Washington Insider-- Tuesday
Virus Surge Hammers UK, EU Trade
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
Sen. Portman Backs Nomination of Tai To Be USTR
Sen. Rob Portman, R-Ohio, is one of the first Republicans to publicly endorse the nomination of Katherine Tai to be the U.S. Trade Representative, calling her experience as the top House Ways and Means trade lawyer good background for the Cabinet post.
“I'm glad that Katherine Tai is the likely nominee,” Portman said during a discussion with other former USTRs hosted by the Center for Strategic and International Studies. “I think that will help in terms of moving a trade agenda forward vis-a-vis Congress because she, obviously, knows how we operate, understands (trade promotion authority) well.”
Portman served as USTR under the George W Bush administration.
Food, Ag Workers Next In Line For Vaccines
Food and agricultural workers will join people 75 and over in the next group to get vaccines against the COVID-19 pandemic after health care workers and nursing home residents.
The Advisory Committee on Immunization Practices (ACIP) voted 13-1 in favor of the plan put forth by an ACIP work group, which puts the nation's approximately 30 million frontline essential workers and 19 million persons aged 75 and over in Phase 1B.
“Grocery store workers” and those in “food and agriculture” and “manufacturing” also are specifically listed in the second phase.
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Bloomberg and others reported over the weekend that the United Kingdom “confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus.” The report said the development offered a “preview of the border chaos to come in the absence of a Brexit deal.”
Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the UK for 48 hours and wants a stricter testing regime before lifting the blockade. Germany and Italy halted arriving flights from Britain with Spain and Portugal following suit. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.
Late Sunday, the Port of Dover stopped freight moved by truck into France. Traffic into the UK was unaffected, though truckers often run supplies in both directions and the latest outbreak in the heart of England may discourage them from entering the island.
The disruptions are exposing Britain's trade vulnerabilities just as a 4-1/2-year odyssey to leave the EU moves from political rhetoric to economic reality. Business groups facing catastrophic losses urged Prime Minister Boris Johnson's government to act quickly, with the 18,000-member Logistics UK calling for rapid COVID-19 testing of truckers departing the country as the quickest way of protecting supply chains.
The group said there are more than 100 trucks carrying seafood due to cross the border into the EU, bound for Christmas wholesale markets in France and Spain. Fears are growing that live shellfish will spoil if they're held up at the border.
French Transport Minister Jean-Baptiste Djebbari said European nations are working on “a solid health protocol” to be implemented “in the coming hours.” Container ports and ferry terminals were already congested because of stockpiling ahead of the Dec. 31 deadline marking a final break from the European single market.
However, a meeting of the EU's crisis response experts in Brussels on Monday ended without reaching a decision on how to proceed regarding UK travel, Bloomberg said. Some members of the group called for an urgent discussion at political levels to resolve the issue.
In the UK, officials sought to downplay the urgency of the situation. Jamie Davies, the prime minister's spokesman, urged Britons not to panic-buy groceries and said “we have resilient supply chains and it is the case that the majority of our food doesn't come in through the short straits.” Asked about virus vaccines, Davies also said the UK already has “the majority of this year's supply” from Pfizer Inc.
The border chaos comes at the end of a year that's seen Johnson nearly die from the virus and come under heavy criticism over his policy responses, which left the UK with a death toll second only to Italy in Europe and the worst hit to output of any major economy.
British supermarket chain J Sainsbury Plc said it is considering using air freight for products sourced from Europe. The firm expects to begin to see “gaps” in the coming days sourcing some fruits and vegetables, said Victoria Durman, head of corporate communications.
Outside Dover, trucks began lining up on the M20 motorway as the “Operation Stack” emergency plan was triggered with drivers unable to board ferries. The Department for Transport was also preparing Manston airport in Kent, which is being overhauled to accommodate as many as 4,000 vehicles as part of Britain's no-deal planning, according to the local government's website.
UK travel, leisure and retail shares slumped on Monday as flights were canceled, while stay-at-home stocks, like Ocado Group Plc, got a boost. Airlines were among the worst hit, with British Airways parent IAG SA falling as much as 20% and Easyjet Plc down as much as 18%.
The economic drag of tougher restrictions and trade turmoil will only deepen the hole the country is in, unleashing more damage stretching from mom-and-pop retailers to already struggling European airlines, Bloomberg said.
Then there is the political fallout. Johnson abruptly scrapped plans to allow families to mix over the holidays as the government warned over the weekend that the new strain of the virus is “out of control.” There was chaos at train stations with people defying social-distancing rules to get out of the capital.
More than 16 million Britons are now required to stay at home, mainly in London and southeast England. The measures ban household mixing in the capital and the southeast, and allow households to see each other “just on Christmas Day” across the rest of England.
So, we will see. It seems now that the mutations of the virus have not reduced the effectiveness of the vaccines that are being mobilized, but certainly concerns regarding potential impacts have locked up travel and trade in several areas. These are trends and impacts producers should watch closely as they intensify and complicate anti-virus efforts worldwide, Washington Insider believes.
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