Commodity Conversations Weekly Press Summary

Eight years after negotiations first started, 15 Asian nations signed the world’s biggest trade agreement with the Regional Comprehensive Economic Partnership (RCEP). The treaty is considered by some as somewhat symbolic and excludes most agricultural products, although it does highlight a tilt in Chinese trade towards more regional partners. At the same time, however, China’s western trade partners have expressed frustrations at the claim that China detected coronavirus samples on the packaging of food imports. In response, New Zealand doubted claims that its frozen beef had signs of the virus. And the WHO and FAO repeated their findings that the virus does not appear to spread through food trade. 

The EU is hoping that a new US President would ease the trade tensions built up by the previous administration. Negotiations over the Transatlantic Trade and Investment Partnership (TTIP) have stalled but EU lawmakers said they hoped to resume talks soon. As a sign of goodwill, perhaps, a committee backed a proposal to remove EU duties on US lobsters. US lobster producers have been struggling to compete because of duties from China and the EU’s free trade deal with Canada. 

The situation concerning a potential trade deal between the EU and the UK does not look as promising, however. Tate & Lyle and Associated British Foods suggested that Northern Ireland could face supply issues in January 2021 because of the uncertainty surrounding Brexit negotiations. The current proposal does not outline how British goods will have access to Northern Ireland, as the region is due to remain in the EU’s single customs market. 

Fish and the protection of British fisheries remain one of the main issues blocking an agreement. An expert noted that the issue was relatively unimportant when measured in terms of economic impact as it only represents 0.08% of the UK’s GDP. The UK Prime Minister is not willing to make any concessions, however, because it is highly symbolic as it represents the UK’s ability to regain its territorial sovereignty. France, meanwhile, has a large fishing fleet and the French President promised to block a deal unless its fishermen are granted access to British waters. 

Speaking of fish, new research identified issues concerning the practice of focusing only on abundant species. Focusing on abundant species can sometimes have a significant impact on other species in what researchers called “indirect extinction cascades”. The fishing world is also unimpressed by China’s campaign to crack down on illegal fishing in the Yangtze River. China’s massive fishing fleet is currently doing a lot more damage to distant fish stocks as far West Africa and the Galapagos. Vessels have to keep going further as the once-abundant Yangtze River, Yellow Sea, Bohai Sea and East China Sea are all effectively considered depleted.

Aquaculture and fish farms have long been promoted as a more sustainable method to produce seafood but a series of dramatic farming disasters has made the practice unpopular with many activists. They point to issues like fish escapes, disease, antibiotic use, and waste as a way to argue that fish farms should be kept out of our oceans. Nevertheless, innovation has made the industry a lot more sustainable over the past few years. The FAO argued that wild fish populations cannot meet the growing demand for seafood and that sustainable aquaculture will have to step in. As of 2018, 46% of the fish eaten globally came from a farm. 

Some aquaculture innovations, like developing a more efficient feed based on microalgae, have been cheerfully accepted, while others remain controversial. In the US, for example, the FDA approved the first genetically modified salmon breeds in 2015 but the product is still not on the market because of legal challenges. The GMO salmon grows twice as fast and has been eaten by Canadians for years. A US court, however, ruled last week that the FDA failed to properly consider the long-term risk of GMO salmon before giving its approval. 

The rush to invest in the plant-based meat sector, meanwhile, continues. Unilever announced a plan to increase sales of meat alternatives five-fold to USD 1.2 billion in 5-7 years, while McDonald’s announced the launch of its own plant-based burger, uninspiringly called the McPlant. At the same time, however, the sale of traditional butter has been steadily rising over the past few years although consumption is not expected to recover to the levels seen before it had to compete with margarine. Nonetheless, butter’s comeback reflects the realisation that plant-based margarine is not necessarily healthier, while an increase in disposable income makes butter a viable option despite its higher price. 

This summary was produced by ECRUU

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