Summary
In the short term smaller ACP citrus exporters could benefit from Brexit in their trade with the UK if they can:
- retain existing duty free-quota free access to the UK market from the date of the UK’s departure from the EU;
- secure the removal of CBS controls in trade with the UK;
- ensure the issue of the disproportionate costs of SPS inspections for small scale ACP exporters under moves to full costs recovery is addressed
However this will still leave the threat posed the dismantling of all tariff protection in the citrus sector, where the UK has no domestic production. This however may be deferred if it only takes place in the context of UK FTA negotiations with non-ACP exporters of citrus fruit.
ACP Citrus exporters to the EU
Sixteen ACP countries had some level of citrus exports to the EU in 2016. While this trade was dominated by South Africa, a number of smaller ACP citrus exporters participated on this trade, mainly from Southern Africa and the Caribbean. The five largest ACP citrus exporters after South Africa accounted for 42,698 tonnes of EU imports or some 1.878% of total EU imports (compared to South Africa’s share of 29.5%) (1).
In volume terms South African exports over 22 times more citrus to the EU than the second largest ACP citrus exporter to the EU, Zimbabwe (671,657 tonnes compared to 29940 tonnes), which in turn exports 3 times more than the third largest ACP supplier Swaziland (9,678 tonnes), which export 6 times more than the fourth largest supplier Jamaica (1,528 tonnes), which exported roughly 25% more than the Dominican Republic (1,218 tonnes) and nearly five times as much as Belize (334 tonnes) (1).
Trends in the Main Small Scale ACP Citrus Exporters to the EU/UK 2008-2016 (tonnes)
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
| Zimbabwe | |||||||||
| EU | 18,287 | 15,594 | 25,912 | 13,898 | 20,616 | 30,916 | 34,508 | 30,467 | 29,940 |
| UK | 1,905 | 706 | 444 | 863 | 137 | 1,371 | 1,577 | 2,328 | 727 |
| UK % | 10.4% | 4.5% | 3.2% | 6.2% | 0.7% | 4.4% | 4.6% | 7.6% | 2.4% |
| Swaziland | |||||||||
| EU | 24,989 | 20,261 | 19,988 | 27,202 | 21,243 | 12,702 | 6,468 | 7,385 | 9,678 |
| UK | 6,190 | 6,079 | 4,667 | 7,033 | 6,422 | 6,314 | 3,536 | 4,047 | 2,906 |
| UK % | 24.8% | 30.0% | 23.3% | 258% | 30.2% | 49.7% | 54.7% | 54.8% | 30.0% |
| Jamaica | |||||||||
| EU | 930 | 3,301 | 5,341 | 5,409 | 2,820 | 2,813 | 2,349 | 1,748 | 1,528 |
| UK | 701 | 2,963 | 5,232 | 5,192 | 2,729 | 2,796 | 2,005 | 1,497 | 1,164 |
| UK % | 75.3% | 89.8% | 98.0% | 96.0% | 96.8% | 99.4% | 85.4% | 85.6% | 76.2% |
| Dom Rep | |||||||||
| EU | 1,769 | 3,461 | 3,145 | 3,405 | 3,025 | 1,935 | 1,847 | 1,236 | 1,218 |
| UK | 568 | 397 | 297 | 193 | 143 | 113 | 53 | 87 | 96 |
| UK % | 32.1% | 11.5% | 9.4% | 5.7% | 4.7% | 5.8% | 2.9% | 7.0% | 7.9% |
| Belize | |||||||||
| EU | 329 | 873 | 1,196 | 921 | 331 | 280 | 1 | 41 | 334 |
| UK | 281 | 833 | 976 | 880 | 280 | 260 | 1 | 0 | 0 |
| UK % | 85.4% | 95.4% | 81.6% | 95.5% | 84.6% | 92.9% | 100% | 0% | 0% |
| Sub-total EU | 46,304 | 43,490 | 55,582 | 50,835 | 48,035 | 48,646 | 45,173 | 40,877 | 42,698 |
| Sub-total UK | 9,345 | 10,978 | 11.616 | 13,981 | 9,711 | 10,854 | 7,172 | 7,959 | 4,893 |
| UK % | 20.2% | 25.2% | 20.9% | 27.5% | 20.2% | 22.3% | 15.9% | 19.5% | 11.5% |
Source: EC ,Market Access Data Base
Exports of citrus from this group of five small scale citrus exporters peaked in 2010 and began to fall steadily from 2012 (1). In part this was linked to the introduction of stricter EU citrus black spot controls (2), the costs of which fell particularly heavily on small scale citrus exporters such as Swaziland. This saw Swazi exports fall from 27,202 tonnes in 2011 to a low of 6,468 tonnes in 2014, before recovering to 9,678 tonnes in 2016, as investments in CBS controls began to feed through into increased access to EU orientated supply chains (1).
2012 also saw a dramatic fall in Jamaican and Belizean citrus exports to the EU, with this in part being related to the introduction of moves to full cost recovery for UK SPS charges in April 2012 (3)
Meanwhile the 10 smallest ACP citrus exporters to the EU accounted for a mere 0.017 of EU citrus imports (some 390 tonnes), with none of them exporting to the UK.
Minor ACP citrus exporters to the EU 2016 (tonnes)
| Namibia | Dominica | Ghana | Ivory Coast | Haiti | Tanzania | Somalia | Burkina Faso | Cameroon | Sudan |
| 192 | 87 | 28 | 22 | 21 | 18 | 10 | 10 | 1 | 1 |
Source: EC ,Market Access Data Base
Brexit and Smaller ACP Citrus Exporters
In 2016 beyond South Africa only 4 other ACP citrus exporters to the EU, exported directly to the UK. Amongst these smaller citrus exporters to the UK, Swaziland and Jamaica have respectively an above average dependency (30%) and excessive dependency (76.2%) on the UK market in their trade with the EU.
In recent years however exports to the EU from Swaziland, Jamaica and Belize have not only been affected by the stricter application of EU citrus black spot related SPS controls but also by the move to full cost recovery for UK SPS inspections. This increased the charges per SPS inspection by 236% in two years (beginning in April 2012) (3). Jamaica and Belize were particularly heavily affected by this unilateral UK measures, given their high rate of dependence on the UK market in their citrus trade with the EU (up to 96% of their exports to the EU at this time) (1).
Against this background four issues can be seen as facing smaller scale ACP citrus exporters to the UK post-Brexit:
- retaining existing duty free-quota free access to the UK market from the date of the UK’s departure from the EU;
- securing the removal of CBS controls on trade with the UK, given the absence of citrus production in the EU and hence the complete absence of any threat of disease transmission to the territory of the UK;
- addressing the issues of the disproportionate costs of SPS inspections for small scale ACP exporters under moves to full costs recovery for UK SPS inspections;
- the future of UK citrus sector tariff policy in the absence of any UK domestic citrus production and the departure of the UK from the confines of the EU’s common agricultural policy and commoner external trade policy.
| Comment and Analysis The first priority for small scale ACP citrus exporters under Brexit will be retaining existing duty free-quota frees access to the UK market from 30th March 2019. Given the capacity constraints the UK government faces in negotiating simultaneously multiple trade agreements and the complexity of agri-food sector trade issues (see respectively companion articles ‘Capacity constraints and complexities of ‘grandfathering’ highlighted by Parliament Report’, 27 March 2017 and ‘Parliamentary report warns of the complexity of Brexit challenges in the agricultural sector’, 19 June 2017), this is likely to require the UK government to establish a transitional unilateral market access arrangements for ACP exporters, which replicates the current access enjoyed under EU market access arrangements Once the UK is no longer a formal part of the CAP and the common EU trade framework, the UK will no longer need to adhere to EU determined systems of SPS controls on imports destined exclusively for the UK market. Given the absence of UK domestic production of citrus fruit, there are no plant health threats to UK agriculture from any trade in citrus fruit infected with citrus black spot. Since citrus black spot poses no threat to human health and only reduces the commercial value of the citrus products infected, there will be no need for strict UK CBS controls. The removal of strict EU CBS controls on ACP exports to the UK market could greatly reduce the frequency and cost of inspections on citrus fruit, opening up new export opportunities for smaller ACP citrus exporters. However for benefits to be gained in this regard action will also need to be taken to address the issue of the disproportionate effects on smaller scale exporters of the introduction of full cost recovery for SPS import inspections by the UK authorities. This systematically disadvantages smaller scale exporters compared to larger scale exporters, who can more easily secure risk assessments, which can then lead to reduced frequency of inspections (and hence costs) and who can also consolidate into larger individual consignments, thereby spreading the costs of SPS import inspections across a larger volume of traded goods. Reducing the costs to small scale exporters while a sufficient volume of trade is attained to allow risk assessments to be carried out could be achieved through adopting a trade for development policy which ‘caps’ the overall total level of SPS charges which can be levied on exporters from small developing countries (possibly by defraying costs through a dedicated aid for trade facility). If these three issues can be addressed then Brexit could generate new export opportunities for smaller scale ACP citrus exporters to the UK. However, in the longer term, given the absence of domestic UK citrus production, the UK government may wish to remove tariffs on citrus imports. This is particularly the case since the trade in citrus fruit is one of the areas where competing producer and consumer interests can easily be reconciled (on the one hand an interest in continued agricultural trade protection and on the other hand and interest in cheaper food). Were such a full liberalisation of UK citrus fruit tariffs to occur this could drive preference dependent ACP citrus exporters out of the UK market. However, it is possible that the UK may delay tariff liberalisation in the citrus sector, in order to be able to have something to ‘trade’ in FTA negotiations with non-ACP countries. This includes both non-ACP citrus exporters which already have trade agreements in place with the EU, such as Egypt, Morocco, Turkey, Israel and Peru and non-ACP citrus exporters such as Brazil, Argentina and Uruguay, which have not yet concluded reciprocal preferential trade agreements with the EU. Together since 2009 these non-ACP citrus exporters have accounted for between 55% and 59% of UK citrus imports from beyond the EU’s borders. Main Non-ACP extra-EU citrus suppliers to the UK market (tonnes)
Source: EC, Market Access Data Base Finally the extent of commercial space on the UK citrus market post-Brexit will be critically influenced by the future basis for EU27-UK trade, since Spain is the main citrus supplier to the UK market. This will be critically influenced by the outcome of UK-EU27 FTA negotiations, which may take some time to complete. ACP citrus exporters should thus monitor carefully developments in UK-EU27 agricultural trade negotiations, once these negotiations get underway, in order to identify potential market opportunities.
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Sources:
(1) EC, Market Access Data Base
http://madb.europa.eu/madb/statistical_form.htm
(2) Agritrade, ‘Tightening of Citrus Black Spot controls could pose challenges’, 28 April 2013’
http://agritrade.cta.int/Agriculture/Topics/SPS-Food-safety/Tightening-of-Citrus-Black-Spot-controls-could-pose-challenges
(3) Agritrade, ‘Financing EU food and feed controls: Recent developments and implications for the ACP’, 17 January 2015
http://agritrade.cta.int/Agriculture/Commodities/Horticulture/Financing-EU-food-and-feed-controls-Recent-developments-and-implications-for-the-ACP
| Key words: BREXIT, Citrus, Zimbabwe, Swaziland, Jamaica, Belize Dominican Republic Area for Posting: BREXIT, Horticulture, CAP |