Summary
Expanding EU sugar production and contracting EU sugar consumption up to 2030 will see EU sugar imports decline (by -300,000 tonnes) and EU sugar exports expand (+700,000 tonnes) compared to 2020. This will increase competition for ACP sugar exports on the EU27 market, in a context where heightened health consciousness and active campaigning is seeing pressure to reduce ‘hidden sugars’ in food and drink products. Further pressures to move away from the use of cane sugar in high sugar content food and drink products will arise from the rules of origin agreed under the EU/UK trade agreement. ACP sugar exporters will need to better understand the market components their exports serve and how they will be impacted by evolving trends. The pressures on ACP sugar exporters could be eased by policy interventions designed to secure automatic cumulation under rules of origin where duty free/quota free access is enjoyed to both the EU and UK markets. Read more “EU Sugar Projections to 2030 Suggest Less Room on EU27 Market for ACP Sugar Exports”
Category: Caribbean
Banana Link Makes the Case for the Extension of Spanish Fair Producer Price Legislation to Pan-EU Banana Imports
Summary
Debates on proposed amendments to the Spanish 2013 Food Chain Law have highlighted how ‘fair pricing’ regulations need to be applied equally to domestic EU producers and 3rd country producers if competition between domestically produced and imported products is not to be distorted. Applying ‘fair price’ regulations to imported as well as domestically produced agricultural products would not only avoid distorting competition but would also provide scope for integrating ‘Green Deal’ sustainability objectives into both domestic and 3rd country supply chains serving the EU market. Read more “Banana Link Makes the Case for the Extension of Spanish Fair Producer Price Legislation to Pan-EU Banana Imports”
Non-Tariff Issues Threaten to Undermine UK Meat Exports to EU27 Markets and Generate Displace of UK Exports to ACP Markets
Summary
The shortage of UK veterinarians required to sign off on Export Health Certificates could seriously constrain UK exports of livestock products destined for the EU market. While Export Health Certification issues should impact on exports to all destinations, if the UK government adopts the BMPA proposals to use supervised Certification Support Officers instead of fully qualified veterinarians to sign off on Export Heath Certificates this could facilitate exports of UK livestock products. However, the EU is unlikely to accept such a downgrading of export health certification controls, without a thorough assessment of the phytosanitary and food safety implications. This could create a situation where in 2021 the new supervised Certification Support Officers were able to sign off on exports to non-EU destinations but not exports to the EU. This would lay the basis for an expansion of displaced UK livestock product exports to ACP markets rather than the EU markets currently served. In the poultry sector, this needs to be seen in a context where over half of all UK extra-EU poultry meat exports were destined for ACP market in 2019. Read more “Non-Tariff Issues Threaten to Undermine UK Meat Exports to EU27 Markets and Generate Displace of UK Exports to ACP Markets”
Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled
Summary
Road traffic disruptions along EU/UK ‘RoRo’ routes have been less than feared. This is largely due to a sharp drop in traffic flow along these routes. However, the changes to EU/UK border arrangements have seen an increase in road haulage costs along these routes. Some of these causes of cost increases are transitional and will decline by 2022. Other causes of cost increases are structural and could undermine the commercial viability of the use of triangular supply chains currently used to get ACP products to market. This will be a particular problem for lower value fresh produce and smaller scale ACP exporters. Individual supply chains will need to assess the long-term commercial implications of rising road haulage costs along EU-UK ‘RoRo’ routes. Policy initiatives to remove the rules of origin complications along triangular supply chains for ACP exporters whose products enjoy duty-free/quota-free access to both the UK and EU market are possible. Equally it should be possible on risk assessment ground to waive any need for phytosanitary import controls on ACP products which have recently been subject to such controls on entry to the EU when onward shipped to the UK. However, under current circumstances this will need to be negotiated bilaterally with the UK. Such initiatives would ease pressures on road haulage operators and incentivise the resumption of more normal haulage arrangements for ACP products shipped to the UK via the EU Read more “Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled”
What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?
Summary
The new EU/UK trade agreement includes new rules of origin requirements, which in the absence of ‘diagonal cumulation’ arrangements, could pose problems for some ACP raw sugar sector supply chains, including those serving food and drink manufacturing industries. Given the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement a significant restructuring of the affected supply chains will be needed, in a context where demand for ACP sugar is shrinking. This could result in all but the largest and most efficient ACP sugar exporters being driven off UK and even some E27 markets. There is potentially some scope for addressing the problems created by the absence of EU/UK ‘diagonal cumulation’ arrangements through the inclusion of specific provisions in enhanced ‘rolled over’ UK trade agreements and even existing EU agreements, should the EU come around to considering such arrangements. However, this will require a sustained lobbying effort on the part of the governments of the affected ACP countries and allies in other sectors facing similar ‘diagonal cumulation’ constraints on the functioning of triangular supply chains. Read more “What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?”
The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?
Summary
Of the three major issues arising in the ACP horticulture sector trade in the context of the new EU/UK trade arrangement, the most important relate to rules of origin verification, given the absence of any ‘diagonal cumulation’ arrangements. This may require all ACP horticultural exports entering the UK market via the EU to remain under customs supervision (under Common Transit Convention procedures) if duty-free access to the UK market is not to be lost. Currently the infrastructure for the effective implementation of CTC procedures is not fully in place, with this potentially posing challenges for the onward trade in ACP horticultural products to the UK market. The phasing in of UK phytosanitary import controls poses tricky choices for ACP exporters in the first months of 2021. Efforts to simplify EU/UK procedures for the cross-border movement of goods could usefully take on board ACP concerns. ACP organic exporters will need to keep a close eye on how EU/UK mutual recognition of organic certification evolves in 2023, so timely and appropriate action can be taken to ensure exports can still be placed for sale as organic products in the target markets after 2023. Read more “The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”
Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade
Summary
While the rate of growth in EU poultry meat exports is slowing down, the EC projects a continued expansion of EU exports up to 2030 on the back of a continued expansion of EU poultry production. While the December 2020 EU/UK trade deal will avert the imposition of standard MFN tariffs on EU/UK mutual trade in poultry products, the introduction of standard 3rd country import control requirements will generate some trade disruption. This will largely affect UK poultry meat exports to the EU27. The trade in value added food products containing poultry meat is also likely to be complicated by new rules of origin requirements for EU/UK trade, given no agreement has been reached on ‘diagonal cumulation’ arrangements. These issues are likely to lead to some level of trade displacement of mutual EU/UK trade in poultry products to 3rd country markets. This is most likely to result in increased UK exports of poultry parts to non-EU27 markets. Read more “Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade”
Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP
Summary
The November 2020 NAO report paints a pessimistic picture of the prospects for the effective functioning of the UK/EU border controls in 2021. Developments since November 2020, in regard to the intensifying Covid-19 crisis will not have helped matters. ACP triangular supply chains, which require the movement of goods across an EU/UK border, are likely to be most severely affected. However, serious congestion at UK seaports, with both berthing and unloading delays, could mean direct ACP sea freighted exports could also face delays, with these compounding the system wide challenges UK border control authorities will face in 2021. Read more “Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP”
Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain
Summary
The EU has proposed regulatory proposals for contingency measures in four main areas: fishing activities, aviation connectivity and safety, road transport connectivity, and rail connectivity. The two main areas of concern to ACP exporters relate to rail and road connectivity between the mainland EU and the UK. These regulatory measure for the road haulage sector while essential will not address the problems of road haulage delays and rising costs which are now emerging. However, these delays and cost increases will be much more severe from 1st January 2021 if these contingency measures are not in place. The issue of aviation connectivity, if not addressed could also carry consequences for international aviation services. This could compound the air freight challenges which have arisen as a result of the Covid-19 pandemic. Any breakdown in EU/UK fisheries relations meanwhile, could carry trade documentation and even tariff implications for the onward trade in ACP fisheries products from the EU to the UK. Read more “Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain”
Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments
Summary
The appointment of an EU Chief Trade Enforcement Officer is likely to see the EU more rigorously enforce the commitments entered onto by ACP governments under EPAs. Particular concerns arise in regard to the interpretation and application of provision dealing with trade defence mechanisms established under the EPAs (safeguard and anti-dumping provisions), the ‘Prohibition of quantitative restrictions’, and ‘National treatment’. The rigorous interpretation and enforcement of these commitments could undermine national agri-food sector development strategies across a wide range of ACP countries. There are concerns disputes with ACP countries constitute areas for ‘early wins’ for the CTEO, given the limited legal capacity of ACP governments to engage in dispute settlement processes and the limited scope for ACP retaliatory action. Particular concerns arise in product areas where a no-deal Brexit could generate severe EU/UK trade disruptions (e.g. the poultry meat sector) and ACP markets are major outlets for EU exports. Read more “Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments”