A post-Brexit shortage of workers, exacerbated by the global strains of the COVID crisis, has sown chaos through supply chains for everything from fuel and pork to poultry and bottled water, raising concerns growth could be crimped.

One fourth-generation dairy farmer who owns a Holstein Friesian herd in central England was forced to dump 40,000 litres of milk in the past two months when no driver turned up to collect it.

“It’s cutting, it’s emotionally draining when you’re producing milk and at the end of the day you have to pull the plug and it has to go,” said the farmer, who asked not to be named due to concerns about the impact of negative publicity on contractors.

The farmer was forced to destroy four milk loads in the past two months due to shortages though in an entire career of 45 years he can remember doing it only two or three times before — and then due to bad weather.

The United Kingdom produced 15.3 billion litres of milk last year so supplies are not yet threatened, though the destruction of milk shows the extent of the labour problems which are straining supply chains across the land.

Distressed milk

Razor-thin margins and the perishable nature of milk mean supply shocks are quickly felt by dairy farmers, according to Peter Alvis, chairman of the Royal Association of British Dairy Farmers, the industry body which lobbies for farmer interests.

“I don’t think things with global supply chains have settled down again after the pandemic, and the shortage of HGV drivers is having quite a large impact,” he said.

Alvis said milk wastage was so far limited to a few incidents, though precise data is hard to come by.

In an indication of the pressures on the dairy industry, many farmers have had to turn to distress milk services, small companies set up to buy milk at lower prices and transport it to other outlets in an effort to stop it being dumped.

Rob Huntbatch, 38, rescues milk for half its normal price and turns it into curd, and typically has two hours from when a farmer calls him to pick up the milk before it is dumped.

In Cheshire alone, Huntbatch saved 160,000 litres of milk in September – an increase of 100,000 litres from the previous month – but was still unable to save 80,000 litres.

“This is only the tip of the iceberg,” Huntbatch said. “I think it will get worse – in wintertime, if there’s snow, drivers get slowed down, and it’s going to be make even more of an impact.”

The uncertainties around milk transport are combining with skyrocketing costs for farmers. Fertilizer used to grow feed for the cows, has spiked in price along with natural gas prices, and electricity prices are also jumping.

Henry Bloxham, a 61-year old Staffordshire dairy farmer who owns 250 cows, says his fertilizer prices have risen by 150% in three weeks and fuel increased by 10p a litre in the last week alone.

If costs continue at current levels, he says he will consider leaving the industry by next April.

“If we have to keep paying these costs, you will see a mass exodus of dairy farmers next summer,” he said.

— Victor Jack is a Reuters reporter in London, England.

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An acute shortage of butchers and slaughterers in the meat processing industry has been exacerbated by COVID-19 and Britain’s post-Brexit immigration policy, which has restricted the flow of east European workers.

The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers and 5,500 poultry workers to alleviate shortages but has given no indication it will introduce schemes for other areas. It argues businesses should invest in their workforce and improve pay and conditions.

Lizzie Wilson, policy services officer at the National Pig Association (NPA), said the shortage of butchers meant processors were operating at 25 per cent reduced capacity.

As a result mature pigs ready for processing are backing up on farms, causing welfare issues.

“There’s about 120,000 pigs sat on farm currently that should have already been slaughtered, butchered, be within the food chain and eaten by now,” said Wilson.

“It is getting to the point where we are saying to government if we don’t get some help soon we’re going to have to look at culling pigs on farm, because that’s our only option now,” she said, adding “there are some producers that have already had the conversation.”

Britain’s biggest pork processors are Cranswick, Morrisons, Pilgrim’s Pride and Karro Food Group.

Wilson said consumers were already seeing the impact of the crisis on supermarket shelves as processors had rationalized pork product ranges.

Minette Batters, president of the National Farmers Union, said a cull of up to 150,000 pigs was “potentially a week, 10 days away.”

“I do not feel anybody can preside over a welfare cull of healthy livestock. I don’t believe it has happened in the world before and it cannot happen now,” she told the BBC.

Batters said she wants an urgent meeting with interior minister Priti Patel and immigration minister Kevin Foster.

She said she has been trying to get a meeting with Patel for two years.

David Lindars, technical operations director at the British Meat Processors Association, said a cull “was getting very close.”

“I don’t understand this government any more. It has to get to white shelves in the supermarket scenario before they believe it,” he said.

A spokesperson for the government said it was aware of the challenges that the pig industry has faced in recent months.

“We are keeping the market under close review and continuing to work closely with the sector to explore options to address the pressures the industry is currently facing,” the spokesperson said.

— James Davey reports for Reuters from London, England.

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The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) removes 95 per cent of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia.

Britain hopes to carve out a niche for itself in world trade as an exporter of premium consumer goods and professional services. Accession to the pact would supplement trade deals London is seeking, or has already agreed, with larger members.

“This part of the world is where Britain’s greatest opportunities lie. We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe,” trade minister Liz Truss said. “It is a glittering post-Brexit prize that I want us to seize.”

The CPTPP is not expected to lead to a surge in British exports. But it locks in market access, including for legal, financial and professional services sectors, and is seen by ministers as an important way to gain influence in a region where China is increasingly the dominant economic force.

Unlike the European Union, the CPTPP does not impose laws on its members, it does not aim to create a single market or a customs union, and it does not seek wider political integration.

Removing tariffs

The process of negotiating membership is largely about proving to existing members that Britain can meet the group’s standards on tariff removal and trade liberalization, and then setting out details of how and when it will do so.

“The CPTPP agreement has strong rules against unfair trade practices like favouring state-owned enterprises, protectionism, discriminating against foreign investors, and forcing companies to hand over private information,” the trade department said in a statement.

“The UK’s joining will strengthen the international consensus against such unfair practices,” it added.

The government is expected to publish documents setting out its assessment of the benefits of membership on Tuesday, but highlighted cars and whisky as goods exports that would benefit.

The U.S. withdrew from an earlier planned trans-Pacific trade pact under then-president Donald Trump. His successor, Joe Biden, spoke prior to his election last November about the possibility of renegotiating the deal, but has not laid out any firm plans since taking office.

— William James is a U.K. political correspondent for Reuters in London.

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Japanese Economy Minister Yasutoshi Nishimura told reporters he welcomed the start of Britain’s joining process after hosting an online meeting of ministers from the 11 countries that make up the trans-Pacific trade pact.

“I think there’s a big meaning to this from a strategic viewpoint of strengthening economic relations between Japan and the United Kingdom,” Nishimura said.

The United Kingdom’s admission into CPTPP would bring the nominal gross domestic product of the zone covered by the pact almost on par with that of the European Union, he added.

“The commencement of an accession process with the United Kingdom and the potential expansion of the CPTPP will send a strong signal to our trading partners around the world,” the 11 member countries said in a statement.

Britain made a formal request to join the trade deal in February as it sought to open new avenues for post-Brexit trade and influence.

The CPTPP removes 95 per cent of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia. Unlike the EU, it does not aim to create a single market or a customs union, and it does not seek wider political integration.

The United Kingdom and Japan signed off on a trade agreement in October last year, marking its first major post-Brexit deal on trade.

— Reporting for Reuters by Daniel Leussink.

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Since deciding to leave the European Union, a process it completed at the end of 2020, Britain has been seeking out new trading arrangements around the world and sees the CPTPP as an important pillar of its new independent trade policy.

“We will shortly submit our formal request to join this free trade area,” Truss told a City + Financial Global conference.

The CPTPP is a trade agreement that removes most tariffs between Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Truss described the bloc as “one of the world’s most dynamic trading areas.” Britain sees it as a lucrative and growing market for exports of both goods and professional services.

Britain is seeking bilateral trade deals with Australia, New Zealand and has already agreed a deal with Canada that maintains the terms Britain had as an EU member. It has also signed a deal with Japan that goes beyond the existing EU deal.

Full membership of the CPTPP would supplement these deals and offer better access to economies that represent around 13 per cent of global economic output.

Truss is also hoping the change in U.S. administration will unlock progress toward what ministers see as one of the biggest post-Brexit prizes — a free-trade agreement with the United States.

Talks began under Donald Trump’s presidency but could not reach agreement before his term ended. In her speech on Wednesday, Truss signalled that she expected a more constructive approach to world trade under President Joe Biden.

Biden, who took office Wednesday, “has said he is committed to working with fellow democracies to set the rules of the road of international trade,” she said.

— Reporting for Reuters by William James in London.

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As Britain prepares to end its transition out of the European Union on Dec. 31, it has negotiated multiple rollover bilateral deals to maintain trade, with many simply replacing the terms the bloc had already agreed.

British Prime Minister Boris Johnson joined Canada’s Justin Trudeau and their respective trade ministers on an online call to mark the deal, which paves the way for a tailor-made agreement covering more areas such as digital trade, small businesses, the environment and women’s economic empowerment.

“Today’s agreement underpins 20 billion pounds worth of trade and locks in certainty for thousands of jobs,” Liz Truss, the U.K.’s international trade secretary, said in a statement.

Her Canadian counterpart Mary Ng said the transitional agreement “largely replicates” the EU deal on tariff reductions and provisions for labour and environment. “We do want an ambitious, high level comprehensive trade agreement with the U.K.,” Ng said, signalling Canada wanted similar terms to the EU deal.

Canada’s Parliament must approve legislation that would enable the deal to come into effect.

Britain is Canada’s fifth largest trading partner after the United States, China, Mexico and Japan.

Johnson is trying to shape a new “global Britain” that can strike out alone and negotiate better trade agreements than the EU as part of what he says is the benefits of its historic decision to leave the world’s biggest trading bloc.

In less than two years it has agreed trade deals with 53 countries, accounting for 164 billion pounds (C$284.62 billion) of British bilateral trade. Johnson’s critics point out that many are largely the same as the EU deals.

The U.K.-Canada Trade Continuity Agreement will be subject to final legal checks before it is formally signed. “This is a good moment,” Trudeau said.

Export-oriented ag groups in Canada said the deal provides clarity and ensures continued market access for some agrifood exporters.

For those sectors, the deal provides “temporary certainty and stability,” Canadian Agri-Food Trade Alliance president Dan Darling said in a release Saturday.

“However, for other agrifood exporters, a transitional arrangement simply reinforces a situation that remains unacceptable under CETA (the Canada-E.U. free trade pact) due to the persistence of trade obstacles that continue to hinder Canadian exports.”

CAFTA called on the parties to “return to the negotiating table as soon as possible in order to reach a comprehensive and more ambitious pact that removes tariffs and non-tariff barriers, provides liberal rules of origin and creates a level playing (field).”

Cereals Canada CEO Dean Dias, in a separate release Saturday, said the continuity agreement “is a positive outcome for Canadian wheat farmers and exporters, especially those operating in a highly integrated supply chain with important U.K. millers and food processors.”

— Reporting for Reuters by Kate Holton and Amran Abocar. Includes files from Glacier FarmMedia Network staff.

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Why it matters: Trade between Canada and the U.K. has been governed by EU trade rules, and if no deal is made by the end of the year, there will be uncertainty for exporters.

The U.K. left the EU on Jan. 31 and nearing the end of an 11-month implementation period where essentially agreements remain status quo while the U.K. negotiates a more permanent agreement with the EU and other countries.

But talks between the U.K. and EU have so far gone poorly and British Prime Minister Boris Johnson is now preparing voters to enter 2021 without a trade agreement in place.

A deal between the two is likely being prioritized over negotiations with Canada, but the U.K. has agreed in principle to some bilateral trade agreements.

When the calendar turns, the U.K. will no longer be included in the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU.

Conservative Party of Canada critic for export promotion and international trade Tracy Gray says companies are looking for certainty as 2021 approaches.

“We’re at a stage right now where the deadline is quickly approaching and we’ve got a number of industries that are very concerned,” says Gray, noting the near $20-billion worth of goods Canada exported to the U.K. last year.

Last month, the Canadian Chamber of Commerce and Confederation of British Industry said in a joint release that the “clock is ticking” on completing a deal.

“The benefits businesses have under CETA are set to disappear and without a trade deal in place both our countries will be going into uncharted territory,” they said.

Mary Ng, the federal minister responsible for international trade, continues to say both parties are working to finish a transitional agreement before the end of the year.

“The U.K. trade secretary is really pleased that we will continue to work with the U.K. to build on our strong trade agreement,” she said. “We are going to continue working on a solid path for both of our countries to grow our economies and benefit our people on a transition agreement that will ensure continuity for businesses here in Canada and for workers and businesses in the United Kingdom.”

While the U.K. says trade talks with Canada have begun, opposition MPs like Gray contend Ng and the Liberal government are failing to be transparent about the status of negotiations.

Earlier this year, the governing Liberals agreed to inform parliamentarians of any negotiations it enters into within 90 days, but by mid-October, no notification has been made.

Meanwhile, there is continued speculation the U.K. will look to join the Comprehensive Progressive Trans Pacific Partnership trade deal.

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Britain left the European Union at the end of January and an 11-month transition period ends on Dec. 31. It is not yet clear what sort of relationship Britain and the EU will have from next January, with the two sides due to resume trade talks later on Thursday.

At the end of the transition period, the new and independent Geographical Indications (GI) schemes will ensure popular and traditional produce from across Britain will be granted special status to mark out their authenticity and origin.

Products such as Scotch whisky, Welsh lamb and Cornish clotted cream will also be covered by the schemes.

Producers whose foods are granted GI status will benefit from intellectual property protection so that others cannot imitate them.

New logos can be displayed on all British produce which is given GI status.

“The new U.K. protected food name scheme will replace the old EU one and will ensure that we continue to recognize and celebrate protected food names and local recipes across our country,” said environment secretary George Eustice.

— Reporting for Reuters by James Davey.

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Why it matters: Canada is an export-dependent country, so trade agreements provide a measure of economic security and market access.

Steve Verheul, assistant deputy minister of trade policy and negotiations at Global Affairs Canada, told a parliamentary committee any deal between the two countries will be impacted by the European Union-U.K. negotiations, which are unlikely to be completed this year.

“Any future relationship between Canada and the U.K. would be influenced by the terms of the agreement between the U.K. and the EU, as well as any unilateral U.K. approaches for after the transition period,” he said during a July 9 meeting of the International Trade committee.

The U.K. left the EU on Jan. 31 and is in the middle of an 11-month implementation period. A trade deal between the two does not appear to be on the immediate horizon, however, as recent negotiations have been difficult.

Verheul reassured members of parliament during his testimony that trade officials from Canada are in contact with their British counterparts to prepare for the post-transition trade relationship.

“Whatever the outcome of Brexit, the U.K. will remain a significant market for Canadian companies,” he said, noting the U.K. is Canada’s most important commercial partner in Europe.

But Canadian officials are challenged by a number of unknowns. The U.K. is prioritizing its negotiation with the EU, and once completed, is expected to enter into bilateral negotiations with a number of other countries, notably its larger trading partners.

There’s also the possibility the 11-month transition phase ends without the U.K. signing a trade deal with the EU.

“We are working closely now with U.K. officials to start to talk about how we can come up with a traditional relationship that would govern our bilateral trade going forward,” said Verheul. “We’re trying to position ourselves to make sure we have an agreement in place, an understanding in place, to deal with that possible event.

“There are various uncertainties here that we are having to monitor.”

If negotiations do begin between Canada and the U.K., Verheul told the committee the goal would be to replicate the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) deal as much as possible, while making it more tailored to the unique relationship between the two countries.

“We would look to, and the U.K. would as well, to translate into a bilateral agreement” said Verheul, adding a “large portion of that work has already been done.”

Discussions between the two nations stretch back to when Brexit was first becoming a reality in 2016, and Verheul noted a deal was almost struck early last year.

Claire Citeau, executive director of CAFTA, said CETA held promise for exporters when first signed but “continues to fall short” of its potential because of the EU’s reluctance to remove technical or non-trade tariff barriers to trade over the deal’s three years of existence.

“Our view is that Canada should formally engage and seek to conclude negotiations of an ambitious Canada-U.K. free trade agreement that removes tariffs and non-tariff barriers that provide liberal rules of origins and secure the level playing fields,” she said, noting some other countries have done this and Canada “needs to be at the table as well.”

She expressed frustration over the pace at which Canada has been negotiating.

“Certainly, there’s been some anxiety that our members feel, not only on non-trade barriers but also the pace of negotiations that some of our competitors have adopted in negotiating free trade agreements around the world, so that has been the case with the U.K., but other countries as well,” she said. “We know that we lose when our competitors are first to markets that we’re also after, so seeing the U.S., Australia, the EU engage the U.K. certainly raises questions and eyebrows.”

Andy Barr, head of trade and economics at the British High Commission in Canada, told Glacier FarmMedia in February that he’d like to see the two nations “lock in the benefits of CETA and then boost the relationship from there.”

Doubts remain over how much any new trade deal between the U.K. and Canada will positively impact farmers. Despite the EU being the world’s largest importer of agriculture and agri-food products, Canada’s market share has been minimal since CETA came into force in 2017.

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Steve Verheul, assistant deputy minister of trade policy and negotiations at Global Affairs Canada, told a parliamentary committee any deal between the two countries will be impacted by European Union-U.K. negotiations, which are unlikely to be completed this year.

“Any future relationship between Canada and the U.K. would be influenced by the terms of the agreement between the UK and the EU, as well as any unilateral U.K. approaches for after the transition period,” he said during a July 9 meeting of the Commons standing committee on international trade.

The U.K. left the EU on Jan. 31 and is in the middle of an 11-month implementation period. A trade deal between the two does not appear to be on the immediate horizon, however, as recent negotiations have been difficult.

Verheul reassured members of Parliament during his testimony that trade officials from Canada are in contact with their British counterparts to prepare for the post-transition trade relationship.

“Whatever the outcome of Brexit, the U.K. will remain a significant market for Canadian companies,” he said, noting the U.K. is Canada’s most important commercial partner in Europe.

But Canadian officials are challenged by a number of unknowns. The U.K. is prioritizing its negotiation with the EU, and once completed, is expected to enter into bilateral negotiations with a number of other countries, notably its larger trading partners.

There’s also the possibility the 11-month transition phase ends without the U.K. signing a trade deal with the EU.

“We are working closely now with U.K. officials to start to talk about how we can come up with a traditional relationship that would govern our bilateral trade going forward,” Verheul said. “We’re trying to position ourselves to make sure we have an agreement in place, an understanding in place, to deal with that possible event.

“There are various uncertainties here that we are having to monitor.”

If negotiations do begin between Canada and the U.K., Verheul told the committee the goal would be to replicate the Canada-European Union trade pact, or Comprehensive Economic and Trade Agreement (CETA), as much as possible, while making it more tailored to the unique relationship between the two countries.

“We would look to, and the U.K. would as well, to translate into a bilateral agreement” said Verheul, adding a “large portion of that work has already been done.”

Discussions between the two nations stretch back to when Brexit was first becoming a reality, following the U.K.-wide referendum on ending EU membership in 2016, and Verheul noted a deal was almost struck early last year.

Claire Citeau, executive director of CAFTA, said CETA held promise for exporters when first signed but “continues to fall short” of its potential, because of the EU’s reluctance to remove technical and non-tariff trade barriers to trade over the deal’s three years of existence.

“Our view is that Canada should formally engage and seek to conclude negotiations of an ambitious (Canada-U.K.) free trade agreement that removes tariffs and non-tariff barriers, that provides liberal rules of origins, and secures the level playing fields,” she said, noting some other countries have done this and Canada needs “to be at the table as well.”

She expressed frustration over the pace at which Canada has been negotiating.

“Certainly, there’s been some anxiety that our members feel, not only on non-tariff barriers but also the pace of negotiations that some of our competitors have adopted when it comes to negotiating free trade agreements around the world… that has been the case with the U.K., but other countries as well,” she said.

“We know that we lose when our competitors are first to markets that we’re also after, so seeing the U.S., Australia, the EU engage with the U.K., it certainly raises eyebrows and questions.”

Andy Barr, head of trade and economics at the British High Commission in Canada, told Glacier FarmMedia in late January that he’d like to see the two nations “lock in the benefits of CETA and then boost the relationship from there.”

Doubts remain over how much any new trade deal between the U.K. and Canada will positively impact farmers.

Despite the EU being the world’s largest importer of agriculture and agri-food products, Canada’s market share has been minimal since CETA came into force in 2017.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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