Brexit: UK announces trade deal with Norway, Iceland and Liechtenstein

The UK has signed a post-Brexit trade deal with Norway, Iceland and Liechtenstein, the government has announced.

The agreement will be a major boost for trade between the four non-EU nations, which is already worth £21.6bn, UK minister Liz Truss said.

She claimed it would boost sectors such as digital and cut tariffs on UK farm products such as cheese and meat.

Britain is Norway's top trading partner outside the European Union (EU).

The UK government said reduced import tariffs on shrimps, prawns and haddock would cut costs for UK fish processing, helping to support jobs in Scotland, East Yorkshire and northern Lincolnshire.

British beef
As Britain is no longer part of the European Common Fisheries Policy, it must deal directly with Norway and UK fleets are keen to have access to the country's sub-Arctic seas.

However, many Norwegian farmers have expressed concerns at opening up the domestic market to British beef and cheese.

State broadcaster NRK says the country's market of 5.4 million people is small but potentially lucrative, with strong purchasing power.

The countries involved are the three non-EU members of the European Economic Area, which allows them to be part of the EU's single market.

Norwegian Prime Minister Erna Solberg said "the deal allows for growth in trade for both our countries".

However, the Norwegian government said the deal with the UK would not restore all the advantages it had when both countries were in the EEA.

2px presentational grey line
In terms of their overall trade volumes, this deal is more significant for Norway and Iceland than it is for the UK.

But politically, it's really important for the post-Brexit British government to show that new trade deals are being done quickly. Even if - as the Norwegian side points out - it is less open than the previous relationship inside the same single market.

The new deal builds on the rollover agreement the UK signed before it left the EU's economic zone, and the government is keen to stress it includes important elements on digital trade which go beyond what the EU has.

But digital and data provisions are relatively new elements in free trade agreements, and it's still unclear how effective they are in the long term.

"At first sight, the deal looks cautiously ambitious," says trade expert David Henig from the European Centre for International Political Economy.

"In many fields, from climate change to SMEs [small businesses] to digital, it sets out some goals, without it being obvious that the underlying provisions will deliver them."

So, it's a decent start. But it's the implementation that counts.

2px presentational grey line
"Prior to the UK's exit from the EU, Norway enjoyed free movement of goods, services, capital and persons to the UK through the EEA agreement," Norway said.

"A free trade agreement will not provide similar access to the British market."

The UK's international trade secretary, Liz Truss, said the deal would be "a major boost for our trade with Norway, Iceland and Liechtenstein, growing an economic relationship already worth £21.6bn, while supporting jobs and prosperity in all four nations at home".

Iceland's Foreign Minister, Gudlaugur Thor Thordarson, said an agreement with the UK had been a priority for his country and would be "crucial for both Icelandic companies and consumers".

Fishing crews have been "disastrously let down" by the government's failure to reach a deal with Norway, UK Fisheries chief executive has said.

UK fleets will not have access to Norway's sub-Arctic seas, following the breakdown of UK-Norway negotiations.

One trawler, which catches 10% of fish sold in chip shops, will be tied up for a year following the collapse in talks.

The government said it had offered a "fair deal" but the two sides were "too far apart" to agree a deal this year.

Labour leader Sir Keir Starmer said fishing communities had been "betrayed by the prime minister".

The UK's departure from the EU means it is no longer part of the European Common Fisheries Policy and instead negotiates with Norway directly over fishing catches.

Who really owns UK fishing rights?
What does the deal mean for fishing?
A quick guide to what's in the Brexit 
dealThe UK and Norway have a basic post-Brexit 
agreement on fishing, but annual negotiations are still needed to pin down detailed numbers.

Those negotiations are meant to conclude by the beginning of each year, but the timing of the EU-UK trade deal in December 2020 had a knock-on effect that meant everything was delayed.

The failure to reach a deal means Norwegian vessels will also lose access to UK waters in 2021. But one of the main species they catch is blue whiting, and a lot of that is caught in the first couple of months of the year which have already gone.

UK vessels, on the other hand, fish throughout the year for cod.

And as warmer sea temperatures push cod stocks further north, they cannot replace the cod they have been catching in Norwegian waters by fishing in UK waters instead.

Many people in the fishing industry felt let down by the EU-UK trade deal, but that was about its future potential.

"This is actually a loss of real fishing opportunities," says Barrie Deas of the National Federation of Fishermen's Organisations, "and in that sense we've gone backwards".

Big Scottish fishing firms will be able to catch more mackerel because of the absence of Norwegian vessels in UK waters, but most of the rest of the industry will be bitterly disappointed.

The government will argue that it had to stick to its guns in a tough negotiation, and there was always likely to be some upheaval as a result of the UK exit from the Common Fisheries Policy.

It changes the UK relationship with big fishing countries like Norway, as well as with the EU itself.

2px presentational grey line
Andrew Crook - president of the National Federation of Fish Friers - warned that it could increase the price of fish and chips.

"We rely on having some domestic catch to keep the market stable and any lack of competition is going to have an impact on prices," the fish and chip owner said.

"We are already seeing large increases on almost all of our supplies and we fear this will continue."

'Absolutely devastating'
Speaking to BBC Radio 4, Jane Sandell chief executive of UK Fisheries, said the failure to reach an agreement would mean her firm having only 40% of the fishing opportunities of previous years.

Her Hull-based company employs approximately 100 crew and Ms Sandell said the news would be "absolutely devastating" for those workers and their families.

"It means so much in this area to our history and our culture... we are in total shock, we never believed this would actually happen."

She said the lack of a deal would mean their Kirkella trawler - which catches around 10% of all the fish sold in the UK chip shops - would be "tied up" for a year.