Front cover: This issue marks the 40th anniversary of the first ever Feed Compounder magazine in January 1981. Older readers may recognise the masthead on the front cover, which is reproduced from that year.


opinion A NEW ERA


With this edition of Feed Compounder, the United Kingdom has embarked on an independent and sovereign course without any formal or institutional relationship with Brussels. This is the case for first time since, in 1973, the UK joined the European Communities, which was the collective term for the European Coal and Steel Community, the European Economic Community and the European Atomic Energy Community which became the European Union (EU) in November 1993,.


The negotiations between Prime Minister Boris Johnson and the


EU President Ursula von der Leyen predictably went down to the wire with the negotiations culminating with an agreement between the two parties being finally reached on Christmas Eve. This was followed by the formal implementation of the agreement which took place on New Year’s Day. This avoided the ‘No Deal’ outcome which, as is generally agreed, would have been particularly damaging to the UK’s economy. The withdrawal agreement ensures that future trade between


the EU and the United Kingdom takes place without the intervention of tariffs or quotas; thus, it establishes what is essentially a free trade area between the UK and EU member states. Since the EU as a whole is currently the UK’s largest trading partner, the success of these negotiations was regarded as crucial. There have, subsequently, been reports of confusion in the implementation of the new regime, particularly relating to Value Added Tax or the costs related to customs declarations, described by one publication, as ‘Post-Brexit disruption over paperwork and procedure’. However, given what is the very recent conclusion of the negotiations between the EU and the UK, procedural problems could have been expected to arise and, with goodwill on both sides, these should hopefully be dealt with over the succeeding months. What is most essential is that traders, in both the EU and the UK,


fully familiarize themselves with the details of the new trading situation as soon as possible, in order that the existing and important trading links between the UK and the EU can continue to work to the two parties’ mutual benefit. The reality, that the EU constitutes the UK’s largest trading partner, should concentrate minds and enhance the UK’s motivation to undertake this aspect. One particular aspect of the deal that has attracted critical attention is that it is too oriented towards trade in manufactured goods whereas, and as is well documented, the UK economy is dominated by the services sector. This aspect should engage the attention of the respective parties in the months to come. One major aspect underlying the drive towards the UK’s departure


PAGE 2 JANUARY/FEBRUARY 2021 FEED COMPOUNDER


from the EU has been the question of sovereignty: the right of the UK to make its own laws and attendant regulations without the intervention of other jurisdictions. Given that the UK is no longer a participant in the EU, the question


of sovereignty should not, in future, cloud the evolving relationship between the parties, leaving discussion to be largely confined to commercial matters, hopefully to the mutual benefit of both. Meanwhile it is, self-evidently, of major importance that the UK continues to negotiate bilateral trading agreements with as many counties as possible, although it is likely that some countries will elect to trade with the UK on World Trade Organization (WTO) terms. There has already been significant activity in this area, with agreements either provisionally or fully ratified between the UK and a significant number of states. One currently significant absentee from the list of countries is the United States but this reflects the complexity of the current transitional regime between the outgoing Trump and incoming Biden administrations. As regards feed manufacture, a critical area for the UK will be


to negotiate a satisfactory relationship with its raw material suppliers, ranging from soybeans and specialty chemicals. In particular, a significant proportion of the UK’s feed manufacturing raw materials, such as soybeans and soybean meal, are sourced via entrepot trade with ports such as Rotterdam and it will be important to ensure that such trading links are maintained and, where possible, enhanced. In addition, a small but significant portion of finished feeds enter into international trade and it will be particularly important to secure the necessary regulatory and other approvals where applicable. Given the fact that the EU is expected to retain its position as the


UK’s most significant trading partner, the new year is the expected to see increasing emphasis on aligning the commercial interests of both parties. It is ironic that the motivation in 1973 of the UK to join what became the EU was partly driven by what was seen as the European Communities’ superior economic performance relative to that of the UK. Almost half a century later, and discounting the impact of the coronavirus pandemic, the UK’s economic performance is, once again, estimated to be poorer relative to that of some of its EU competitors. To describe the current situation, following the UK’s withdrawal


from the EU, as a ‘new era’ is perhaps to exaggerate the essential dimensions of the new situation. What is of critical importance for both sides is to consider the relationship in terms that will ultimately be of benefit to both parties. This publication, Feed Compounder which, with this issue marks its fortieth, anniversary will continue to promote such a relationship.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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