Can the Post Cotonou Negotiations Provide the Context for a Rethink of the EU’s EPA Policy?

Summary

While the debate in East Africa on the EAC-EU EPA continues, with the UNECA warning of the dangers posed by the agreement to the structural economic transformation of East Africa, the German Chancellor Angela Merkel has described the EPAs as ‘not right’ and possible in need of re-negotiation. A key issue will be laying the basis for EU trade agreements to contribute to the structural economic transformation of African agro-food sectors. This issue needs to be taken up in the post-Cotonou negotiations in order to:

  1. enshrine an EU commitment to the flexible and responsible implementation of EPA commitments in legally binding agreements;
  2. address the systematic bias against smallholder producers and small scale exporters which exists in design and implementation EU food safety and SPS control systems;
  3. extend the current EU regulatory initiative son UTPs to ACP-EU supply chains;
  4. revise the design of loan and investment support instruments to effectively meet the needs of local agricultural producers and agro-processing companies.

Read more “Can the Post Cotonou Negotiations Provide the Context for a Rethink of the EU’s EPA Policy?”

EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls

Summary

EU farmers organizations continue to push for stricter SPS controls on citrus imports including the mandatory use of cold treatment. The South African citrus industry believes such a requirement would be an economic disaster for the industry. In the context of the Spanish citrus industry’s pressure for stricter EU SPS controls, the UK’s departure from the EU could offer a life line for the South African citrus industry. If SPS controls not relevant to UK agricultural production were lifted and duty free-quota free access to the UK market could be secured in line with the South African government’s current aspirations for post-Brexit trade relations with the UK, then less restrictive market access requirements would apply potentially opening up additional export opportunities to the UK market. Read more “EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls”

Canadian dairy TRQ administration replicates earlier EC practices to consternation of EU Exporters

Summary

EU dairy exporters have complained Canada’s system for the allocation of the CETA cheese TRQ unfairly favours local manufacturers. The EU makes use of similar yet even more severe arrangements for TRQ administration in sensitive sectors, with under the EU-South Africa TDCA import licences being allocated only to ‘approved undertakings’ (EU dairy companies) on food safety grounds.  Important lessons in regard to how to ensure TRQ regulated imports under recently concluded EPAs do not undermine local producers can be learned from EU practices with regard to TRQ administration. These lessons could prove useful in ensuring that expanded imports from the EU in sensitive sectors do not undermine local agro-food sector development. Read more “Canadian dairy TRQ administration replicates earlier EC practices to consternation of EU Exporters”

Proposed EC Regulatory Initiative on UTPs Needs to be Extended to ACP-EU Supply Chains

Summary

The EC is currently undertaking consultations on new proposals to reduce unfair trading practices (UTPs), to which farmers are seen as being particularly vulnerable. UTPs are seen as stifling innovation and undermining on-farm investment through reducing the commercial viability of farming activities. The envisaged regulations aim to ensure a fairer distribution of value along agricultural supply chains, and increase both farm incomes and on-farm investment.

There is an urgent need to extend EU regulations on UTPs to ACP-EU supply chains since in some major sectors abuses of the weak market position of smallholder producers are endemic. Investments in poverty focused export orientated smallholder production will be undermined unless issues of UTPs along ACP-EU supply chains are addressed. Read more “Proposed EC Regulatory Initiative on UTPs Needs to be Extended to ACP-EU Supply Chains”

Report highlights vulnerability of EU poultry sector to liberalisation of trade in poultry meat

 

 

Summary

A January 2017 report on the relative competitiveness of the EU poultry sector highlights the importance of continued tariff protection and managed trade (using TRQ access) to the future of the EU poultry sector.  This EU policy practice contrasts markedly with EU policy advocacy in its dealings with ACP countries. Without trade protection competitive third country poultry producers would gain a strongly competitive position in the EU market, exporting far higher volumes of poultry meat to the EU. However, EU tariff protection cannot be justified on the basis of higher EU standards, which are small relative to the differences in price competitiveness between EU and major third country poultry exporters. Read more “Report highlights vulnerability of EU poultry sector to liberalisation of trade in poultry meat”

EU plans to invest in agriculture in Africa to curb migration pressured need to address UTPs in Africa-EU agro-food sector supply chains

Summary

EU Agricultural Commissioner Hogan has called for investment to be mobilised in sustainable agro-food sector development in Africa to combat migration pressures. While an EU action plan is under development in this area, calls have been made for the EU to extend its planned regulatory initiative on Unfair Trading Practices (UTPs) to Africa-EU supply chains. Current widespread abusive practices by EU importers fall particularly heavily on smallholder farmers. Given its economic significance, this is an issue which the ACP Group could usefully take up in its post-Cotonou negotiations with the EU as part of the wider dialogue with the EU on migration issues. Read more “EU plans to invest in agriculture in Africa to curb migration pressured need to address UTPs in Africa-EU agro-food sector supply chains”

CBS controls remain threat to South Africa citrus exports to EU despite recent expansion

Summary
Contrary to EU delegation claims, South African citrus exports to the EU have not tripled since 2007.  Export volumes since 2012 have in fact been 6.2% below the recent peak level attained in 2008. This is in part attributable to stricter EU CBS controls which have fallen particularly heavily on emergent and previously disadvantaged farmers, who find themselves commercially excluded from EU market supply chains. On-going campaigning by Spanish citrus growers for stricter CBS controls remains a threat to South African citrus exports, particularly given the burden the existing control measures place on government plant disease control capacities.

The issue of the differential impact which EU SPS controls have on small emergent commercial farmers and large commercial farmers raises the need to improve the design and application of EU SPS controls so as to support smallholder participation in high value export supply chains whilst still ensuring underlying EU SPS controls objectives are attained. Read more “CBS controls remain threat to South Africa citrus exports to EU despite recent expansion”

Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries

Summary

UK proposals for future customs arrangements with the EU seek to subvert the sequencing of negotiations laid in the EU Council instructions to the European Commission for the conduct of the Brexit negotiations. The UK proposals have been criticized as ‘a fantasy’ in some political quarters of the EU. The proposals nevertheless include elements which could be built on in protecting ACP interests within the Brexit process. The UK’s reiteration of assurances of continuity in access to the UK market for ACP exporters leaves unaddressed how this is to be achieved. The UK’s ambitious aspirations for trade agreements with non-EU countries encompassing services, digital trade and trade in goods, suggest concluding such agreements could be a lengthy process. This highlights the need for transitional arrangements to ensure continuity of ACP access to the UK market under current terms and conditions from day 1 of the UK’s formal departure from the EU. Read more “Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries”

Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade

Summary

While the EU has been urged to ‘take a more active role in trying to shape a Brexit outcome that is least damaging to its interests’, the ACP Group needs to ensure this approach is extended to the EU’s traditional developing country partners such as the ACP Group.  It is becoming increasingly apparent that for major ACP agro-food export product groups, Brexit could have a major impact on the functioning of existing ACP supply chains currently serving the EU28 market.  This needs to be fully assessed so that as the Brexit negotiations develop the key priorities for administrative and regulatory initiatives and marketing adjustment support are identified.    Read more “Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade”

Guest Editorial:  Hon. Jomo Dlamini (MP), Chair of the SADC Parliamentary Forum Committee on Trade, Industry, Finance and Investment

Moving Beyond Rhetoric

It is my pleasure to be part of the team providing guest editorials to the epamonitoring net website. Since its launch a short while ago, this site has proved to be a critical source of information and analysis of  the implications of the yet to be fully implemented EPAs.

More so since the advent of Brexit, the site has been in the forefront, providing critical analysis on the possible impact of Brexit on ACP countries  and its implication for the ACPs’  future trade with the EU. This analysis cannot be made without considering the economies of the ACP countries, who for so long have been reliant on the EU as a trading partner. Brexit not only takes away a substantial part of the EU market to which many ACP countries export, but presents complex challenges in realigning relationships with the UK to minimise the adverse effects on ACP countries.

The site has been one of the very strong advocates for the ACP, arguing for unhindered access to the UK market for those countries that have been doing trade with the UK.

From interactions and discussions with peers and colleagues, I have observed that many MPs come into politics with an incomplete perception of the technical aspects of trade issues, and ultimately of what lies ahead in terms of advancing our national interests in an ever globalizing world. This is true of myself also. Public servants on the other hand, are well equipped, and fare much better in this regard because they are usually trained specialists in the field of public or trade policy.

Forums/publications like this one help to simplify the technical matters and enable legislators to think from a clearer  and informed point of view when enacting laws that support trade policy. I am glad to state that I have gleaned a better understanding of the complexities resultant from the decisions and policies of the bigger economies, and especially their impact on Developed Countries.

I hope that the selection of articles in all the ten volumes that have  been issued thus far, has been an invaluable asset to many politicians and trade practitioners in enhancing their understanding of the intricacies of trade policy, and has also inculcated the desire to explore issues more deeply and put in place tools and policies that will allow the ACP Countries to overcome the challenges before them, take the opportunities available to them, and harness the benefits. This is important, considering the enormity of and diversity of the issues faced by the ACP Member States.

Much has been said about EPAs, and about the new sugar regime affecting sugar producing ACP countries, with opinions on unfair trade practices by the EU and the like. As the year is drawing to a close (we are now in the second half), Sugar cane growing countries like Swaziland are faced with the daunting reality of the end of the sugar trade regime come 1 October  2017. For the rest of the ACP, it is the end of the Cotonou Partnership Agreement in 2020.

In these interesting times, no amount of political flamboyance and eloquent rhetoric will be enough to propel the ACP forward. Instead, it will be the sound and practical trade proposals put on the table, that will carry the day. These proposals and arguments must solely be based on economic studies and analysis; and Member States must be wary not to be in violation of WTO rules; which govern global trade.

At stake are the smallholder sugar cane growers and the small scale chicken and vegetable farmers. I cite the two because if you go to ACP countries, you will discover that most of the economic areas under threat from the open market regime are the areas where for generations, agriculture has been the mainstay of a large number of citizens in the ACP. This is where they derive most of their revenue. More sophisticated areas like Trade in Services and the Financial Services do not need much protection because they have historically been operated by multinationals and those in the upper class of society, who are more attuned to survive and accommodating competition. But when it comes to farming, the situation is different.

Recently there was a paper on the future of family owned farms, a very thorny issue considering that multi nationals are creating large farms buying off family owned farms in the ACP, creating mega operations that will eventually prise out those small scale farmers who try to resist this new order. The reality is that ACP markets are going to be awash with EU goods and commodities, if Member States do not put in place measure to control this.

This week I had the privilege of participating in The SADC Week, from the 31st July to 4th August in Johannesburg, South Africa, in my capacity as Chairman of the Trade Industry Finance and Investment committee of the Southern Africa Development Community Parliamentary Forum (SADC-PF) whose theme was “SADC Industrialization.” This forum was intended to bring together the minds of the region and beyond, with the intention of fostering regional co-operation.

On  the issue of trade agreements, the participants were reminded that instruments like EPAs and AGOA (for those countries selling to the US market), are mere facilities that must be fully exploited in order for them to have the desired effects. This observation then led to another observation that in order for the ACP countries to fully exploit these instruments, they first must focus on improving their competitiveness, have national export strategies, produce adequate raw materials and turn them into finished products and finally stop being a source of raw materials, and instead do the value addition on a wide range of products prior to export to the EU and other markets.

Colleagues, what is important and urgent at this juncture is face up to the changes which lie ahead, so we can reap benefits wherever possible. New realities require fresh thinking and practical solutions, with a need to gather the low hanging fruits first. A reengineering of processes is required to prevent the complete collapse of trade under the weight of competition. The reality is that Brexit is here; the end of sugar quotas is here, the EPAs have been negotiated and must now be implemented to the best advantage of  ACP countries. The onus is on us, let us take the bull by the horns!

Hon. Mfanawemakhosi (Jomo) Dlamini, MP,

Has been a Member of Parliament of The Kingdom of Swaziland since 2008. He is the Deputy Chairman of the Portfolio Committee on Economic Planning and Development and has been a member of the Public Accounts Committee since 2008. He is also Chairman of the Committee on Trade, Industry, Finance and Investment of the SADC Parliamentary Forum.  This Committee is currently tasked with the promotion of the SADC industrialization strategy, with a focus on the legislative reforms needed to improve access to quality and affordable medicines by exploiting the Doha agreement using TRIPS flexibilities.

He has been a member of The ACP-EU JPA since 2013, with his interventions focusing on the role of agriculture and particularly the sugar industry, in which smallholder farmers are playing an increasing role. He attaches high priority to promoting  the interests of small holder sugar cane farmers in the context of the changes underway, as he strongly believes that if their interests are not protected, their extinction may not be far away from now. He has used his position in the JPA to lobby for the sugar cane industry among his peers and with the EU commission.