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The success of the Brexit movement to force the exit of UK from the European Union demonstrates the limits of globalism, which for many has become a kind of euphoric synonym for innovation, increased efficiency and low cost. In the end, the sacrifice of sovereignty and the inflexibilities, which are a kind of double-edged sword, proved to be too much. Inflexibility on the one hand brings established rules and a known trading platform which does not have to be renegotiated for every trade. On the other hand, it reduces the nimbleness needed to manage the unique features of many big trades. Flexibility can often assure the greatest good while avoiding bureaucratic dead weight losses, the unfortunate hallmark of many real world economic trading partnerships.
It seems likely that several other political/trade partner separations will be debated and perhaps acted upon within current alignments of nations in the next year or two. The typical motives for separation from such global trade and even national associations like the EU or USA include, countries or states believing the unique value of their contribution to the group is no longer matched by others, inflexibility/bureaucracy of group requirements, impingement on national sovereignty, or shared values in place originally are no longer matching up well as cultures evolve and immigration further shifts cultures.
Some big strategic plays as well as battles are looming in global food trade in the next five or so years and the outcome of them is far from known. Positioning to secure trading partners with established rules through agreements such as the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnerships (TTIP) as well as a host of other regional, continental and hemispheric pacts are both economic and geo-political in nature. By that I mean they facilitate trade as well as potentially serve as instruments of foreign policy.
Trading partnerships and agreements among nations can be used to potentially punish through exclusion or reward through admittance, regional powers with whom the group is either aligned or at odds. The effectiveness of trading pacts used as an instrument of foreign policy to reward or bring sanctions depends on the strength and resources of the individual players. In the case of the UK, its powerful trading capability and productivity makes its departure from the EU less risky for it than for other member-states. Since it is well schooled in and fully compliant already with the EU trade bureaucracy, rules and certification requirements etc., a relatively smooth transition to outside trading partner should not be that troublesome.
We have brought attention here in several previous articles about the race to secure global resources in support of agricultural production, even independent of trade if such a contingency arises, (such as the long-term leases of arable land in locations such as Africa, Madagascar, and Brazil). Expect further re-shuffling of global alliances and strategic acquisitions in the next few years to support future growth (food needs) of nations and to prepare for any contingency if food and resource availability becomes weaponized by governments. Food as a weapon has a very long and colorful history and there is no reason to believe it is a thing of the past.
Exports of pork are the only real pathway to growth for those nations which have the capacity to produce it with a comparative advantage. The disruption of exports, especially because of the non-storable nature of pork (without loss of value, for instance, inherent in freezing) and the inflexibility of the production system which cannot be easily stopped temporarily can cause huge financial losses. It will be interesting to see the mechanisms by which such a catastrophe is prevented as the concentration of production in exporting countries like the US continues. The TPP is certainly that for US pork producers but will it be ratified and will it be enough given the coming uncertainties?
