An Island Tax Haven Shows How Brexit Fight Over Fish Isn’t Over – Bloomberg

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From his restaurant at an old Nazi military bunker on Jerseys rocky northwest coast, former fisherman Sean Faulkner makes a prediction: If they dont get their own way, theyll be back.

Like his fellow islanders, Faulkner, 66, had just watched French fishing vessels stage a protest over changes in access to waters following the U.K.s departure from the European Union. The standoff prompted Britain and France to deploy warships in the strip of sea that separates them. Billedas a game of chicken byU.K. tabloids, the same press rejoiced when the Frenchwent home.

So while theimmediate danger wasdefused, the sight ofa naval confrontation near anislandof 100,000 inhabitants was a reminder of the real-life consequences of an acrimonious divorce and why its such populist politicalcatnip.

Sean Faulkner on the beach at St Ouen, Jersey, onMay 9.

Photographer: Chris J. Ratcliffe/Bloomberg

The sudden escalationturned a local economy primarily based on financial services into a post-Brexit theater ofthe absurd, and though fewin the outside world can locate Jerseyon a map,the fight is over a lot more than the mackerel, pollock and crab off its shores.

As part of the Channel Islands, Jerseyis neither in the EU nor officially in the U.K. It is aself-governing British crown dependency 14 miles away from Francethat relies on Britain for its defense. People there had no say in Brexit, a topic that consumed politics and markets.

Fish was the last sticking point in talks and one that resurrectedhostility between two neighbors that have taken turns being bitter enemies and strategic allies over centuries. So Jersey, almost by accident, got ensnared in the fraughtcross-Channel relations in recent months that has involved everything from customs bureaucracy to coronavirus vaccines.

Our cultural ties go back a thousand years, said John Le Fondre, Jerseys chief minister, who has been working with the U.K. government and European Commission on resolving the fishing problem. This slight difficulty is saddening.

Fishing boats moored in view of La Collette power stationin St Helier, Jersey, May 8.

Photographer: Chris J. Ratcliffe/Bloomberg

The latest clash came after Frances maritime minister, the daughter of a Brittany fisherman,suggested the government could cut off electricity supply to Jersey if the countrys grievances over fish werent addressed.

The Brexitdeal was that EU boats would still allowedto fish in U.K. waters for years though their access would need to be curtailed and also there would be a lot more red tape. There aredelays in getting licenses and the pandemic didnt help.

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Annick Girardins words triggered a series of unintended consequences, according to French officials speaking on condition of anonymity. Theysaid they were surprisedhow quickly the situation escalated andworked the back channels to smooth things over.In Paris, the government was left navigating between appeasing the U.K. and publicly showing support for embattled fishermen.

The showdown also had itspolitical uses. U.K. Prime Minister Boris Johnson enjoyed a wave of positive headlineswith the Daily Mail labelling the retreat of the French fishing fleet as Le grand surrender.For French President Emmanuel Macron, some saber-rattling at the British is no bad thing when you face a challenge from the far-right leader Marine Le Pen.Frances junior minister for European affairs threatened the U.K. on financial services if Britain failed to grant licenses to French fishermen.Inaninterviewin the Journal du Dimanche, Clement Beaune said the U.K. is constantly testing the resolve of France and the EU in an attempt to show that Brexit was liberating:We wont let them do this.

Elizabeth Castle through the window of a harbor control officein St Helier.

Photographer: Chris J. Ratcliffe/Bloomberg

Amassing around Jerseys 16th century Elizabeth Castle beside its main harbor, the 60-strong flotilla was met with a military history re-enactment enthusiast firing a musket from the castles ramparts. France last tried to invade Jerseyin 1781 during the American Revolutionary War, the defeat of which is celebrated by various monuments throughout the island.

Yet screaming headlinesof a potential blockadeand the cutting of power supplies also carried a sinister undertone for some residents, given how they suffered food shortages when the island was occupied by the Germans during World War II. On Sunday, it celebratestheliberation from the Nazis.

At issue now is whether the spat can be quickly resolved, after French boats argue they were wrongly denied access and the European Commission accused theU.K. of breaching the terms of the Brexit deal. Caught in the middle, the Jersey government said it believes there arepractical solutions.

The value of the fishing at stake is a rounding error for the French, U.K. and Jersey economies, but its anemotive issue. Disagreement over fish almost derailed the entire trade deal between Britain and the EU, before a compromise was reached at the 11th hour on Christmas Eve.

Its not just about a few mackerels, the EUs chief Brexit negotiator, Michel Barnier, wrote in his recently publisheddiary about the trade negotiations. Its about men and women who live dangerously, courageous communities, who sustain coastal territories.A last-minute British proposal on fishing introduced just days before a deadline ran out on producing the trade and cooperation agreement was a bluff, he said, a document filled with traps, false compromises and backsliding.

Fishermen in Jersey have been particularly affected, with Faulkner having lost up to 50% of his sales from not being able to export to France due to the rising political tensions and new red tape. Jason Bonhomme, another fishermen, was unable to land his catch of cuttlefish in Carteret because an intimidating group of French fishermen stopped him at the quay.

The Lighthouse Beach Cafe in Le Mare, Jersey.

Photographer: Chris J. Ratcliffe/Bloomberg

Brexit has been carnage, one person who fishes lobster and crab around Jersey said, who asked not to be identified. They used to export their catch in France, but now they must try to sell it all locally.

Somezones remain closed, which meansboats are wading intoother waters. French fishermen will argue there are also other unresolvedfactors in play, such as how the fishreproduce closer to their warmer coastline before migrating closer to Englandat the adult age when they become prize catch.

A quirk of the dispute is the rich seam of French heritage that runs through Jersey, which is best known internationally for itspotatoes andcows. Many of its road names are in French and Jerriaisthe local dialect that is still taught in the islands schools, though few people speak it nativelyis closely related to French.

Its also not the first time French boats have made a statement around Jersey: In 1998, some Frenchmen briefly captured the Minquiers, a small group of rocks and islands belonging to Jersey off its south coast where fishermen often land.

For all the controversy, years of fishing together in sharedwaters means many Jersey and French fishermen are friends and they dont want to see the dispute get out hand.Many Jersey people have French blood in their ancestry and the island has long enjoyed good relations with its closest neighbor, the lobster-fisher said.

As one person put it: We dont want to start a war with the French.

With assistance by Iain Rogers

(Adds comment from French minister in 12th and 13th paragraph.)

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An Island Tax Haven Shows How Brexit Fight Over Fish Isn't Over - Bloomberg