Summary
The new Rainforest Alliance certification standard has been criticised by Latin American banana producers for failing to get to grips with the structural problems of cost and revenue distribution along the supply chain. While Rainforest Alliance is keenly aware of the problem, it holds certification alone cannot solve this structural imbalance. Rainforest Alliance is therefore looking to use other tools to leverage changes in cost and revenue distribution along banana supply chains. This could usefully focus on ensuring the inclusion of provisions on cost and revenue distribution in any EU ‘Green Deal’ regulatory initiatives aimed at promoting compliance with environmental and climate change concerns, and their coordinated implementation alongside the EU’s Unfair Trading Practices regulation. This could provide a means of getting to grips the long-term structural concerns of banana producers. Read more “Criticisms of New Rainforest Alliance Banana Certification Standards Highlights Centrality of Price Issues to Sustainability Efforts”
Category: Horticulture
Dominican Republic and Bananas Dominate ACP Organic Products Exports to the EU28
Summary
ACP countries account for a growing share of EU organic imports, with the Dominican Republic and bananas playing a particularly important role in this trade. In 2019 the entry into force of new EU organic regulations and the UK’s departure from the EU customs union and single market could prove disruptive, unless sensitivity is shown to the potential trade disruptions changes to trade documentation requirements can cause. In the Brexit context an extended transitional period during which the EU and UK will continue to recognize certifications issued by organic certification bodies in each other territories would appear essential. Alternatively, ACP exporters will need to seek dual certification from EU27 and UK registered bodies, with this involving additional costs and considerable uncertainty given Covid-19 related movement and social distancing restrictions. Read more “Dominican Republic and Bananas Dominate ACP Organic Products Exports to the EU28”
Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU
Summary
This article seeks to highlight the main areas of impact of the new EU/UK border arrangements as these are likely to affect ACP exporters serving EU27 markets. While this will mainly impact ACP exporters using triangular supply chains, it will also have some effects on direct exports to the EU, mainly via it effects on trade administration documentation requirements, the need for valid authorisations and certifications, customs and taxation rules and the rules of origin requirements under preferential trade agreements. While ACP exporters themselves need to make their own assessments of the impact of the UK’s full withdrawal from the EU and set in process appropriate preparations for the changes which will occur, there is some scope for policy interventions to try and mitigate the adverse impact on ACP supply chains. However, this will require proactive engagement with the EU by the governments of the country’s most seriously impacted by the impending changes. To date there is no evidence the concerned government have yet appreciated the urgency of such policy initiatives. This could leave ACP exporters having to cope alone with further trade disruptions. This is likely to be most severely felt by those ACP exporting countries already suffering most severely because of Covid-19 related trade disruptions. Read more “Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU”
Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?
Summary
While the UK government asserts the introduction of UK border controls on goods entering from the EU will leave trade with ACP countries and the rest of the world unaffected, this is not entirely the case. ACP goods entering the UK market via EU27 member states along so-called triangular supply chains, will be most severely affected, though be it in a wide variety of ways. This will depend on:
- The nature of product and whether any significant alteration to the product takes place in the territory of the EU on route to the UK, specifically whether the consignment is simply broken down or undergoes repackaging or some simple level of processing prior to onward trade to the UK.
- Whether the product remains formally ‘in transit’ under the provisions of the CTC.
- Whether the good enters the customs territory of the EU prior to onward movement to the UK.
- The basis on which the UK finally leaves the EU customs union and single market.
- The efficiency of UK border control services and border clearance infrastructure in the face of the basis on which the UK leaves the EU customs union and single market.
All these factors will influence the impact the UK’s departure from the EU customs union has on ACP exports to the UK. In addition even direct ACP exports to the UK will be affected by the new UK/EU border requirements, in terms of the trade documentation required to enter the UK customs area and the overall efficiency of UK border control services, in the face of the new demands a UK/EU border will generate. ACP exporters will need to be alert to and prepare for all these potential impacts, with the level of adjustment required varying considerably across products. Read more “Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?”
UK International Trade Secretary Raises Concerns Over UK Border Control on Imports From EU
Summary
The UK Trade Secretary has expressed concerns over plans for a phased implementation of UK border controls on imports from the EU27 regarding their WTO compatibility, the impact on smuggling operations and the credibility of UK trade policy. Concerns have also been raised over the practicality of implementing ‘light touch’ border control systems between the mainland UK and Northern Ireland. Problems in designing and implementing ‘light touch’ border control systems and concerns over smuggling could see more rigorous controls applied to ACP goods entering the UK market via EU27 member states. Unless special arrangements are set in place to facilitate the continued smooth functioning of ACP triangular supply chains, the functioning of important ACP export sectors could be seriously undermined (e.g. short shelf life horticulture products and cut flowers, value added cocoa products and even fisheries products). Read more “UK International Trade Secretary Raises Concerns Over UK Border Control on Imports From EU”
Could Leaked Requirements for Movement of Goods to Northern Ireland Provide Basis for Special Arrangements for ACP Triangular Supply Chains
Summary
Proposals for consolidated electronic document requirements for the movement of goods from the mainland UK to Northern Ireland could provide a basis for special arrangements to facilitate the continued smooth functioning of ACP triangular supply chains. Additional arrangements to remove the need for phytosanitary checks on ACP goods entering the UK market via EU27 countries would however be required. While there is seen as being no political objection in the UK to averting disruption of trade with developing countries which enters the UK market via EU27 member states, there is not currently the ‘band width’ in UK government services to deal with this issue, given Covid-19 related demands and the fraught state of UK/EU negotiations. There is therefore a need for the most directly affected ACP governments to launch a political initiative for the establishment of special arrangements to ensure the continued smooth functioning of ACP triangular supply chains. Such an initiative would need to reach out to both the UK and EU authorities to make sure suitable arrangements are in place along the whole of the supply chain. Read more “Could Leaked Requirements for Movement of Goods to Northern Ireland Provide Basis for Special Arrangements for ACP Triangular Supply Chains”
Commitment to Phasing in of UK Controls on Goods Entering from the EU Provides a Framework for Addressing ACP Triangular Supply Chains Issues
Summary
On 12th June 2020, the UK has announced there will be no extension of the transition period in UK/EU trade relations. At the same time, the UK announced plans for phasing in of border controls on imports from the EU. This phased approach is aimed at providing time for UK businesses to prepare for changes in border arrangements given the setbacks to preparatory activities generated by the Covid-19 pandemic. However, the underlying border controls challenges facing the UK government pre-dated the Covid-19 pandemic and remain substantial. Against this background ACP exporters using triangular supply chains need to intensify preparation for the implementation of new UK/EU border arrangements, while ACP governments will need to ensure their Continuity Agreements with the UK, fully address the need to ensure ‘continuity’ in the smooth functioning of triangular supply chains. The governments of least developed countries will also need to ensure a mechanism is found to make similar arrangements for the smooth functioning of triangular supply chains used by LDC based exporters. Read more “Commitment to Phasing in of UK Controls on Goods Entering from the EU Provides a Framework for Addressing ACP Triangular Supply Chains Issues”
What Lessons Can the ACP Draw from the EU’s Post Covid 19 EU Recovery Plan
Summary
The EU has launched a huge €1.98 trillion EU Recovery Plan in response to the Covid-19 crisis. The focus of the long-term recovery dimension of this plan and the basis for its financing, raise a number of issues in an ACP context. The most important of these are: the need to identify ways in which ‘easier and quicker access to finance’ can be provided to ACP companies which would otherwise be viable in the absence of the crisis; the options for using the EC’s good credit rating to mobilise funds in support of economic recovery in ACP countries; the scope for adopting the ‘strategic autonomy’ approach in sectors whose critical importance and vulnerability has been highlighted by the crisis; opening a dialogue with the EU on how future development assistance financing can be used to reimburse the budgets of agreed programmes from which funds have been redirected to address current emergency needs. Read more “What Lessons Can the ACP Draw from the EU’s Post Covid 19 EU Recovery Plan”
EU Moves Swiftly to Redeploy Existing Funds to Meet Immediate Crisis and Long-Term Structural Needs
Summary
The EU has moved swiftly to unlock Covid-19 blocked development expenditures for redeployment to meeting immediate health crisis and longer term structural economic needs. To date the EU framework for effectively supporting a recovery in trade and production in ACP countries is still under development, with ACP farmers organisations and agri-food sector associations urgently needing to initiate a dialogue with the local EU delegate to assist in defining the approach to be adopted by the EU locally in supporting the restoration of production and trade in the face of the ongoing Covid-19 pandemic. There is a need to ensure EU action in support of economic recovery focuses on the specific needs of farmers and agri-food sector enterprises, given the potentially serious food and livelihood security issues raised by the ongoing pandemic. Read more “EU Moves Swiftly to Redeploy Existing Funds to Meet Immediate Crisis and Long-Term Structural Needs”
Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets
Summary
The Covid-19 surge in demand for cold storage space is generating significant increases in cold storage charges and an absolute shortage of space in Europe. In the case of the UK this situation is being compounded by the growing prospect of a no-deal UK departure from the EU customs union. This will generate yet another cost increase for ACP agri-food exporters of fresh products which require cold storage before delivery to final customers. This suggests ACP exporters of products requiring cold storage need to shorten their supply chains through the establishment of arrangements for direct delivery of goods to final buyers. This would allow these ACP exporters to side-step the commercial costs of the worsening cold storage availability situation in not only the UK but elsewhere in Europe. Smaller ACP exporters may need to explore their options for accessing the ‘Airbnb’ model of cold store provision. Read more “Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets”