Category: West African EPA

EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa

epamonitoring

 

Summary
The export of chicken parts (particularly bone- in quarters and halves) is driven by expanding EU poultry meat production, given the EU consumer preference for breast meat. This is greatly assisted by a protective trade policy which carefully manages imports of poultry meat to allow EU producers to fully benefit from growing EU consumer demand, despite their production cost disadvantages compared to competitive 3rd country poultry meat exporters. This enables the maintenance of higher EU market prices which allows a cross subsidisation of exports of residual poultry parts. Against this background across a growing number of sub-Saharan African countries, the strong growth in EU poultry meat exports which stifles local poultry sector development in the face of growing African consumer demand is set to continue. Read more “EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa”

The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market

epamonitoring

 

Summary
Recent statements by the UK government committing it to regulatory divergence from the EU once it has left the EU customs union is causing concerns in the UK food and drink sector that this will sound the death knell of frictionless trade with the EU. While it remains unclear to what extent the desire not to be governed by EU defined rules will translate it actual regulatory divergence, serious issues arise for ACP exporters of short shelf life agri-food products who serve the UK market along supply chains which pass through EU27 member states. This is leading to calls for the UK and EU authorities to:

  • waive any need for customs checks for good transiting EU27 member states where duty free-quota free access if enjoyed to both the UK and EU27 markets under parallel ‘rolled-over’ trade arrangements;
  • waive any need for UK phytosanitary checks on the basis of an EU commitment to the continued conduct of phytosanitary checks on imports destined for the UK market;
  • the communication of these commitments to concerned supply chain stakeholders and supporting the establishment of logistical and administrative arrangements to ensure the continued smooth flow of short shelf life products along triangular supply chains.

Read more “The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market”

UK Africa Investment Conference Aims to Boost UK Trade With Africa But What of Current African Exports to the UK?

epamonitoring

 

Summary

While the UK government has launched a UK-Africa investment conference to showcase the financial services the City of London can offer in mobilising investment financing, it is neglecting a range of nuts and bolts trade issues in the agri-food sector which could profoundly impact on around €1 billion in African exports to the UK market. This includes sectors which in the past 20 years have attracted considerable investment in export orientated production and which have generated 100,000 of employment opportunities. These issues, notably in regard to the UK’s future MFN tariff regime and the administrative measures which need to be taken to ensure the continued smooth functioning of triangular supply chains, which serve the UK market via the Netherlands and Belgium need to be urgently addressed. Read more “UK Africa Investment Conference Aims to Boost UK Trade With Africa But What of Current African Exports to the UK?”

Entry into Force of New EU Plant health Regulation Could Pose Serious Challenges for ACP Horticulture Exporters

epamonitoring

Summary

EU phytosanitary controls are becoming increasingly stringent and administratively demanding. Almost all fruit and vegetable products will now require phytosanitary certificates and be subject to document checks which are being applied with varying degrees of rigour by different national EU phytosanitary authorities. For high risk products comprehensive documentation on control measures in place will need to be submitted in advance, if continued access to the EU market is to be allowed. These stricter EU import controls will require the adoption of pre-export pest control and verification measures. The costs increasing effects this gives rise to could drive smaller ACP exporters out of the EU market, although it is Kenyan pepper exports who have been the first to diversify away from the EU market to lower priced but more reliably accessible markets in the Middle East. The scale of ACP exports potentially adversely affected is huge. However, the UK’s departure from the EU customs union and single market could offer some relief if future UK risk assessments for phytosanitary controls were to be based solely on UK agri-climatic conditions and patterns of production and not pan EU agri-climatic conditions and patterns of production. Read more “Entry into Force of New EU Plant health Regulation Could Pose Serious Challenges for ACP Horticulture Exporters”

Growing Support for Payment of the Living Income Differential in the Cocoa Sector

epamonitoring

Summary
There is growing support for the payment of the living income differential to cocoa farmers, but with the Ghana Cocoa Board and Conseil du Café Cacao of Cote d’Ivoire insisting on the need for close monitoring of how the initiative is implemented alongside private sector sustainability schemes. The LID needs to be seen as floor price on which private sector initiatives can build to ensure cocoa farming communities not only survive but prosper. Read more “Growing Support for Payment of the Living Income Differential in the Cocoa Sector”

Ghana prepares for EPA implementation with finalisation of its revised tariff offer

epamonitoring

 

Summary
The government and Ghana has agreed revised tariff phase down commitments on imports from the EU. Tariff reductions will commence in the first quarter of 2020 and be completed by 2029. It is unclear how the revised EPA will support Ghanaian structural development objectives given wider trends in trade with the EU. However it is likely to accelerate existing trends towards expanded EU agro-food exports to Ghana and increase pressure on Ghana to sign a bilateral FTA with the UK within 18 months. Potentially Brexit could open up opportunities for an expansion of Ghanaian exports of value added cocoa products and preserved tuna directly to the UK market. This could support Ghanaian structural economic development objectives. This however will require the conclusion of an agreement with the UK which in the long term preserves current duty free-quota free access for Ghanaian exports. Discussions around cocoa sector issues could be complicated by growing concerns in the EU over the level of deforestation resulting from cocoa production in West Africa. Read more “Ghana prepares for EPA implementation with finalisation of its revised tariff offer”

Conservative Party Election Victory Mean Full Speed Ahead with Brexit and Raises The Threat of Loss of ACP Tariff Preference as a Result of Post-Brexit UK MFN Tariff Choices

epamonitoring

Summary
The Conservative Party’s election victory which has delivered a 80 seat majority means Parliamentary approval of the Withdrawal Agreement can now go ahead and the UK can leave the EU on 31st January 2020. The UK will however remain part of the EU customs union and single market until at least 1st January 2021. The size of the majority means the influence of the ERG hard Brexit group of Conservative MPs will be reduced. This will give Prime Minister Johnson more space to extend UK membership of the EU customs union and single market if the conclusion of a comprehensive free trade area agreement by 1st January 2021 proves unrealistic. In this context the major issue facing ACP exporters in the first half of 2020 will be the impact of the scheduled UK-Only MFN tariff review on the value of rolled over ACP tariff references, with bananas, preserved tuna, fresh beans and certain value added cocoa products looking vulnerable to a loss of value of rolled over preferences (current ACP direct exports to the UK valued at €936 million). This need to be seen in a context where the UK government has already made the decision to set UK-only MFN tariffs for all other fruit, vegetables and cut flowers at zero (current ACP direct exports to the UK valued at €449 million). The trade effects for these products could be even greater given the volume of exports to the UK which takes place along triangular supply chains focussed on the landing of cargoes in the Netherlands and Belgium prior to onward shipment. The commercial impact of this process of preference erosion will however needs to be assessed on a product by product basis in light of the functioning of individual ACP supply chains and current patterns of UK imports and the tariffs actually levied on this current trade. Read more “Conservative Party Election Victory Mean Full Speed Ahead with Brexit and Raises The Threat of Loss of ACP Tariff Preference as a Result of Post-Brexit UK MFN Tariff Choices”

Rising EU SMP Prices and New Mechanism for Monitoring FFMP Exports Could Lay the Basis for Easing Competitive Pressures on ACP Milk Producers

epamonitoring

Summary
Given the trade in milk powders is the principal area through which EU dairy sector developments impact on ACP dairy sector development, the increase in EU SMP prices which has followed on from the elimination of EU SMP intervention stocks should offer some relieve to African milk producers. This being noted no immediate benefits will be felt given the 30% increase in EU SMP exports from January to July 2019. The situation is further complicated by the level of EU exports of fat filled milk powders to sub-Saharan Africa, which is likely to continue to expand for the foreseeable future. Monitoring this trade should be simpler in future given the creation of a consolidated tariff heading for this product (19019050). The revised EU27/UK Withdrawal Agreement along with the UK’s post Brexit MFN tariffs for dairy products could reduce the adverse trade effects of any ‘No-Deal’ Brexit which could still emerge from 1st January 2021. What this could mean for EU-ACP dairy sector trade flows will however require detailed product by product analysis, with the key consideration being the extent to which disruptions of existing EU27 dairy exports to the UK result in increased EU production and stocks of SMP. Read more “Rising EU SMP Prices and New Mechanism for Monitoring FFMP Exports Could Lay the Basis for Easing Competitive Pressures on ACP Milk Producers”

Non-Tariff Costs For ACP Exporters Will Need to Be Addressed under a ‘No-Deal’ or ‘Hard’ Brexit

epamonitoring

Summary
According to UNCTAD trade costs linked to NTM are now higher than tariffs, with a need for cooperation and greater use of IT solutions to minimise such cost while meeting key public policy objectives. The non-tariff issues arising for ACP exporters within the process of the UK’s withdrawal from the EU, particularly under a ‘No-Deal’ Brexit scenario need to be fully addressed is substantial new costs are not to be generated for ACP agro-food exporters. Key areas where clear UK and EU policy commitments are needed include:  removing the need for customs checks where DFQF access is enjoyed to the EU and UK markets; allowing continued use of trade facilitating IT systems until alternatives are in place; continuing with phytosanitary checks in the EU for goods destined for the UK; -establishing mechanisms for a review of ‘UK-Only’ phytosanitary controls in Continuity Agreements concluded with the UK. Read more “Non-Tariff Costs For ACP Exporters Will Need to Be Addressed under a ‘No-Deal’ or ‘Hard’ Brexit”

No-Deal Brexit Could Adversely Impact Cocoa Prices but Open Up opportunities for Increased Value Added Cocoa product Exports to the UK

epamonitoring

Summary
Given the role the London Cocoa Future market plays in setting the benchmark for cocoa prices, through its impact on the value of the £ a ‘No-Deal’ Brexit could have a significant impact on cocoa prices. With growing investment in local cocoa value added processing for the domestic market in countries such as Ghana, the application of the UK’s currently proposed post-Brexit unilateral MFN tariff schedule could create new market opportunities for the export of not fatted cocoa paste and cocoa butter to the UK market. However, given the existing ownership structure of value added cocoa processing activities, there may be a reluctance to plan for an expansion of local value added processing to serve the UK market since this would directly compete with similar facilities in the Netherlands and Belgium which are part of the same corporate family. Read more “No-Deal Brexit Could Adversely Impact Cocoa Prices but Open Up opportunities for Increased Value Added Cocoa product Exports to the UK”