflicts involving fishers [4
]. Such knowledge could also enhance the legitimacy of regulatory institutions and increase the extent to which relevant actors comply with regulations [6
]. A number of studies that focus on agents’ attitudes toward the decision-making process vis-à-vis fisheries have been conducted in recent decades. Research on the views of fishers has focused mostly on increasing their participation in decision making, and it concludes that greater co-management should render regulatory measures more effective [8
]. Others have analyzed fishers’ opinions about the (dis)incentives for complying with fisheries’ rules. This research finds that compliance is most strongly affected by individual morality, social pressure, and the perceived legitimacy of the institutions promulgating fishery rules [12
In this context, our study explores the perceptions of companies linked to Galicia’s fisheries’ sectors regarding Brexit’s potential effects on the Common Market; in particular, we explicitly examine the influence of such factors as a firm’s branch of activity, turnover, and size (number of employees). Companies’ perceptions of Brexit—in light of these factors—have been recently explored in the literature using, basically, contingency tables [16
]; however the statistical independence, the degree of internationalization of the companies surveyed, as well as the company’s internationalization strategy and its possible expectation of internationalization have not been analyzed. The analysis presented here is an extension of that work and is devoted to bridging this research gap. The Galician firms that operate in the fisheries’ activities is the target population of the study and, for it, the data used for the survey is extracted from ARDAN (Report Free Trade Zone-Vigo Spain) and SABI (Sistema de Análisis de Balances Ibéricos) databases. We use statistical techniques whose results confirm that, in general, (a) perceptions are affected by firm size, yet (b) the attitudes of fishing companies are independent of all the factors just mentioned. Understanding perceptions can help policymakers prepare appropriate contingency plans to mitigate the impact of Brexit on fisheries, especially in the “no deal” scenario, and to redefine UK–EU trade relations. Accomplishing these goals would, in turn, make it easier for firms to make rational decisions about investing in (or divesting from) fisheries.
Of the 686 questionnaires, 275 (40.1%) were completed between June and August 2018 by the manager of the company; this figure represents more than 10% of the targeted population when one considers that most of trading firms marketed agricultural products. Our sample is distributed by economic activity as follows (see Table 1
): 58% of the respondents worked in marketing companies, 26% in the marine fisheries subsector, 7% in the manufacture of canned fish, 6% in marine aquaculture, and 3% in fish processing. Table 1
also reports the sample distribution of firms by turnover and size (i.e., number of employees). The largest portion (41%) of our surveyed companies reported turnover in the range of EUR 1–3 million. These companies tend to be small: more than half (56%) of them employ nine or fewer workers, and the next largest group (39% of the sample) comprises surveyed companies with 10–49 employees.
The table of descriptive statistics for the sample indicates a turnover mean is EUR 7,245,000.00 (minimum value EUR 33,851.00 and maximum value EUR 307,029,987.00). In reference to size of the companies in the sample, the number of employees is 17 in mean, of a minimum value 1, and a maximum value of 384.
Finally, in order to further characterize the sample, we have carried out a disaggregated analysis on the composition of the sample taking into account the internationalization strategy of the sample. We can see the fish marketing, fish processing, and fish canning sector reflect high internationalization.
lists our survey questions, which address five groups of perceptions, and reports values from our statistical analysis of the participants’ responses. The results reveal substantial uncertainty (about 60%) surrounding Brexit. This uncertainty pertains not only to general aspects of how the UK withdrawal could affect companies’ economic activity but also to more specific questions about its implications for EU workers, trade in goods, and the External Fisheries Policy. With respect to the respondents’ general perceptions, the table shows that—notwithstanding the 72.9% who were uncertain—a sizable portion (25.3%) of respondents view Brexit as having negative implications for their respective company’s economic activity; only 1.8% perceive it favorably. Of those surveyed, 28.4% expressed a preference for a transitory and flexible application along with the possibility of bilateral agreements; only 4% would prefer that the Brexit terms be applied immediately.
As regards particular post-Brexit outcomes, 30% of respondents believed that it could affect the free movement, not only of EU workers currently working for fisheries sector enterprises in the United Kingdom (and thus their social benefits, right to remain, etc.), but also EU workers seeking employment in those enterprises. Fewer than 2% of the respondents believed that Brexit would not result in changes. Insofar as the trade in goods is concerned, we find that 43% (resp. 4%) of the companies surveyed view Brexit as having negative (resp. positive) effects on Spain; the uncertainty here is 52%. Furthermore, 25.7% (resp. 3.7%) believe that Brexit could have negative (resp. positive) effects on their own company; however, the majority of those surveyed acknowledged that they had no idea of how Brexit will affect fishery enterprises. Therefore, despite the perception that Brexit will harm the Spanish economy as a whole, opinions are less negative when only its effects on fishing companies are considered—although uncertainty is high in both cases.
With respect to the External Fisheries Policy’s scope (i.e., in terms of international agreements, membership in international bodies, etc.), the UK exit is perceived negatively by 31.6% of those surveyed and positively by only 3.3%. Once again, those surveyed are characterized by high uncertainty (65%) regarding Brexit’s effects on these aspects of European foreign policy.
Responses to questions concerning the marine fisheries subsector (NCEA code 0311) exhibit less uncertainty than those about other subsectors. Nearly two thirds (66.2%) of those surveyed stated that fishers on Spanish-flagged vessels will be worse-off, under Brexit, in terms of access to fisheries resources; only 7% of respondents expected favorable effects. Survey participants also believed that it was both desirable and possible to reformulate the total allowable catch (TAC) limits, the distribution of quotas, and (albeit to a lesser extent) the principle of relative stability (PRS). Furthermore, almost all respondents who approved of reformulating the PRS likewise favored changing the system of TACs and/or the distribution of quotas. As for the fleet of Spanish-owned but British-flagged vessels, 59.2% of these marine fishing enterprises perceive Brexit as entailing a significantly negative change; only 7% expect no change. Finally, we remark that Brexit means that one less country will be contributing funds to the EMFF (and receiving distributed funds). Just 2.8% of respondents view the net outcome of these changes as having a positive effect on Spain, and 15.5% anticipate a negative impact owing to reduced subsidies. As with the responses related to most other topics, the degree of uncertainty here is high.
The results shown in Table 2
reveal that, for conventional levels of significance, the hypothesis of homogeneity in the behavior of perceptions between the two subgroups of companies cannot be rejected and, therefore, we accept that the perceptions that companies have about the implications of Brexit are no different depending on the degree of internationalization of the company surveyed, which makes the results obtained more robust.
Toward the end of examining these attitudes more closely, we undertake a segmentation analysis of the sample according to companies’ main activity, turnover, and size. The results of this analysis are presented in Table 3
, Table 4
and Table 5
(where “Asymp. sig.” denotes “asymptotic significance”). Regarding economic effects, results of the chi-squared test of independence—with a value of 30.928 for 6 degrees of freedom (df)—lead us to reject the null hypothesis for firm size; yet the respective values of 14.493 (8 df) and 12.218 (10 df) are such that we cannot reject it for the other two qualitative variables (see Table 3
). Thus, we affirm that (i) there is no association (at the 10% significance level) between general perceptions of Brexit and NCEA codes and turnover level, whereas (ii) there is such an association between those attitudes and company size. Because no association is observed between companies’ attitudes and their subsector or turnover, we can safely conclude that respondents’ negative opinions are independent of those factors. The p
-values of Fisher’s exact test confirm the independence between negative attitudes and the NACE code (0.098, p
≥ 0.05); turnover (0.301), where the null hypothesis cannot be rejected; and firm size (0.034, p
< 0.05), where the null hypothesis is rejected.
As for the procedures used to implement Brexit, we find that a transitory and flexible process is strongly preferred. Results from our hypothesis testing allow us to affirm that these attitudes are generally shared by the sample as a whole, although there is statistical support—derived using Pearson’s chi-squared test and the likelihood ratio—for only an association between those responses and (again) company size (19.428 and 17.725 with 6 df for the chi-squared value and likelihood ratio, respectively). In addition, the significance of the chi-squared value and the likelihood ratio is less than the cut-off (0.05) at which we could reject the hypothesis that perceptions are not independent of firm size. The p-value of Fisher’s test (0.037) also indicates a low probability of there being no association between firm size and attitudes concerning a transitory process; in other words, there is a high probability of some relationship between them.
With regard to the free movement of workers, we deduce that Brexit could have repercussions for the situation of EU workers currently employed by companies linked to UK fishery sectors. In particular, results from our hypothesis testing corroborate that certain relationships exist between responses to worker movement questions (on the one hand) and both NCEA codes and turnover levels (on the other hand). The chi-squared value and likelihood ratio are each high (respectively, 36.397 and 23.010 for the NCEA code; 36.210 and 26.065 for turnover), and the low p-values confirm the probability of an association between the perceptions of negative repercussion for current EU workers in the UK and, respectively, the NCEA code and turnover (i.e., the null hypothesis is rejected for these two variables). Yet, the null hypothesis of no association between a negative perception toward the situation of EU workers in the UK and firm size cannot be rejected, because (a) the significance of chi-squared values and likelihood ratios—as well as the p-value of Fisher’s test—are greater than the critical point (0.05) and (b) the chi-squared values and likelihood ratios are low, which suggests a weak relation between perceptions and firm size.
For the case of potential EU workers, the only clear relationship is that between negative attitudes and turnover; this relation follows from the chi-squared and likelihood ratio results (large values and low probabilities of no association) and the p-value of Fisher’s test (p < 0.05). Thus, the null hypothesis is rejected for this factor. For the NCEA variable, the chi-squared probability and likelihood ratio results do not allow one to accept the null hypothesis that perceptions are independent of the firm’s sector of activity (relatively large values and low probabilities of independence). Hence there is some association between them; although, Fisher’s test indicates that this relation is significant only at the 10% level (we reject the null hypothesis at that level of significance). Finally, we can accept the hypothesis of no association between this attitude and firm size because the statistical values are low, the probabilities of no association are high, and for Fisher’s test we have p > 0.05.
The surveyed companies are fairly pessimistic about Brexit’s implications for fishing trade at both the national (Spanish) and company level. Yet, Table 4
shows that, at a more disaggregated level, hypothesis testing supports the existence of an association (at the 10% level) only between these negative perceptions and company size—that is, according to Pearson’s chi-squared tests and the likelihood ratios; thus the null hypothesis is rejected for this variable. In addition, the p
-value indicates a low probability of no association between those negative perceptions and firm size. For the other two qualitative variables, we cannot reject the (null) hypothesis of independence because the statistical values are low (for the respective degrees of freedom) and because, for Fisher’s test, p
We also analyze the surveyed companies’ opinions about how Brexit would affect the External Fisheries Policy. The results, which are also reported in Table 4
, show that the United Kingdom’s exit from the EU is expected to have a negative effect on all branches of activity. Hypothesis testing confirms that there are some distinguishable and statistically significant relationships involving company turnover and size, since the statistical values are high (48.909 and 52.910 for turnover, and 22.250 and 20.744 for size, for the chi-squared value and likelihood ratio, respectively) and since the p
-value of Fisher’s test is less than 0.05 in both cases. For the NCEA code variable, we accept the null hypothesis of no association between that negative perception and subsector because the chi-squared and likelihood values are low, the probabilities of independence between the variables are relatively high, and the p
-value of Fisher’s test exceeds 0.05. In short, our analysis detects—among those individuals surveyed—a pervasive expectation that Brexit will have a negative effect on Spain and its companies. The results obtained from independent tests for contrasts lead us to conclude that there is statistically significant evidence for rejecting the null hypothesis and thus accepting the alternative, relationship hypothesis for turnover level and company size affecting perceptions in the cases just described.
Finally, our detailed examination of marine fishery enterprises (see Table 5
) establishes that, for the most part, Spanish fishers anticipate that Brexit will result in reduced access to resources; hence these respondents are more than willing to consider reformulating the system of TACs, quota distributions, and/or the PRS. Companies in this subsector perceive Brexit as likely to reduce opportunities for the Galician fleet operating under the British flag. The econometric results are unclear but suggest there is no association between the perceptions and the respective variables. The low statistical values, combined with the chi-squared probability and likelihood ratio exceeding the critical threshold of 0.05, lead us to accept the hypothesis that these perceptions are independent of the turnover level and firm size for all questions. In addition, and according to Fisher’s test, the null hypothesis—that these views are independent of both company size and turnover—cannot be rejected because the p
-values are considerably higher than 0.05. Hence, we deduce that, among enterprises in the marine fishery subsector, the prevailing overall view of Brexit outcomes is negative.
Since the mid-20th century, the intensity of fishing activity in European Atlantic waters has increased significantly, resulting in conflicts between countries (the “Cod War” between the United Kingdom and Iceland in 1960, for example), successive adaptations of fisheries’ regulation (starting with the first agreements of the 1966 London Conference, which were followed by the impacts of the provisions derived from UNCLOS (United Nations Convention on the Law of the Sea) III with the implementation of the EEZ (Exclusive Economic Zone)), and the generalization of the trade in fisheries between European countries.
For our case study, which refers to the relationships arising from the activity of Spanish fishing companies in waters of British sovereignty, the institutional context of reference prior to Brexit, is based on three fundamental pillars: (i) the implementation in the European Common area of the EEZ since 1977, (ii) the starting of Blue Europe with a specific Community regulation based on the system of TACs and Quotas and the Principle of Relative Stability (first decrees of 1983), and (iii) the specific Treaty of Accession for Spain and Portugal (with effect since 1986), where the fisheries chapter was of some importance.
This context had several effects of different significance for Spanish fishing companies. First, it provided greater stability for the activity of these undertakings, ending the period of uncertainty (1977–1986) following the introduction of the EEZ which led to the sequence of annual agreements limiting the entry authorizations of Spanish fishermen in European waters, in which they had operated in previous years. On the other hand, since the Spanish accession, a series of strategic actions and positions were followed, both by Spanish fishing companies, as well as British fishermen and managers, seeking to protect their respective interests, with sometimes conflicting episodes (such as the mentioned cases of quota hopping and regulatory provisions of the activity, followed by legal positions in European courts). Furthermore, focused on extractive activity, other commercial and logistical actions were followed, consolidating an active and significant business network (assets, commodities, and people) in both countries.
Brexit arises in this scenario, with intense and variable previous interactions, but is certainly increasing and in consolidation. Its consideration should allow us to not only understand the importance of the perceptions of fishery agents who are the subject of this study but also to relativize the results obtained from their answers, helping to ask future questions. The first assessment that the responses of the agents consulted allow us to make is the finding of the state of uncertainty generated by the process. This perception is undoubtedly related to the lack of definition and sequence of the Brexit process. But the possible underlying influence of previous reality and experiences accumulated through previous interactions in the indicated context should not be dismissed.
Brexit could certainly affect the Spanish fleet because many of its vessels currently fish in British waters. In this study we have analyzed the opinions of companies in the Galician fisheries sector about the possible impact of Brexit on their economic activity. In these coordinates, following the above exercise, we can assess general results of the perceptions of Galician fishing companies and other more concrete results on the impact of Brexit relating to aspects considered, sub-sectors involved and dimensions of the companies concerned.
Our results clearly show that survey respondents have an overall negative view of the effects that Brexit might have. More specifically, about 30% of those surveyed anticipate that Brexit will have negative consequences for EU workers in UK fishery companies; a slightly higher percentage of these respondents expect the United Kingdom’s exit from the EU to depress Spain’s foreign trade. Likewise, more than half of those surveyed perceived Brexit as resulting in the adverse scenario of reduced access to fisheries’ resources. In light of that possibility, nearly all of those surveyed were in favor of reformulating the current system of TACs and quotas among the remaining, post-Brexit member states. Most respondents also agreed that Brexit will have negative repercussions on vessels of the Galician fleet operating under the British flag. Our statistical analysis identifies a significant relationship between negative attitudes about Brexit outcomes and the focal company’s size for fisheries’ sectors as a whole; however, no relation between those attitudes and firm size or turnover is identified when the particular fishing firms’ perceptions are evaluated.
This study’s results can be used to identify the possible negative (though highly uncertain) effects that may follow from Brexit. Thus, the UK exit could affect the legal status of our surveyed (and similar) companies; thereafter, these Spanish sectors might well face reduced investment levels. Of course, this case study can hardly incorporate all the possible effects that Brexit might entail. For example, the EU and UK criteria for international fishery relations will now differ; hence, we are likely to see separate bilateral agreements and/or international bodies adopting different positions with respect to future fishery regulations. Furthermore, some internal EU decisions could be altered—for instance, the allocation of quotas and the distribution of European funds in the fisheries’ sector. The latter will be affected quantitatively (i.e., by the withdrawal of a net contributor), and the criteria for defining priorities or distribution might also be altered if the EU’s internal balance changes post-Brexit.
Regardless of the exit scenario, UK–EU trade relations are bound to be redefined. In fisheries, this implies future negotiations on access to British waters for European vessels, the definition and implementation of the common management of shared stocks with a distribution of fishing possibilities, and new trade agreements to reduce or eliminate potential customs and tariff barriers. At first, the current access to British waters could be extended over a transitional period, perhaps until the end of 2020 (as originally foreseen in the initial agreement with the EU). The United Kingdom would, thus, regain its sovereignty, although it would then be necessary to reset relations between the two parties. This negotiation is vital for the future of European fisheries, since the EU’s remaining member states depend on British waters for 33% (by volume) and 25% (by value) of their marine production [2
]. It follows that closing those waters to European fishing fleets would have a severe effect on European markets and income.
With respect to the common management of shared fishing grounds and in particular to the distribution of fishing opportunities, the remaining 27 members of the EU must proceed to reallocate their fishing quotas under the new circumstances while retaining—to the extent that this is possible—the principles of maximum sustainable yield and respect for the rules of fishing control. The Spanish government should take advantage of these new conditions to replace those European rules that discriminate against the Spanish fleet; one example is the principle of relative stability, which was adopted in 1983 before Spain joined the EU. The government could propose revised guidelines and assignments so that they correspond more closely with production capacities of the Spanish fleets involved. Additional factors that merit attention include the extent to which citizens depend on the focal fishing grounds; the socioeconomic effects of Brexit in areas and/or regions that are highly dependent on fishing; and the common and sustainable management of fish stocks.
The last-mentioned factor will entail the establishment of customs tariffs. Trade relations between the EU and the United Kingdom must be re-established within the framework of the World Trade Organization. Spain is one of the world’s leading importers of seafood. Therefore, the Spanish government should seek to ensure that trade agreements with the United Kingdom guarantee a supply of fish with reduced tariff rates—to meet not only the Spanish market’s direct needs but also the needs of its processing and cannery industry—without a significant increase in the prices of imported products.
Finally, we remark that this study has some limitations related to our analysis of how strongly certain variables and factors are related. Hence, future research could profitably focus on assessments of such strength by elaborating contingency tables related to our nominal qualitative variables (perceptions) and particular factors: sector of activity, level of turnover, and firm size. Another limitation of our study is its relatively small sample size; increasing that size, if possible, would render the sample more truly representative. Another benefit of a larger sample is that it would enable full use of a five-point scale, and the preferences of respondents within each analyzed sector would have greater statistical significance; one could then assess whether, for example, larger (or exporting) companies exhibit a comparatively more negative attitude toward the effects of Brexit.
In any case, and since Brexit is a recent process with uncertain dynamics, this study provides a basis for continuing to analyze, in the future, the perceptions of these agents in successive phases of the process.