The outcome of the U.S. election, Brexit and the ongoing challenges of COVID-19 to economies around the world. These are just some of the macro business issues facing fresh produce suppliers on both sides of the Atlantic.
In terms of Brexit, it’s a case of one step forward and one step back. In October, the U.K. government said that unless there is further give from the EU Commission, there is no point in further talks. The EU has said, in return, that the U.K. has been going back on past agreements and the chances of a deal are fading.
The truth is that both sides probably still want a deal, even if it was what has been described as a “skinny Brexit,” covering only a limited number of points. But time is running out fast.
The situation is made more complicated by the U.S. election and the discussions between the U.K. and the U.S. on a free trade deal. The general view in the U.K. is that if President Trump is re-elected, the U.K./U.S. trade deal will be pushed on, at pace. If Biden wins, he has said that if Brexit compromises the security situation in Ireland, then a U.K.-U.S. free trade deal is just not possible.
Regardless, there are a number of areas to sort out. In the U.K., rightly or wrongly, we don’t like the idea of chlorinated chicken, GM soybeans, hormone-treated beef or produce treated with higher levels of pesticides than are allowed in the U.K. There is, at times, a frenzied media and political debate going on over these issues.
The U.K. government has consistently said it is committed to protecting U.K. farmers against lower-standard food imports, but, earlier in October, it then rejected amendments to a Bill of Parliament that set out to do this.
Not all U.S. agricultural and food products are produced in this way, of course, especially those destined for international markets. But why let the facts get in the way of a good story?
The perceived threat to U.K. farmers, though, is real and many consumers — and we dare say it, retailers — would not welcome this either. What they might like is the potential for lower food prices — just not the way the food appears to have been produced.
A good deal of compromise is going to be needed in both Brexit and U.K.-U.S. free trade talks to push these over the line. It will come down to “who needs who most.” Brexit is due to be finalized by the end of the year. U.K.-U.S. free trade talks will go on over a longer period.
It leaves the commercial supply chains on both sides of the Atlantic unsure as to what and when will happen next and how they respond. This is not good news when the global economy still faces an uncertain 3, 6, 9, 12 months and there is trade disruption in other key international markets.
As a result, produce companies in both the U.S. and U.K. need to be more agile and resilient than ever before. Not all are going to make it through this incredibly challenging period. In our experience, the full impact of supply chain shocks such as Brexit, new trade deals (or not) and COVID-19 will be to speed up the industry trends already taking place.
John Giles is a divisional director with Promar International, the consulting arm of Genus PLC. E-mail him at john.giles@genusplc.com.
More from John Giles:
Could produce hold up a UK/U.S. trade deal?
A personal view of COVID-19’s impact on UK supply chains
COVID-19’s ramifications for produce in the UK
