Pacific sustainable palm oil supply chains could face disruption from Brexit

Summary

A market positioning strategy has been adopted by Pacific island palm oil producers focused on the supply of fully traceable sustainably certified palm oil through a dedicated facility in the UK which then serves the whole of the EU28 market for fully traceable sustainable palm oil. Any failure to conclude an UK-EU27 trade agreement by 30 March 2019 could see a re-imposition of tariffs by the EU27 on Pacific palm oil processed in the UK. This could disrupt the functioning of existing Pacific palm oil supply chains and compound the challenges being faced by Pacific palm oil suppliers as a result of environmental and health campaigns in the EU against the use of palm oil in food products. Read more “Pacific sustainable palm oil supply chains could face disruption from Brexit”

UK WTO representative seeks to clarify future UK trade treatment of developing countries

Addendum to Article
UK government commits to extending EBA access for LDCs post Brexit

Following on from the 24th June 2017 UK government statement entitled ‘Government pledges improved post-Brexit access to UK markets for world’s poorest countries’(1), the UK representative to the UN and Other International Organisations in Geneva sought to clarify UK policy towards non-LDC developing countries.  In a letter to fellow representatives to the UN, which was copied to WTO Director General Roberto Azevedo, Julian Braithwaite declared the UK government’s commitment to ‘avoiding disruption for our trading partners as we leave the European Union’. It was stated ‘the UK has decided to replicate its existing trade regime in the WTO in new UK-only schedules’. This was announced on response to questions from WTO members as to ‘what will happen to the nearly £20 billion of exports to the UK from developing countries who benefit from special tariff preferences’. Read more “UK WTO representative seeks to clarify future UK trade treatment of developing countries”

UK government commits to extending EBA access for LDCs post Brexit

Summary

The UK has committed to extending in the immediate post-Brexit period the non-reciprocal duty free access granted LDCs under the EU’s current EBA initiative. However action was expected given the long standing UK support for duty free-quota free (DFQF) access for LDCs. The issue has always been whether current DFQF access enjoyed by ACP non-LDCs would be extended from 30th March 2019. This issue remains unclear, with the UK government solely making a commitment to explore options for maintaining existing trade arrangements. Read more “UK government commits to extending EBA access for LDCs post Brexit”

ACP rice exporters and Brexit

Summary
In terms of trade with the EU the UK is not a major market for ACP rice exporters.  However the impact of the UK’s departure from the EU on ACP rice exporters will not be felt via changes to UK rice import tariffs, but rather as a result of the increased competition on the smaller EU27 market, where the departure of the UK will reduce overall EU rice import demand by around 23% while the EU’s TRQ market access commitments under existing bilateral agreements will remain unchanged. The removal of UK import demand is also likely to exacerbate the competitive challenges which ACP rice exporters face as a result of the DFQF access granted to LDC rice exporters to the EU. This measure saw imports from the main LDC rice exporters to the EU increase from under 7,500 tonnes in 2007 to around 500,000 tonnes in 2015 and 2016. Read more “ACP rice exporters and Brexit”

ACP Citrus Exporters and Brexit: Part 2, The Case of Smaller Scale Exporters

Summary
In the short term smaller ACP citrus exporters could benefit from Brexit in their trade with the UK if they can:

  1. retain existing duty free-quota free access to the UK market from the date of the UK’s departure from the EU;
  2. secure the removal of CBS controls in trade with the UK;
  3. 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. Read more “ACP Citrus Exporters and Brexit: Part 2, The Case of Smaller Scale Exporters”

ACP citrus exporters and Brexit: Part 1 The Case of South Africa

 

Summary
For South Africa both challenges and opportunities arise in the citrus sector as a result of the Brexit process. The first challenge, in common with other ACP citrus exporters, is to retain existing preferential access to the UK market. South Africa could also benefit from the dismantling of strict CBS controls on exports to the UK. Unlike other ACP citrus exporters, South Africa could also gain some marginal benefits from the immediate removal of current seasonal tariffs on its citrus exports. However, securing these benefits will be dependent on the UK pursuing a ‘hard Brexit, which may now be less likely following the UK June 2017 election result. In addition, if no new trade arrangement is set in place between the UK and EU27 from 30th March 2019 and MFN duties are imposed on mutual trade, South Africa could see new market opportunities emerge in the citrus sector in trade with the UK, given Spain’s current role as the dominant supplier to the UK. These opportunities however will exist only on the fringes of the existing season. Read more “ACP citrus exporters and Brexit: Part 1 The Case of South Africa”

ACP banana exporters and Brexit

Summary
Brexit is likely to give rise to 3 distinct challenges for ACP banana exporters: retaining preferential access to the UK market; dealing with the market consequences of a possible abolition of duties on banana imports into the UK; dealing with the increased competition on EU27 markets as a result of the application of banana sector TRQs under bilaterally negotiated EU FTAs. While to date overall ACP banana exporters have expanded their exports to the EU28 despite expanded TRQ access for $ banana suppliers, the situation varies greatly between different ACP exporters. With Caribbean small island banana exporters largely being squeezed out of EU markets since 2007. However, the past strong trade performance of some ACP banana exporters since 2007 is no guarantee of future competitiveness. Market adjustment support may be required to ACP producers and exporters in adjusting to the market consequences of Brexit in the banana sector. The EC will also need to take account of the impact of expanded TRQ access on ACP banana suppliers in its application of the stabilisation mechanism set in place to protect EU banana producers. Read more “ACP banana exporters and Brexit”

Parliamentary report warns of the complexity of Brexit challenges in the agricultural sector

Summary
Important WTO dimensions to future UK agricultural and agricultural trade policies are faced which could prove complicated to resolve. Depending on how UK/EU27 negotiations process works out, new opportunities for exports to the UK could be opened up for ACP agro-food exporters. For example stricter UK immigration controls on agro-food sector workers could make it more attractive for UK businesses to import consumer ready agro-food products, allowing ACP exporters to move up the value chain. The UK Parliamentary report highlights the need for transitional trade arrangements for UK trade relations, given the complexity of the issues involved. This recognition of a need for transitional arrangements is something on which ACP governments could usefully build. Read more “Parliamentary report warns of the complexity of Brexit challenges in the agricultural sector”

European development NGO-EU28 Brexit letter leaves important trade issues unaddressed

Summary
The UK and European development NGO platforms have sought engagement with the UK administration and the EC’s Brexit task force on the importance of ‘putting people and our planet first’ in the Brexit process. NGO concerns appear to be focused on securing continued engagement by the UK in EU and international development financing initiatives and continued collaboration in pursuit of the globally defined development agenda.  However, it is likely to be in the trade sphere where the effects of Brexit are first felt by developing countries. The economies of a number of ACP countries will be strongly adversely affected, unless the UK government establishes alternative national regulations extending the preferential market access currently enjoyed under EU trade agreements from day 1 of the UK’s formal departure from the EU (30 March 2019). Read more “European development NGO-EU28 Brexit letter leaves important trade issues unaddressed”

The UK elections, Brexit and agro-food sector trade

Summary
The UK election result creates further uncertainties around the Brexit process, making it even more necessary for ACP counties to secure an unequivocal commitment to the automatic, unilateral extension of existing terms and conditions of access for ACP exporters to the UK market from the date of the UK’s formal departure from the EU. Such arrangement would be transitional and would need to remain in place until reciprocal trade agreements can be negotiated and ratified to replace the existing EU negotiated economic partnership agreements. A precedent for such a unilateral UK regulation exists in the EU’s MAR 1528/2007. Read more “The UK elections, Brexit and agro-food sector trade”