British voters spoke loud and clear. They want the party that would guarantee them the end of the Brexit saga. But that decision has served a severe blow to its overseas territory — the Falklands Islands whose fishing industry is heavily reliant on the E.U., its biggest export market.
The Falklands Islands waters form 2.7 million square kilometers of Patagonian Shelf, and most of the fishing is done in the waters of up to 200ft deep within this shelf and sometimes within Burdwood Bank - which lies south of the islands in a deep channel known as Falklands Trough.
Most of the fish found in the Falklands waters are either squid or finfish. Squid is the big business for the Falklanders which catches 200,000 tones per year, and 82% of its exports go to Spain, 4.2% to the U.S., South Africa at 3.6% and 2.3% to the U.K. It is the fishing industry that sustains the entire Falklands economy whose GDP stood at $193.28 million in 2017 for the population of 3,398.
The Falklanders have no right to vote in British elections nor the Brexit referendum unless they are domiciled in the U.K., so as members of the British overseas territories, they have to comply with the rules set in London. If the U.K. strikes a deal with the EU, then Falklands would continue to trade freely with EU27. Still, if there is a no-deal Brexit, which now looks likely, that would mean the Falklands fishing industry would have to operate under the World Trade Organisation (WTO) and impose tariffs of up to 16%. That would have significant consequences on the industry of the island. If the latter happens, some members of the Falkland Islands would like to seek permission from Downing Street to negotiate a post-Brexit agreement directly with the EU. However, this would be unlikely. They would have to operate under whatever the UK decides.
But, this will not only have a massive effect on Falklands, but it would also on Spain, in particular, the port of Vigo through which fishery products from Falklands go. About 6,000 jobs in Spain are directly tied to the fishing industry of the island. They have 66 trawlers which operate in the British waters, and most of the crew are Spanish.
The Falklands also has a strong wool industry. Still, it is the oil that would be most profitable to the U.K. In 2010, Rockhopper started drilling for oil, and in 2015 it found significant signs North of the Falklands Basin. That only served to further anger Argentina, which is trying to criminalize British exploration companies working on the island. Argentina, which refers to the island as Malvinas, claims it has the right to the territory because it inherited it from Spain in 1800, but lost the island to the British during the 1982 war over the two British dependent territories in the South Atlantic. However, the Falklands, have voted to remain part of the U.K. That did not please Argentina's former President, Cristina Fernandez de Kirchner. Throughout her presidency, she tried to destroy the island with aggressive policies on trade and tourism. But her claim to the Falklands is based around oil, which amounts to 60 billion barrels, while Argentina, fourth largest reserve in South America has only 2.4 billion barrels.
But for now, Brexit is a more significant threat to the Falklands, and as the UK leaves the EU on January 31st, it will not be Argentina who will bear the cost of the economic slowdown of the island.